Ashmore brings in £1.9bn despite intermediary outflows

Ashmore pulled $2.4bn (£1.9bn) in net new money in Q3 despite net outflows from intermediaries.

Assets under management at the emerging markets specialist remain flat at $91.9bn as $2.3bn of negative investment performance offset institutional-led inflows, for the quarter ended 30 September 2019.

The trading update described a “a small net outflow” from intermediary retail clients.

Willis Owen head of personal investing Adrian Lowcock said given the drop in intermediary redemptions was slight, it could be due to one company making a tactical decision or changing their view of the market.

Lowcock said: “EM debt looks attractive in a world of falling interest rates and negative yields on bonds in developed markets. While they are riskier there is money to be made in a low return world. Ashmore’s data shows that institutional investors have seized on this opportunity last quarter as yield curves inverted.”

The highest net flows were in blended debt, external debt, local currency, equities and corporate debt. Alternatives were flat and there was a “small net outflow” from multi-asset.

Ashmore admitted its performance had weakened over one year “as a consequence of recent market volatility” but remained strong over three and five years.

Peel Hunt, which lists Ashmore as a buy, said flows were spread across products, although it noted short duration flows had taken a hit in August. The boutique launched a Emerging Market Short Duration Sicav in 2014 although it already managed $7bn in the asset class before launch.

Ashmore chief executive Mark Coombs said the group continued to see broad-based demand for emerging markets in Q3.

“While the global macro environment remains uncertain, the low yields and relatively high equity valuations in developed markets mean investors’ returns are enhanced by increasing their allocations to the diverse and resilient range of emerging economies in both fixed income and equities,” Coombs said.

Volatility over the summer had provided investment opportunities, he added.