Ashmore confident of 'strong 2017' despite quarterly decline

Emerging markets focused fund manager, Ashmore revealed that relatively minor outflows and negative market performance combined to put a $2.4bn dent in assets under management in the second quarter, but that for 2017 it expects "further strong performance".

AUM declined 4.4% to $52.2bn in the three months to 31 December, as £0.7bn of net outflows combined with $1.7bn of negative investment performance.

In the preceding quarter, AUM had increased 4% to $54.6bn.

Chief executive Mark Coombs said the strong EM performance delivered a 5% increase in Ashmore's AuM over the calendar year despite the final quarter being impacted by the US election outcome, renewed strength in the US dollar, and a steepening of yield curves.

"While these factors interrupted the improvement in sentiment towards emerging markets, the effect proved to be short-lived with asset prices strengthening in December and continuing into the new year," he said.

"The combination of attractive absolute and relative returns, accelerating GDP growth, and low allocations all support the expectation of further strong performance in 2017 and a return to the improving flow trend seen for most of 2016."

Ashmore's shares climbed 1.8% to 288.7p in early trade on Monday, still some way from October's two-and-a-half-year high of 378.5p.

Analyst Paul McGinnis at broker Shore Capital said the sharp reversal in sentiment towards both emerging markets and bonds in the wake of the US presidential election result has hit Ashmore in two ways.

"First, it meant that the positive inflection in net flows that the company (and analysts) had been forecasting for this quarter was effectively postponed; and second it negatively impacted the performance of the emerging market debt asset class. However, there is room for optimism in the statement," he said.