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(Sharecast News) - Specialist emerging markets asset manager Ashmore said in an update on Monday that assets under management decreased by $2.1bn in the March quarter, which it attributed to negative investment performance of $0.1bn and net outflows of $2bn.
The FTSE 250 company said the backdrop of more subdued markets, following a robust end to 2023, led institutional clients to reduce risk, driving the majority of net outflows.
Particularly, outflows were prominent in local currency, blended debt, and corporate debt themes, partially offset by a small net inflow in the equities theme.
In the alternatives theme, successful asset realisations and subsequent capital return resulted in a reported net outflow for the three months ended 31 March.
Despite that, Ashmore said it expected to deliver performance fees in the second half of the year, at least equivalent to those realised in the first half, which totalled £8m.
While hard currency markets performed relatively well, buoyed by spread compression, especially in high yield markets, and equities delivered positive returns, local currency bonds faced challenges due to the strengthening dollar during the period.
Notably, Ashmore said its strategies generally outperformed benchmark indices over the quarter.
Furthermore, the company maintained its long-term track record of outperformance across a broad range of strategies, consistent with its position in December.
"Emerging markets delivered a mixed performance over the quarter as stronger than expected economic data pushed back expectations of rate cuts by the US Fed," said chief executive officer Mark Coombs.
"Looking beyond the short-term, macroeconomic stability in emerging countries underpins superior GDP growth compared with the developed world, and many central banks continue to cut rates in response to lower inflation."
Coombs said an easing of US monetary policy would further boost hard currency bonds and, with the dollar at or close to its cyclical peak, he added that a weaker greenback would underpin returns from local currency bonds and equities.#
"Ashmore remains well-positioned to benefit from the capital flows that should follow these positive market trends."
Reporting by Josh White for Sharecast.com.
