Emerging Markets

Any Port in a Storm

Turmoil proves to be a boon for emerging-market specialist Ashmore.


Photographer: Charles McQuillan/Getty Images
At Closing, April 20th
419.40 GBp

In a squall, any haven will do. As global stock markets wobbled in the first quarter amid a surge in volatility, emerging-market equities held their nerve. That was after the MSCI Emerging Markets Index gained almost 35 percent in 2017, handily outpacing the 20 percent climb in the MSCI World Index.

Relative Performance

Emerging market stocks and bonds outpaced their global peers in the first quarter

Source: Bloomberg Barclays bond indexes, MSCI stock indexes

Rebased to 100

That relative calm helped Ashmore Group Plc, which specializes in emerging markets, gather more assets from investors in the first quarter, according to figures released on Tuesday.

As Man Group Plc's results last week showed, investors seem willing to increase their allocations to active managers by more than their performance currently merits. Just $600 million of the $7 billion increase in Ashmore's assets under management in the first three months of the year came from investment performance.

A Rising Tide

Ashmore has increased its assets under management by almost 37 percent in the past year

Source: Company filings

So net inflows in the first quarter were $6.4 billion, the best since June 2013 and, according to analysts at UBS, the second biggest Ashmore has ever recorded. Corporate debt enjoyed the strongest growth, expanding by 21 percent to $9.4 billion, followed by local currency debt portfolios which grew by 19 percent to $17.7 billion.

Ashmore's share price had already outpaced its U.K. peers in recent months. The jump following Tuesday's trading update puts the stock firmly into positive territory for this year.

Leader of the Pack

Ashmore's share price has outpaced its peers this year

Source: Bloomberg

The second quarter, though, is starting to look different from the first. Emerging market stocks underperformed the broader market by more than 3.5 percentage points in April; fixed income markets have also lagged, though not by as much.

Ashmore will need to prove to shareholders that it can deliver returns that both beat its benchmarks and compare credibly with developed markets to extend its sector-beating gains.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

    To contact the author of this story:
    Mark Gilbert in London at magilbert@bloomberg.net

    To contact the editor responsible for this story:
    Edward Evans at eevans3@bloomberg.net

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