Specialist Emerging Markets asset manager Ashmore announced a 4.4 per cent drop in assets under management (AuM) following “challenging market conditions”.
AuM for the quarter ended 31 December 2021 declined by $4bn (£2.9bn), comprising net outflows of $2.2bn (£1.6bn) and negative investment performance of $1.8bn (£1.3bn).
The external debt, equities and alternatives themes had net inflows, including the first close of a private equity fund raised by Ashmore Colombia.
There were net outflows in the blended debt, local currency, including a $1.3bn (£951m) reduction in overlay mandates, and corporate debt themes.
Against the backdrop of generally declining Emerging Markets over the quarter, Ashmore’s relative performance was positive in local currency, equity and investment grade strategies, and weaker in some US dollar-denominated strategies.
Relative performance over the longer term shows strong outperformance in local currency, equities and investment grade funds and some underperformance in certain external debt, corporate debt and blended debt strategies.
Ashmore’s chief exec,Mark Coombs, commented on the results: “Persistent global inflation expectations, new COVID-19 variants and weaker growth in China meant challenging market conditions for Emerging Markets continued through the final months of 2021.
“However, 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.”
“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.”
Ashmore will announce its interim results in respect of the six months ending 31 December 2021 on 10 February 2022.