Ashmore stock rises as outflows continue but asset manager beats expectations

Emerging markets investment firm Ashmore has surpassed expectations once again despite experiencing further outflows, leading to a 1.6% uptick in its share price.

The FTSE 250 fund manager’s recent half-year results indicate that the adjusted operating profit reached £33.7m for the last six months of 2024, outperforming the £31m predicted by analysts, as reported by City AM.

At the close of December, assets under management were reported at $48.8bn (£39.2bn), maintaining their level from the previous half-year. Positive investment performance contributed an additional $0.6bn, but outflows dampened this gain with a $1.1bn deduction.

There was a notable decrease in net management fee income, dropping from $103.7m in the final six months of 2023 to $88.3m, causing profit margins to shrink from 39 basis points to 36—which fell short of analysts’ expectations of 37.

Ashmore's total adjusted net revenue declined by 14% compared to the previous year to £79.9m, although the company mitigated some of the impact due to a nine percent reduction in adjusted operating costs.

CEO Mark Coombs commented on the results: "Ashmore’s net flows continue to improve and AuM was largely unchanged at the end of the period. Ongoing strong control of operating costs helped to mitigate the impact of lower average AuM on the financial results, and the group continues to invest in strategic growth and diversification opportunities, including through its seed capital investments."

"There are compelling reasons for investors to shift their allocations from heavily overweight US positions towards the appealing valuations and investment opportunities in emerging markets," was the advice given.

"These markets provide significant diversification and growth, which is increasingly acknowledged by clients and reflected in activity levels. Ashmore’s active investment management processes are delivering for clients and the Group is well-equipped to handle the asset price volatility resulting from the US election, and to seize the longer-term upside from current market levels."

Peel Hunt analyst Stuart Duncan commented: "We believe there is still room for optimism that a revival in sentiment towards emerging markets could benefit Ashmore."

He added, "This is supported by a multi-year bull run in the US dollar, which, if it reverses, should lead to increasing allocations to areas like emerging markets, and improved investment performance, as is typical of Ashmore’s investment process."

Last month, the asset manager surprised markets when it reported a drastic decrease in outflows. Investors withdrew $400m (£322m) in the last quarter of 2024, significantly less than the $1.1bn (£885m) anticipated by analysts.