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T. Rowe Price Reports 5% Sequential Decline in February AUM

Zacks Equity Research

T. Rowe Price Group, Inc. TROW has announced preliminary assets under management (AUM) of $1.15 trillion for February 2020. The figure reflects nearly 5% decline from the $1.21 trillion recorded on Jan 31, 2020.

Client transfers from mutual funds to other portfolios, including trusts and separate accounts, were $0.9 billion in February.

Month-end total sponsored U.S. mutual funds came in at $647 billion, down 5.3% from January 2020. Of the total sponsored U.S. mutual funds, around 79% was from stock and blended assets, while the remaining came in from fixed income and money market.

Total other investment portfolios were $503 billion, highlighting a 4.9% decrease from the previous month. Overall, stock and blended assets accounted for $389 billion or 77% of other investment portfolios, while money-market and fixed income came in at $114 billion or 23%.

T. Rowe Price recorded $277 billion in target date-retirement portfolios, down 5.1% from the $292 billion in the prior month.

Our Viewpoint

Although regulatory restrictions and sluggish economic recovery might impair the company’s growth and escalate costs, T. Rowe Price’s diverse and efficient business model is anticipated to boost its AUM. Moreover, its organic growth remains impressive, as indicated by continued growth in revenues.

The stock has lost around 14.4% in the past three months compared with the industry’s decline of 13.8%.

T. Rowe 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, Invesco IVZ announced its AUM for February 2020. The company’s preliminary month-end AUM of $1,159.4 billion represents a decline of 4.9% from the previous month. The decline was due to unfavorable market returns, net long-term outflows and net outflows in money market AUM, partly offset by net inflows in non-management fee earning AUM and reinvested distributions. Further, unfavorable foreign-exchange movement resulted in a fall in the monthly AUM by $3.9 billion.

Franklin Resources BEN announced preliminary AUM by its subsidiaries of $656.5 billion for February 2020. Results displayed a 4.6% decrease from $688 billion recorded as of Jan 31, 2020. Net outflows and negative market returns led to the decline. Further, the reported figure declined 8.1% year on year.

LPL Financial Holdings Inc.’s LPLA total brokerage and advisory assets of $736.6 billion at the end of February 2020 declined 4% from the prior month but increased 9% year over year. Of the total brokerage and advisory assets, brokerage assets were $380.9 billion, while advisory assets totaled $355.7 billion. The sequential decline can be attributed to lower equity markets, including a decline of 8.4% in the S&P 500 Index.

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