AAM bullish as rise in value of funds offsets £100m net outflow

Aberdeen Asset Management (AAM) has seen the value of its funds rise, despite suffering net outflows in recent months as a strong recovery in global markets failed to persuade more 
clients to invest their cash.

In a trading update ahead of its full-year results, the fund manager said a positive performance across its fund range had outweighed the £100 million of net outflows during July and August. This helped overall assets under management rise to £184.3 billion, up from £182.7bn at the end of June.

AAM said clients continued to buy into its higher-margin pooled products, including 
global emerging markets and global equities funds, with a better-than-expected £2bn going into equities, while £1.3bn flowed out of lower-margin fixed income products.

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Finance director Bill Rattray told The Scotsman that the firm has seen an increase in investor demand for emerging market debt, and it expects that trend to continue.

He added: “On the equities side, we continue to see reasonably good inflows. Fixed income has a better underlying feel to it, but you can never predict the timing of when the flows turn.”

Rae Maile, an analyst at JP Morgan Cazenove, said: “Although continued outflows in fixed income are disappointing, we take heart from continued progress in gross new business wins of £1bn in the two months, of which £400 million was emerging market debt.”

Overall, the company estimated that the shift into higher-margin areas will add about £10m of annual fee income.

Chief executive Martin 
Gilbert said: “With uncertainty 
surrounding the global macro-
economic situation … our strong performance across a variety of capabilities and products means we remain well-
positioned to meet the needs of investors in a constantly changing environment.”

Peel Hunt analyst Stuart Duncan said he was forecasting 
adjusted pre-tax profits of £334.5m for the year, up from £301.9m a year ago. He added: “With the underlying momentum remaining strong, there is scope for 2013 estimates to start moving up, given equity markets continue to rise.”

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