Specialist emerging markets manager Ashmore revealed the value of its assets under management plunged $14.3bn in the second quarter as war in Ukraine and rising interest rates caused investors to pull back sharply.
In a statement today, the firm said the sharp fall in its managed assets comprised of negative investment performance of $7bn and $6.6bn worth of outflows, leaving the firm’s estimated total assets at around $64bn at the end of June.
Boss Mark Coombs said the geopolitical backdrop had made it a difficult quarter for the firm.
“The global macro environment deteriorated in the quarter due to continued geopolitical tension, higher than expected inflation and more aggressive monetary tightening in the US leading to fears of recession and broad-based risk aversion,” he said.
“The decline in Ashmore’s AuM over the quarter reflects this challenging market backdrop as asset values fell and investors de-risked portfolios.”
Coombs said that emerging countries contrast to the declining global macroeconomic picture, with indicators pointing to a slowdown in growth rather than an outright recession.
“After 18 months of monetary policy tightening, many emerging countries are well ahead of the Fed and the ECB in tackling inflation, and are therefore offering relatively high real yields and attractive FX valuations,” he said.
He added that sentiment will inevitably continue to be “swayed by global macro and geopolitical developments”, but the “exceptional valuations and relatively healthy fundamentals” would provide opportunities for long-term investors.