* Q3 total assets up 7 pct to $55.9 bln
* Market gains add $2.3 bln, net inflows add $1.4 bln
* CEO says emerging markets look good value versus developed
(Adds background, share reaction, analyst quote)
By Simon Jessop
LONDON, April 18 Emerging markets-focused fund
manager Ashmore Group saw quarterly net inflows for the
first time in nearly three years in the three months to the end
of March, helping to drive a 7 percent rise in its total assets.
Out of favour for years amid concerns over growth, emerging
markets are starting to lure in investors again, given cheap
valuations when compared with developed markets and a more
positive economic outlook.
Ashmore said on Tuesday total assets at the end of the
period - its fiscal third quarter - were $55.9 billion, up 7
percent on the prior quarter, after a $2.3 billion uplift from
positive market movements and after clients added a net $1.4
billion in new capital to its funds.
Its shares were down 0.4 percent at 0813 GMT in a flat
mid-cap market. The stock has risen 35 percent from November
lows as investors started to bake-in the broader market
Shore Capital analyst Paul McGinnis said the strong share
price performance was reason to keep his valuation at 'hold' for
now, although he was positive on the outlook.
"Even with flat markets in Ashmore's final quarter, we would
expect a Q4 net flows figure in excess of $1 billion and
therefore see scope to push up our full year AuM [assets under
management] forecast," he wrote in a note to clients.
Ashmore said clients had added more money to its
overlay/liquidity, local currency, external debt and corporate
debt strategies, while flows into equities and alternatives were
The company's blended debt and multi-asset strategies saw
net outflows over the period, it added.
"Ashmore delivered the anticipated return to net inflows
this quarter, generated from a diverse range of existing and new
clients," Chief Executive Mark Coombs said in a statement.
"The outperformance of Emerging Markets reflects
accelerating economic growth and attractive absolute and
relative valuations across Emerging Markets equity and fixed
income markets. This increases the pressure on investors to
address their underweight allocations."
After gains of nearly 10 percent last year and more than 11
percent year-to-date, emerging markets are
expected to rise further this year as investors turn away from
more richly valued markets, such as in the United States.
A poll of analysts in March suggested developed market
equity markets could face a correction of 10 percent or more in
(Additional reporting by Vikram Subhedar; Editing by Maiya
Keidan and Mark Potter)