February 8, 2018 / 7:27 AM / in a year

Ashmore sees strong 2018 for emerging markets as assets rise

LONDON (Reuters) - Emerging markets-focused fund manager Ashmore reported on Thursday an 18 percent rise in ‍assets under management to $69.5 billion (£50 billion), buoyed by net inflows of new client money and market gains.

The company has enjoyed strong gains across developing markets over the last two years and said it expected more of the same in 2018 as investors bet on countries from Brazil to Vietnam and Rwanda after years of shunning them.

Net inflows during the six months to the end of December were $7.9 billion, while positive market performance added a further $3.2 billion, it said in a statement.

Attractive valuations, supportive economic conditions and stable inflation had helped lure investors back, including into its fixed income and equity products, Ashmore said, with 93 percent of its funds outperforming over a three-year period.

“We expect another good year of performance across the range of Emerging Markets asset classes in 2018, as economic conditions continue to be supportive, valuations remain attractive, and therefore investors continue to increase allocations,” Ashmore Chief Executive Mark Coombs said.

The growth in assets helped drive a 5 percent increase in the company’s management fee income - a fee charged yearly as a percentage of assets.

While the company trimmed costs by 6 percent, pretax profit over the period also fell, to 99 million pounds from 121.5 million pounds in the same period a year earlier, due to adverse currency moves, a dip in performance fee revenue and the lower level of gains from its investments made in seeding new funds.

The company said it would pay an interim dividend of 4.55 pence a share.

KBW analyst Jonathan Richards said the results were ahead of his expectations thanks to the strong inflows and a beat on performance fee income, although the shares were priced at historical highs and so he rated the stock ‘market perform’.

Shares in Ashmore were flat at 420 pence at 0806 GMT.

Reporting by Simon Jessop; Editing by Maiya Keidan and Mark Potter

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