‘Significantly’ lower redemptions
Dollar weakness a boon for EM
‘Well-positioned’ for reallocations

FTSE 250 specialist asset manager Ashmore (ASHM) reported a welcome slowdown in fourth-quarter outflows as positive investment performance contributed to a 3% rise in its AuM (assets under management).

Shares in the emerging markets specialist money manager rose 2.3% to 171.7p in early dealings as chief executive Mark Coombs called out emerging markets’ recent outperformance of developed world equity and bond markets.

This is partly a result of the ongoing weakness in the US dollar as investors re-evaluate the attractiveness of US assets amid tariffs and changes in relative growth expectations.

‘Consequently, investors are beginning to rebalance portfolios away from heavily overweight US positions towards more attractively valued asset classes, including those in EM,’ enthused Coombs.

AUM ON THE RISE

For the quarter ended 30 June 2025, Ashmore’s AuM increased by 3% or US$1.4 billion to $47.6 billion as emerging markets indices delivered positive returns.

Emerging markets outperformed many developed markets due to what Ashmore called their ‘robust underlying fundamentals’ together with the impact of US dollar weakness which underpinned higher returns in local emerging market currencies and equities.

A weaker greenback is positive for emerging markets as it helps reduce the cost of imports and therefore weakens imported inflation.

Ashmore’s fourth quarter AuM growth reflected positive investment performance of $2.2 billion as well as net outflows of $0.8 billion, a notable slowdown on the $3.9 billion clients yanked from its funds in the previous quarter.

‘Net flows improved from the prior quarter with significantly lower redemptions, against a backdrop of continuing trade tensions and geopolitical uncertainty,’ said the London-based company, though Ashmore cautioned investors’ risk appetite generally ‘remains subdued given macro events’.

Overall, net flows were positive in equities, flat in external debt and alternatives, and there were net outflows in Ashmore’s blended debt, local currency and corporate debt themes.

WHY COOMBS IS CONFIDENT

Coombs commented: ‘While recent EM mutual fund inflows have been concentrated in exchange-traded funds, previously this has been a precursor to broader institutional behaviour.

‘Ashmore’s diversified product range and delivery of investment outperformance for clients means it is well-positioned to participate in the reallocation opportunity, as investors move back up to target weights and then address the structural underweights compared with EM’s representation in global indices.’

Issue Date: 14 Jul 2025