Ashmore

Who said emerging markets were fragile? If anything, their strong economic fundamentals make them “boring” – and robust enough to weather a storm in global monetary conditions.

That’s the bullish and somewhat unorthodox view of Jan Dehn of $70bn investment house Ashmore. Speaking to journalists on Wednesday, he dismissed the widely-held idea that EM countries have benefitted from a splurge of cheap money since quantitative easing began as “utter nonsense”. 

Is Ashmore running out of road? The emerging markets fund manager, which on Thursday posted a 7.4 per cent drop in interim pre-tax profits, says not. But investors aren’t so sure. The shares dipped 1 per cent the news, which is nothing given the general flight out of EMs on the day.

But after doubling in 2009-10, in the recovery from the 2008 crisis, Ashmore shares have gained very little in the past two years. Clearly, investors need to be convinced that the group can find new ways of profiting from EM in the face of growing low-cost competition from index-tracking rivals. 

It helps if you keep your head in choppy waters. Ashmore, the emerging markets debt specialist manager, seems to have done just that.

The group on Tuesday reported results for the year to the end of June which modestly exceeded market forecasts, with a slight dip in pre-tax profits from £245.9m last year to £243.2m.

Ashmore made up for a fall in performance-linked fees with increases in basic management fees.  That’s good for shareholders in Ashmore, though not necessarily for investors in its funds.