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Ashmore nets rebound in institutional client flows

Tom Arnold
·2-min read

By Tom Arnold

LONDON (Reuters) - Ashmore Group netted positive flows from institutional clients for the first time since the COVID-19 crisis in the six months to the end of 2020 as a recovery in emerging markets helped the fund manager deliver a 14% rise in pretax profit.

The emerging markets investment firm was hit by outflows and market volatility in the aftermath of the coronavirus-led sell-off last year, as investors fled the asset class en masse.

But emerging markets have staged a recovery since then, notching ten consecutive months of net positive flows, helping take the MSCI equity index to a record high on Wednesday.

Net inflows from institutional clients, that account for around 90% of Ashmore's clients, reached 600 million pounds ($830.5 million) in the period.

Overall net outflows of $1.4 billion represented an improvement from recent periods, and were mostly driven by intermediary retail redemptions during the six months, it said.

The firm delivered a pretax profit of 150.6 million pounds during the six months ending Dec. 31, underpinned by investment performance and an 11% rise in assets under management to $93 billion.

Ashmore's shares rose 2.2% after the results and Tom Shippey, Ashmore's group finance director, told Reuters the firm was upbeat about the outlook.

"We're looking forward to 2021," he said.

"EM is well positioned versus DM given the GDP growth output, the relatively low level of indebtedness...and the diversity of opportunities that are available within an emerging market context."

The International Monetary Fund (IMF) is forecasting growth of 6% in emerging markets in 2021, compared to 3.9% in advanced economies.

Pre-pandemic levels of public debt were around 105% of gross domestic product in advanced economies and 54% for emerging markets, according to the IMF. Levels of indebtedness are, however, on course to swell in both as governments, particularly in the advanced world, splurge on stimulus to try to jumpstart their economies after the pandemic.

($1 = 0.7225 pounds)

(Reporting by Tom Arnold; Editing by Kirsten Donovan)