Few companies are a better barometer of investor sentiment towards emerging markets than Ashmore Group.
The fund manager, a member of the FTSE 100 between 2011-12, specialises in emerging market asset classes that include equities, bonds, currencies and alternative investments such as property and infrastructure.
Today it reported a 54% drop in half-year pre-tax profits, to £53.8m, largely reflecting an 11% drop in assets under management to $57.2bn as at the end of December.
Of that, some $7.6bn reflected anxious investors pulling out their money, only partly offset by an extra $800m due to investment performance.
Mark Coombs, the chief executive, said client redemptions had not yet come to an end but were “significantly less every day”.
He added that the company had noted a very modest improvement in sentiment in recent weeks but not a lot.
He told analysts: “Investors still do nothing when they’re frightened so risk aversion tends to create not much activity – but we are seeing a bit of activity.
“If 10 was everyone loving to invest, they’ve gone from zero to one. But it’s a start. And very typical after very ugly periods of performance in the market.”
Mr Coombs said the key investment themes during the last six months had been high inflation – although he noted that headline numbers were “trending lower” – aggressive interest rate rises from central banks around the world, the war in Ukraine and, more recently, “China unwinding at massive speed its zero-COVID policy”.
He said some of the global macro headwinds faced in 2022, including the Fed’s aggressive tightening of monetary policy, were now receding – but warned he did not expect inflation to fall in a straight line and predicted there would be a few “bumps in the road”.
But he noted that valuations continued to be attractive across emerging markets.
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He added: “After a positive shift in sentiment towards the end of…
