Ashmore’s emerging markets story

Uncertainty in emerging markets has hit specialist investor Ashmore in recent months, but the long-term story shows how the trend for investment in growth economies has made the London-listed manager a success.

The manager saw its AUM hit this year against the backdrop of uncertainty in emerging markets, though assets under management (AUM) have grown overall by $11.3 billion (€14.3 billion) since 2012. As of September AUM is $71.3 billion.

This week, a KPMG report shows the asset manager has the second greatest cumulative increase in assets under management between 2007/8 and 2013/14, out of 17 of the UK’s largest investment managers.

Since September 2007, Ashmore’s AUM has grown from $33.1 billion to as high as $77 billion in 2013, before dipping earlier this year.

It has been a challenging year for emerging markets. China’s expansion has slowed, Brazilian growth has been disappointing with the re-election of President Dilma Rousseff sparking concerns about a lack of reform, and though India has seen strong growth, investment has been weak.

Meanwhile, lower oil prices have put added pressure on oil-producers such as Russia, which continues to feel the impact of sanctions related to the Ukraine crisis. Exports generally have suffered from a lack of demand in developed markets such as Europe, and commodity prices have remained low.

In its annual report, chief executive officer of Ashmore, Mark Coombs, commented on weathering market turbulence during the previous 12 months.

He wrote: “The Group’s long-standing investment processes sought to take advantage of the market volatility, and while this can result in short-term underperformance, the recovery in sentiment towards emerging markets in recent months has benefited positions taken during those more volatile
periods over the course of the year.”

Coombs writes that there are still some areas for Ashmore to develop. “The experience of the past year suggests there is more to be done in enhancing the understanding of the diversity of investment opportunities available, and also to counter the long-standing prejudices and misconceptions that prevail in some investors’ minds.”

©2014 funds europe

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