Ashmore sees funds fall as inflation concerns knock bonds


Ashmore PLC (LON:ASHM) said inflows into its equity funds helped reduce the impact of a tough period for debt and fixed income products in the three months to end-March.

Assets under management fell by US$3.1bn over the period, the group’s third quarter, to US$89.9bn, comprising net inflows of US$1.5bn and a negative investment performance of US$4.6bn.

Globally, fixed income markets fell while equity markets rose over the quarter, reflecting successful vaccination programmes in many countries and a repricing of inflation expectations.

Consequently, the absolute performance was negative in the fixed income investment themes and positive in equities, said the emerging markets specialist fund manager.

Relative performance over the quarter continued to be strong in equities and was in line with or slightly below benchmarks in fixed income strategies and over three years had shown a broad improvement, the FTSE250 group added.

Mark Coombs, chief executive, added: “The past quarter has shown that as economies transition from the shock of the COVID-19 pandemic back to growth, there will be periods of market volatility as they adjust towards normality.

“While this has had a mark-to-market impact, it provides opportunities for active management and the positive trend in Ashmore’s net flows continued including the seventh consecutive quarter of net inflows to equity strategies.

“There are good reasons to believe that annual inflation rates will subside after a short-term spike over the next few months, given the base effects of the economic shock in 2020 and pressure on supply chains, and the deflationary influence of higher unemployment.

“Central bank policies are expected to remain supportive, which provides a solid backdrop for continued superior economic growth and strong performance in Emerging Markets.”


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