Ashmore Group plc (LON: ASHM), an emerging-market fixed-income focused fund manager, posted strong earnings and asset growth in the first half, sending its shares to a nine-month high of 493 p. The firm’s pre-tax profits jumped 14% to £150.6 million thanks to a good fee generation, a good performance in its funds, and a healthy gain on a seed capital investment.
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Investments returned $10.8 billion during the first half, as a weaker US dollar, relative valuations, and as institutional investors poured more money into emerging markets. Accordingly, AuM increased 11% over the year to $93 billion, and net outflows dropped from $5.8 billion to $1.4 billion as retail investor redemptions were offset by institutional interests.
While Ashmore’s fixed-income investments make up the majority of the company’s assets under management, the company’s equity business saw a sharp rise in AuM, up 41% to $6.5 billion, thanks to strong returns and net inflows. The local asset management units of ASHM also turned in strong results, reaching $6.9 billion in AuM in the first half, up 39% compared to the first half of last year.
Ashmore Group plc (ASHM)’s CEO Mark Coombs was optimistic about its results: Ashmore’s performance in this period was consistent with the early stages of a typical recovery cycle. The firm’s investments delivered mark-to-market gains that had been expected, he said.
With the dollar set to remain weak, investors may seek higher returns and growth than what is available in developed markets, Coombs observed. Investors will look to emerging markets, where growth and value remain favorable, he concluded.