(Alliance News) - Ashmore Group said on Monday that assets under management fell in its second quarter on challenging conditions in emerging markets.
The London-based investment company said assets under management fell 4.4% to USD87.3 billion at December 31 from USD91.3 billion on September 30. Ashmore's financial year runs to June 30.
This USD4 billion decline in assets over the period comprised net outflows of USD2.2 billion and negative investment performance of USD1.8 billion, it explained.
Ashmore put this down to challenging emerging markets conditions, because of "persistent global inflation expectations," new Covid-19 variants and weaker growth in China during the quarter.
Nonetheless, it affirmed that its performance was still "positive" in local currency, equity and investment-grade strategies.
The company added that its relative performance over the longer term shows strong outperformance in local currency, equities and investment-grade funds, as well as some underperformance in certain external debt, corporate debt and blended debt strategies.
"The global macro economic environment is expected to be more supportive for emerging markets in 2022. Targeted fiscal and monetary stimulus will support China's growth, fed policy tightening is already reflected in valuations, and commodity prices are providing a tailwind to the terms of trade, and therefore the external accounts, of exporters," Chief Executive Mark Coombs commented.
He added: "Very little of this positive outlook is currently priced in to fixed income and equity valuations in emerging markets, with yields and spreads at elevated levels relative both to history and to developed world capital markets, and equities trading at a 15-year relative low. This, therefore, provides a strong backdrop against which emerging markets can outperform and attract capital as investors address their underweight allocations."
Shares in Ashmore were down 1.7% at 284.40 pence each on Monday morning in London.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
Ashmore (ASHM)