Inflows buoy Ashmore despite emerging market trade tremors

* Total (LSE: 524773.L - news) assets under management down 3 pct to $73.9 bln

* Investment losses of $5.2 bln offset inflows of $2.6 bln

* Shares (Berlin: DI6.BE - news) up 2.6 pct; CEO says valuations attractive (Recasts, adds share reaction, analyst quote)

By Simon Jessop

LONDON, July 13 (Reuters) - Shares in emerging markets-focused fund manager Ashmore Group (Frankfurt: A1B.F - news) rose on Friday after the firm said it continued to take in money from clients in April-June despite tough market conditions as trade tensions escalated.

London-based Ashmore said its assets fell 3 percent to $73.9 billion in the three months through June, its fourth quarter, as fears of a global trade war hit markets, compounded by a rise in the value of the dollar and a weakening euro.

But while U.S. President Donald Trump's increasingly sharp trade rhetoric contributed to investment losses of $5.2 billion, Ashmore said it still took in $2.6 billion in new client money.

In response, shares in Ashmore were up 2.6 percent at 359.8 pence a share at 0756 GMT, but remain down 11.1 percent in the year to date, against a 1 percent rise in the FTSE midcap index over the same period.

Trade tensions rose sharply again this week after Trump said he would slap 10 percent tariffs on an extra $200 billion worth of Chinese imports.

"Although market conditions in Q4 have been more challenging, net inflows have remained robust as clients continued to allocate to EM," said Peel Hunt analyst Stuart Duncan in a note to clients.

"With EM valuations at depressed levels, while it is difficult to call the bottom, we see the prospects of Ashmore outperforming when sentiment improves," he added, increasing his recommendation to 'Buy' from 'Add'.

Ashmore's local currency and blended debt investments were particularly affected by weakness in the foreign exchange markets, and all investment themes bar alternatives lost money, it said.

Chief Executive Mark Coombs, however, said he was confident of a market rebound, led by improving economic fundamentals in many emerging economies.

"This has left Emerging Markets valuations at levels last seen immediately after the U.S. election in 2016, following which markets delivered a sustained rally.

"While there is a small number of emerging countries that face challenges, most Emerging Markets economies are in even better health today," Coombs said in the statement. (Reporting by Simon Jessop, editing by Huw Jones and Susan Fenton)