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T. Rowe Price (TROW) Records Sequential Growth in August AUM


T. Rowe Price Group, Inc. TROW announced preliminary assets under management (AUM) of $1.09 trillion for August 2018. Results reflect nearly 2% rise from $1.07 trillion recorded on Jul 31, 2018.

Client transfers from mutual funds to other portfolios, including trusts and separate accounts, were $1.6 billion in August.

Month-end total sponsored U.S. mutual funds came in at $648 billion, up 1.6% from the prior month. Of the total sponsored U.S. mutual funds, around 80% were from stock and blended assets, while the remaining came in from fixed income and money market.

Total other investment portfolios were $438 billion, reflecting an increase of 2.6% from the previous month. Overall, stock and blended assets accounted for $338 billion or 77% of other investment portfolios, while money market and fixed income came in at $100 billion or 23%.

T. Rowe Price recorded $253 billion in target date-retirement portfolios, marginally up from $251 billion in July.

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, the company’s organic growth remains impressive, as indicated by the continued rise in revenues.

So, we believe, driven by these, the stock has gained 4.1% so far this year against 11.1% decline registered 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, Franklin Resources BEN announced preliminary AUM by its subsidiaries of $722.4 billion for August 2018. Results display 1.5% fall from $733.7 billion recorded as of Jul 31, 2018. Net market losses and net outflows were the undermining factors. Further, the figure dipped 3.3% from the previous year.

Invesco Ltd. IVZ reported preliminary month-end AUM of $988 billion for August 2018. The figure reflects a marginal increase from the prior month. This improvement was mainly driven by favorable market return and non-management fee earning AUM inflows. These were partially offset by net long-term outflows, foreign exchange and a decrease in money market AUM.

Cohen & Steers CNS reported preliminary AUM of $61.3 billion as of Aug 31, 2018, up 1.3% from the prior-month level. Market appreciation of $910 million and net inflows of $71 million were partially offset by distributions of $207 million.

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