Emerging market fund Ashmore shares hit 13-yr low as investors pull out cash

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LONDON -Shares in emerging markets investment firm Ashmore fell to a 13-year low on Thursday after it reported a much heavier-than-expected $6.6 billion exodus from its funds after a torrid few months for developing economies.

Russia’s invasion of Ukraine, a soaring dollar and China’s economic strains have combined to give emerging markets their most difficult year on record.

London-based Ashmore said its assets under management had tumbled by $14.3 billion to $64 billion during the quarter to June 30, comprising $6.6 billion of net outflow and what it described as $7.7 billion of negative investment performance.

The outflows – a term for how much money clients have pulled out of funds – were more than double the $3 billion analysts had been expecting.

Ashmore’s shares fell as much as 5%, one of the worst performers in the FTSE 250. The shares are at their lowest since mid-2009 and down nearly 70% since the start of the COVID-19 pandemic in 2020.

“The decline in Ashmore’s AuM over the quarter reflects this challenging market backdrop as asset values fell and investors de-risked portfolios,” Chief Executive Mark Coombs said.

Ashmore said the net outflows were concentrated in its “local currency” and “blended debt” funds which invest in assets in countries’ own currencies rather than international currencies such as the dollar or euro.

There had been substantially smaller outflows in the international currency or “external debt” funds as well as from EM equity and corporate debt funds.

Ashmore was a major holder of Russian debt before the invasion in February. Since then, Western sanctions have forced Russia into default, wiping out most of the bonds’ value.

(Reporting by Marc Jones and Emma-Victoria Farr, editing by Sinead Cruise and David Evans)