Schroders said that while retail investors had pulled money from its funds in the second quarter amid worries about a U.S. withdrawal of monetary stimulus, most had since bought back into its products in July.
June's sell-off underlines the fragility of investor sentiment and the risks of outflows for fund managers despite long-term trends - a need for rising retirement savings and an ageing population - supporting their business.
Retail investors in particular, scarred during the financial crisis, have been quick to pull money on fears of an economic slowdown or that efforts by central banks to revive business activity would soon taper off.
"Most of the flows out were in retail. We've seen a lot of that bounce back in July," chief executive Michael Dobson told reporters after Schroders unveiled its first-half results.
Stock in Schroders, Standard Life and Henderson Group, which also reported first-half results, fell as investors digested news of the outflows in the second quarter, and took profits on shares that have risen strongly this year.
Standard Life, which earns most of its money by selling insurance, saw 7.1 billion pounds of net new money added to assets run for clients by its fund management arm in the first half of 2013.
Henderson Group, smaller than its two FTSE-100 listed rivals, posted a slowdown in net outflows in the second quarter - to 182 million pounds from 1.27 billion pounds in the first quarter - beating forecasts by RBC Capital Markets analysts, helped by a turnaround in retail sales.
Dobson said the backdrop for equities in particular remained positive, with Bank of England governor Mark Carney's forward guidance on the path of interest rates providing a boost.
"It does give investors and companies the opportunity to look forward and make some asset allocation calls with a slightly longer-time horizon," he said.
With the exception of June, most UK fund managers have enjoyed a strong 2013 due to recovering investor appetite for risk-taking, and several have reported double-digit profit rises and hikes to their dividends of up to 40 percent.
Confidence that the U.S. and European economies are on the road to recovery have sent stock markets higher, boosting assets under management and with it, fund firms' fees.
Schroders said its assets under management rose to 235.7 billion pounds. This was 21 percent higher than the same time last year as strong net inflows during the first five months of the year outweighed June's outflows.
Standard Life said total assets under management at its investment arm rose to 178.8 billion pounds, up 7 percent on a year earlier, lifted by flows of new money and investment performance buoyed by stronger markets.
Henderson said assets rose 3 percent to 67.9 billion pounds during the first-half on the back of market gains, although it suffered from 1.45 billion pounds of client withdrawals.
DIVIDEND HIKES
Schroders plans to increase its interim dividend to 16 pence per share from 13 pence per share a year ago, following a raft of fund management firms that have used rising profits to increase payouts to shareholders.
Across the half-year, net inflows topped 4.5 billion pounds at the company. Profit before tax and exceptional items rose to 228 million pounds ($353.8 million) from 177.4 million a year earlier on the back of more client money and rising fee incomes.
Standard Life hiked its dividend 6.5 percent to 5.22 pence, while last week Jupiter Fund Management lifted its dividend by 40 percent after profit rose by a quarter.
Shares in Schroders fell 4.8 percent by 1237 GMT, after investors focused on a bigger than expected drop in assets under management in the three months to end-June. Henderson fell 1 percent.
Standard Life shares traded 1.9 percent lower, with analysts highlighting operating profits below consensus, hurt in part by higher debt repayment costs. ($1 = 0.6445 British pounds)
(Reporting by Tommy Wilkes; additional reporting by David Brett; editing by David Holmes, Tom Pfeiffer and Thomas Atkins)
