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Legg Mason's (LM) AUM Up in January, Net Outflows Recorded

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Legg Mason Inc. , headquartered at Baltimore, reported 1.6% rise in assets under management (AUM), as of Jan 31, 2018, compared with the prior month. Preliminary month-end AUM came in at $779.6 billion, up 1.6% from December 2017.

January’s AUM displayed $2.1-billion fixed income inflows, mostly offset by net equity outflows of $1.4 billion, liquidity outflows of $1.6 billion and $0.1 billion of alternative outflows. Notably, positive foreign exchange impact of $4.1 billion remained a favorable factor.

Legg Mason’s equity AUM at the end of January increased around 4.4% from the prior-month figure to $216.7 billion. Fixed income AUM inched up 1.2% from the previous month to $425 billion. However, alternative assets edged down moderately to $66 billion.

Rise in fixed income and equity AUM, partially offset by lower Alternative AUM, resulted in long-term AUM of $707.7 billion. The figure marked around 2% growth from the previous month. However, liquid assets, which are convertible into cash, moved down 1.8% to $71.9 billion.

Competitive Landscape

Franklin (BEN - Free Report) has announced preliminary AUM by its subsidiaries of $770.8 billion for January 2018. Results display 2.3% rise from $753.8 billion recorded as of Dec 31, 2017. Nevertheless, the figure ascended 5.8% year over year.

T. Rowe Price Group, Inc. (TROW - Free Report) reported preliminary AUM of $1.05 trillion for January. Results reflect 5.7% rise from $991 billion as of Dec 31, 2017. Client transfers from mutual funds to other portfolios totaled $3.7 billion for the month.

Among others, Invesco Ltd. (IVZ - Free Report) is expected to announce preliminary month-end AUM for January 2018, later this week.

Our Viewpoint

Legg Mason has the potential to outperform its peers over the long run, backed by a diversified product mix and leverage to the changing market demography. Nonetheless, absence of continued growth in equity markets and foreign-exchange fluctuations remain headwinds.

Legg Mason currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of the company have inched up around 1.8% over the last six months, underperforming 7.7% growth recorded by the industry.



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