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Legg Mason (LM) January AUM Increases, Outflows Recorded

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Baltimore-based Legg Mason Inc.LM reported a rise in its assets under management (AUM) as of Jan 31, 2017, as compared with the prior month. Preliminary month-end AUM came in at $713.8 billion, slightly up from Dec 2016.

January's AUM displayed fixed income outflows of $1.0 billion, $0.8 billion equity outflows, alternative outflows of $0.7 billion and liquidity outflows of $4.0 billion. However, positive foreign exchange impact of about $3.7 billion was a favorable factor.

Legg Mason's equity AUM at the end of Jan 2017 increased 2% from the prior-month figure to $172.4 billion. Moreover, fixed income AUM inched up around 1% from the previous month to $385.1 billion. Alternative assets, including AUM managed by Clarion Partners, EnTrustPermal, RARE Infrastructure and Glouston Capital declined slightly to $71 billion.

The increase in equity and fixed income, partially offset by the decline in Alternative AUM, resulted in long-term AUM of $628.5 billion. The figure marked a 1.1% decrease from the prior month. Moreover, liquid assets, which are convertible into cash, decreased around 3.9% to $85.3 billion.

Competitive Landscape

Among other investment managers, Franklin Resources Inc. BEN inched up 1.86% after the company announced preliminary AUM by its subsidiaries of $728.8 billion for Jan 2017. The results exhibited around 1.2% rise from $720.0 billion as of Dec 31, 2016. However, the figure was almost in line with the prior year.

Further, Invesco Ltd. IVZ reported preliminary month-end AUM of $825.3 billion, up 1.5% from the previous month. The rise was supported by favorable market returns, foreign exchange and net long-term inflows, partially offset by a decline in money market AUM and outflows in PowerShares QQQs.

Our Viewpoint

Though absence of consistent growth in equity markets remain headwinds, we believe that Legg Mason has the potential to outperform its peers over the long run, given its diversified product mix, positiveforeign exchange fluctuations and leverage to the changing market demography.

Currently, Legg Mason carries a Zacks Rank #3 (Hold). The company's stock dropped 23.8% in 2016, underperforming the 3.3% growth for the Zacks categorized Investment Management industry.

A better-ranked finance company is Apollo Global Management, LLC APO , sporting a Zacks Rank #1 (Strong Buy). The company's shares gained over 27.5% in 2016. The Zacks Consensus Estimate for the stock climbed 9.8% to $2.25, over the last 30 days, for 2017.

You can see the complete list of today's Zacks #1 Rank stocks here .

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Invesco PLC (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.


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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