97% of Ashmore Group’s assets under management outperform benchmark
Ashmore Group’s pre-tax profits for the second half of 2020 rose by 14% to £150.6m.
The result was driven by a strong “investment performance”, with 97% of Ashmore Group’s assets under management (AuM) outperforming benchmark indices over the six month period.
Net revenue fell to £150.67m compared to £177.3m for the same period in 2019, while its assets under management rose by 11% to $93bn.
Ashmore Group’s share price dropped by over 1% to 474p per share on the FTSE 250 as markets opened on Monday. Following the share price plummeting in March 2020, Ashmore shares have rebounded somewhat towards their pre-lockdown 570p value in February.
Mark Coombs, chief executive of Ashmore Group, suggested that the company’s ongoing recovery could be slower as it awaits investment to further increase its assets under management.
“Ashmore’s performance in this period reflects the early stages of a typical recovery cycle, with strong investment performance driving AuM growth and delivering mark-to-market gains on the firm’s seed capital investments.
Given the recovery in average AuM and revenues naturally occurs with a lag, Ashmore has continued to focus on managing operating costs and has therefore maintained the Group’s operating profitability at a high level,” Coombs said.
Looking forward, Coombs outlined the importance of the vaccine roll-out.
“The delivery of vaccination programmes around the world will be critical to the ongoing economic recovery in 2021, and in the meantime government and central bank stimulus provide near term support but will lead to a weaker US dollar over time,” Coombs said.
Robert Murphy, managing director of Edison Group, believes there are opportunities for Ashmore within ESG investing and that emerging markets will continue to offer value for money.
“In the medium-term Ashmore Group’s process of diversification should continue to provide growth opportunities including areas such as ESG funds. On a global scale, a keen eye will be kept on the potential long-term growth of Emerging Markets which still trade at a significant discount to developed markets,” said Murphy.