Franklin Resources Inc.
) declared preliminary assets under management (AUM) of $731.0
billion by its subsidiaries for the month of August 2012. The
company's results witnessed a rise of 1.7% from $718.7 billion as
of July 31, 2012. Moreover, it increased 2.0% from $716.4 billion
as of August 31, 2011.
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Month-end total equity assets came in at $288.1 billion, improving
2.4% from the prior month and 0.5% on a year-over-year basis. Of
the total equity assets, around 72% were from international
sources, while the remaining 28% were from the U.S.
Total fixed income assets were $329.3 billion, inching up 1.0% from
$325.9 billion as of July 31, 2012, and 4.7% from $314.6 billion as
of August 31, 2011. Overall, tax-free assets accounted for only 25%
of the fixed income assets, while the remaining 75% were taxable.
Franklin recorded $107.4 billion in hybrid assets, which augmented
1.9% from $105.4 billion as of July 31, 2012. However, hybrid
assets dipped 0.4% from $107.8 billion recorded in the prior-year
month. Cash management funds were reported at $6.2 billion, up from
$6.1 billion in the prior month but waning from $7.2 billion in the
On a quarterly basis, as of June 30, 2012, total AUM was $707.1
billion, down from $725.7 billion as of March 31, 2012,
attributable to market depreciation of $22.5 billion, partially
offset by net new flows of $4.8 billion. Moreover, AUM decreased 4%
on a year-over-year basis, mainly due to market depreciation of
Simple monthly average AUM of $710.7 billion during the quarter
climbed 1% sequentially but declined 2% year over year. Net new
flows were $4.8 billion versus $5.6 billion in the prior quarter
and $21.7 billion in the prior-year quarter.
Franklin's global footprint is an exceptionally favorable strategic
point as its AUM is well diversified. The company is also poised to
benefit from its strong balance sheet. However, regulatory
restrictions and sluggish economic recovery could mar AUM growth
and alleviate costs. Additionally, lower revenues remain a matter
Franklin currently retains a Zacks #3 Rank, which translates into a
short-term Hold rating. Considering the fundamentals, we also
maintain a long-term 'Neutral' recommendation on the stock.
Among Franklin's peers,
) is expected to announce its preliminary month-end AUM for August,
later this week.