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Ashmore shares in the red as investment performance hit by weaker market conditions

Ashmore said the effect of tax-related stimulus on the US economy and its support for the US dollar started to fade towards the year end
asset management
Assets under management rose by 0.4% to £76.7bn at the end of the second quarter

Ashmore group PLC (LON:ASHM) shares dropped on Tuesday as the asset manager said its investment performance was “modestly negative” in the second quarter due to weaker global market conditions in October.

Assets under management still rose by 0.4% to £76.7bn at the end of December from £76.4mln at the end of September as net inflows of US$0.5bn offset a negative investment performance of US£0.2bn.

Net inflows came from corporate debt, blended debt, equities, multi-asset and overlay/liquidity themes. The local currency theme, however, saw a small net outflow while external debt and alternatives themes were flat.

The only theme to deliver a positive investment performance was local currency, which was supported by a weaker US dollar. The investment performance in equities, corporate debt and overlay/liquidity was flat.

The rest of themes had a slightly negative investment performance.

READ: US elections to create buying opportunities for emerging markets asset manager Ashmore

"Despite the more challenging markets experienced for much of 2018, client flows remain resilient reflecting investors' very low allocations to emerging markets and recognition of the value available,” said chief executive Mark Coombs.

“The effect of tax-related stimulus on the US economy and its support for the US dollar started to fade towards the year end, removing the main headwind for emerging markets outperformance.

“The reduction in emerging markets asset prices despite improving economic growth suggests underweight investors will continue increasing allocations to emerging markets, and a return to the positive market trends experienced in 2016 and 2017."

Shares fell 2.5% to 369p in mid-morning trading. 

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