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Buy 5 Investment Management Stocks to Enrich Your Portfolio in 2025
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The investment management industry, which consists of companies that manage securities and funds for clients to meet specified investment goals, has seen impressive growth in the past year. The Zacks-defined Financial – Investment Management Industry is currently in the top 20% of the Zacks Industry Rank.
The industry has provided 38.8% returns in the past year. Year to date, the investment management industry has provided 38.9% returns, higher than the S&P 500 Index’s return of 23.8%. Since it is ranked in the top half of Zacks Ranked Industries, we expect the investment management industry to outperform the market over the next three to six months.
At this stage, it will be prudent to invest investment management stocks with a favorable Zacks Rank to enrich portfolio in 2025. Five such stocks are: BrightSphere Investment Group Inc. , Janus Henderson Group plc (JHG - Free Report) , SEI Investments Co. (SEIC - Free Report) , KKR & Co. Inc. (KKR - Free Report) and Federated Hermes Inc. (FHI - Free Report) .
Positive Catalysts
Equity markets globally have performed impressively in the past two years, driven by sustained economic growth. This has resulted in solid AUM (asset under management) growth. With falling interest rates scenario, investors are likely to rotate out of money market mutual funds or short-term investments into other higher-yielding assets like equity funds, alternative assets and long-term bond funds.
Additionally, deregulation is expected to open up the previously inaccessible retirement market. Thus, these factors are expected to drive AUM balance in the upcoming period. So, investment managers will likely witness a solid improvement in performance fees and investment advisory fees, which constitute a major part of their revenues.
5 Investment Management Stocks to Buy
These five stocks have strong revenues and earnings growth potential for 2025. They have witnessed positive earnings estimate revisions in the last 60 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
BrightSphere Investment Group Inc.
Zacks Rank #1 BrightSphere Investment Group is a publicly owned asset management holding company. BSIG provides its services to individuals and institutions. It manages separate client-focused portfolios through its subsidiaries. BSIG also launches equity mutual funds for its clients. BSIG invests in public equity, fixed-income, and alternative investment markets through its subsidiaries.
BrightSphere Investment Group has expected revenue and earnings growth rates of 6.6% and 12%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 8.2% over the last 60 days.
Janus Henderson Group plc
Zacks Rank#1 Janus Henderson Group is an asset management holding entity. JHG provides services to institutional, retail clients, and high-net-worth clients. JHG manages separate client-focused equity and fixed-income portfolios. JHG also manages equity, fixed income, and balanced mutual funds for its clients. JHG invests in public equity and fixed-income markets, as well as in real estate and private equity.
Janus Henderson Group has expected revenue and earnings growth rates of 9.6% and 11%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 5.8% over the last 60 days.
SEI Investments Co.
Zacks Rank #1 SEI Investments is a leading provider of wealth management business solutions in the financial services industry. SEIC’s global presence, diverse product offerings, solid balance sheet, strategic buyouts and robust AUM balance are expected to support revenue growth. A robust liquidity position will keep SEIC’s capital distributions sustainable.
SEIC operates through the following five business segments: Private Banks, Investment Advisors segment, Institutional Investors segment, Investment Managers segment and Investments in New Businesses segment.
SEI Investments has expected revenue and earnings growth rates of 7.2% and 10.6%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 0.4% over the last 30 days.
KKR & Co. Inc.
Zacks Rank #2 KKR & Co. has been benefiting primarily from impressive growth in AUM and record transaction fees for the capital markets business. KKR’s efforts to improve and add investment strategies will continue to support AUM growth.
The addition of new capabilities to capture a growing set of opportunities from infrastructure, real estate, growth and core investing activities will likely aid revenue growth. KKR’s solid liquidity position will aid capital distribution activities.
KKR & Co. has expected revenue and earnings growth rates of 18.6% and 29.7%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 1% over the last 30 days.
Federated Hermes Inc.
Zacks Rank #2 Federated Hermes’ third-quarter 2024 results reflect a rise in AUM balance. FHI’s AUM balance continues to benefit from strategic deals and a focus on acquiring money market assets. We project total AUM to witness a three-year CAGR of 3.6% by 2026.
FHI offers world-class active investment management and engagement services across a wide range of asset classes for investors around the world. With a diverse asset and product mix, FHI holds significant growth potential in the upcoming period. FHI’s decent liquidity position supports its capital distribution activities.
Federated Hermes has expected revenue and earnings growth rates of 7.5% and 34.3%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 3.9% over the last 60 days.
