Ashmore Group said Donald Trump's election impacted business as investors backed away from emerging markets

Courtney Goldsmith
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Trump's election caused investors to rethink emerging markets
Trump's election caused investors to rethink emerging markets (Source: Getty)

Asset manager Ashmore Group today said the US election hit outflows despite a strong performance in its quarterly trading update.

The figures

Assets under management (AUM) are set to fall $2.4bn (£2bn) for the second quarter, ending 31 December, due to negative investment performance of $1.7bn and net outflows of $700m.

The FTSE 250-listed business said overlay and blended debt delivered net inflows over the quarter. Overlay increased 13 per cent to $3.6bn while blended debt fell three per cent to $14.1bn.

Corporate debt fell two per cent to $5.2bn, equities fell three per cent to $2.9bn and alternatives didn't change at $1.5bn.

That was enough for investors: shares finished four per cent higher, at 294.92p.

Why it's interesting

The group faced a tough quarter as President-elect Donald Trump's election in November caused investors to flee the business over fears of his impact on emerging markets.

Read more: The contrarian Trump trade: Why you should buy the Mexican peso and bonds

The steepening of yield curves and strengthening of the US dollar led to drops in local currency, blended debt and corporate debt and equities, while other investments remained flat, Ashmore said.

Despite lower market levels, the group's performance was strong throughout the quarter in relation to its benchmarks.

What Ashmore Group said

Mark Coombs, the company's chief executive, said its final quarter was hit by the US election outcome, a strong dollar and steep yield curves.

While these factors interrupted the improvement in sentiment towards emerging markets, the effect proved to be short-lived with asset prices strengthening in December and continuing into the new year. The combination of attractive absolute and relative returns, accelerating GDP growth, and low allocations all support the expectation of further strong performance in 2017 and a return to the improving flow trend seen for most of 2016.

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