Ashmore Group (LSE:ASHM) said assets under management rose by $0.5bn, or 1%, to $54.5bn in the quarter ended 30 September, as net inflows of $1.1bn were partially offset by negative investment performance of $0.6bn.
The London-listed emerging markets asset manager said net inflows were split equally across fixed income and equities, consistent with the prior financial year, with every investment theme attracting net inflows except corporate debt, which was flat. Gross redemptions fell to their lowest quarterly level in more than 15 years, Ashmore said, while gross subscriptions maintained recent momentum.
Emerging market fixed income indices fell between 1% and 4% over the quarter, still outperforming developed markets, while emerging market equities declined 0.4%.
Ashmore attributed the negative performance to a sharp rise in US and other developed market government bond yields late in September, driven by renewed inflation concerns tied to oil prices, central bank rate increases in the US and Europe, developed market debt levels and the financing demands of AI investment.
Despite the volatility, the company said its active management continued to deliver outperformance for clients, with the proportion of group AuM beating benchmark indices held at the levels reported at 30 June.
"DM bond yields spiked late in the quarter, reflecting higher oil prices, rising interest rates and elevated DM government debt levels," chief executive Mark Coombs said, adding that "the relative strength of emerging markets in terms of policy credibility and longer-term structural tailwinds meant that both client responses and EM asset price reactions have been relatively subdued."
Coombs said the case for emerging markets "remains compelling", pointing to higher real yields in EM fixed income relative to developed markets and a significant valuation discount in EM equities, and said dollar strength is expected to prove transitory given large US fiscal deficits and investors' need to diversify.
The update follows Ashmore's full-year results reported on 7 September, which showed AuM rising 13% to $54bn for the year ended 30 June, with profit before tax up 17% to £126.9m aided by an £82.5m gain on its seed capital programme, and the board maintaining the final dividend at 12.1p.