ABERDEEN Asset Management has predicted continuing market volatility but reassured investors that net outflows are slowing after an £8.8bn drain in the previous quarter.
In a static market dampened by global tensions, the fund manager's shares slipped 0.5p to 399p after starting the month at 435p.
In a trading update yesterday, Aberdeen reported assets under management up three per cent to £331.2 billion at August 31, and said its new emerging market debt and property products had each contributed net inflows of over £1bn in the first 11 months of the financial year.
It said the integration of SWIP, its £550m Edinburgh-based acquisition from Lloyds, was on track, and added: "Much of the front office migration is complete and a number of SWIP teams have successfully transferred to Aberdeen's offices.
"The remaining front office migration will be implemented over the next few months, while the back office integration will be completed in late 2015."
Martin Gilbert, chief executive, said: "Our equity capabilities are recovering, both in terms of performance and flows following a tough 2013. It's also encouraging that our marketing focus on non-equity products is gaining traction, particularly in terms of property and emerging market debt."
Mr Gilbert said he was confident that Aberdeen's increased scale and breadth provided "a solid foundation to weather what are likely to remain volatile markets"."
The group said business flows had stabilised since June and were improving, with the mix moving towards higher margin products. Aberdeen's core equity portfolios saw net inflows of £100m, while property and emerging market debt inflows were "subdued" and high yield saw investors taking some profits from the sector.
Bill Rattray, finance director, said: "In the early part of the financial year we saw quite weak investor sentiment on emerging markets, which in the latter part of the period has begun to recover. It is going to take a bit of time for the respective teams to get familiar with the broader product range, it is something we are envisaging taking a few quarters."
Net outflows from the legacy SWIP business totalled £700m, compared with £3.3bn in the previous quarter. Aberdeen expects some continuing loss of low margin business but reports "steady net inflows to the SWIP Property Trust and some new fund launches in infrastructure".
Goldman Sachs, which maintained its buy rating on the shares, said: "The recent flow trend represents a continued sequential improvement in outflows, with annualised outflows of 3.2 per cent versus 10.8 per cent in the previous quarter and 6.7 per cent in the same quarter last year."
Aberdeen said: "Overall, performance remains robust and short-term equity performance has improved steadily in recent months. In particular, global equity performance has recovered strongly as sentiment towards emerging markets and Asia, in which our funds are overweight, has improved."
But it noted volatility returned in September and said "being mindful of various geo-political problems around the world, we continue to be cautious on the outlook for markets".
Further additions have been made to the pipeline of new mandates awarded but not yet funded, spread across asset classes.
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