Investor appetite for emerging markets helps bolster Ashmore
Emerging markets-focussed asset management company Ashmore Group said its assets under management were “broadly flat” for the first quarter, reflecting net inflows of $2.4bn (£1.91bn), offset by negative investment performance of $2.3bn.
The FTSE 250 firm said its external debt assets rose 2.6% in the three month period ended 30 September to an estimated $19.6bn, while local currency assets were stable at $19.7bn and corporate debt assets were down 3.2% at $15bn.
Blended debt assets were 0.4% lower at $24.2bn, equities assets were 4.5% higher at $4.6bn, and alternatives were flat at $1.6bn.
Ashmore said its multi-asset theme saw a 20% fall to $0.4bn, while overlay and liquidity was 1.5% higher at $6.8bn, with the company’s total assets under management managing gains of 0.1% for the quarter to $91.9bn.
The company said its clients continued to raise their allocations to emerging markets, with the combination of additions to existing funds and new client mandates delivering “broad-based flows” during the period, with net inflows in every investment theme except alternatives, which was flat, and a small net outflow in multi-asset.
It noted the net flows were highest in blended debt, external debt, local currency, equities and corporate debt, with a small net inflow in the overlay and liquidity theme.
A “wide range” of institutional clients reportedly accounted for the net inflow and, in aggregate, there was a small net outflow from intermediary retail clients.
The relative strength of the US dollar over the period affected local currency and equities returns, and the rally in the US Treasury market provided support to external debt pricing.
Absolute performance was negative in the corporate debt, blended debt, local currency and equities themes and, to a lesser extent, in the external debt theme, the board said.
Relative investment performance remained “strong” over three and five years, but had weakened over one year as a result of recent market volatility and Ashmore's investment committees taking advantage of lower prices to add risk selectively to portfolios in the quarter.
“This quarter continued to see broad-based demand for the attractive risk-adjusted returns available across emerging markets, and the delivery of continued net inflows demonstrates both the diversified nature of Ashmore's client base and the breadth of its product range,” said chief executive officer Mark Coombs.
“The price volatility over the summer has provided Ashmore's active processes with attractive investment opportunities to underpin long-term outperformance for clients.
“While the global macro environment remains uncertain, the low yields and relatively high equity valuations in developed markets mean investors' returns are enhanced by increasing their allocations to the diverse and resilient range of emerging economies in both fixed income and equities.”