Legg Mason's (LM) July AUM Increases on Higher Equity Assets

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Legg Mason Inc. LM has reported an increase in assets under management (AUM), as of Jul 31, 2018, compared with the previous month. Preliminary month-end AUM came in at $749.2 billion, higher than the June 2018 figure of $744.6 billion.

The July AUM displayed $1.9-billion net fixed income outflows, along with equity net outflows of $0.5 billion and $0.6 billion of alternative outflows. Further, liquid AUM witnessed net outflows of $1.6 billion. Notably, positive foreign-exchange impact of $0.1 billion was a favorable factor.

Legg Mason's equity AUM at the end of July climbed 2.8% from the previous month to $212.1 billion. Fixed income AUM increased slightly from the prior-month figure to $413.1 billion. However, alternative assets decreased moderately to $66 billion.

Increase in fixed income and equity AUM, partially offset by fall in alternative AUM, resulted in long-term AUM of $691.2 billion. The figure marked slight increase from the previous month. However, liquid assets, which are convertible into cash, edged down 0.9% to $58 billion.

Competitive Landscape

Franklin Resources BEN announced preliminary AUM by its subsidiaries of $733.7 billion for July. Results reflect growth of 1.3% from $724.1 billion recorded as of Jun 30, 2018. This upside was primarily driven by market gains, partially offset by net outflows.

Cohen & Steers CNS reported preliminary AUM of $60.5 billion as of Jul 31, 2018, up almost 1% from the prior-month level. Market appreciation of $653 million was partially offset by net outflows of $72 million and distributions of $261 million.

Invesco Ltd. IVZ reported preliminary month-end assets under management (AUM) of $987.8 billion for July 2018. The figure reflects a rise of 2.5% from the previous month. This improvement was mainly aided by increase in money market AUM, full consolidation of the Invesco Great Wall joint venture and reinvestment of distributions.

Our Viewpoint

Legg Mason has the potential to outperform its peers over the long run, backed by a diversified product mix and leverage to the changing market demography.

Nonetheless, current cyclical and secular pressures in the asset-management business and equity outflows remain concerns for the company.

Shares of the company have lost 18.4% over the last six months compared to the 9.3% decline recorded by the industry .

Legg Mason currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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Invesco Ltd. (IVZ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: IVZ , LM , BEN , CNS

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