Emerging markets boost Ashmore assets in quarterly review

The FTSE 250 firm said external debt, blended debt, equities, local currency and multi-asset had net outflows, with no individual theme experiencing significant net outflows.

Alternatives and overlay/liquidity had neutral flows, the company reported, with corporate debt having a small net inflow in the quarter.

Emerging markets assets continued to deliver strong returns over the period, with Ashmore saying fundamentals reasserted themselves and previous headwinds, such as falling commodity prices and a strong US dollar against emerging markets currencies, abated.

Investment performance was flat in alternatives and overlay/liquidity, and positive across all other investment themes, it said, notably in blended debt, external debt, local currency and corporate debt.

“Emerging Markets asset classes have continued to perform well and Ashmore's investment processes delivered good absolute and relative performance during the quarter,” said Ashmore chief executive officer Mark Coombs.

“These asset classes are among the best performing so far in 2016, for example local currency bonds have returned 14% and yield over 6%.

“The highly attractive yields and uncorrelated equity returns are supported by solid fundamentals such as higher GDP growth, low and stable inflation, flexible monetary policies and improving current accounts,” Coombs explained.

He said that in contrast, developed markets offered lower returns and appear to have mispriced economic and political risks.

“The strong performance recovery in emerging markets is unsurprising after a period of weak returns despite resilient underlying economies.

“While near term investor sentiment may be affected by uncertainty in the developed world, and institutional decisions can lag market performance despite the strength of the rally, the arguments for investing in emerging markets are powerful and can be expected to drive allocations higher over time,” Coombs added.