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Legg Mason AUM Rises in April, Fixed Income Inflows Recorded

Zacks Equity Research

Legg Mason Inc. LM reported 1.3% growth in assets under management (AUM) as of Apr 30, 2019, from the previous month. Preliminary month-end AUM came in at $767.5 billion, up from the March 2019 figure of $758 billion.

The company’s April AUM displayed $2.5 billion fixed income inflows and alternative inflows of $0.1 billion, partly offset by liquidity and equity net outflows of $1.1 billion and $1.4 billion, respectively. Notably, alternative AUM recorded $0.1 billion of realizations. However, negative foreign-exchange impact of $0.5 billion remained an unfavorable factor.

Legg Mason’s equity AUM at the end of April climbed 3.5% from the prior-month figure to $209 billion. Fixed income AUM was up slightly sequentially to $422.5 billion. Further, alternative assets increased around 1% to $66.8 billion.

Rise in fixed income, equity and alternative AUM, resulted in long-term AUM of $700.7 billion. The figure marks a 1.5% increase from the previous month. However, liquid assets, which are convertible into cash, edged down 1.5% to $66.8 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 18.7% over the last six months, as against 9.1% growth recorded by the industry.

Legg Mason currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Competitive Landscape

Among other investment managers, Cohen & Steers CNS reported preliminary AUM of $63.1 billion as of Apr 30, 2019, around up 1% from the prior-month level. Market appreciation of $178 million and net inflows of $428million, partly offset by distributions of $195 million, drove this upswing.

Invesco IVZ has also announced its AUM for April. The company’s preliminary month-end AUM of $975.2 billion increased 2.1% from the prior month. This growth was primarily driven by favorable market returns, increase in money market AUM, non-management fee earning AUM inflows, net long-term inflows and reinvested distributions. However, unfavorable foreign-exchange movement brought down the month’s AUM by $0.4 billion.

Franklin Resources BEN recorded preliminary AUM by its subsidiaries of $720.5 billion for April. Results display 1.2% growth from the $712.3 billion recorded as of Mar 31, 2019. Net market gains, partially offset by net outflows, led to this upside. However, the figure dipped 1.6% from the previous year.

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