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Legg Mason's (LM) AUM Ascends in July, Net Inflows Recorded

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Baltimore-based Legg Mason Inc. reported a rise in assets under management (AUM), as of Jul 31, 2017, compared with the prior month. Preliminary month-end AUM came in at $753.3 billion, up 1.6% from June 2017.

July’s AUM displayed $2.2-billion fixed income inflows, alternative outflows of $0.7 billion and liquidity inflows of $0.9 billion. Equity flows remained stable in the reported month. Notably, positive foreign exchange impact of $3.4 billion was a favorable factor.

Legg Mason’s equity AUM at the end of July 2017 increased 1.4% from the prior-month figure to $199.9 billion. Fixed income AUM inched up 1.9% from the previous month to $411.4 billion. However, alternative assets edged down around 1% to $65.9 billion.

Rise in fixed income and equity AUM, partially offset by lower Alternative AUM, resulted in long-term AUM of $677.2 billion. The figure marked 1.6% growth from the previous month. Additionally, liquid assets, which are convertible into cash, climbed 1.6% to $76.1 billion.

Competitive Landscape

Among other investment managers, Franklin Resources Inc. (BEN - Free Report) announced preliminary AUM by its subsidiaries of $752.7 billion for July 2017. Results displayed 1.3% rise from $742.8 billion as of Jun 30, 2017. Moreover, the figure inched up 1.7% from the prior-year quarter.

Invesco Ltd. (IVZ - Free Report) announced an increase in its preliminary month-end AUM for July 2017. The company’s AUM came in at $876.9 billion, up 2.2% from $858.3 billion recorded in the prior month. The rise reflected favorable market returns, higher Money Market AUM and net long-term inflows, partly offset by outflows in PowerShares QQQs. Further, FX increased July AUM by $3.7 billion.

Our Viewpoint

Legg Mason has the potential to outperform its peers over the long run, backed by a diversified product mix, positive foreign exchange fluctuations and leverage to the changing market demography. However, absence of consistent growth in equity markets remains a headwind.

Among others, Ameriprise Financial, Inc. (AMP - Free Report) is worth considering, with the estimates witnessing upward revisions for the last 30 days.

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Franklin Resources, Inc. (BEN) - free report >>

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