Legg Mason AUM Ascends in August, Liquidity Inflows Recorded

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Legg Mason Inc.LM reported a slight rise in assets under management (AUM) as of Aug 31, 2018, from the prior month. Preliminary month-end AUM came in at $751.8 billion, up from the July 2018 figure of $749.2 billion.

August AUM displayed $0.7-billion fixed income outflows, equity net outflows of $0.6 billion and alternative net outflows of $0.1 billion, fully offset by $2.9 billion of liquidity inflows. Notably, negative foreign exchange impact of $1.7 billion remained an unfavorable factor.

Legg Mason's equity AUM at the end of August inched up 1.7% from the prior-month figure to $215.7 billion. Fixed income AUM dipped slightly sequentially to $409.5 billion. Further, alternative assets decreased moderately to $65.8 billion.

Fall in fixed income and Alternatives AUM was partly offset by rise in equity AUM, resulting in long-term AUM of $691 billion. The figure marks a marginal fall from the previous month. Moreover, liquid assets, which are convertible into cash, moved up 4.8% to $60.8 billion.

Competitive Landscape

Franklin Resources BEN has announced preliminary AUM by its subsidiaries of $722.4 billion for August 2018. Results display 1.5% fall from $733.7 billion recorded as of Jul 31, 2018. Net market losses and net outflows were undermining factors. Also, the figure dipped 3.3% from the previous year.

T. Rowe Price Group, Inc. TROW announced preliminary AUM of $1.09 trillion for August 2018. Results reflect nearly 2% rise from $1.07 trillion recorded on Jul 31, 2018. Client transfers from mutual funds to other portfolios, including trusts and separate accounts, were $1.6 billion in August.

Though Invesco Ltd's IVZ preliminary month-end AUM as of Aug 31, 2018 of $988 billion remained stable compared to the previous month, all its AUM segments, except Equity AUM, witnessed a fall. While favorable market returns and non-management fee earning AUM benefited the company's AUM, net long-term outflows and decrease in balanced AUM were the downside. Moreover, foreign exchange dragged down the month's AUM by $1.2 billion.

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, absence of continued growth in equity markets and foreign-exchange fluctuations remain headwinds.

Shares of the company have lost around 24.6% over the last six months compared with 8.4% 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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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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