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T. Rowe Price (TROW) Records Marginal Fall in September AUM


T. Rowe Price Group, Inc. TROW announced preliminary assets under management (AUM) of $1.08 trillion for September 2018. Results reflect marginal fall from $1.09 trillion recorded on Aug 31, 2018.

Client transfers from mutual funds to other portfolios, including trusts and separate accounts, were $1.1 billion in September.

Month-end total sponsored U.S. mutual funds were $645 billion, down marginally 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 $439 billion, reflecting a marginal increase from the previous month’s total of $438 billion. Overall, stock and blended assets accounted for $339 billion or 77% of other investment portfolios, while money market and fixed income were $100 billion or 23%.

T. Rowe Price recorded $252 billion in target date-retirement portfolios, marginally down from $253 billion in August.

Our Viewpoint

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

We believe, driven by these, the stock has gained 7.5% over the past year against 14% decline registered by the industry.

T. Rowe Price 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 announced preliminary AUM by its subsidiaries of $717.1 billion for September. Results display marginal fall from $722.4 billion recorded as of Aug 31, 2018. Net market losses and net outflows were undermining factors.

Cohen & Steers CNS reported preliminary AUM of $60.1 billion as of Sep 30, 2018, down 2% from the prior-month level. Market depreciation of $806 million, net outflows of $75 million and distributions of $333 million were the reasons behind the decline.

Invesco Ltd.’s IVZ preliminary month-end AUM of $980.9 billion for September decreased nearly 1% from the previous month. Unfavorable market returns, net long-term outflows and decrease in money market AUM were the primary reasons behind the decline. However, these were partially offset by non-management fee earning AUM inflows as well as reinvested distributions.

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