ASHMORE GROUP PLC Ashmore Group plc
Investor presentation | March 2019 |
www.ashmoregroup.com
A specialist active manager of Emerging Markets assets
EMERGING MARKETS FUNDAMENTALS UNDERPIN LONG-TERM GROWTH
•EM accounts for majority of world's population (85%), FX reserves (66%), GDP (59%)
•High growth potential: social, political and economic convergence trends with DM
•Large, liquid, diverse investment universe
•Investors are underweight, typically <10% allocations vs 10%-20% EM weight in global indices
LONG-STANDING INVESTMENT APPROACH DELIVERS OUTPERFORMANCE
•Deep understanding of EM underpins an active, value-based investment philosophy
•Inefficient markets mean volatile prices, but significant alpha opportunities
•Investment committees, not a star culture
•Performance track record extends over more than 26 years
DIVERSIFIED CLIENT BASE
•Global client base diversified by type and location
•Retail markets accessed through intermediaries
•1/3rd of AuM sourced from EM-domiciled clients
DISTINCTIVE STRATEGY & EFFECTIVE BUSINESS MODEL
•Three phase strategy to capture value from long-term EM growth trends
•Remuneration philosophy aligns interests and provides flexibility through profit cycles
•Disciplined cost control delivers a high profit margin
•High conversion of operating profits to cash (110% since IPO)
•Scalable operating platform, 300 employees in 10 countries
•Network of local EM fund management platforms
•Strong balance sheet supports commercial and strategic initiatives, e.g. seed capital
ASHMORE CHARACTERISTICS
•AuM of USD 76.7bn diversified across eight investment themes
•Strong investment performance, 97% of AuM outperforming benchmarks over three years
•High EBITDA margin (67%)
•Well-capitalised,liquid balance sheet with ~£520m of excess capital
•Alignment of interests between clients, employees and shareholders; employees own ~46% of equity
•Progressive dividend policy, more than £1bn returned to shareholders since IPO
2
Emerging Markets
Current views
Emerging Markets outlook
•2018 market weakness due to temporary factors
•EM GDP growth is high, accelerating vs DM
•Low inflation, well-controlled by central banks
•Diverse asset classes with highly attractive valuations
•Capital flows reflect underweight positioning, QE unwinding and poor value in DM
•Elections bring uncertainty, therefore opportunities
What are the main risks?
•China/US: rhetoric expected to moderate
•US dollar: weakening, temporary support fading
•Country-specific: requires active management
•Greater risks in DM: political turmoil and high valuations
EM price weakness in 2018 inconsistent with economic backdrop
6.0 | -5.7 | -14.9 | +9.9 | +15.2 | -6.2 | +3.9 | GBI-EM GD returns (%) |
(ytd) | |||||||
5.0
4.0
3.0
2.0
1.0
0.0
2014 | 2015 | 2016 | 2017 | 2018f | 2019f | 2020f | 2021f | 2022f | 2023f | ||
EM GDP growth (%) | Growth premium (%, EM-DM) | ||||||||||
Significant value available: external debt
1000
800
600
400
200
0 | |||||||||||||
2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 |
EMBI GD spread over UST, bps
4
Historical valuations relative to Developed Markets
External debt | Local currency |
Index: 72 countries, 167 issuers, 733 bonds | Index: 19 countries, 19 issuers, 219 bonds |
550
500
450
400
350
300
250
200
2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 |
EMBI GD spread over UST, bps
Yield (%)
8.0% | 6.00% | ||||||||||
7.0% | 5.50% | ||||||||||
6.0% | |||||||||||
5.0% | 5.00% | ||||||||||
4.0% | 4.50% | ||||||||||
3.0% | 4.00% | ||||||||||
2.0% | |||||||||||
1.0% | 3.50% | ||||||||||
0.0% | 3.00% | ||||||||||
2010 | 2013 | 2016 | 2019 | ||||||||
JPM GBI Global (lhs) | JPM GBI-EM GD (lhs) | Yield difference: GBI-EM vs GBI Global (rhs) | |||||||||
Corporate debt | Equities | |||||||||||||||||||||||||||||||||||||||||||||||||
Index: 50 countries, 643 issuers, 1,404 bonds | 5.0 | 110 | ||||||||||||||||||||||||||||||||||||||||||||||||
700 | ||||||||||||||||||||||||||||||||||||||||||||||||||
4.5 | 100 | |||||||||||||||||||||||||||||||||||||||||||||||||
600 | ||||||||||||||||||||||||||||||||||||||||||||||||||
4.0 | 90 | |||||||||||||||||||||||||||||||||||||||||||||||||
500 | 3.5 | 80 | ||||||||||||||||||||||||||||||||||||||||||||||||
400 | ||||||||||||||||||||||||||||||||||||||||||||||||||
300 | 3.0 | 70 | ||||||||||||||||||||||||||||||||||||||||||||||||
2.5 | 60 | |||||||||||||||||||||||||||||||||||||||||||||||||
200 | ||||||||||||||||||||||||||||||||||||||||||||||||||
100 | 2.0 | 50 | ||||||||||||||||||||||||||||||||||||||||||||||||
0 | 1.5 | 40 | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | |||||||||||||||||||||||||||||
CEMBI BD spread over UST, bps | EM vs DM growth premium (IMF, %, lhs) | MSCI EM vs DM total return (Dec2010=100, rhs) 5 | ||||||||||||||||||||||||||||||||||||||||||||||||
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Ashmore Group plc published this content on 26 March 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 26 March 2019 17:19:09 UTC
