Turmoil drags down funds at Ashmore

SHARES in investment manager Ashmore dropped yesterday after a weak September performance at some of its funds.

Ashmore’s Emerging Market Liquid Investment fund fell eight per cent and its Local Currency Debt fund dropped 10.2 per cent last month, according to analysis published yesterday by Peel Hunt.

Mark Williamson at Peel Hunt said he was not surprised by the “underperformance”.

“This is linked to the group’s strategy of using market dislocation as an opportunity to pick up quality credit at discount prices and thus locking in future outperformance.

“The downside of course is that in the very short term this leads to underperformance relative to benchmark but we understand that this is well understood by Ashmore’s institutional investors.”

He continued to rate the stock as a “buy”, however, and said the emerging markets will play an increasing large role in asset allocation by institutions.

Ashmore stocks were down 3.7 per cent at one stage yesterday and recovered to close down 6.4p, or 1.96 per cent, at 320.8p. The firm was promoted to the FTSE100 on 19 September but its shares have weakened since then.

Ashmore managed $65.8bn (£42.21bn) at 30 June. The fund, which declined to comment on Peel Hunt’s statements, feels its returns have been at a similar level to those of its peers amid the market turmoil that has gripped Europe.

Last month it reported a 13 per cent rise in full-year pre-tax profit to £246m. At the same Mark Coombs, the chief executive, earned the largest recent dividend payout among the family and private owners of Britain’s largest listed fund managers. Coombs stands to pocket £43.3m after Ashmore raised its full-year dividend.

The firm will issue an interim management statement tomorrow.