Analysts at Canaccord Genuity reiterated their 'buy' rating of emerging markets investment manager Ashmore Group on Tuesday, citing strong net inflows from company's third quarter and increased momentum going forward.
A research note from the analysts highlights that the company recorded its strongest quarter for gross and net flows since June 2013, with net inflows for the three months to 31 March reaching $6.4bn, far outstripping the analysts' projection for $2.5bn.
The research note said: “Reassuringly, the inflows were broad-based in terms of both strategies and investors, including some significant top-ups from a range of existing clients. Local currency and corporate debt saw growth of c.20% and blended debt and equities saw growth of approximately 10% in the quarter.”
Furthermore, Ashmore Group had total assets under management (AUM) of $76.5bn at the end of the quarter, increasing 10% over the quarter and outstripping Canaccord analyst's projections for both the quarter end and the year-end.
In the same research note, Canaccord also reiterated its 450p target price for Ashmore Group's shares.
Attractive pricing, US dollar weakness, improved emerging market fundamentals and underweight allocations “should provide a tailwind to flows and performance”, the Canadian broker said, even as it cautioned that flows would likely be volatile from quarter to quarter and the company could face an FX headwind to management fees.
“Investment performance on both an absolute and relative basis also remains strong, with Ashmore continuing to outperform benchmarks across most strategies over 1, 3 and 5 years. In addition, volatile markets typically offer mis-pricing opportunities that Ashmore, as a very active manager, should be well placed to take advantage of,” said the research note.
As of 1449 BST, Ashmore Group's shares were up by 4.09% at 411.20p.