Ashmore AUM falls in challenging period for emerging markets

For the fourth quarter, Ashmore’s AUM decreased $2.6bn from $76.5bn on 31 March 2018 to $73.9bn.

Chief executive officer Mark Coombs blamed the poor performance on negative investment performance, stating asset prices weakened over the period, particularly in local currency markets, and returns were hit by a combination of a stronger US dollar and weaker euro.

Coombs said that risk aversion to developed world political uncertainty, and concerns about trade protectionism were also contributors.

He said: “This has left emerging markets valuations at levels last seen immediately after the US election in 2016, following which markets delivered a sustained rally.

“While there is a small number of emerging countries that face challenges, most emerging markets economies are in even better health today. Therefore, the recent sell off has created significant value opportunities on which an active manager such as Ashmore can capitalise.”

Strong dollar

Darius McDermott, managing director at Chelsea Financial Services said emerging market performance has hit Ashmore’s AUM. “Some parts of the local market are down 10% over the period and that can be attributed to the dollar strength.”

Investment performance was negative across all asset classes, except alternatives. Multi asset assets suffered the largest fall, dropping 17% from $1.2bn to $1.0bn. Equity strategies fell 2% to $4.2bn.

McDermott said multi asset represents a small amount relative to the size of Ashmore’s total AUM.

Inflows helped corporate debt assets grow 4% over the quarter from $9.4bn to $9.8bn.

“The corporate debt had gone up during the period because of strong flows into the emerging market short duration funds which continue to be very popular,” he said.

Ashmore AUM