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T. Rowe Price Reports 8% Sequential Gain in January AUM

Zacks Equity Research

T. Rowe Price Group, Inc. TROW has announced preliminary assets under management (AUM) of $1.04 trillion for January 2019. Results reflect nearly 8% rise from $962 billion recorded on Dec 31, 2018.

Client transfers from mutual funds to other portfolios, including trusts and separate accounts, were $2.7 billion in January.

Month-end total sponsored U.S. mutual funds came in at $607 billion, up 7.6% from December 2018. Of the total sponsored U.S. mutual funds, around 80% was from stock and blended assets, while the remaining came in from fixed income and money market.

Total other investment portfolios were $432 billion, reflecting an increase of 8.5% from the previous month. Overall, stock and blended assets accounted for $332 billion or 77% of other investment portfolios, while money market and fixed income came in at $100 billion or 23%.

T. Rowe Price recorded $247 billion in target date retirement portfolios, up 7.4% from $230 billion recorded in the previous 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 its 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 2.7% in the past three months compared with 2% growth recorded by the industry.



T. Rowe currently has a Zacks Rank #3 (Hold). 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 $60 billion as of Jan 31, 2019, up 9.5% from the prior-month level. Market appreciation of $5 billion and net inflows of $427 million, partly offset by distributions of $200 million, drove this upswing.

Invesco Ltd.’s IVZ AUM as of Jan 31, 2019, came in at $930.6 billion, up nearly 4.8% from the previous month. Favorable market returns, higher money market AUM and reinvested distributions were primary reasons behind the rise in total AUM. Moreover, foreign exchange boosted the month’s AUM by $4.9 billion. However, these were partially offset by net long-term outflows and non-management fee earning AUM outflows.

Franklin Resources BEN announced preliminary AUM by its subsidiaries of $678.3 billion for January 2019. Results display 4.4% rise from $649.9 billion recorded as of Dec 31, 2018. Net market gains, partially offset by net outflows, led to this upside. However, the figure dipped 12% from the previous year.

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