T. Rowe Price assets fall on market declines

T. Rowe Price Group on Wednesday reported assets under management of $541.7 billion as of June 30, down 2.4% from the prior quarter's record high of $554.8 billion but up 4% from the year before.

For the latest quarter, market-related declines of $17.8 billion more than offset $4.7 billion of net inflows, down from the record inflows of $12.4 billion the firm reported for the quarter ended March 31, and down as well from year-earlier inflows of $9.8 billion.

More than half of the second-quarter's $4.7 billion in inflows, or $2.8 billion, were garnered by T. Rowe's target-date retirement portfolios, buoying AUM for that segment of the firm's business to $79 billion, or 15% of overall assets.

The company said net inflows during the latest quarter for its U.S.-distributed mutual funds more than offset outflows from the firm's other managed investment portfolios.

AUM for those U.S.-distributed mutual funds came to $321.7 billion as of June 30, down $3.7 billion from the prior quarter amid market-related declines of $10 billion and net inflows of $6.3 billion.

The firm's stock and blended asset funds pulled in the bulk of those net inflows, at $5.3 billion, with bond funds taking in $1.2 billion and money market funds seeing net outflows of $200 million.

Assets under management for the firm's other investment portfolios, including institutional accounts, came to $220 billion, down $9.4 billion from the prior quarter amid market-related declines of $7.8 billion and net outflows of $1.6 billion. T. Rowe's earnings news release tied those outflows “primarily” to institutional investors outside the U.S.

With average AUM for the latest quarter exceeding average AUM for the prior quarter. T. Rowe still managed to report gains in income and revenue alike.

Net income for the quarter came to $206.8 million, up 4.7% from the prior quarter and up 1% from the year before.

Revenue, meanwhile, came to $736.8 million, up 1.1% from the prior quarter and up 3.2% from the year before.

In the news release, James A.C. Kennedy, T. Rowe's president and CEO, noted the optimism early this year that the economic outlook for the U.S. and global economies was improving had given way to renewed pessimism during the second quarter.

Amid that pessimism, Mr. Kennedy urged investors “to look beyond the headlines and focus on the long-term. Corporate balance sheets remain healthy, the U.S. housing market is showing signs of improvement, and stock valuations are generally reasonable,” he said.