one area of investing has reacted badly to donald trump <u+2019>s u.s. election victory: emerging markets and the fund managers that serve them, such as aberdeen asset management . the potential toxic mix of higher u.s. interest rates and protectionist measures to restrict trade between the u.s. and other markets has hit emerging market equities and debt. that amplified existing concerns about the pain from tighter u.s. monetary policy. for listed asset managers, the latest slide began in october. since then, aberdeen shares are down 18%, and those of rival ashmore group, which is even more emerging market focused , are down 21%. however, aberdeen<u+2019>s results for its fiscal year ended sept. 30 had some positives. net outflows from equities funds, which produce the highest fees, slowed throughout the year . emerging market bonds, however, remain unloved by investors, the company said. the outlook isn<u+2019>t improving. in recent weeks, equity outflows continued while inflows have stopped as investors wait to see what president-elect trump will actually do, aberdeen said. but while trump has hindered, brexit has helped: the fall in sterling since the summer drove a 10% increase in assets under management for aberdeen as net outflows and market performance canceled each other out over the year. ultimately, however, aberdeen<u+2019>s operating margins were down by almost one quarter compared with 2015 and pretax profit fell 37%. martin gilbert, aberdeen chief executive, reckons that if mr. trump does cut taxes quickly and the u.s. starts to boom, then it will likely suck in imports from emerging markets, especially raw materials. investors who are positive on the u.s. should then see a buying opportunity in emerging markets. unfortunately for groups like aberdeen and ashmore, investors aren<u+2019>t looking at all tempted by that theory right now. write to paul j. davies at paul.davies@wsj.com
emerging market fund managers trampled by trump  - wsj
paul j. davies