(Sharecast News) – Ashmore Group reported a $1.8bn decrease in assets under management in the June quarter on Friday, on the back of positive investment performance of $1.1bn, but net outflows of $2.9bn.
The FTSE 250 emerging markets-focussed asset manager said the net outflows primarily resulted from top-down asset allocation decisions made by institutional clients in the external debt theme, with the blended debt and local currency themes also experiencing some impact, although to a lesser extent.
It said the corporate debt theme saw a small net outflow, while the equities and alternatives themes remained relatively stable, with flat net flows.
Emerging markets performed well during the three months ended 30 June, as reflected in the benchmark indices which recorded returns ranging from 1% to 2.5%.
Ashmore said local currency markets in particular showed a strong performance, benefiting from the continued weakness of the dollar and a notable decline in inflation in larger emerging economies.
The firm said it achieved outperformance in local currency, equities, and investment grade strategies over the three months.
However, the group underperformed in other external debt, corporate debt, and blended debt strategies.
The recovery in emerging markets asset prices and Ashmore’s strong investment performance over the last three quarters had resulted in about two-thirds of the group’s assets under management outperforming over one and three years, as at 30 June, the board said.
“There remains some global macro uncertainty and certain investors have therefore reduced risk during the quarter,” said chief executive officer Mark Coombs.
“However, emerging markets continue to perform well, with support from improving fundamentals such as accelerating GDP growth, falling inflation and the potential for rate cuts, as well as the benefit of a weaker US dollar.
“Against this developing backdrop, and as expected at this point in the cycle, Ashmore’s active investment management approach is delivering outperformance across a range of equity and fixed income strategies.”
Reporting by Josh White for Sharecast.com.
