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Legg Mason (LM) AUM Falls in May, Equity Outflows Recorded

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Legg Mason Inc. (LM - Free Report) reported 1.3% fall in assets under management (AUM) as of May 31, 2019, from the previous month. Preliminary month-end AUM came in at $757.9 billion, down from the April 2019 figure of $767.5 billion.

The company’s May AUM displayed liquidity and equity net outflows of $0.6 billion and $1.6 billion, respectively, partly offset by $0.7 billion fixed income inflows and alternative inflows of $0.3 billion. Negative foreign exchange impact of $0.2 billion was another unfavorable factor.

Legg Mason’s equity AUM at the end of May declined 7% from the prior month to $194.3 billion. However, fixed income AUM was up 1.2% sequentially to $427.7 billion. Further, alternative assets increased slightly to $69.6 billion.

Fall in equity AUM was partially offset by higher fixed income and alternative AUM, which resulted in long-term AUM of $691.6 billion. The figure marks a 1.3% decrease from the previous month. Also, liquid assets, which are convertible into cash, edged down nearly 1% to $66.3 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.

Shares of the company have gained 43.4% over the past six months compared with 13.9% growth recorded by the industry.

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

Competitive Landscape

Among other investment managers, Cohen & Steers (CNS - Free Report) reported preliminary AUM of $62.9 billion as of May 31, 2019, down marginally from the prior-month level of $63.1 billion. Market appreciation of $264 million was more than offset by net outflows of $228 million and distributions of $207 million.

Invesco (IVZ - Free Report) also announced its AUM for May. The company’s preliminary month-end AUM of $1,159.3 billion increased 18.9% from the prior month.

Franklin Resources (BEN - Free Report) has announced preliminary AUM by its subsidiaries of $695 billion for May. Results display a 3.5% decline from the $720.5 billion recorded as of Apr 30, 2019. Market decline and modest outflows led to this downside. Further, the figure dipped 5.2% year over year.

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