LONDON, June 12 The rout in emerging market
currencies, stocks and bonds in the past few weeks has prompted
heavy selling of shares in British fund management companies
exposed to developing economies.
The emerging market sell-off across asset classes has been
prompted by expectations that any scaling back of bond-buying
stimulus by the U.S. Federal Reserve would send money flooding
back to the relative safe-haven of the United States.
This could also translate into emerging market fund outflows
from asset managers.
Aberdeen Asset Management, which ranks a number of
emerging market funds among its most popular products, has
suffered a 19 percent drop in its share price since peaking in
Its benchmark FTSE 100 blue chip index fell 7
percent over the period.
Rival Schroders is off more than 15 percent since
peaking in mid May, while the FTSE 100 has fallen 4 percent over
the same period.
Emerging market specialist Ashmore Group is down
more than 16 percent since shares reached an all time high on
The MSCI emerging markets index has fallen more
than 10 percent since early May.
But analysts said the weakness in fund management company
shares was overblown, particularly in the case of Schroders
where any outflows from emerging markets would head to developed
market equity funds, a core business for the firm.
"If there a more broad setback to emerging market economies
... it probably would affect the likes of Aberdeen and Ashmore
more than Schroders which is a more broadly balanced business,"
said Stuart Duncan, analyst at Peel Hunt.
The slump in investor sentiment marks a sharp reversal from
the euphoria earlier this year surrounding companies with
emerging market exposure.
Emerging market funds had enjoyed a surge of interest as
investors, flush with cheap money from central banks such as the
U.S. Fed, hunted for yield and sort to escape weak growth in
In this environment, the popularity of Aberdeen's emerging
market funds prompted the company to impose a 2 percent initial
charge on some products to try to stem investor flows.
Aberdeen and Ashmore declined to comment when asked if they
had seen investors withdraw money from their emerging market
A spokeswoman at Schroders said: "Outflows from our emerging
market funds is not a trend that we have observed."