Emerging market sentiment sees Aberdeen assets drop 3%

A turn in investors’ attitudes towards emerging markets has seen Aberdeen Asset Management record a 3 per cent drop in assets under management, according to its latest interim statement.

The group said assets fell to £193.6bn in the last three months of 2013 from £200.4bn as at September 30 last year.

Gross inflows in the quarter fell to £6.8bn for the period, down from £9.6bn for the three months prior, the statement said.

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The company saw £4.4bn of net outflows for the three month period with the greatest net outflow from its suite of equity funds at £3.1bn, in spite of positive performance.

It added the outflows from global equities were “largely the result of strategic asset allocation changes made by two segregated clients” while outflows from fixed income products came mainly from redemptions in “lower margin products”.

The company added it had “encouragingly” seen net inflows into emerging markets bonds, high yield and property, three areas it called “key elements of our global distribution strategy”.

These areas will be important to Aberdeen given its highly-successful range of emerging market equities funds now levies punitive charges in a bid to dissuade investors from the products.

Martin Gilbert, chief executive, blamed sentiment towards Asia and emerging markets for the assets under management reduction.

“Business flows reflected the continuing negative sentiment towards Asian and emerging markets generally, particularly later in the quarter,” he said.

“However, we believe the fundamental attractions of the Asian and developing economies and companies that we invest in are compelling.”

The chief executive added the company had a “strong new business pipeline” which is expected to deliver roughly £2bn in assets early this year across a range of asset classes and geographies.

“We are also making good progress towards completing our acquisition of Scottish Widows Investment Partnership, which will significantly expand and diversify our base of assets under management,” he added.