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Franklin's April AUM Advances

Zacks Equity Research

Franklin Resources Inc. (BEN) declared preliminary assets under management (:AUM) of $847.5 billion by its subsidiaries for Apr 2013. The company’s AUM rose 2.9% from $823.7 billion as of Mar 31, 2013. Moreover, it increased 16.7% from $726.4 billion as of Apr 30, 2012.

Month-end total equity assets came in at $325.9 billion, inching up 1.9% from the prior month and 10.1% from the year-ago period. Of the total equity assets, approximately 72.6% were from international sources while the remaining 27.4% were from the U.S.

Franklin’s total fixed income assets were $383.7 billion, up 3.9% from $369.2 billion as of Mar 31, 2013 and 19.8% from $320.3 billion as of Apr 30, 2012. Overall, tax-free assets for Franklin accounted for only 22.3% of the fixed income assets, while the remaining 77.7% were taxable.

Franklin recorded $132.1 billion in hybrid assets, which increased 2.2% from $129.2 billion in the prior month and surged 27.3% from $103.8 billion in the year-ago month.

Cash management funds for Franklin were reported at $5.8 billion, up 7.4% from the prior month but down 6.5% from the prior-year month.

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

Franklin has a global footprint and well-diversified AUM, which is strategically excellent for the company. Further, Franklin is expected to benefit from its strong balance sheet.

However, regulatory restrictions and a sluggish economic growth can adversely affect AUM improvement and increase costs.

Currently, Franklin carries a Zacks Rank #2 (Buy). Other better performing asset managers include Waddell & Reed Financial Inc. (WDR), which carries a Zacks Rank #1 (Strong Buy).

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