Ashmore assets fall 11% despite emerging market recovery


Ashmore Group has seen its assets fall 11 per cent for the year ending 30 June, despite the sector recently returning to favour with investors.

The emerging market specialist’s average assets under management were 22 per cent lower on the previous year, but ended the financial period at $52.6bn, compared to $58.9bn in 2015.

Chief executive Mark Coombs said investor sentiment remained weak over most of the period resulting in net outflows of £7.5bn, even though emerging markets returned to favour towards the end of the period.

Net revenues declined 18 per cent to £232.5m due to the lower assets under management. Ebitda was £130.9m over the period with a margin of 62 per cent.

Investment performance saw asset increase $1.2bn over the period with 69 per cent of assets outperforming the benchmark over one year, 63 per cent over three years, and 73 per cent over five years.

In last year’s results only 23 per cent of assets outperformed the benchmark over the one-year period and 60 per cent over the three-year period, however, 81 per cent outperformed over the five-year period.

Coombs says: “Market conditions for the first half of the financial year were volatile and weak, with continued falls in commodity prices, a devaluation of the Chinese renminbi, fluctuating expectations for US monetary policy and concerns about global economic growth.

“The second half of the financial year saw a sharp recovery in sentiment, however, as central banks in the developed world generally adopted dovish stances, commodity prices rallied and then stabilised, and economic and political conditions across Emerging Markets have generally proven resilient.”

The UK’s vote to leave the European Union had little direct impact on emerging markets, Coombs says, but the group’s non-sterling denominated revenues and balance sheet positions benefited from the weaker exchange rate.

Coombs add that the current emerging market rally is underpinned by accelerating GDP growth, low and stable inflation, and “responsible and effective” fiscal and monetary policies.

“In contrast, the ongoing challenges in the developed world, such as high indebtedness, political risk and reluctance to reform, are seemingly not priced in, and therefore provide a clear incentive for investors to shift or increase allocations to emerging markets.”

The board has recommended a final dividend of 12.1p per share for the period ending 30 June.

It has also announced the departure of Nick Land, who will retire at the AGM in October having served on the board for 10 years.