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Franklin December AUM Up on Higher Equity & Hybrid Assets


Franklin Resources Inc. BEN announced preliminary assets under management (AUM) by its subsidiaries of $720.0 billion for Dec 2016. The results exhibited around 1% rise from $714.4 billion as of Nov 30, 2016. However, the figure declined 5.7% from $763.9 billion as of Dec 31, 2015.

Month-end total equity assets came in at $298.3 billion, up around 1% from the prior month, but down 4.9% on a year-over-year basis. Of the total equity assets, around 66% were from international sources, while the remaining 33% came from the U.S.

Total fixed income assets were $277.2 billion, down slightly from the previous month and 10.3% from the $309.2 billion recorded in Dec 2015. Overall, tax-free assets accounted for only 26% of the fixed income assets, while the remaining 74% was taxable.

Franklin recorded $138.3 billion in hybrid assets, which improved 1.8% from $135.9 billion recorded in the prior month and 2.9% from $134.4 billion in Dec 2015.

Cash management funds were reported at $6.2 billion, in line with the prior month, but down from $6.6 billion recorded in Dec 2015.

Though the company’s global presence helps it diversify AUM; regulatory restrictions and sluggish economic recovery might impair growth and raise costs. Moreover, Franklin is subject to numerous regulations by the U.S. and non-U.S. regulators, which are concerns to its operations and may even hurt profitability.

Franklin currently carries a Zacks Rank #3 (Hold). The company’s stock has gained 18.8% over the past one year, outperforming the 16.9% growth for the Zacks categorized Investment Management industry.

A better-ranked finance company is Ares Management, L.P. ARES, sporting a Zacks Rank #1 (Strong Buy). The company’s shares gained over 56% over the past one year. The Zacks Consensus Estimate for the stock climbed 5.6% to $1.32, over the last 30 days, for 2016.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Among other asset managers, Legg Mason Inc. LM and Invesco Ltd. IVZ are expected to release preliminary AUM results for Dec 2016, later this week.

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