Ashmore Group, a specialist emerging markets investor, saw an increase of assets under management (AUM) in its equities business but falling AUM in fixed income, potentially reflecting consistent demand in the wider market this year for emerging market equities.
During the second quarter, the firm saw a 5% increase in AUM for emerging market equities – bringing AUM in this segment to an estimated US$6.2 billion.
However, the firm noted fund flows were “flat” in this segment and the increase in AUM was explained by positive investment performance.
The higher AUM in equities contrasts with a 4% decline in fixed income to an estimated $48.2 billion.
AUM for debt in US dollars saw the largest fall, of 13%.
Overall, AUM decreased by $1.8 billion over the period, comprising positive investment performance of $1.1 billion and net outflows of $2.9 billion.
Ashmore said the net outflows were primarily the result of top-down asset allocation decisions by institutional clients in the external debt theme and, to a lesser extent, in the blended debt and local currency themes.
There was a small net outflow in corporate debt, and net flows were flat in the equities and alternatives themes.
Emerging markets performed well over the quarter, said the firm, with returns of between 1% and 2.5% in the main benchmark indices.
Local currency markets performed particularly well, supported by continued weakness in the US dollar and rapidly falling inflation in larger emerging economies.
Mark Coombs, CEO of Ashmore, said: “There remains some global macro uncertainty, and certain investors have therefore reduced risk during the quarter. However, emerging markets continue to perform well, with support from improving fundamentals such as accelerating GDP growth, falling inflation and the potential for rate cuts, as well as the benefit of a weaker US dollar.
“Against this developing backdrop, and as expected at this point in the cycle, Ashmore’s active investment management approach is delivering outperformance across a range of equity and fixed income strategies.”
Fund transaction network Calastone, which regularly publishes fund flow data, recently said that emerging market equity funds had seen their best six-month inflows since the firm started publishing data.
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