Ashmore Bucking Fund Management Trends

16 January, 2012

Ashmore, the Asia and emerging debt specialist, was yesterday one of the few fund managers able to unveil a more upbeat end to the year as the industry continues to report global falls in assets under management.

The European fund industry suffered continued outflows between October and December amid the uncertainty over the impact and spread of the eurozone crisis, Lipper, the data provider, said yesterday.

Lipper said that there was an uptick in fund inflows in November but predicted that “sales activity for long-term funds may well finish with more than €45bn of outflows in 2011”. There was a significant divide between inflows of €96bn in the first half of the year and outflows it estimated would be about €140bn in the second half, it said.

Worldwide, assets in funds declined 11 per cent in dollar terms to $25,000bn or €18,580bn in the third quarter, according to the European Fund and Asset Management Association as investors drew out net cash of about €104bn. This compared with net inflows of €147bn in the second quarter. “The message for the fourth quarter may be slightly better than the third quarter, but overall uncertainty about the world economy and economic prospects lingers on and investors are very cautious,” said Bernard Delbecque, Efama’s director of research.

Efama said net inflows into bond funds fell from €70bn to €7bn globally while money flowing out of equity funds reached €79bn during the third quarter. Funds with a mix of fixed income and equities also recorded net outflows. Money market funds continued to experience net withdrawals both in Europe and the US. European funds hold just under a third of global assets.

In the US – which manages about $12,000bn which is close to half the world’s assets in funds – net outflows from all funds in the last quarter of 2012 were about $7.5bn according to The Investment Company Institute.

In the same period, Ashmore staged a recovery from the previous quarter and reported flows into its funds of $0.5bn, slightly ahead of analysts’ expectations. It said assets rose 2.5 per cent to $60.4bn having fallen about 10 per cent the previous quarter. Assets in its corporate debt funds alone rose 27 per cent reflecting clients desire to diversify and find safer havens for their savings. US and European clients are shifting assets from their home territories and spreading internationally, say fund managers. Ashmore said it had net inflows into blended debt, local currency, corporate debt and external debt themes although it still suffered outflows from equities and alternative products.

The shares closed up 4.57 per cent to 340.8p.

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Ashmore Bucking Fund Management Trends

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