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Legg Mason's August AUM Down on Outflows in Liquid Assets

Zacks Equity Research

Legg Mason LM reported marginal fall in assets under management (AUM) as of Aug 31, 2019, from the previous month. Preliminary month-end AUM came in at $776.8 billion, down 0.5% from the July 2019 figure of $780.5 billion.

The company’s August AUM displayed $0.8 billion long-term net inflows, which was more than offset by liquidity outflows of $4.4 billion. Also, negative foreign-exchange impact of $1.4 billion was an unfavorable factor.

Legg Mason’s equity AUM at the end of August declined 2.8% from the prior month to $201 billion. However, fixed income AUM was up 1.5% sequentially to $444.7 billion. Further, alternative assets remained stable at $71.7 billion.

Rise in fixed income AUM and stable alternative AUM resulted in long-term AUM of $717.4 billion. The figure marks a slight increase from the previous month level of$716.7 billion. However, liquid assets, which are convertible into cash, were down 6.9% to $59.4 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 pose headwinds.

Shares of the company have rallied 55.8% so far this year, outperforming 15.9% growth 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.

Performance of Other Asset Managers

Cohen & Steers CNS reported preliminary AUM of $69.6 billion as of Aug 31, 2019, up 3% from the prior-month level of $67.5 billion. Market appreciation of $2 billion and net inflows of $240 million were partly offset by distributions of $186 million.

Invesco’s IVZ preliminary month-end AUM of $1,175.1 billion for August 2016 decreased 2% from the prior month. The decline primarily stemmed from net long-term outflows, reduced money market AUM, foreign exchange, non-management fee earning AUM outflows and unfavorable market returns.

Franklin Resources BEN reported preliminary AUM by its subsidiaries of $690.6 billion for August. Results display 2.7% decrease from the $709.5 billion recorded as of Jul 31, 2019. Slight net outflows and net market declines led to this downside. Further, the reported figure went down 4.4% year on year.

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Franklin Resources, Inc. (BEN) : Free Stock Analysis Report
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