At an enormous 13%, Ashmore Group (LSE: ASHM) has the second-highest yield on the FTSE 250. A yield like that would make a fantastic addition to a passive earnings portfolio.

But the inventory has tanked greater than 64% over the previous 5 years. That’s regarding but additionally means the present price appears notably low-cost. At 127p, it’s close to the bottom it’s been in over 15 years.

However earlier than diving in, I must assess its prospects. If it recovers, it may very well be a fantastic alternative for worth traders to safe profitable returns. If it retains dipping, it might fade into obscurity.

Let’s see what led to the decline and whether or not the inventory is value contemplating.

Rising markets

Ashmore’s efficiency over the previous 5 years is intently tied to rising markets, which will be topic to vital volatility on account of geopolitical and financial elements. That is most probably the explanation for the numerous decline it has suffered since Covid in 2020. Whereas the rising economies of Latin America, Africa and Asia proceed to wrestle, so will Ashmore.

Particularly, foreign money devaluation in Türkiye and Argentina has had an affect on the inventory. Rising inflation and rates of interest have additionally contributed, together with the battle in Ukraine and China-US commerce tensions. Till these points subside, its possibilities of restoration may very well be dampened.

The consequences of those points are additionally evident within the firm’s monetary outcomes.

2025 first half outcomes

Within the first fiscal half of 2025, the corporate reported a 16% decline in income to £77.5m and a 36% drop in internet earnings to £37.1m (in comparison with H1 2024). Earnings per share additionally decreased to five.5p from 8.7p.

Previous to latest challenges, Ashmore’s property beneath administration (AUM) have been enhancing. In 2024, they rose by $2.5bn, to $51.8bn – a 5% quarter-on-quarter enchancment. The expansion was attributed to elements similar to a weakening US greenback, improved macroeconomic situations and Chinese language fiscal stimulus plans.

However the newest quarter wiped all that out as commerce tensions prompted asset reallocations. As of 31 March 2025, AUM had dropped to $46.2bn, led by a 6% lower in Fastened Revenue AUM and a 3% decline in Equities. These outflows have been barely offset by a 7% enhance of inflows into Options.

Concerns

With little proof to assist a price restoration within the quick time period, dividends stay Ashmore’s essential draw. The corporate has a reasonably respectable dividend observe document, with no cuts or reductions.

Nevertheless, the full-year dividend has remained at 16.9p for the previous 4 years, that means it has misplaced worth to inflation. It’s additionally value noting that if earnings proceed declining, it might wrestle to keep up funds and may very well be compelled to make a minimize.

On the flip facet, historical past (and logic) dictate that international markets will finally get better. With a below-average price-to-earnings (P/E) ratio of solely 12.1, Ashmore ought to have respectable room to develop.

Nevertheless, it may very well be some time earlier than that occurs. Dividend-focused traders could also be sensible to maintain the inventory in thoughts and think about it when issues start to enhance.