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T. Rowe Price Reports 6.5% Sequential Decline in October AUM

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T. Rowe Price Group, Inc. TROW has announced preliminary assets under management (AUM) of $1.01 trillion for October 2018. Results reflect nearly 6.5% fall from $1.08 trillion recorded on Sep 30, 2018.

Client transfers from mutual funds to other portfolios, including trusts and separate accounts, were $1.2 billion in October.

Month-end total sponsored U.S. mutual funds came in at $602 billion, down 6.7% from the last month. Of the total sponsored U.S. mutual funds, around 79% were from stock and blended assets, while the remaining came from fixed income and money market.

Total other investment portfolios were $411 billion, reflecting a decrease of 6.4% from the previous month. Overall, stock and blended assets accounted for $314 billion or 76% of other investment portfolios, while money market and fixed income came in at $97 billion or 24%.

T. Rowe Price recorded $238 billion in target date retirement portfolios, down 5.6% from $252 billion recorded in the prior month.

Our Viewpoint

Although regulatory restrictions and sluggish economic recovery are likely to impair the company’s growth and escalate costs, T. Rowe Price’s diverse and efficient business model will likely help it improve AUM. Also, its organic growth remains impressive, as indicated by the continued growth in revenues.

So, we believe, driven by these, the stock has gained 1.2% in the past year, outperforming 15.9% decline of the industry.

T. Rowe currently has 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, Franklin Resources BEN has announced preliminary AUM by its subsidiaries of $682.7 billion for October 2018. Results display a 4.8% fall from $717.1 billion recorded as of Sep 30, 2018. Net market losses and net outflows were undermining factors. Further, the figure dipped 9.1% from the previous year.

Legg Mason Inc. LM reported around 3% fall in AUM, as of October 31, from the prior month. Preliminary month-end AUM came in at $733 billion, down from $755.4 billion recorded in September.

Invesco Ltd. IVZ reported preliminary month-end AUM of $926.1 billion for October. The figure reflects 5.6% decrease from the previous month. This fall has been mainly impacted by unfavorable market returns, net long-term outflows, foreign exchange and non-management fee earning AUM outflows, partially mitigated by elevated money market AUM and reinvested distributions. Furthermore, FX affected October AUM by $3.9 billion.

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