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Emerging markets asset manager Ashmore reported a rise in assets under management and 'strong' profit growth, driven by investment performance.
For the six months ending 31 December 2020, pre-tax profit rose 14% to £150.6 million year-on-year and assets under management grew 11% to $93 billion.
'Emerging Markets asset prices appreciated strongly over the past six months, ... driven by a sharp bounce in economic activity in Q3, continued loose monetary policy by central banks in the main developed and emerging markets, and the market reaction to the US election result,' the company said.
Looking ahead, the company said further currency weakness in developed countries amid expansionary monetary and fiscal policy would result in record debt/GDP levels in those countries, which undermine longer-term growth, favouring investments in emerging markets.
'This backdrop therefore favours Emerging Markets, since a weaker US dollar will cause capital to flow from the US economy in search of higher returns elsewhere,' Ashmore said.
'The highly attractive spreads, real yields and equity valuations available across a broad range of emerging markets will attract flows, which in turn drives economic growth and currency appreciation, and leads to further capital inflows,' it added.