Ashmore Group enjoys boost as investors shy away from US

Investors have begun turning their backs on the United States, driven by the trade turbulence and geopolitical uncertainty stemming from President Trump’s policies. This shift has provided a much-needed boost to Ashmore Group, one of London’s leading emerging market asset managers. The company reported a sharp drop in client withdrawals during the three months ending June, falling to a net $800 million from $3.9 billion in the previous quarter.

Ashmore’s performance was underpinned by $2.2 billion in investment gains, pushing its assets under management up by 3 per cent to $47.6 billion. The group attributed this improvement to strong returns in emerging markets, which outperformed their developed counterparts amid continuing trade tensions. A significant factor behind this trend was a weakening US dollar, following the White House’s protectionist approach to trade policies that shocked global markets earlier this year.

The impact of Trump’s tax-and-spend strategy, estimated to add $3.4 trillion to the US national debt over the next decade, has further shaken investor confidence. With concerns mounting over the long-term health of the American economy, many are retreating from US assets and reallocating their portfolios toward undervalued opportunities in emerging markets. According to Ashmore’s Chief Executive, Mark Coombs, the ongoing weakness of the dollar has been an important driver of this rebalancing process.

Founded as the emerging markets debt business of Australian banking giant ANZ, Ashmore became an independent entity following a management buyout led by Coombs in 1999. The company later floated on the London Stock Exchange in 2006 and has since become a major player in the high-risk emerging markets space. While its assets under management peaked at around $100 billion in 2019, they have slid dramatically due to geopolitical upheavals, including the war in Ukraine and inflation concerns.

Despite the challenges, Coombs remains optimistic about the group’s prospects and continues to advocate for emerging market investments. Speaking on Monday, he noted that these markets are outperforming developed world equities and bonds thanks to favourable valuation opportunities. Shares in Ashmore closed up 2.5p at 170.25p, lifting its market capitalisation to approximately £1.2 billion.

This resurgence reinforces Ashmore’s position as a significant player in the global asset management industry, with investors increasingly seeking alternatives to US investments amidst mounting economic and political uncertainty.