Asset manager reports growth and talks up emerging market after Brexit vote

William Turvill
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Ashmore's share price has risen from 260p to 329p in the weeks after the Brexit vote emerged (Source: Getty)

Emerging markets asset manager Ashmore Group has reported a three per cent growth in assets under management (AUM) in the last quarter.

Mark Coombs, chief executive of Ashmore, said emerging markets asset classes have been “among the best performing so far in 2016”.

At the time of writing, Ashmore’s share price had fallen nearly one per cent to 329p. In common with a number of other companies, its share price plummeted in the days after the Brexit vote – 16 per cent from 309p to 260p – but has now recovered to its highest point this year.

Read more: The case for buying emerging markets on dips

Ashmore Group Ashmore Group | mobile image

Ashmore today reported an AUM figure of $52.6bn (£39.3bn) for 30 June, up from $51.3bn at the end of the first quarter of this year.

Chief executive Mark Coombs said: "These asset classes are among the best performing so far in 2016, for example local currency bonds have returned 14 per cent and yield over six per cent.

“The highly attractive yields and uncorrelated equity returns are supported by solid fundamentals such as higher GDP growth, low and stable inflation, flexible monetary policies and improving current accounts. In contrast, developed markets offer lower returns and appear to have mispriced economic and political risks.”

He added: "The strong performance recovery in emerging markets is unsurprising after a period of weak returns despite resilient underlying economies. While near term investor sentiment may be affected by uncertainty in the developed world, and institutional decisions can lag market performance despite the strength of the rally, the arguments for investing in emerging markets are powerful and can be expected to drive allocations higher over time."

Read more: Are emerging markets getting their mojo back?

Separately, Ashmore’s head of research Jan Dehn published a note today highlighting the UK’s Brexit vote will “barely register” with emerging markets.

He said: “The UK accounts for less than two per cent of global GDP, so the country’s demise will barely register in most EM countries. EM technicals are also strong, which means that there have been very few sellers. Without pregnant positions to help create momentum interest is fading in the press and among analysts.”

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