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Franklin's September AUM Rise - Analyst Blog

Posted: 10/9/2013 10:10:00 AM
Referenced Stocks: BEN;IVZ;LM;WDR

Franklin Resources Inc. ( BEN ) declared preliminary assets under management (AUM) of $844.7 billion by its subsidiaries for Sep 2013. The reported AUM depicted a rise of 3% from $817.3 billion as of Aug 31, 2013. Additionally, it increased 12.6% from $749.9 billion as of Sep 30, 2012.

Month-end total equity assets came in at $341.1 billion for Franklin, up 5.4% from the prior month and 14.8% 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 was $359.5 billion, rising 1.8% from $364.4 billion as of Aug 31, 2013 and 6.9% from $336.3 billion as of Sep 30, 2012. Overall, tax-free assets accounted for only 20% of fixed income assets, while the remaining 80% was taxable.

Franklin recorded hybrid assets of $137.5 billion, up 2.8% from $133.8 billion in the prior month and increasing 24.9% from $110.1 billion in the prior-year month.

Cash management funds were reported at $6.6 billion, down from $6.8 billion in the prior month but increasing 3.1% from $6.4 billion in the prior-year month.

Quarterly Performance

On a quarterly basis, as of Jun 30, 2013, Franklin reported total AUM of $815.0 billion, up from $707.1 billion as of Jun 30, 2012, driven by market appreciation of $73.8 billion and $29.9 billion of net new flows.

Simple monthly average AUM of $833.2 billion in the quarter climbed 17% year over year. Net new flows were $8.4 billion versus $4.8 billion in the prior-year quarter.

Among other asset managers, Legg Mason Inc. ( LM ) and Invesco Ltd. ( IVZ ) are expected to release their preliminary AUM for Sep 2013 by the end of this week.

Our Viewpoint

Franklin's global footprint is favorable and enables its AUM to be well diversified. The company is also poised to benefit from its strong balance sheet. However, regulatory restrictions and a sluggish economy could limit AUM growth and increase costs. Additionally, a rise in expenses remains a matter of concern.

Franklin currently carries a Zacks Rank #3 (Hold). However, a better-performing company in the same industry with a Zacks Rank #1 (Strong Buy) is Waddell & Reed Financial, Inc. ( WDR ).

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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