Ashmore Group (LSE:ASHM)’s US$1.6bn (£1.3bn) performance gains announced in today’s trading update mask the more sobering fact that investors have continued pulling funds from the FTSE 250 constituent in large volumes.
Net outflows for the emerging markets specialist investor clocked up US$1.1bn in the quarter ending March 31, marking the seventh straight quarter of upflows for a total of more than US$22bn.
However, the numbers show a definite improvement over the 2022 rout, when assets under management (AuM) decreased by 32% due to a combined negative investment performance of US$16.6bn and net outflows of US$13.5bn.
AuM crept 1% higher to US$57.2bn in the latest quarter, though this pales in comparison to the near US$100bn managed by the group barely three years ago.
Asmore’s listed Emerging Markets Total Return Fund bore witness to the emerging markets slump in recent years. Shares dropped 25% in 2022 before adding about about 1.4% year to date.
Bloomberg noted in February that Ashmore’s three public funds underperformed their peers in 2022.
But as an emerging markets-focused group, a depreciating US dollar is likely to support Ashmore’s performance going forward, particularly if China, which represents around 30% of emerging markets' gross domestic product, sufficiently rebounds after the Communist Party’s draconian zero-Covid policies.
“Valuations across emerging markets remain attractive and sentiment is improving,” noted Peel Hunt analysts, who said Ashmore’s reduced net outflows “are a reflection of a more positive emerging markets environment, with investors recognising the superior growth prospects and attractive valuations”.
Given the group’s investment angle, the future of Ashmore’s performance rests solely on the prospect of an emerging market rebound.