Franklin Resources Inc.
) declared preliminary assets under management (AUM) of $768.8
billion by its subsidiaries for the month of November 2012. The
company's results witnessed a rise of 2.0% from $753.9 billion as
of Oct 31, 2012. Moreover, it increased 13.8% from $675.8 billion
as of Nov 30, 2011.
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Month-end total equity assets came in at $295.4 billion,
increasing 0.1% from the prior month but elevating 7.7% on a
year-over-year basis. Of the total equity assets, around 73% were
from international sources, while the remaining 27% were from the
Total fixed income assets were $348.5 billion, inching up 1.9%
from $341.9 billion as of Oct 31, 2012, and 16.2% from $299.8
billion as of Nov 30, 2011. Overall, tax-free assets accounted
for only 25% of the fixed income assets, while the remaining 75%
Franklin recorded $118.9 billion in hybrid assets, which
augmented 7.3% from $110.8 billion in the prior month. Moreover,
hybrid assets surged 25.7% from $94.6 billion recorded in the
prior-year month. Hybrid assets of the month under review
included the acquisition of K2 Advisors of approximately $8.7
Cash management funds were reported at $6.0 billion, in line with
the prior month and waning from $7.2 billion in the prior-year
On a quarterly basis, as of Sep 30, 2012, total AUM was $749.9
billion, up from $707.1 billion as of Jun 30, 2012, driven by
market appreciation of $40.8 billion and net new flows of $2.9
Simple monthly average AUM of $726.7 billion during the quarter
climbed 2% sequentially. Net new flows were $2.9 billion versus
$4.8 billion in the prior 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, higher expenses
remain a matter of concern.
Franklin currently retains a Zacks #3 Rank, which translates into
a short-term Hold rating. We believe the acceleration in AUM amid
volatile markets might lead to positive estimate revisions. This,
in turn, could cause an improvement in the Zacks Rank.
Among Franklin's peers,
) is expected to announce its preliminary month-end AUM for
November later this week.