Investment group Ashmore loses $ 3.1 billion in assets in three months as China’s predicament shakes UK emerging market specialists
- Large institutional investors withdraw $ 1 billion from Ashmore Group in volatile markets
- Investors are cautious due to uncertain growth prospects and rising inflation
Asset manager Ashmore Group plunged £ 3.1 billion in assets under management in just three months as large investors withdrew cash from emerging market specialists.
A London-listed company told investors that its assets under management fell from $ 94.4 billion to $ 91.3 billion in the three months to the end of September as investment funds were affected by volatile market conditions.
Investors have become increasingly cautious in recent months, especially in emerging markets, as the global economic recovery, inflation and the certainty of China’s devastating reform programs decline.
Ashmore’s exposure to embarrassed real estate developer Evergrande has previously raised concerns
The group said: “Macro-environment-stimulated market sentiment worsened as the quarter progressed, and the resulting decline in investor risk appetite meant negative returns throughout the period.
“A certain … strategy has underperformed, but as is common in such market environments, equity and investment grade strategies have outperformed.”
In particular, asset managers have confirmed that the value of corporate debt assets has fallen by 8.8%.
In late September, Morningstar researchers said Ashmore held a significant holding of debt issued by the embarrassed real estate giant China Evergrande Group.
Following a warning from Credit Suisse a month ago, Ashmore’s exposure to China’s debt was lowering returns.
Investment losses accounted for approximately $ 2.1 billion in the company’s asset decline, with £ 1 billion mainly drawn from “a small number of large institutional investors.”
Ashmore’s share price fell more than 2% to 316.4 pence in the early stages of the transaction. This is the lowest level since the pandemic market crash in the spring of 2020, but has returned to normal by noon.
The company’s stock price has fallen 26% year-to-date.
However, CEO Mark Coombs remains positive about the company’s outlook.
He states: ‘Vaccination rates are rising and regulations are being relaxed in a wide range of emerging markets, leading to higher leading indicators and increased economic growth.
In addition, emerging market central banks are raising interest rates, fortifying attractive yields available.
“This positive underlying background is not reflected in the current assessment, providing opportunities for Ashmore’s aggressive investment process to take advantage of and allowing investors to benefit from increased allocations to emerging markets. I can.”
Ashmore’s assets caused $ 3.1 billion in bleeding as China’s predicament rocked EM specialists
Source link Ashmore’s assets caused $ 3.1 billion in bleeding as China’s predicament rocked EM specialists