Fund manager Ashmore has said emerging markets have shown “resilience” in the face of recent volatility in the financial markets despite growing “uncertainty”.
Shares in the firm slid in early trading on Monday as the FTSE 250 firm also reported a flurry of withdraws from significant investors.
The emerging markets specialist reported that total assets under management dipped by around 5% to 46.2 billion US dollars (£35 billion) over the three months to March 31, compared with the previous quarter.
It came after net client outflows of 3.9 billion dollars (£3 billion) offset around 1.3 billion dollars (£1 billion) of increased investments.
Ashmore said it benefited from higher subscriptions activity over the quarter, particularly from Asian institutions.
However, this was outweighed by “a small number of large institutional redemptions” towards the end of the quarter.
The company, however, stressed that it was supported “by economic resilience in emerging economies”, positive developments in China’s technology sector and the weak US dollar.
The update comes amid a backdrop of recent turbulence in global financial markets after US President Donald Trump launched his fresh tariff regime, which prompted an escalating trade war with China.
Ashmore boss Mark Coombs said the “aggressive” tariffs and continued weakness in the dollar could support its activity in emerging markets.
“Since the quarter end, market volatility has heightened due to increased tariffs and changes to terms of global trade,” the chief executive said.
“While this creates uncertainty and a risk-off response from certain investors, it is notable that the diversity and resilience of emerging markets is reflected in performance of the main indices.
“This resilience demonstrates that there are increasingly powerful reasons for investors to rebalance their asset allocations away from the US capital markets, such as tighter fiscal policy and a smaller government in the US, the start of fiscal stimulus in Europe, higher rates in Japan and China’s focus on boosting domestic demand.
“When combined with the impact of aggressive trade tariffs, these factors point to a weaker US dollar, which will be supportive for the performance of emerging markets.”
Shares in the firm were 7.3% lower at 124p on Monday morning.
