Emerging market bounce cushions impact of Ashmore outflows

* Assets fall to $70.1 bln from $75.3 bln at end-Dec

* Net (Dusseldorf: NETK.DU - news) outflows in March quarter $6.2 bln

* $4 bln pulled by one client exiting low-margin FX hedges

* Underlying asset performance improves, adds $1 bln to AuM

* Shares up 2.3 pct after sliding at the open (Adds shares, analyst comment, detail from statement)

By Simon Jessop

LONDON, April 10 (Reuters) - A recovery in emerging market asset prices boosted fund manager Ashmore Group (Other OTC: AJMPF - news) 's performance in the first three months of the year, cushioning the impact of clients pulling $6.2 billion from its funds.

After volatility fuelled by tension between Russia and Ukraine, slowing growth in China and the impact of tightening U.S. monetary policy, the performance of its underlying investments improved to boost assets by $1 billion by the end of March.

That mirrors a recovery across global emerging markets, with the MSCI Emerging Markets index hitting a four-month high this week.

"During the quarter we have seen interesting price and geo-political moves combined with negative sentiment, which in turn makes us comparatively more positive about the outlook for investment returns than at this time last year," Chief Executive Mark Coombs said in a statement on Thursday.

The mixed update was reflected in early share price moves. After leading FTSE mid-cap fallers at the open, shares in Ashmore had recovered by 0822 GMT to trade up 2.3 percent, outpacing a 0.8 percent gain in the broader index.

Shares in fellow EM-focused fund manager Aberdeen Asset Management, due to report interim results on May 6, were down 0.1 percent in a 0.7 percent stronger FTSE 100.

The bulk of the outflows, $4 billion, came after a redemption from funds used to provide currency hedging for investment portfolios. Smaller net outflows were seen in its local currency, blended debt and multi-strategy funds.

Assets under management closed the quarter at $70.1 billion, down from $75.3 billion at the end of December.

Although the headline net outflow initially appears weak, analysts at Goldman Sachs (NYSE: GS-PB - news) said in a note to clients, "we believe this is misleading".

"More than two-thirds of this outflow relates to FX overlay products whose revenue margins are typically less than one-third of the group average. Stripping out these products implies... a sequential improvement from the previous quarter's net outflow". (Editing by Chris Vellacott and Tom Pfeiffer)