Worries about global and Chinese growth have battered riskier emerging markets in recent months. Emerging market stocks <.MSCIEF> have fallen nearly 30 percent since April 2015, with sovereign wealth funds among investors pulling out of the asset class.

"As we look forward, emerging and developed market assets are very much in focus in challenging conditions," Chief Financial Officer Tom Shippey told Reuters.

Shippey said that he remains cautiously optimistic, however, adding: "We have been in a down cycle for a while. At some point markets tend to turn."

Ashmore is increasing its sovereign weighting in fixed-income portfolios and adding to local currency positions where yields are high, Shippey said.

Assets under management dropped 16 percent to $49.4 billion, from $58.9 billion in June 2015, as a result of net outflows of $5.7 billion and negative investment performance of $3.8 billion.

Sovereign wealth funds in the Gulf region have driven a broad sell-off in global markets.

"We were part of the redemption round that took place ... as a consequence of certain oil-biased sovereigns adjusting their portfolio," Shippey said.

Ashmore's adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 29 percent to 68 million pounds ($98.84 million) in the six months to Dec.31, though this was slightly above a forecast of 64.2 million pounds in a company-supplied poll.

Net revenue fell 29 percent to 116.4 million pounds, against a forecast of 103.8 million.

Ashmore's shares fell by 4.9 percent to 201 pence at 0830 GMT, one of the worst performers in the FTSE mid-cap index <.FTMC>.

"We think the investment case is getting more interesting at these (share price) levels, albeit market movements so far in 2016 continue (to be) unhelpful," analysts at Shore Capital said in a client note.

Ashmore said it would pay an interim dividend of 4.55 pence per share, against a forecast 4.6 pence.

(Reporting by Carolyn Cohn; Editing by Rachel Armstrong and David Goodman)