ii view: Ashmore Q1 flows hit by Middle East conflict

Third-quarter trading update to 31 March

• Net outflow of funds of $0.9 billion
• Total assets under management fell 3% from the previous quarter to $50.7 billion

Chief executive Mark Coombs said:

“Ashmore's specialist approach and long history of investing in emerging markets, across different cycles and complex geopolitical and macro events, means it is well positioned to navigate the current environment.”

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ii round-up:

Specialist emerging markets (EM) fund manager Ashmore Group (LSE:ASHM) today detailed a net outflow of monies, the reverse of a net fund inflow seen in the previous quarter which had been the first inflow for more than four years.

A third-quarter net fund outflow of $0.9 billion contrasted with an inflow of $2.6 billion during the prior second quarter. The City had a forecast a net outflow of $0.8 billion.

Shares in the FTSE 250 company fell 2% in UK trading having come into this latest news up by around a quarter so far in 2026. Emerging market indices were flat to down 3% during the first quarter. The FTSE 250 index is up just 1.4% year-to-date. Fund manager and takeover target Schroders (LSE:SDR) is up 42% this year. 

Ashmore invests in asset classes including government and corporate debt, equities, and real estate across the emerging markets on behalf of both institutional and retail clients.

Assets under management as of 31 March totalled $50.7 billion, down from $52.5 billion late December. The 3% fall came via a combination of $0.9 billion in fund outflows and $0.9 billion of investment losses. 

Chief executive Mark Coombs note that, “Geopolitical events interrupted some of the macro tailwinds supporting emerging markets, but the reaction across most asset classes has so far been manageable and with limited price dislocations.”

The largely bond oriented Ashmore also reiterated a strategic partnership with Japan Post Insurance announced only weeks ago. The deal builds on an eight-year relationship that aims to increase the Japanese insurer’s exposure to EM. 

A fourth-quarter trading update is scheduled for 14 July. 

ii view:

Joining the UK stock market in 2006, Ashmore today employs around 280 people. Headquartered in London, most of its investments are made across bond or debt markets, with around 17% in equities and under 4% in alternative assets.  

For investors, heightened geopolitical tensions and a war in the Middle East now offer increased economic outlook uncertainties. The considered safe haven status of the US dollar in any crisis typically means a stronger US currency and increased headwinds for emerging markets (EM debt is often priced in US dollars, so a strong greenback makes interest payments more expensive). Competition generally across the fund management industry remains intense, while a forecast price/earnings (PE) ratio above the three- and 10-year averages may suggest the shares are not obviously cheap.

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On the upside, a possible end to the Middle East war could see investors refocus on US tariffs, with potentially less trade with the US reducing demand for the dollar which would benefit EM nations. Ashmore’s specialist focus on EM helps set it apart from other fund managers, consolidation across the asset management industry remains a possibility, while £350 million of cash and deposits held as of the end of its last financial year continues to support shareholder returns.   

For now, and despite ongoing risks, a prospective dividend yield of over 7% continues to reward investors who believe in the emerging markets growth story.

Positives: 

• Diversity of assets managed
• Attractive dividend (not guaranteed) 

Negatives:

• Uncertain economic outlook
• Fee pressure from ETF funds

The average rating of stock market analysts:

Weak hold