Negative investment performance pushes AuM southwards at Ashmore

Specialist emerging markets asset manager Ashmore Group updated the market on the quarter ended 30 June on Friday, reporting that assets under management fell $2.6bn during the period, comprising net inflows of $2.6bn offset by negative investment performance of $5.2bn.

The FTSE 250 company said net inflows were delivered in the local currency, corporate debt, blended debt and equities themes, with a “broad range” of institutional clients adding to mandates, as well as new accounts and continued retail demand through the intermediary channels.

Capital was returned in the alternatives theme, and there were small net outflows in the external debt, overlay and multi-asset themes.

Investment performance was negative across all themes, the board reported, except alternatives, particularly reflecting foreign exchange weakness in the local currency and blended debt themes.

The board explained that, as was normal in a period of market volatility, Ashmore's investment committees had actively added risk where assets had been oversold in order to capture value and to sustain long-term outperformance.

Ashmore's performance against benchmarks remained strong over one, three and five years, it added.

“Client activity levels continued to be broad-based through the quarter ahead of the typical seasonal slowdown,” said chief executive officer Mark Coombs.

“Asset prices weakened over the period, particularly in local currency markets, as returns were impacted by the combination of a stronger US dollar and weaker euro, risk aversion to developed world political uncertainty, and concerns about trade protectionism.”

Coombs said that had left emerging markets valuations at levels last seen immediately after the US election in 2016, following which markets delivered a sustained rally.

“While there is a small number of emerging countries that face challenges, most emerging markets economies are in even better health today.

“Therefore the recent sell-off has created significant value opportunities on which an active manager such as Ashmore can capitalise.”