Schroders sees October bounce back from tough Q3, shares rise

* Q3 assets 294.8 bln pounds vs 309.9 bln at end-June

* Hit by stock and bond market falls, FX losses

* October trading 'reasonable'; shares up 1.5 pct (Adds detail from statement, CEO quote, analyst quote, shares)

By Simon Jessop

LONDON, Nov 5 (Reuters) - British fund manager Schroders said trading had picked up in October after a tough third quarter, boosted by demand for its global fixed income and multi-asset funds, sending its shares higher.

Asset managers across the world have been hit hard during a quarter when many markets fell in volatile trading amid growing concerns around the growth outlook, particularly in China.

Managed assets slid 4.9 percent in the three months to the end of September, hit by stock and bond market falls, as well as adverse currency moves. Most of the outflows were from Schroders (LSE: SDR.L - news) ' emerging market debt and commodity funds.

"It (Other OTC: ITGL - news) 's a resilient performance in what has been a volatile environment, with low demand in retail in August and September for the industry, with flows at their lowest level all year in cross-border funds," said Chief Executive Michael Dobson.

Assets under management were 294.8 billion pounds ($453.4 billion) at the end of the period, against 309.9 billion at the end of June, a fall of 4.9 percent, after a 14.6 billion pounds investment hit and net outflows were 0.5 billion pounds.

Since then, however, the firm had taken in 2.3 billion pounds of net new business from institutional investors in Asia and the UK, largely into its global fixed income funds, while performance across October had been reasonable, Dobson said.

The weak investment performance and improved inflows follows a pattern set earlier in the reporting season by rival fund managers including Jupiter Fund Management and hedge fund Man Group (LSE: EMG.L - news) .

Shares (Berlin: DI6.BE - news) in Schroders were up 1.5 percent at 0844 GMT, outperforming in a 0.5 percent weaker FTSE 100, which had fallen 7 percent during the third quarter.

Keeping a "hold" recommendation on the stock, Shore Capital analyst Paul McGinnis said with net inflows for the first half at 8.8 billion pounds, the third quarter slowdown had been material, and would require him to revise down his full year view for inflows of 15.6 billion.

Profitability in both asset management and wealth management had held up well, though, he added. Pretax profits over the nine months to end-September period were up 21 percent to 438.9 million pounds, Schroders said. ($1 = 0.6502 pounds) (Reporting by Simon Jessop; Editing by Sinead Cruise and Keith Weir)