By Scott Kanowsky
Investing.com -- Ashmore Group PLC (LON:ASHM) saw its assets under management slip by $8 billion in its first quarter, as geopolitical and economic uncertainties led investors to shy away from riskier bets.
The U.K.-based firm, which specializes in emerging markets, said in a trading update on Friday that the total value of the investments it oversees dropped to an estimated $56 billion during the three-month period ended on September 30.
The fall was linked primarily to institutional investors moving to scale back their exposure to external debt by 17.4% and local currency by 11.2% compared to the amounts registered in its financial year ended on June 30. Meanwhile, Ashmore's blended debt strategy - which includes positions in external and corporate debt, as well as local currency - decreased by 14.6%.
Ashmore cited the effect of soaring inflation, aggressive central bank interest rate hikes, and the war in Ukraine. It added that these pressures have, in turn, combined to cause a slide in global fixed income and equity markets in both developed and emerging markets over the quarter, while also bumping up the risk of a recession in many countries.
"Investor risk appetite therefore remains limited in the near term and Ashmore's AuM movement this quarter reflects the impact of lower market levels and investors continuing to reduce risk," said chief executive officer Mark Coombs in a statement.
However, Coombs backed the attractiveness of emerging market assets, saying that the company has a "firm foundation" to capture long-term growth once economic conditions begin to improve.