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Franklin January AUM Slides - Analyst Blog

Posted: 2/11/2014 6:25:00 PM
Referenced Stocks: BEN;IVZ;LM;WDR

Franklin Resources Inc. ( BEN ) declared preliminary assets under management (AUM) of $857.2 billion by its subsidiaries for Jan 2014. The company's results exhibited a 2.5% fall from $879.1 billion as of Dec 31, 2013. Yet it surged 5.9% from $809.8 billion as of Jan 31, 2013.

Month-end total equity assets came in at $353.1 billion for Franklin, down 3.4% from the prior month but up 11.0% on a year-over-year basis. Of the total equity assets, around 71% were from international sources, while the remaining 29% were from the U.S.

Total fixed income assets were $351.1 billion, down 2.2% from $359.0 billion as of Dec 31, 2013 and 2.6% from $360.5 billion as of Jan 31, 2013. Overall, tax-free assets accounted for only 20% of the fixed income assets, while the remaining 80% were taxable.

Franklin recorded $146.6 billion in hybrid assets, which inched down around 1.0% from $147.8 billion in the prior month but jumped 17.1% from $125.2 billion in the prior-year month.

Cash management funds were reported at $6.4 billion, down from $6.6 billion in the prior month but up from $5.9 billion in the prior-year month.

Quarterly Performance

On a quarterly basis, as of Dec 31, 2013, total AUM was $879.1 billion, up from $781.8 billion as of Dec 31, 2012, driven by market appreciation of $77.3 billion and $24.0 billion of net new flows. Simple monthly average AUM of $865.9 billion during the quarter climbed 13% year over year.

Our Viewpoint

Franklin's global footprint is a 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 growth could mar AUM improvement and alleviate costs.

Franklin currently carries a Zacks Rank #2 (Buy). However, a better performing company in the same industry with a Zacks Rank #1 (Strong Buy) is Waddell & Reed Financial, Inc. ( WDR ).

Among other asset managers, Invesco Ltd. ( IVZ ) and Legg Mason Inc. ( LM ) are expected to release preliminary AUM for Jan 2014 later this week.

FRANKLIN RESOUR (BEN): Free Stock Analysis Report

INVESCO LTD (IVZ): Free Stock Analysis Report

LEGG MASON INC (LM): Free Stock Analysis Report

WADDELL&REED -A (WDR): Free Stock Analysis Report

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