Overview
Ashmore Group Plc reported a stronger-than-expected quarter for client flows, with net inflows of $1.3 billion in the three months to June 30. The result exceeded the Jefferies consensus estimate of $700 million and marked a turnaround from net outflows of $900 million in the previous quarter.
AUM movement and drivers
The firm said assets under management increased by $3.3 billion, equivalent to a 7% rise over the quarter, a combination of favourable investment performance and the reported net inflows. Ashmore disclosed period-end AUM of $50.7 billion. Separately, Jefferies cited a period-end AUM figure of $54 billion, which it described as in line with its consensus estimate.
Flows by strategy
Ashmore recorded net inflows across local currency, equities, blended debt and corporate debt strategies. External debt stood out as the sole investment theme to post net outflows during the quarter, the company said, with these outflows attributed to continued redemptions. Jefferies noted that the external debt redemptions reflected a small number of institutional client withdrawals.
Portfolio sizing - estimated positions at June 30
- External debt: $7.8 billion
- Local currency: $17.4 billion
- Corporate debt: $5.4 billion
- Blended debt: $11.4 billion
- Fixed income (aggregate): $42 billion
- Equities: $10 billion
- Alternatives: $2 billion
The company also provided the actual figures for March 31, which were: external debt $8 billion, local currency $16.4 billion, corporate debt $5.1 billion, blended debt $10.5 billion, fixed income $40 billion, equities $8.8 billion and alternatives $1.9 billion.
Performance versus benchmarks and analyst stance
Jefferies reported that the average gap between Ashmore fund performance and benchmark indices was 0.4 percentage points over one year and 0.8 percentage points over three years. The brokerage maintains a "buy" rating on Ashmore shares and has set a price target of 285 pence, versus a prior close of 215.20 pence.
Management commentary
Chief executive Mark Coombs said: "Emerging markets performed well, demonstrating their diversity and resilience following the market volatility caused by the closure of the Strait of Hormuz and the corresponding oil price spike. Against this backdrop, Ashmore’s active investment management approach has continued to generate excess returns."
Coombs added that the risk of a global inflation shock is reducing, provided hydrocarbon exports and incomes continue to recover, and that markets are beginning to reprice recession risk underpinned by capital spending on artificial intelligence and energy security.
Implications for markets and investors
The quarter's inflows and the rise in AUM reflect renewed client demand across several emerging markets strategies, supporting asset prices in those segments. At the same time, the continued redemption pressure in external debt highlights a focal point of investor caution within fixed income allocations to emerging markets.