By Tom Arnold
LONDON (Reuters) - Emerging markets-focused money manager Ashmore Group (L:ASHM) said on Wednesday its assets under management rose by $1.9 billion (1.5 billion pounds) during the first quarter as a continued market recovery helped to offset net outflows of $800 million.
Assets under management were estimated at $85.5 billion at the end of September, when its fiscal first quarter ends, the firm said, as it recorded a positive investment performance of $2.7 billion.
The firm's shares rose 4.1% on Wednesday, as analysts said the quarterly update was stronger than expected.
Ashmore said the improving quarterly flow trend was sustained in the three months to the end of September, reflecting diversified gross sales and a further fall in redemptions.
The firm was hit by outflows and market volatility in the aftermath of the coronavirus-led sell-off earlier this year, as investors fled emerging markets en masse.
The latest net outflows were primarily within blended debt and to a lesser extent in external debt, local currency and corporate debt, the company said on Wednesday.
The liquidity and equity sectors delivered net inflows, it said.
"The positive trends evident in the quarter to June were sustained in this period," Ashmore Group Chief Executive Mark Coombs said.
"Markets continued to recover from oversold levels, Ashmore's active investment processes generated strong outperformance, momentum in equities is increasing diversification, and client flows continue to stabilise."
Ashmore's first-quarter update was better than expected and continued the improving trend already reported in the fourth quarter, Peel Hunt said in a note.
Although the coronavirus and the U.S. elections were near-term risks that may temper investors' risk appetite, those environments historically provided good investment opportunities, said Coombs.