Ashmore assets under management tumble by $9bn over quarter

Lauren Mason
clock • 2 min read
Ashmore assets under management tumble by $9bn over quarter

Emerging market fund management specialist Ashmore suffered a $9bn fall in its assets under management over the last three months to the end of March, according to its latest Q3 AUM statement.

Negative investment performance and net outflows accounted for respective falls of $5bn and $3.7bn. In terms of sector, capital in corporate debt vehicles shrunk by 15.8%, blended debt funds lost 14.9% of assets, and both external debt and fixed income portfolios each fell in AUM by 11.1%.

Investor capital in local currency and equity funds reduced by a respective 6.6% and 7.5%, although the firm's reduction in ownership of Taiping Fund Management Company - from 8.5% to 5.2% - also contributed to $0.3bn fewer assets within local currencies.

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The only sector to have increased its number of assets was alternatives, which rose by 13.3%.

In total, this meant Ashmore's assets under management slid by 10.3%.

The firm said institutional mandates accounted for a majority of net redemptions over the last quarter, as rebalancing across firms following Russia's invasion of Ukraine took its toll.

In terms of total returns, equity and alternative mandates achieved net gains over the last three months, while fixed income vehicles fell, with the main benchmark indices falling between 7% and 10%. Local currency, external debt and investment grade credit strategies outperformed on a relative basis, despite making a loss, while corporate debt, blended debt and equity vehicles underperformed their benchmarks.

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Mark Coombs, chief executive officer of Ashmore, said: "The war in Ukraine is a humanitarian tragedy that will have far-reaching consequences for the existing world order.

"The shock is likely to weigh on investor sentiment in the short term, but the consequences of the conflict will not be felt equally across the diversified set of more than 70 emerging market countries, as has already been seen with the impact of higher commodity prices.

"Ashmore's active management and deep-rooted experience of investing in emerging markets mean it is well positioned to understand and to act upon the current market volatility."

Coombs said the primary economic impact of the crisis has been to push inflation higher, and that "this is being felt across the world".

"Importantly, against the inflationary backdrop, central banks in emerging markets have been raising interest rates for the past year, and China is in a position to ease policy, whereas developed world banks have only just started to react with modestly higher rates," he reasoned.

"As trade and political relationships are reorganised in the coming years, portfolio diversification will be increasingly important and this will benefit emerging countries, in which investors are typically underweight."