Ashmore is regarded by many as a bellwether of investor sentiment towards the emerging markets
The UK-listed fund manager, regarded by many as a bellwether of investor sentiment towards the emerging markets, reported in its fiscal first-quarter trading statement on October 14 that its assets under management had increased by $ 2 billion to $ 54.6 billion during the three months ended September 30.
The firm said in a statement that this had been “driven solely by positive investment performance”.
Crucially, the trading update also said that net flows had been flat over the three-month period. The quarter therefore marked an end to eight consecutive quarters of net outflows, since Ashmore recorded $ 1.6 billion in inflows in the three months ended June 30, 2014.
Ashmore said “small net inflows” were into its blended debt, local currency, corporate debt and overlay/liquidity investment themes, while there were small outflows from equities, external debt and multi-asset strategies.
Ashmore chief executive officer Mark Coombs said that the improvement in net flows was “encouraging in what is typically a quiet quarter”.
He added: “The stability of emerging markets over recent months contrasts with the volatility experienced during the same period in 2015 and 2014. The ongoing recovery in emerging markets asset prices through 2016 and the attractive returns on offer across a diverse range of investment themes are causing investors to reconsider their underweight positions.”
Ashmore’s optimistic outlook chimed with analysts at research firm Liberum, which said that the $ 2 billion increase in the firm’s AUM reflected the “ongoing rally” in emerging markets.
Liberum added: “We believe there has been a pick-up in gross sales and a reduction in redemptions both year-on-year and quarter-on-quarter, which in our opinion is encouraging.”
As of 10:05 BST on October 14, Ashmore’s shares were trading at 366.7p, 0.47% higher than the previous day’s close, and 43% up so far in 2016.