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Franklin's February AUM Advances - Analyst Blog

By: Zacks.com
Posted: 3/12/2013 11:31:00 AM
Referenced Stocks: BEN;IVZ;LAZ;LM

Franklin Resources Inc . ( BEN ) declared preliminary assets under management (AUM) of $813.8 billion by its subsidiaries for Feb 2013. The company's results witnessed a rise of 0.5% from $809.8 billion as of Jan 31, 2013. Moreover, it increased 11.9% from $727.4 billion as of Feb 29, 2012.

Month-end total equity assets came in at $317.5 billion for Franklin, decreasing 0.2% from the prior month but increasing 5.4% on a year-over-year basis. Of the total equity assets, around 72.9% were from international sources, while the remaining 27.1% were from the U.S.

Franklin's total fixed income assets were $364.7 billion, rising 1.2% from $360.5 billion as of Jan 31, 2013, and augmenting 15% from $317.2 billion as of Feb 29, 2012. Overall, tax-free assets for Franklin accounted for only 23.4% of the fixed income assets, while the remaining 76.6% were taxable.

Franklin recorded $125.7 billion in hybrid assets, which edged up 0.4% from $125.2 billion in the prior month and surged 22.4% from $102.7 billion in the prior-year month.

Cash management funds for Franklin were reported at $5.9 billion, in line with the prior month but waning 7.8% from the prior-year month.

Among other investment managers , Invesco Ltd . ( IVZ ) recorded a rise in its preliminary month-end AUM for Feb 2013. The AUM for the month was $713.8 billion compared with $712.6 billion at the end of Jan 2013. Favorable market returns as well as surge in both active and passive long-term inflows were the primary reasons for the rise. Yet, foreign exchange led to a $5.8 billion drop in AUM.

Further , Legg Mason Inc . ( LM ) is expected to release its preliminary AUM for the month of Feb 2013 later this week.

Our Viewpoint

Franklin has a global footprint and a well diversified AUM, which is an excellent strategic point for the company. Further, Franklin is expected to benefit from its strong balance sheet.

However, regulatory restrictions and sluggish economic growth can adversely affect AUM improvement and increase costs. Additionally, higher expenses remain a matter of concern.

Franklin currently carries a Zacks Rank #3 (Hold). Other asset managers in the same sector worth considering is Lazard Ltd . ( LAZ ), which currently holds a Zacks Rank #1 (Strong Buy).



FRANKLIN RESOUR (BEN): Free Stock Analysis Report

INVESCO LTD (IVZ): Free Stock Analysis Report

LAZARD LTD (LAZ): Free Stock Analysis Report

LEGG MASON INC (LM): Free Stock Analysis Report

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