UPDATE 1-Ashmore's assets down by 3% as market volatility hits performance

(Adds detail, context)

LONDON, April 16 (Reuters) - Ashmore Group said on Friday that its assets under management fell by $3.1 billion during the first three months of 2021, as market volatility hurt performance.

The UK-listed emerging markets-focused investment group said its AUM dropped to $89.9 billion in the three months to March 31 from $93 billion in the prior three-month period.

"The past quarter has shown that as economies transition from the shock of the COVID-19 pandemic back to growth, there will be periods of market volatility as they adjust towards normality," CEO Mark Coombs said.

Worries about rising U.S. rates and high COVID-19 cases and slow vaccination programmes in developing countries have weighed on investor sentiment and emerging market assets this year. The replacement of Turkey's central bank governor and tensions between Russia and Ukraine have added to the bearish outlook. Ashmore said its net inflows of $1.5 billion were offset by negative investment performance of $4.6 billion.

It said it had net inflows in overlay/liquidity, corporate debt, equities and alternatives, but net outflows in external debt and local currency. (Reporting by Tom Arnold; editing by Jason Neely)