Ashmore Group PLC (LON:ASHM) enjoyed a combination of net inflows and positive market movements into its emerging market debt and currency funds.
Assets under management of US$98.4bn at the end of the half-year to 31 December, were up US$6.5bn or 7.1% over three months as a result of US$3.3bn of inflows and almost as much from investment performance.
"The outlook for capital flows to emerging markets in 2020 remains positive,” said chief executive Mark Coombs.
This assessment was based upon the “continued availability of significant relative value and the diversity of investment opportunities across fixed income and equity asset classes, the lower growth and lack of yield in developed markets, and investors' underweight positions”.
Net inflows of US$3.3bn in the second quarter followed US$2.4bn in the first, with the FTSE 250-listed specialist asset manager reporting flows into its local currency, blended debt, overlay/liquidity and equities themes, with a broad spread of client type and geography.
A recent 2020 outlook from Ashmore estimated the modest cyclical rebound that began for emerging markets in the second half of last year will continue and support equity returns.
"The principal risks emanate from developed markets due to a combination of overvalued markets, fading growth prospects, inadequate policy options and rising populism."
Ashmore shares were little moved at 548.5p on Wednesday morning.
Some brokers are bearish
Broker Peel Hunt said it was “another good quarter with strong inflows highlighting the ongoing demand from clients”.
Upgrading its target price to 600p, the broker downgraded its rating to 'add' from 'buy' after the share price rose 50% last year.
Over at Shore Capital, which last summer downgraded Ashmore to 'sell' over its belief that the shares were mispricing the risk of sentiment turning negative towards emerging market debt as an asset class, noted that while the Q2 performance was positive in absolute terms, the one-year performance figure in fixed interest (85% of overall AuM) “is now behind index benchmark in the majority of sub-categories which is also now starting leak into some of the three year numbers”.
The analysts noted that the asset manager saw cumulative net outflows of US$24bn between the years ending June 2014 and June 2016 when EMD was last out of favour.
--Adds share price, broker comment--