Shares of emerging markets fund Ashmore hit 13-year low as investors pull cash

LONDON, July 14 (Reuters) – Shares in emerging markets investment firm Ashmore (ASHM.L) fell to their lowest level in 13 years on Thursday after reporting a much larger than expected exodus of 6.6 billion of its funds after a torrid few months for developing economies.

Russia’s invasion of Ukraine, a soaring dollar and China’s economic woes combined to give emerging markets their toughest year on record.

London-based Ashmore said its assets under management fell from $14.3 billion to $64 billion in the quarter to June 30, including $6.6 billion in net outflows and what it described as $7.7 billion in negative investment performance.

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Outflows – a term for the amount of money customers took out of funds – were more than double the $3 billion analysts expected.

Ashmore shares fell 5%, one of the worst performers on the FTSE 250 (.FTMC). Stocks are at their lowest since mid-2009 and down almost 70% since the start of the COVID-19 pandemic in 2020.

“Ashmore’s decline in assets under management during the quarter reflects this challenging market environment as asset values ​​fell and investors de-risked portfolios,” Chief Executive Mark Coombs said.

Ashmore said the net outflows were concentrated in its “local currency” and “mixed debt” funds which invest in assets in countries’ currencies rather than international currencies such as the dollar or euro.

There had been significantly lower outflows from international currency or “external debt” funds as well as emerging market equity and corporate debt funds.

Ashmore was a major holder of Russian debt before the February invasion. Since then, Western sanctions have forced Russia into default, wiping out most of the value of the bonds.

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(Reporting by Marc Jones and Emma-Victoria Farr, Editing by Sinead Cruise and David Evans)

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