Ashmore see first-quarter AuM drop 8%

Emerging markets asset manager Ashmore Group saw an 8% drop in assets under management (AuM) in its fiscal first quarter on the back of ongoing market volatility and risk aversion.

The company said in a trading update on Friday that AuM fell by $4.2bn to $51.7bn in the three months to 30 September, due to a negative investment performance of $1.3bn and net outflows of $2.9bn.

Ashmore blamed "continuing institutional risk aversion" for the outflows, which were mainly in external debt and corporate debt categories, which were at similar levels to the preceding quarter.

Meanwhile, fixed income and equity strategies were impacted by ongoing concerns about the strength of the Chinese economic recovery and continued restrictive monetary policy in many markets. That said, emerging markets indices fell by 2-3% over the period, broadly in line with or silghtly better than developed markets.

Chief executive Mark Coombs said the company remains "well-positioned to benefit from a further recovery in emerging markets".

"Emerging markets were largely rangebound this quarter and overall delivered slightly negative returns. After three quarters of positive returns, such a period of consolidation within a longer recovery cycle is normal, and there continue to be positive fundamental trends in emerging markets.

"For example, central banks in many countries are cutting policy rates in response to falling inflation, which supports the outlook for local bond and equity markets and provides an opportunity to take advantage of lower asset prices."

The stock was down 1.3% at 182.2p in early deals on Friday.