Ashmore assets drop 21% on emerging market fears

Asset manager Ashmore Group has seen a 21 per cent drop in assets under management in the past year as investors continue to pull out of emerging markets.

The emerging markets specialist saw assets drop to $58.9bn (£38.35bn) in the year to the end of June 2015, compared to $75bn for a year earlier.

The manager said that investor fears on emerging markets continue to be affected by factors such as a potential US interest rate rise and the fallout in Chinese stockmarkets. 

However, Ashmore says it is positive on the future. 

“The fundamentals across the emerging markets universe, comprising more than 70 countries and a diverse range of asset classes, remain sound, with economies demonstrating their ability to withstand notable challenges of the past few years such as higher funding costs, lower commodity prices, currency devaluations and major electoral cycles,” says Mark Coombs, chief executive at Ashmore. 

However, the manager’s performance has dropped this year too, with 60 per cent of assets outperforming benchmarks over three years, compared to 81 per cent last year. Over five years 81 per cent of assets are outperforming, down from 92 per cent last year. 

“Investment performance improved in absolute and relative terms in the second half of the year, as was expected after the Group’s investment processes added risk in a period of market weakness,” says Coombs.

“Ashmore’s proven business model, coupled with a disciplined approach to cost control, has maintained a high operating margin and good cash generation despite lower AuM levels,” he says.

Net revenues at the asset manager increased 8 per cent, to £283.3m, driven by higher performance fees and the US dollar strength, although this figure was dragged down by lower management fees. 

Amid falling management fees and assets the manager reduced its total operating costs by 1 per cent to £99.5m.

The group proposed a final dividend of 12.1p, leading to a 1 per cent increase in the full-year dividend. It also announced that chairman Michael Benson will retire next month, to be replaced by Peter Gibbs.