Ashmore assets fall to 3-year low as emerging markets suffer

* Assets under management fall to $63.7 bln, a 3-year low

* Investors withdrew $4.2 bln; losses led to $2.8 bln decline

* Shares (Dusseldorf: DI6.DU - news) fall to lowest since 2010 (Adds details, background, shares)

By Nishant Kumar

LONDON, Jan 13 (Reuters) - Assets managed by Ashmore Group (Other OTC: AJMPF - news) fell to three-year low in the final quarter of 2014, hit by a sell-off in emerging market securities and as investors withdrew cash, sending its shares to their lowest since July 2010.

The emerging market-focused money manager said on Tuesday portfolio losses led to a $2.8 billion decline in assets under management during the quarter, while investors pulled out a net $4.2 billion, mainly from currency and fixed-income funds.

The sale of the group's interest in a Chinese real estate joint venture also cut assets by $600 million, as its total assets under management fell to a smaller-than-expected $63.7 billion at the end of December from $71.3 billion in September.

That level was the lowest since December 2011, when the money manager had $60.4 billion under management, and shows the challenges faced by emerging market-focused funds as the prospect of higher U.S. interest rate make investors bail out of riskier assets bought in search of higher yields.

"While asset prices have fallen, uncertainty over the timing and pace of Federal Reserve rate increases is likely to weigh on sentiment in the near term," said Chief Executive Mark Coombs.

He added, however, that emerging market fundamentals remained sound and uncertainties such as elections had abated.

Analysts expected Ashmore to report $67 billion in assets under management, according to brokerage Canaccord Genuity (Other OTC: CCORF - news) .

Ashmore's shares opened down 2.7 percent at 257 pence, their lowest since July 2010, before recovering to 260 pence at 1010 GMT. By comparison, the FTSE Midcap 250 Index was up 0.5 percent.

Net outflows in debt funds were due to a small number of accounts managed for a single investor or institution, Ashmore said. Investors also exited its equities, local currency and multi-strategy funds. (Editing by Anjuli Davies and Mark Potter)