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Ashmore hit with £3bn outflow as emerging market woes bite

by Robert St George on Apr 10, 2014 at 09:33

Ashmore hit with £3bn outflow as emerging market woes bite

Assets under management at Ashmore have dropped for the second quarter in a row, with investors continuing to flee local currency emerging market debt.

In the three months to 31 March 2014, Ashmore’s total assets fell by 6.9% or $5.2 billion (£3.1 billion) to $70.1 billion. At the same point in 2013 Ashmore ran $77.7 billion (£46 billion).

The principal outflow in the quarter was the result of a redemption in Ashmore’s overlay/liquidity business, where a currency hedge was unwound. Assets in the sector more than halved in the three months to $4 billion (£2.4 billion).

Assets in Ashmore’s local currency debt business also declined by $1 billion (£596 million) to $15.9 billion (£9.5 billion). In the equivalent period of 2013, the business grew by 29.5% to $17.1 billion (£10.2 billion).

‘Typically amid times of stress in global markets commentators predict the end of the emerging markets investment opportunity,’ said Mark Coombs, Ashmore’s chief executive.

‘The past six months have again stimulated nervousness and weaker sentiment among investors, but in our view emerging markets investing is about price and relative value and being prepared to acquire risk when others are not; it is not a temporary phenomenon that will pass.

‘During the quarter we have seen interesting price and geo-political moves combined with negative sentiment, which in turn makes us comparatively more positive about the outlook for investment returns than at this time last year.’

Ashmore’s share price closed yesterday at £3.50, and opened this morning 4.3% lower at £3.35. Since then it has rallied back to £3.57 in early trading.

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