Ashmore Group plc (LON:ASHM) (LSE:ASHM.L) has released an update regarding its assets under management (AUM) for the quarter to 31 December 2016. AUM decreased by $2.4 billion during Q2, which included negative investment performance of $1.7 billion and net outflows of $0.7 billion.
The steepening of the yield curve and a stronger US dollar caused negative investment performance in local currency, blended debt, external debt and in corporate debt and equities (the latter two to a lesser extent). Other investment themes were flat in performance in Q2. While disappointing, Ashmore’s investment performance compared to benchmarks remained strong in Q2 across all fixed income and equities investment themes.
Overlay and blended debt delivered net inflows during the quarter. Flows were neutral in the corporate debt, alternatives and equities themes. Net outflows were mostly influenced by a small number of segregated account redemptions and a fall in mutual fund flows during the US election.
Emerging markets delivered a 5% increase in Ashmore’s AUM in the 2016 calendar year. Although the final quarter of the calendar year was impacted by the US election, a stronger dollar and a steeping of yield curves, the company expects a strong performance in 2017.
In the last six months, Ashmore has declined by 19%. This is a worse performance than financial services peers Barclays PLC (LON:BARC) (LSE:BARC.L), Lloyds Banking Group PLC (LON:LLOY) (LSE:LLOY.L), Aberdeen Asset Management plc (LON:ADN) (LSE:ADN.L) and Standard Chartered PLC (LON:STAN) (LSE:STAN.L). Barclays has risen by 53%, Lloyds is 16% higher, Standard Chartered is up 19%, while Aberdeen Asset Management has declined by 12%.
In my view, Ashmore has a relatively appealing long term future. However, I believe 2017 could be a turbulent year for the stock market, so it’s not a share I’m looking to trade via a spreadbetting account. I also feel there may be better opportunities within the wider financial services sector, although I believe Ashmore’s performance could improve in future.