UPDATE 1-Schroders H1 assets buoyed by market gains, new client cash

(Corrects to read assets under management and administration, paragraph 1)

* Total (LSE: 524773.L - news) assets under management 418.2 billion pounds

* Pretax profit up 21 pct from 2016; dividend up 17 pct

* Shares (Berlin: DI6.BE - news) up 2 pct

By Simon Jessop

LONDON, July 27 (Reuters) - British asset manager Schroders posted a 21.6 percent rise in first-half assets under management and administration, boosted by market gains and inflows of new client money, sending its shares higher on Thursday.

Active asset managers such as Schroders (Frankfurt: 929969 - news) have been hit by rising costs and pressure on fees as more money is invested using index-tracking funds, but the company said it had seen broad growth across its range of products in the six months to the end of June.

Schroders, which manages mutual funds for retail and institutional clients, as well as offering wealth management services, said total assets were 418.2 billion pounds ($549.3 billion), from 343.8 billion pounds a year earlier.

The gains were driven primarily by investment returns of 17.6 billion pounds, it said.

While it took in 800 million pounds of new money across its business, the total was limited by outflows of 5.2 billion pounds from funds it advises on for other firms.

That compares with inflows of 3.6 billion pounds for British peer Jupiter Fund Management on Wednesday.

"Overall a solid set of results with scope to edge up full year numbers," said Shore Capital analyst Paul McGinnis in a note to clients in which he kept a 'hold' rating on the stock on valution grounds.

Shares in Schroders were up 2 percent at 0815 GMT, outperforming in a flat FTSE 100.

Many asset managers are looking to diversify into so-called 'alternatives' like private equity to service institutional clients desperate for better returns, and earlier this year, Schroders agreed to buy Swiss-based private equity firm Adveq.

Chief Executive Peter Harrison said the company would continue to diversify further.

"Underlying progress in all regions was encouraging and we are building out our capabilities in Private Assets. We are confident in our ability to continue identifying, and investing in, areas of future growth," he said.

The growth in assets helped underpin a 21 percent rise in pretax profit from the same period a year earlier to 342.8 milllion pounds, and a 17 percent rise in the interim dividend to 34 pence a share, it said in a statement.

($1 = 0.7614 pounds) (Reporting by Simon Jessop; editing by Maiya Keidan/Keith Weir)