European asset managers enjoyed a positive third quarter, analysts at UBS noted on Monday, with major equity indices rising 3-7% and market volatility falling to pre-UK referendum levels.

“Given the turbulent start to the quarter (following the Brexit vote), Q3 2016 turned out to be a more benign environment than expected,” equity analyst Michael Werner said on Monday.

Retail client flows rebounded from the challenged Q2 levels, prompting UBS to raise its estimates for Aberdeen, Jupiter and Schroders.

“We are adjusting our 2016-17 earnings per share figures upwards for the European asset managers on the back of the benign operating environment for the group this past quarter,” London-based Werner added. 

“That said, the upgrades are generally modest.”

UBS analysts continue to view Italian asset manager Anima as their preferred investment house out of the bunch.

The Swiss bank also upped its our price target for emerging markets- focused Ashmore by 8% (to 340p). 

“Emerging markets asset classes continue to enjoy superior flows this year relative to the recent past," said Ben Gutteridge, head of fund research at Brewin Dolphin at the start of the week. 

Given the backdrop, Gutteridge revealed on Monday that Brewin has raised its emerging market allocation after an extended period of a below benchmark position. 

Elsewhere, UK trade body the Investment Association sent out some monthly statistics at the start of the week, showing UK fund sales bounced bank in August after a Brexit slump.

Funds under management now stand over £1trn. Net retail sales totalled £1.7bn in August with fixed income the best selling asset class with sales over £1.2b

"Industry funds under management reached a record high of £1trn in August further cementing the importance of the asset management industry in the UK," said Chris Cummings, chief executive of the Investment Association. 

"Net retail sales were £1.7bn, reversing the Brexit related outflows of the past few months. However, caution is still evident as retail investors continue to prefer fixed income and absolute return strategies to traditionally more risky equity products."

Alastair Wainwright, fund market specialist at the tade body added that although markets have rallied due to looser monetary policy from the Bank of England and the weaker pound, UK investors remain cautious in their asset allocation decisions.