Legg Mason Inc.
) reported a rise in its assets under management (AUM) as of Jul
31, 2013, compared with the prior month. Preliminary month-end
AUM came in at $656.4 billion, up 1.8% from June-end.
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Equity, fixed income and liquidity AUM were all up in the month
under review. Notably, July AUM reflects the redemption worth
$1.4 billion from a global equity mandate.
Legg Mason's equity AUM as of July-end rose 3.5% from the prior
month to $170.1 billion, while fixed income AUM inched up 0.4%
compared with the prior month to $352.5 billion.
The rise in fixed income and equity AUM resulted in a long-term
AUM of $522.6 billion, reflecting a 1.4% increase against the
prior month. Liquid assets, which are convertible into cash,
surged about 3.6% to $133.8 billion.
Among other investment managers,
) announced a 3.4% rise in its preliminary month-end AUM for Jul
2013, which stood at $729.4 billion. Another firm -
Franklin Resources Inc.
) - declared preliminary AUM of $834.1 billion by its
subsidiaries for the month of Jul 2013, reflecting an increase of
2.3% over the prior month.
We believe Legg Mason has the potential to outperform its peers
in the long run, given its diversified product mix and leverage
to the changing market demography. Moreover, a significant
rebound in equity markets in the coming quarters would act as a
However, in the near term, asset outflows will remain a
significant headwind. Yet, owing to the restructuring initiatives
and cost-cutting measures, we expect operating efficiencies to
improve for Legg Mason and dividend payments to continue to
inspire investors' confidence in the stock.
Currently, Legg Mason holds a Zacks Rank #3 (Hold). Some better
performing asset managers include
Ameriprise Financial, Inc.
) with a Zacks Rank #2 (Buy).