Franklin's April AUM Up - Analyst Blog

Franklin Resources Inc. BEN declared preliminary assets under management (AUM) of $895.4 billion by its subsidiaries for Apr 2014. The company's AUM increased 1.0% from $886.9 billion as of Mar 31, 2014. Also, it climbed 5.7% from $847.5 billion as of Apr 30, 2013.

Month-end total equity assets came in at $376.8 billion for Franklin, up 1.0% from the prior month and 15.6% on a year-over-year basis. Of the total equity assets, around 71% were from international sources while the remaining 29% were from the U.S.

Total fixed income assets were $355.7 billion, up 0.6% from $353.7 billion as of Mar 31, 2014 and down 7.3% from $383.7 billion as of Apr 30, 2013. Overall, tax-free assets accounted for only 20% of the fixed income assets, while the remaining 80% were taxable.

Franklin recorded $156.1 billion in hybrid assets, which inched up 1.4% from $154.0 billion in the prior month. It also rose 18.2% from $132.1 billion in the prior-year month.

Cash management funds were reported at $6.8 billion, up from $6.3 billion in the prior month and $5.8 billion in the prior-year month.

Quarterly Performance

On a quarterly basis, as of Mar 31, 2014, total AUM was $886.9 billion, up from $823.7 billion as of Mar 31, 2013, driven by market appreciation of $77.3 billion. Simple monthly average AUM of $876.4 billion climbed 9.0% year over year.

Our Viewpoint

Franklin's global footprint is favorable for its well-diversified AUM. The company is also poised to benefit from its strong balance sheet. However, regulatory restrictions and sluggish economic growth could restrict AUM improvement and cost control capability.

Franklin currently carries a Zacks Rank #3 (Hold).

Some better-ranked asset managers include Affiliated Managers Group Inc. AMG, Cohen & Steers Inc. CNS and Brookfield Asset Management Inc. BAM. While Affiliated Managers and Cohen & Steers carry a Zacks Rank #1 (Strong Buy), Brookfield Asset Management holds a Zacks Rank #2 (Buy).