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Franklin's (BEN) April AUM Rises on Equity & Hybrid Assets

Franklin Resources Inc. BEN announced preliminary assets under management (AUM) of $747.1 billion by its subsidiaries for Apr 2016. The results exhibited around 1% growth from $742.6 billion as of Mar 31, 2016. However, the figure declined 16.5% from $894.9 billion as of Apr 30, 2015.

Month-end total equity assets came in at $306.3 billion, slightly up from the prior month while it decreased 18.5% on a year-over-year basis. Of the total equity assets, around 67% were from international sources, while the remaining 33% were from the U.S.

Total fixed income assets were $299.5 billion, almost in line with the prior month while the figure demonstrated a decline of 14.6% from $350.8 billion as of Apr 30, 2015. Overall, tax-free assets accounted for only 25% of the fixed income assets, while the remaining 75% was taxable.

Franklin recorded $135 billion in hybrid assets, which surged 1.8% from $132.6 billion recorded in the prior month but down 16% from $160.8 billion in Apr 2015.

Cash management funds were reported at $6.3 billion, up from $6.2 billion in the prior month but down from $7.4 billion in Apr 2015.

Our Viewpoint

Though the company’s global footprint helps it to diversify its AUM, regulatory restrictions and sluggish economic recovery might mar AUM growth and raise costs.  Moreover, Franklin is subject to numerous regulations by the U.S. and non-U.S. regulators that pose threat to its operations and may even hurt profitability.

Franklin currently carries a Zacks Rank #3 (Hold). However, a better-ranked finance company is SEI Investments Co. SEIC with a Zacks Rank #1 (Strong Buy).

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

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INVESCO LTD (IVZ): Free Stock Analysis Report
 
LEGG MASON INC (LM): Free Stock Analysis Report
 
FRANKLIN RESOUR (BEN): Free Stock Analysis Report
 
SEI INVESTMENTS (SEIC): Free Stock Analysis Report
 
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