Although we don’t believe in timing the market or panicking over every stock fluctuation, understanding how a business is performing, competing and changing is vital to sensible investment.
What: Shares in Ashmore (LSE: ASHM) plunged by more than 12% in early trade this morning, following a second-quarter statement on its assets under management.
So what: In total there was a 4.1% drop-off in assets under management, representing a loss of $3.5bn (from $78.5bn in Q1 to an estimated $75.3bn), which shocked the market as it was contradictory to most analysts’ forecasts.
The money was largely withdrawn from “a small number of redemptions” in its Blended Debt (-3%) and Overlay/Liquidity (-12.6%) themes, as investors became wary over the increased volatility seen across emerging markets.
Elsewhere, the second quarter also saw the basis of calculation for the annual investment management fee on two of its closed-end special situations funds amended, reducing revenues by approximately $25m.
Now what: Ashmore’s saving grace was Corporate Debt, which saw a positive net inflow of 9.4%, while CEO Mark Coombs remains positive about the year ahead as he stated:
“There is now greater clarity over US monetary policy, and Emerging Market assets offer attractive prospective returns across both equities and fixed income, and especially against Developed Market assets.”
