Emerging markets will become increasingly relevant in investment portfolios, according to Ashmore as it revealed its annual results.
Emerging nations are generally in good health; aggregate GDP growth in emerging markets was 4.5% in 2013 and is expected to be higher still in 2014, inflation is at acceptable levels and foreign exchange (FX) reserves remain strong.

“This is an important backdrop as the global economy evolves. Developed markets are weaning themselves off unprecedented monetary policy experiments while emerging markets need to decide how to manage substantial FX reserves in the face of potential foreign currency weakness,” said Mark Coombs, CEO of Ashmore Group.

“This will lead to greater balance and rising emerging markets relevance in investment portfolios. Investors will increasingly need to differentiate between those countries and companies that foresee and plan for the unwinding of global imbalances, and those that are ill-prepared.”

Ashmore Group, the specialist emerging markets asset manager, has recorded asset under management (AuM) of $75bn, a slight dip from $77.4bn last year. Nevertheless, the firm had strong long-term investment performance with 81% of AuM outperforming benchmarks over three years and 92% over five years (compared to 92% and 73%, published last year).

“Ashmore’s financial results for the year reflect the impact of market volatility experienced for much of the period and the effects of sterling strength. The operational performance was sound, operating cost control and flexibility was demonstrated, and the Group continued to make strategic progress in the period,” said Coombs.