- Total assets rise to $57.2 billion in December
- Enthusiasm for emerging markets returning
- Potential for further gains in 2023
FTSE 250 specialist asset manager Ashmore (ASHM) saw a rise in the value of its assets last quarter thanks to a return of confidence in emerging markets.
The shares eased 2% to 266p after closing at a nine-month high of 271.6p at the end of last week.
SOLID INVESTMENT PERFORMANCE
A recovery in sentiment towards emerging markets contributed to a positive investment performance of $3.8 billion in the three months to December, offsetting net outflows of $2.6 billion.
The resulting $1.2 billion increase in value took Ashmore’s total estimated AuM (assets under management) from $56 billion to $57.2 billion.
As global macro concerns eased last quarter, the main emerging market bond and equity benchmarks were up between 5% and 10%, while Ashmore’s investments performed better still.
‘Emerging markets' strong performance over the past three months reflects a positive shift in investor sentiment against a backdrop of light positioning and highly attractive valuations’ said chief executive Mark Coombs.
Outflows, which were down around 50% on the previous quarter, reflected a shift in investor asset-allocation decisions as well as a small net outflow in the corporate debt theme.
Almost $50 billion of Ashmore’s $57.2 billion of investments are in debt, with $6 billion in equities and $1.3 billion in alternatives.
BRIGHTER OUTLOOK FOR 2023
The firm’s chief executive is upbeat about the prospects for a further increase in valuations in emerging markets as macro uncertainty eases.
‘Some of the headwinds of 2022, such as the Fed's aggressive policy tightening, are receding, China re-opening its economy will stimulate activity more broadly, and a number of emerging countries are starting to see deflation as a consequence of effective monetary policy action over the past two years.
‘Therefore, we expect investor risk appetite to increase over the course of the next 12 months, underpinning further market performance and ultimately leading to capital flows into emerging markets.’
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