One financial industry group that does especially well during bull markets is the asset managers. Not only do their funds rise with equity prices, but they tend to attract more new investment money and generate more revenues in a virtuous spiral.
If, that is, they are performing in line with their index benchmarks. Or better yet, leaving them behind.
BlackRock (BLK - Analyst Report), Affiliated Mangers Group (AMG - Analyst Report), and the private equity princes Blackstone (BX - Analyst Report) and Apollo Global (APO - Snapshot Report) have all been at least Zacks #2 Rank stocks this year and their stock investors have been rewarded with steady returns, just like their institutional ones.
I make a habit of paying attention to these money masters every day for my Follow The Money (FTM) trading service which tracks institutional buying in growth stocks. And another name that pops up quite frequently in my screening and digging through the SEC filings just went public this year and is our Zacks #1 Rank Bull of the Day.
New AM on the Block
Artisan Partners Asset Management (APAM - Snapshot Report) is a $4.2 billion investment management firm that provides a range of active, global equity strategies. The firm manages $97 billion in investments for other institutions primarily through mutual funds and separate accounts.
Its clients include pension and profit sharing plans, trusts, endowments, foundations, charitable organizations, government entities, private funds and non-U.S. pooled investment vehicles. Artisan prefers its clients to have an allocation structure and process that lends itself to longer-term investing, and has turned away some "faster" money funds.
Talent Above All
While the firm that had its IPO in March of this year, Artisan Partners Asset Management, was founded on in 2011, the roots of Artisan Partners go back to 1994 when Andy and Carlene Ziegler wanted to create a different type of asset manager that valued talent. Over the years, they have built a model around fund manager autonomy, focus, and support.
With five investment teams covering Global Equity, Growth, U.S. Value, Global Value and Emerging Markets, fund managers run about 10 mutual funds using 13 different strategies. And they are freed of marketing and sales duties and allowed to focus on what they do best: pick stocks.
Performance Begets Success
According to Investor's Business Daily in their November 26 profile "At Artisan Partners, Stock-Picking Strategy Pays Off," of the firm's 12 funds that have long-term track records, nine have outperformed benchmarks in both the last year and the most recent three-year period.
Those kind of numbers beat the majority of portfolio managers over the long run since only 1 in 5 manage to survive and best their benchmarks. From IBD...
"As a result, assets under management, revenue and earnings have all ballooned. Artisan reported assets of nearly $97 billion at the end of the third quarter. That's up 39% from the $69.8 billion in managed assets a year earlier. Revenue came in at $178 million also up 39% from 2012's third quarter. Artisan earned 67 cents a share in the quarter ended Sept. 30, up from 43 cents in the corresponding 2012 period."
Watch the Rank, It's Money in the Bank
Artisan first became a Zacks #1 Rank on June 4 when shares were trading $47. Within two weeks they marched to new highs of $56. Then APAM earned the Zacks #1 Rank again on October 3 at $52 before it made a month long surge to new highs at $64.
Since the investment management industry is currently in the top 10% of industries ranked by Zacks -- and since the bull market is far from over -- it pays to watch the asset managers right now, and this smaller player in particular.
Kevin Cook is a Senior Stock Strategist for Zacks where he runs the Follow The Money portfolio.