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Franklin's (BEN) April AUM Grows on Positive Market Returns

Zacks Equity Research

Franklin Resources BEN announced preliminary assets under management (AUM) by its subsidiaries of $599.4 billion for April 2020. Results displayed a 3.3% increase from the $580.3 billion recorded as of Mar 31, 2020. Lower net outflows and a strong market performance led to the upsurge. However, the reported figure dropped 16.8% year on year.

Month-end total equity assets came in at $227.6 billion, up 9.7% from the previous month but down 21.1% year over year. Of the total equity assets, around 54% were from international sources, while the remaining 46% came in from the United States.

Total fixed income assets were $239 billion, up 2% from March 2020 but down 16.7% from the prior-year period. Overall, tax-free assets accounted for only 27% of fixed-income assets, while the remaining 73% was taxable.

Franklin recorded $122.6 billion in hybrid assets, up 3.7% from the $118.2 billion witnessed in the previous month but down 9.7% from the $135.8 billion reported in April 2019.

Cash management funds came in at $10.2 billion, down from the prior-month figure of $10.7 billion but up from the $9.2 billion recorded in the previous year.

Though regulatory restrictions and a sluggish economic recovery might mar AUM growth and escalate costs, the company’s global footprint is an exceptionally favorable strategic point as its AUM is well diversified.

Currently, Franklin carries a Zacks Rank #4 (Sell). Shares of the company have lost 19.2% in the past three months compared with the 20.9% decline registered by the industry.

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

Competitive Landscape

Invesco’s IVZ preliminary April-end AUM of $1,118.6 billion represents a rise of 6.2% from the previous month. This increase resulted from favorable market returns and net inflows. Also, a favorable foreign-exchange movement resulted in a rise in the monthly AUM by $63 billion.

Among others, T. Rowe Price Group, Inc. TROW and Legg Mason Inc. LM are expected to release preliminary AUM results for April, later this week.

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