Shares in Schroder's were down on the FTSE 100 in afternoon trading despite the asset management company more than doubling its pre-tax profit in the full year ended 31 December 2010.

Funds under management rose from £148.4 billion in the previous year to £196.7 billion, while net inflows increased from £15 billion to £27.1 billion.

The group said that pre-tax profit jumped from £137.5 million to £406.9 million and added that it would be raising its full year dividend from 31.0 pence per share to 37.0 pence per share.

Profitability was driven by Schroder's Asset Management division, which saw profits rise from £174.7 million to £381 million. By contrast the group's Private Banking arm saw profits slump from £20.1 million to £10.1 million.

In a statement Schroder's said, "2010 was a volatile year for investors. Equity markets initially continued the strong performance of 2009 before falling back as concerns developed over the stability of the Eurozone. Meanwhile, the continued search for yield in a very low interest rate environment provided good support for fixed income markets. Later, with further quantitative easing in the US, investors' risk appetite returned and equity markets resumed their upward trend to the end of the year. 2010 also saw a reappraisal of sovereign risk and the prospects for economic growth in developed economies which led investors to rebalance their portfolios towards emerging markets.

"We expect the economic recovery to continue in 2011 which should support asset prices over the year. However, markets will continue to be volatile in the face of increasing inflationary pressures, interest rates trending upwards in many countries and heightened political risk in developing markets."

By 14:45 shares in Schroder's were down 1.61 per cent on the FTSE 100 to 1,771.00 pence per share.