Franklin Resources Inc. (BEN) declared preliminary assets under management (:AUM) of $726.4 billion by its subsidiaries for the end of April 2012. The company’s results witnessed a slight rise from $725.7 billion as of March 31, 2012 and a decrease of 0.9% from $733.1 billion as of April 30, 2011.
Month-end total equity assets came in at $296.1 billion, down 1.3% sequentially and 7.8% on a year-over-year basis. Of the total equity assets, roughly 72% were from international sources, while the remaining 28% were from the U.S.
Total fixed income assets were $320.3 billion, up 1.2% from $316.6 billion as of March 31, 2012, and significantly increasing from $288.5 billion as of April 30, 2011. Of the total, tax-free assets accounted for only 25%, while the rest 75% were taxable.
Franklin recorded $103.8 billion in hybrid assets, up 0.3% from $103.5 billion as of March 31, 2012, but down 11.1% from $116.7 billion as of April 30, 2011. Cash management funds, as reported, were $6.2 billion, up from $5.7 billion recorded in the prior month and down from $6.6 billion as of April 2011.
On a quarterly basis, as of March 31, 2012, total AUM was $725.7 billion, up from $670.3 billion as of December 31, 2011, attributable to market appreciation of $50.9 billion and net new inflows of $5.6 billion. Moreover, AUM increased 3% on a year-over-year basis, mainly due to net new flows of $14.8 billion and $10.9 billion from acquisitions.
Simple monthly average AUM during the quarter climbed 5% sequentially and 3% year over year to $706.9 billion. Net new inflows were $5.6 billion versus outflows of $15.6 billion in the prior quarter and net inflows of $8.4 billion in the prior-year quarter.
Our Take
Among Franklin’s peers, Invesco Ltd. (IVZ) is expected to report month-end AUM for the month of April 2012 later this week.
Franklin's global footprint is in an exceptionally favorable strategic position owing to its well diversified AUM. The company is also poised to benefit from its strong balance sheet.
Further, the company’s completed acquisitions in calendar year 2011 are expected to strengthen its financials. However, the regulatory restrictions and sluggish economic recovery could mar the AUM growth while increasing its costs.
Franklin currently retains its Zacks #3 Rank, which translates into a short-term Hold rating.
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