Ashmore (ASHM) reported a recovery in investment performance during the second quarter as unprecedented fiscal and monetary stimulus improved investors’ risk appetite.
More than a dozen emerging market governments, including Indonesia and the Philippines, have joined those in Europe and the US in buying-up local-currency and government bonds and other assets to help tackle the economic devastation caused by coronavirus.
Assets under management (AuM) rose 9 per cent during the three months to June thanks largely to market gains in equity and corporate debt strategies, but the emerging markets specialist reported its second consecutive quarter of net outflows, which totalled $2.2bn (£1.8m).
Blended debt, local currency, external debt and overlay/liquidity themes all reported net outflows as institutional investors pulled client funds. What’s more, equities aside, most strategies were behind their one- and three-year benchmarks, which is likely to weigh on performance fees for the year to June.
Ashmore chief executive Mark Coombs argued that current valuations indicated that investors were betting on emerging markets suffering a more severe recession than developed markets, which meant “emerging markets assets trading at significantly more attractive levels than the equivalent developed world bond and equity markets”.
Shore Capital analyst Paul McGinnis said that given net outflows had been negative for two consecutive quarters, the brokerage would expect to upgrade its previously forecast $86.5bn closing assets under management at the end of June 2021, by less than the $4.3bn beat to the Jun 2020’s closing AuM. Mr McGinnis provisionally upgraded FY2021 revenue forecasts by around 3 per cent and pre-tax profits by 5 per cent to £215m, against a 2020 forecast of £197m.
