Investment group Ashmore reveals an $8bn decline in assets
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Ashmore reveals $8 billion drop in assets as geopolitical risks and rising recession fears send asset manager investors rushing for the exit
- The London-listed company said the decline was the result of net outflows of $5 billion for the three months ended Sept. 30 and negative return on investment of $3 billion.
- The net outflow was mainly due to institutional investors reducing their exposure to the themes of external debt, local currency and mixed debt
- Emerging market assets are at the sharp end of the recent market turmoil
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Asset manager Ashmore has revealed that assets under management fell $8 billion in the September quarter as investors fled.
The London-listed company said the decline was due in part to net outflows of $5 billion for the three months ended Sept. 30, as well as $3 billion in investment losses.
The net outflows were mainly due to institutional investors reducing their exposure to the themes of external debt, local currency and mixed debt, while flows in local currency as well as corporate debt and equity themes also all suffered from outflows .
Asset management firm Ashmore has revealed its assets under management fell $8 billion in the September quarter as investors reacted to geopolitical risks, mounting fears of a recession and interest rates
Ashmore shares fell more than 2 percent, trading at 186.00p Friday morning.
Mark Coombs, CEO of Ashmore, commented: “Global fixed income and equity markets declined over the quarter as a result of continued uncertainty over geopolitical risks, higher inflation and increasingly aggressive central banks.
“This has increased the risk of recession in many countries and has pushed bond yields higher and equity valuations higher in both developed and emerging markets. Investors’ risk appetite therefore remains limited in the near term and Ashmore’s AuM move this quarter reflects the impact of lower market levels and investors continuing to reduce risk.
He added: “Emerging markets equities and fixed income valuations are extremely attractive, yet investors are in lighter positions after a period of lower risk appetite.
This provides a solid foundation for performance and higher allocations to capture the longer-term growth and investment opportunities available in emerging markets as macroeconomic conditions begin to improve.
“Ashmore’s active management means it can take advantage of attractive market levels to anchor value in portfolios, and as a result it is well positioned to outperform its range of equity and fixed income strategies in the coming years.”
Emerging market assets were at the sharp end of the recent market turmoil, suffering the prospect of slowing growth, higher interest rates in developed markets and general financial stability concerns that encouraged flights to safety.
Shares in emerging markets have fallen nearly 30 percent since the start of the year and are heading for their worst annual performance since the 2008 financial crisis.
Emerging market government hard currency bonds are down 23 percent over the year, while local debt is down 20 percent.
JPMorgan has calculated that investors have withdrawn $70 billion in emerging market bond funds since the beginning of 2022, and forecasts this will rise to about $80 billion by the end of the year.