Asset manager Ashmore Group (LSE:ASHM) highlighted the resilience of emerging markets following the recent imposition of US tariffs and the emerging new trade war with China.
The emerging markets-focused group reported a net outflow of US$3.9 billion and a 5% fall in assets under management for the the past quarter to 31 March, but CEO Mark Coombs said this was despite a solid performance in the period.
"Emerging Markets performed well over the quarter on the back of economic resilience together with the benefit of a weaker US dollar and strength in the Euro as a consequence of planned fiscal expansion in Europe," he said alongside the FTSE 250 group's third-quarter update.
Since the start of April, with market volatility having heightened after the launch of US tariffs, Coombs highlighted that a 1% decline in the US Treasury index and a 2% decline in US high-yield bonds, Emerging Markets fixed income index is down by less than 2%, and Emerging Markets equities performance is in line with the US, which he said reflected "the diversity and resilience" of the region.
"This resilience demonstrates that there are increasingly powerful reasons for investors to rebalance their asset allocations away from the US capital markets, such as tighter fiscal policy and a smaller government in the US, the start of fiscal stimulus in Europe, higher rates in Japan and China's focus on boosting domestic demand.
"When combined with the impact of aggressive trade tariffs, these factors point to a weaker US dollar, which will be supportive for the performance of emerging markets."
In the company's previous update in February, it had reported net outflows totalling US$1.1 billion in the six months to the end of December, against US$4.5 billion a year ago.
Shares in Ashmore fell 5.8% to 126p in early trading on Monday.