(Alliance News) - Ashmore Group PLC on Thursday reported a drop in assets over the first quarter, as the firm blamed a reduction in risk appetite in September for the slip.
The emerging markets asset manager ended September 30 with USD91.3 billion in assets under management, down from USD94.4 billion three months earlier.
Ashmore noted it recorded USD1.0 billion in net outflows in the first quarter and saw a USD2.1 billion negative investment performance.
The firm's Fixed Income funds, its largest asset class, saw assets drop to USD82.0 billion from USD85.3 billion over the three-month period. Equities rose to USD7.8 billion from USD7.7 billion.
Within Fixed Income, Local Currency assets fell to USD30.5 billion from USD31.9 billion, Blended Debt dropped to USD22.4 billion from USD23.4 billion, Corporate Debt fell to USD10.3 billion from USD11.3 billion, but External Debt increased slightly to USD18.8 billion from USD18.7 billion.
"The net outflows were influenced by a small number of large institutional redemptions and there was a small net outflow from intermediary retail clients. New mandates were won in external debt, blended debt, local currency and equities, and there continues to be good demand for investment grade strategies," Ashmore explained.
The investment manager said market sentiment "deteriorated as the quarter progressed," leading to a reduction in investor risk appetite in September.
Chief Executive Mark Coombs said: "Investors have focused increasingly on the global growth outlook, including the impact of higher commodity prices, supply chain challenges and China's ongoing reforms. Meanwhile, vaccination rates are increasing and restrictions are easing across a wide range of Emerging Markets, delivering a pickup in leading indicators and a broadening of economic growth.
"Further, central banks in emerging countries are raising interest rates, reinforcing the attractive yields available. This positive fundamental backdrop is not reflected in current valuations, presenting an opportunity for Ashmore's active investment processes to exploit and enabling investors to benefit from increasing their allocations to Emerging Markets."
Ashmore noted relative performance over one, three and five years remains broadly consistent with the position in June.
Shares in Ashmore were 0.2% lower in London on Thursday morning at 322.40 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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Ashmore (ASHM)