Ashmore assets rise as market recovery offsets outflows
Ashmore’s assets under management rose by nearly $2bn in the first quarter as a recovery in the markets helped to offset net outflows.
The money manager, which focuses on emerging markets, said assets under management (AUM) increased by $1.9bn in the period to 30 September, offsetting net outflows of $0.8bn.
AUM were estimated at $85.5bn at the end of last month as it recorded positive investment performance of $2.7bn.
Ashmore said the strong performance in the quarter reflects diversified gross sales and a further decline in redemptions.
The better-than-expected performance saw shares in the firm rise nearly seven per cent.
Emerging markets were particularly badly hit by the pandemic as investors sought out assets that were deemed lower risk.
Ashmore’s AUM had dipped nine per cent in the year to the end of June but it has staged a strong recovery as momentum in equities increased diversification and client flows continued to stabilise.
The net outflows for the first quarter were primarily within the blended debt and to a lesser extent in external debt, local currency and corporate debt. While the liquidity and equity sectors delivered net inflows.
Chief executive Mark Coombs said: “While there are some near-term macro risks that may temper investors’ risk appetite, such as COVID-19 and the US election, these environments have historically provided good investment opportunities for Ashmore’s active processes to exploit and deliver outperformance for clients.”
“At the same time, attractive valuations across equities and fixed income in Emerging Markets underpin returns notably when compared with those available in Developed Markets, and support ongoing incremental allocations.”
Ashmore’s update indicates “strong outperformance” and all of the firm’s EMD strategies are outperforming benchmarks, Shore Capital analysts said in a note. It means the money manager has “closed the underperformance gap over the one and three year periods.”