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UPDATE 2-Money manager Invesco's quarterly profit up 2 percent

* Earned 38 cents a share in quarter vs 36 cents year ago

* Earned adjusted 42 cents a share, just below analysts' estimate

* Total assets $683 billion, up 14 percent from year ago

Nov 1 (Reuters) - Money manager Invesco Ltd said its third-quarter profit rose 2 percent as customers added almost $12 billion to the firm's funds.

Net income attributable to common shareholders totaled $170.6 million, or 38 cents per share, up from $166.9 million, or 36 cents per share, in the same period a year ago, the Atlanta-based firm said in a statement.

Chief Executive Martin Flanagan pointed to strength in Invesco's asset allocation funds and Powershares line-up of exchange-traded funds during the quarter. ``This was amongst the strongest net flows in the history of the company and the most robust net flows we've experienced since the second quarter of 2010,'' Flanagan said on a call with analysts.

Excluding items, Invesco earned 42 cents per share. On that basis, analysts, on average, had expected 45 cents, according to Thomson Reuters I/B/E/S.

The slight miss relative to expectations came as Invesco's adjusted compensation expenses rose to $328 million, a 7 percent increase that was more than double the 3 percent rise in adjusted revenue.

That resulted from the need to pay money managers more for investment performance, which ultimately will draw in more customers, Nomura analyst Glenn Schorr said.

Investor's ``focus should be on solid performance and great flow numbers,'' he wrote in a report on Thursday.

Assets under management totaled $683 billion, up 14 percent from a year earlier and almost 6 percent during the quarter. Customers added a net $9.4 billion to long term funds and accounts and $2.3 billion to money market accounts.

Almost all of the long-term customer inflows went to bonds, which garnered $7.2 billion in the quarter, and balanced funds, which got $3.7 billion. Equity and alternative funds saw outflows of $800 million and $500 million respectively.

Shares of Invesco closed at $24.74, up 1.7 percent, on Thursday on the New York Stock Exchange. The shares have gained 23 percent so far this year, outpacing a 14 percent advance in the Standard & Poor's 500 Index.