Ashmore Group reports sharp drop in AuM for Q4 amid aggressive Fed rate hikes

Emerging markets-focused fund manager Ashmore Group reported a sharp drop in its assets under management during its fourth fiscal quarter as a result of higher geopolitical tensions, faster-than-expected inflation and more aggressive interest rate hikes by the Federal Reserve.

AuM were reported down by 18.3% quarter-on-quarter for the three months ending on 30 June to reach $64.0bn, as a result of net outflows of $6.6bn and a negative investment performance of $7.7bn.

Net outflows were concentrated in the firm's local currency and blended debt themes which registered AuM drops of 22.5% and 18.6% quarter-on-quarter.

Commenting on the market backdrop, Ashmore boss, Mark Coombs, said that geopolitics, faster-than-expected inflation and aggressive Fed rate hikes had all led to fears of recession and "broad-based" risk aversion, prompting investors to de-risk their portfolios.

Despite that, he sounded a confident note regarding the fundamentals in emerging markets.

"Sentiment will inevitably continue to be swayed by global macro and geopolitical developments, but the exceptional valuations and relatively healthy fundamentals currently evident in Emerging Markets provide attractive opportunities for long-term investors."

US dollar-denominated balance sheet items were translated at an exchange rate of 1.2145 US dollars per pound, against 1.3545 at the end of 2021 and 1.3815 one year ago.

Ashmore was scheduled to report its full-year figures on 2 September.