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T. Rowe Price assets sprout 7% in quarter to record $617.4 billion

T. Rowe Price

T. Rowe Price Group reported a record $617.4 billion in assets under management as of March 31, up 7% from the previous quarter and 11.2% higher than a year ago.

Market appreciation and income totaled $37.3 billion in the first quarter, the company said in an earnings statement Wednesday. Net inflows were $3.3 billion, including $3.8 billion into the firm's target-date retirement portfolios. In the fourth quarter, the company reported overall net outflows of $4.2 billion.

Mutual fund assets totaled $377 billion in the first quarter, an increase of 8.6% from Dec. 31 and 15.8% higher than the previous year. Net cash flows into stock and blended mutual funds totaled $5.2 billion, compared to net outflows $1.4 billion in the previous quarter. T. Rowe's fixed-income funds had net inflows of $2.5 billion vs. net inflows of $700 million in the previous quarter. Net outflows of $100 million came from money market funds, compared to net inflows of $300 million three months earlier.

As of March 31, $98.4 billion was in T. Rowe Price's target-date retirement portfolios — $88.1 billion in target-date funds and $10.3 billion in target-date trusts. The total target-date AUM was up 10.6% from the fourth quarter and 24.9% higher than the first quarter 2012.

Net income for the quarter came to $241.9 million, a 4.2% increase from the previous quarter and 22.5% higher than the first quarter 2012. Revenue totaled $815.7 million, up 3.6% from three months earlier and up 11.9% from the previous year.

Analysts indicated in separate notes to clients Wednesday that T. Rowe Price's inflows were weak.

Daniel Fannon of Jefferies & Co. wrote that the $4.3 billion in institutional net outflows in the first quarter were well below Jefferies' estimate of $1 billion in net inflows.

“The outflow marked the sixth time in the previous seven quarters that flows were negative in this segment,” Mr. Fannon wrote.

William Katz of Citigroup, research division, wrote that the $3.3 billion in total net inflows were about 50% below Citi's forecast. However, he added, “To be fair, $7.6 billion in mutual fund inflows were modestly ahead of our $6.5 billion forecast and a solid 9% annualized growth rate.”