T. Rowe Price sees assets inch up for quarter, jump for year
By Rick Baert | January 29, 2013 12:34 pm
T. Rowe Price Group on Tuesday reported $576.8 billion in assets under management as of Dec. 31, up 0.4% from the previous quarter and 17.8% higher than the year-earlier quarter.
Market appreciation and income totaled $6.6 billion in the fourth quarter, partially offsetting net outflows of $4.2 billion, the company said in an earnings statement.
For 2012, net cash inflows were $17.2 billion, including $10.1 billion into the firm's target-date retirement portfolios. Market appreciation and income, net of distributions not reinvested, increased AUM by $70.1 billion from the end of 2011.
Net cash inflows of $700 million into T. Rowe Price's bond funds and $300 million into its money market funds were more than offset by $1.4 billion in net cash outflows from its stock and blended asset funds.
Mutual fund assets totaled $346.9 billion, an increase of 1.1% from Sept. 30, with $4.4 billion in market appreciation and income, and net cash outflows of $400 million. In the third quarter, mutual funds saw $16.7 billion in market gains and $4.5 billion in net inflows.
As of Dec. 31, $88.9 billion was in T. Rowe Price's target-date retirement portfolios — $80.2 billion in target-date funds and $8.7 billion in target-date trusts.
The firm's stock and bond portfolios had combined AUM of $164.2 billion, up 16.7% from the end of 2011, while fixed-income, money market and stable value funds had a total of $65.7 billion, up 10.6% from a year earlier.
Net income for the quarter came to $232 million, a 6.1% decline from the previous quarter but 23.1% higher than the fourth quarter 2011.
Revenue totaled $787.3 million, up 2.3% from three months earlier and up 17.2% from the previous year.
William Katz, analyst at Citi Investment Research, said in a client note that T. Rowe Price's AUM and flows were disappointing. “To be fair, year-end tax selling likely contributed to seasonally weak fourth-quarter mutual fund flows,” Mr. Katz said, adding that the firm will benefit “should fixed income-to-equities rotation pick up, but underlying volume trends remain mixed nonetheless, we believe.”