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Legg Mason's (LM) AUM Down in February, Net Inflows Recorded

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Legg Mason Inc. , headquartered at Baltimore, reported fall in assets under management (AUM), as of Feb 28, 2018, compared with the prior month. Preliminary month-end AUM came in at $766.7 billion, down 1.7% from January 2018.

February’s AUM displayed $2.8-billion fixed income inflows, equity inflows of $0.4 billion and $0.2 billion of alternative inflows, partly offset by liquidity outflows of $0.4 billion. Notably, negative foreign exchange impact of $1.2 billion remained an unfavorable factor.

Legg Mason’s equity AUM at the end of February slipped around 4.2% from the prior-month figure to $207.7 billion. Fixed income AUM edged down nearly 1% from the previous month to $421.6 billion. Further, alternative assets decreased moderately to $65.9 billion.

Fall in fixed income, equity AUM and Alternative AUM resulted in long-term AUM of $695.2 billion. The figure marked around 1.8% decline from the previous month. Moreover, liquid assets, which are convertible into cash, moved down slightly to $71.5 billion.

Competitive Landscape

Franklin Resources (BEN - Free Report) has announced preliminary AUM by its subsidiaries of $744.9 billion for February 2018. Results display 3.4% drop from $770.8 billion recorded as of Jan 31, 2018. Net market losses and outflows were primarily responsible for this decline. However, the figure inched up around 1% from the prior year.

T. Rowe Price Group, Inc. (TROW - Free Report) reported preliminary AUM of $1.02 trillion for February. Results reflect 2.9% fall from $1.05 trillion as of Jan 31, 2018. Client transfers from mutual funds to other portfolios totaled $4.8 billion for the month.

Invesco Ltd. (IVZ - Free Report) reported preliminary month-end AUM of $945.4 billion for February 2018. The figure indicates 2.8% drop from the prior month. The AUM declined due to unfavorable market returns, foreign exchange, non-management fee earning AUM outflows and net long-term outflows, partially offset by higher money market AUM. Notably, FX decreased February AUM by $5.1 billion.

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 increased around 10.9% over the last six months, underperforming 13.5% growth recorded by the industry.



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