Emerging market fund manager Ashmore hit by impact of U.S. election

By Simon Jessop

LONDON (Reuters) - Fund manager Ashmore Group plc (ASHM.L) said assets under management fell 4 percent in its second quarter, as the impact of stronger dollar after the U.S. presidential election hit market returns and prompted more investors to pull their cash.

The firm, which specialises in emerging markets investments, said the impact of a rising dollar and steepening yield curve had mostly been felt in its local currency and external debt funds, where assets fell 7 percent and 9 percent, respectively.

The dollar rose after the Nov. 8 U.S. presidential election on expectations that President-elect Donald Trump's plan to boost fiscal stimulus would benefit the currency. A faster than expected pace of rate hikes from the Federal Reserve next year also contributed.

Combined assets under management declined $2.4 billion during the three months to the end of December, with negative market moves accounting for $1.7 billion and net client withdrawals $700 million.

That took total assets to $52.2 billion from $54.6 billion at the end of September.

Despite the tough quarter, emerging markets had chalked up a strong 2016 calendar year, adding 5 percent to Ashmore's assets, said, Ashmore Chief Executive Mark Coombs, and asset prices had strengthened in December and into the new year.

"The combination of attractive absolute and relative returns, accelerating GDP growth, and low allocations all support the expectation of further strong performance in 2017 and a return to the improving flow trend seen for most of 2016," he said in a statement.

(Reporting by Simon Jessop; Editing by Rachel Armstrong and Louise Heavens)