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Franklin August AUM Falls, Equity & Hybrid Assets Slump

Franklin Resources Inc.BEN declared preliminary assets under management (AUM) of $806 billion by its subsidiaries for August 2015. The company's results exhibited a 5.7% decline from $854.7 billion as of Jul 31, 2015. Moreover, it fell 12.6% from $922.2 billion as of Aug 31, 2014.

Month-end total equity assets came in at $330.7 billion for Franklin, down 7.6% from the prior month while it decreased 14.4% on a year-over-year basis. Of the total equity assets, around 68% were from international sources, while the remaining 32% were from the U.S.

Total fixed income assets were $323.6 billion, down 4.1% from the prior month and 11.3% from $365 billion as of Aug 31, 2014. Overall, tax-free assets accounted for only 22% of the fixed income assets, while the remaining 78% were taxable.

Franklin recorded $144.2 billion in hybrid assets, which decreased 5.3% from $152.3 billion in the prior month and 12.2% from $164.2 billion in the prior-year month.

Cash management funds were reported at $7.5 billion, up from $7.1 billion in the prior month and $6.7 billion in the prior-year month.

Competitive Landscape

Invesco Ltd.'s IVZ preliminary month-end AUM came in at $776.4 billion for August 2015, reflecting a decrease of 3.8% from the prior-month. The fall in AUM was attributable to unfavorable market returns and foreign exchange, along with outflows from money market funds as well as PowerShares QQQ.

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 elevate costs.

Franklin currently carries a Zacks Rank #3 (Hold). However, a better performing company in the same industry with a Zacks Rank #2 (Buy) is Lazard Ltd. LAZ .

Among other asset managers, Legg Mason Inc. LM is expected to release preliminary AUM for August 2015 later this week.

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INVESCO LTD (IVZ): Free Stock Analysis Report

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LAZARD LTD (LAZ): 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.


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

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