6th Sep 2019 08:32
(Alliance News) - Ashmore Group PLC on Friday reported a "strong" financial 2019 as the emerging markets investment manager ended the period with sharp growth in assets under management, despite escalation of the US-China trade war.
At June 30, Ashmore's assets under management stood at USD91.8 billion, up 24% from USD73.9 billion at the same point a year ago.
"The year was positive for Emerging Markets as economic and political fundamentals continued to strengthen. While there have been some headwinds, for example the deteriorating US-China trade relationship, thus far these have had only a temporary impact on market sentiment, and therefore prices, but not a major effect on the aggregate Emerging Markets growth picture," Ashmore commented.
The asset manager's Blended Debt theme grew by 23% over the period, ending the year at USD24.3 billion. The Corporate Debt theme added 58%, ending at USD15.5 billion. External Debt and Local Currency themes grew by 32% to USD19.1 billion and 16% to USD19.7 billion, respectively.
Ashmore delivered USD10.7 billion of net inflows in the period while its investment performance added USD6.9 billion.
The asset manager said its positive investment performance was delivered in the second half, as markets "rallied" and Ashmore's active investment processes delivered "strong" absolute and relative performance.
Ashmore's investor base remains heavily weighted towards pensions plans, with 29% of assets coming from pensions. Governments and central banks contribute 15% apiece, and corporations 14%.
Chief Executive Mark Coombs said: "Ashmore has delivered strong results for the year on the back of AuM growth and continued investment outperformance. The backdrop for Emerging Markets remains relatively healthy, with economic indicators such as GDP growth and inflation continuing to trend favourably. The main risks relate to the US and the impact that its confrontational trade policy and slowing domestic growth will have on the broader global economy."
Ashmore's pretax profit increased 15% year on year to GBP219.9 million. The company's management fees increased 17% to GBP294.3 million, resulting in a 13% increase in revenue to GBP314.3 million.
The asset manager's total dividend for the year was flat at 16.65 pence each.
"Ashmore will continue to implement its active investment processes to exploit these opportunities for clients, is well-positioned to continue to capture investors' rising allocations to Emerging Markets and, through its consistent strategy and proven business model, to create value for shareholders," continued Coombs.
Looking ahead, Ashmore believes the greatest threat to the current market environment is US trade and economic policy.
Coombs explained: "Ashmore's base case is for a further gradual slowing of US growth at this late stage of the business cycle, which would maintain downward pressure on the US dollar and support continued flows to Emerging Markets. However, a US recession or, less likely, consistently stronger US growth would affect investor sentiment and potentially change allocation decisions."
Ashmore also noted that it has opened a fully operational office in Ireland.
"This addresses the risk associated with the most severe potential scenario, as it provides the group with continued access to EU-based clients after the UK has left the EU and in the absence of any equivalence arrangements," Coombs added.
Ashmore shares were up 2.3% early Friday in London at 465.20 pence.
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