The increase in assets under management was evenly split between net inflows into the funds of $600m and positive investment performance of $500m.
The group said that net inflows were strongest into its blended debt strategies, with corporate debt and alternatives also generating net inflows. The weakest spots were external debt, where assets under management dropped from $14.5bn to $13.8bn, and local currency debt, where assets dropped from $17.6bn to $17.2bn. The group’s multi-strategy funds also saw outflows, with overall assets in the strategies dropping 10.8%. Equities and external debt contributed the most to investment performance during the quarter with other themes broadly flat.
The group said that demand was broad-based by both client type and geography, reflecting its diversified client base and the progress made in developing distribution capabilities. Having been largely focused on the institutional market, the group has been broadening its distribution strategy to include retail and wholesale investors over the past eighteen months, particularly as the market for emerging market debt has expanded.
Mark Coombs, chief executive officer, said: " Although Emerging Market asset prices recovered in September, valuations across equity and fixed income markets remain attractive, particularly when compared to developed market alternatives that continue to face uncertainty owing to numerous economic and fiscal challenges. We therefore remain optimistic about the diverse range of emerging market investment opportunities." Coombs had expressed concern in the last quarterly statement that a ‘cyclical slowdown in certain emerging markets has been extrapolated by the market into something abysmal’ despite the relative strength of the US recovery.
There have been signs of investors moving back into emerging market equity and bond funds since September. The latest BlackRock ETP Landscape Report showed investors warming up to emerging markets equities and debt after a long period of unpopularity with fund flows finally turning positive in September.