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Buy 5 Investment Management Stocks to Enrich Your Portfolio in 2025
The investment management industry, which consists of companies that manage securities and funds for clients to meet specified investment goals, has seen impressive growth in the past year. The Zacks-defined Financial – Investment Management Industry is currently in the top 20% of the Zacks Industry Rank.
The industry has provided 38.8% returns in the past year. Year to date, the investment management industry has provided 38.9% returns, higher than the S&P 500 Index’s return of 23.8%. Since it is ranked in the top half of Zacks Ranked Industries, we expect the investment management industry to outperform the market over the next three to six months.
At this stage, it will be prudent to invest investment management stocks with a favorable Zacks Rank to enrich portfolio in 2025. Five such stocks are: BrightSphere Investment Group Inc. , Janus Henderson Group plc (JHG - Free Report) , SEI Investments Co. (SEIC - Free Report) , KKR & Co. Inc. (KKR - Free Report) and Federated Hermes Inc. (FHI - Free Report) .
Positive Catalysts
Equity markets globally have performed impressively in the past two years, driven by sustained economic growth. This has resulted in solid AUM (asset under management) growth. With falling interest rates scenario, investors are likely to rotate out of money market mutual funds or short-term investments into other higher-yielding assets like equity funds, alternative assets and long-term bond funds.
Additionally, deregulation is expected to open up the previously inaccessible retirement market. Thus, these factors are expected to drive AUM balance in the upcoming period. So, investment managers will likely witness a solid improvement in performance fees and investment advisory fees, which constitute a major part of their revenues.
5 Investment Management Stocks to Buy
These five stocks have strong revenues and earnings growth potential for 2025. They have witnessed positive earnings estimate revisions in the last 60 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
BrightSphere Investment Group Inc.
Zacks Rank #1 BrightSphere Investment Group is a publicly owned asset management holding company. BSIG provides its services to individuals and institutions. It manages separate client-focused portfolios through its subsidiaries. BSIG also launches equity mutual funds for its clients. BSIG invests in public equity, fixed-income, and alternative investment markets through its subsidiaries.
BrightSphere Investment Group has expected revenue and earnings growth rates of 6.6% and 12%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 8.2% over the last 60 days.
Janus Henderson Group plc
Zacks Rank#1 Janus Henderson Group is an asset management holding entity. JHG provides services to institutional, retail clients, and high-net-worth clients. JHG manages separate client-focused equity and fixed-income portfolios. JHG also manages equity, fixed income, and balanced mutual funds for its clients. JHG invests in public equity and fixed-income markets, as well as in real estate and private equity.
Janus Henderson Group has expected revenue and earnings growth rates of 9.6% and 11%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 5.8% over the last 60 days.
SEI Investments Co.
Zacks Rank #1 SEI Investments is a leading provider of wealth management business solutions in the financial services industry. SEIC’s global presence, diverse product offerings, solid balance sheet, strategic buyouts and robust AUM balance are expected to support revenue growth. A robust liquidity position will keep SEIC’s capital distributions sustainable.
SEIC operates through the following five business segments: Private Banks, Investment Advisors segment, Institutional Investors segment, Investment Managers segment and Investments in New Businesses segment.
SEI Investments has expected revenue and earnings growth rates of 7.2% and 10.6%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 0.4% over the last 30 days.
KKR & Co. Inc.
Zacks Rank #2 KKR & Co. has been benefiting primarily from impressive growth in AUM and record transaction fees for the capital markets business. KKR’s efforts to improve and add investment strategies will continue to support AUM growth.
The addition of new capabilities to capture a growing set of opportunities from infrastructure, real estate, growth and core investing activities will likely aid revenue growth. KKR’s solid liquidity position will aid capital distribution activities.
KKR & Co. has expected revenue and earnings growth rates of 18.6% and 29.7%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 1% over the last 30 days.
Federated Hermes Inc.
Zacks Rank #2 Federated Hermes’ third-quarter 2024 results reflect a rise in AUM balance. FHI’s AUM balance continues to benefit from strategic deals and a focus on acquiring money market assets. We project total AUM to witness a three-year CAGR of 3.6% by 2026.
FHI offers world-class active investment management and engagement services across a wide range of asset classes for investors around the world. With a diverse asset and product mix, FHI holds significant growth potential in the upcoming period. FHI’s decent liquidity position supports its capital distribution activities.
Federated Hermes has expected revenue and earnings growth rates of 7.5% and 34.3%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 3.9% over the last 60 days.