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T. Rowe Price (TROW) Reports 2% Sequential Growth in May AUM


T. Rowe Price Group, Inc. TROW announced preliminary assets under management (AUM) of $1.04 trillion for May 2018. Results reflect nearly 2% rise from $1.02 trillion recorded on Apr 30, 2018.

Client transfers from mutual funds to other portfolios, including trusts and separate accounts were insignificant in May.

Month-end total sponsored U.S. mutual funds came in at $625 billion, up 1.8% from the prior 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 $413 billion, reflecting an increase of 1.7% from the previous month. Overall, stock and blended assets accounted for $316 billion or 77% of other investment portfolios while money market and fixed income came in at $97 billion or 23%.

T. Rowe Price recorded $243 billion in target date retirement portfolios, slightly up from $241 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 is anticipated to help it further improve AUM. Also, its organic growth remains impressive, as indicated by the continuous rise in revenues.

So, we believe, driven by these, the stock has gained 24.3% in the last six months, outperforming 0.2% rise of 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, Franklin Resources BEN announced preliminary AUM by its subsidiaries of $732.8 billion for May. Results display a marginal rise from $732.5 billion recorded as of Apr 30. Acquisition of Edinburgh Partners Limited was primarily responsible for this increase. However, net market declines and net outflows during the month mostly offset the upside.

Legg Mason Inc. LM reported a slight fall in AUM, as of May 31, from the prior month. Preliminary month-end AUM came in at $747.2 billion, down from $752.3 billion recorded in April.

Invesco Ltd. IVZ reported preliminary month-end AUM of $977.3 billion for May. The figure reflects slight increase from the prior month. This rise has been mainly driven by favorable market returns, improvement in money market AUM, net long-term inflows and non-management fee earning AUM inflows. However, FX affected May AUM by $5.1 billion.

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