Ashmore Q3 AuM tick up, outflows reduce

Ashmore posted an uptick in third-quarter assets under management on Monday thanks to a positive investment performance, with outflows reducing.

In the quarter to the end of March, AuM rose by $0.5bn to $57.7bn. This comprised a positive investment performance of $1.6bn and net outflows of $1.1bn.

The company said net outflows continued to reduce, "reflecting the more positive emerging markets environment over the past six months alongside investors recognising the superior growth prospects and attractive valuations available across equity and fixed income emerging markets".

Ashmore also said there is a growing expectation that the US dollar is due a period of weakness given a recessionary outlook in developed markets.

The net outflows were primarily in the blended debt theme, with smaller outflows in the equities, corporate debt and local currency themes, it said.

Chief executive Mark Coombs said: "While volatility returned to capital markets in the quarter, driven primarily by the developed world as higher rates caused stresses in the banking system, emerging markets delivered positive performance.

"These markets continue to have attractive prospects centred on cheap valuations, superior economic growth and the potential for interest rate cuts as inflation has already started to fall. Greater stability in markets benefits investor risk appetite, with history suggesting that recovery cycles last for several years, meaning that the medium-term outlook for investment returns and capital flows is positive for emerging markets."

Broker Peel Hunt, which rates the shares at ‘buy’, said AuM were broadly in line with consensus of $57.8bn, while positive market movements were slightly ahead of expectation and net outflows were slightly worse than anticipated.

"Valuations across EM remain attractive and sentiment is improving," it said. "Ashmore has now presented two quarters of positive investment performance and reducing outflows are evident. We are forecasting FY23 EBITDA of £114.5m."