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Legg Mason's (LM) AUM Falls in April, Net Inflows Increase

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Legg Mason Inc. (LM - Free Report) reported a slight fall in assets under management (AUM), as of Apr 30, 2018 compared with the prior month. Preliminary month-end AUM came in at $752.3 billion, down from the March 2018 figure of $754.1 billion.

April AUM displayed $1.3-billion fixed income inflows and liquidity net inflows of $2.7 billion, partly offset by equity net outflows of $0.2 billion and $0.1 billion of alternative outflows. Notably, negative foreign exchange impact of $3 billion remained an unfavorable factor.

Legg Mason’s equity AUM at the end of April inched up slightly from the prior-month figure to $203.6 billion. Fixed income AUM dipped nearly 1.1% from the previous month to $417.6 billion. Further, alternative assets decreased moderately to $65.8 billion.

Fall in fixed income and Alternative AUM, partially offset by rise in equity AUM resulted in long-term AUM of $687 billion. The figure marked slight decline from the previous month. However, liquid assets, which are convertible into cash, moved up 4.1% to $65.3 billion.

Competitive Landscape

Franklin Resources (BEN - Free Report) has announced preliminary AUM by its subsidiaries of $732.5 billion for April 2018. Results display nearly 1% drop from $737.5 billion recorded as of Mar 31, 2018. Net outflows were primarily responsible for this decline but were partially offset by market appreciation. Further, the figure fell 1.1% from the prior year.

T. Rowe Price Group, Inc. (TROW - Free Report) reported preliminary AUM of $1.02 trillion for April. Results reflect 1% rise from $1.01 trillion as of Mar 31, 2018. Client transfers from mutual funds to other portfolios totaled $2.5 billion for the month.

Invesco Ltd. (IVZ - Free Report) reported preliminary month-end AUM of $972.8 billion for April 2018. The figure reflects an increase of 4.1% from the prior month. The rise was mainly driven by the Guggenheim acquisition, favorable market returns, improvement in money market AUM and reinvested distributions. These were partially offset by net long-term outflows and non-management fee earning AUM outflows.

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 #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of the company have gained around 4.3% over the last six months, outperforming 0.8% growth recorded by the industry.

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