Year over year, the company said AUM decreased $54 billion primarily due to $20.3 billion of net outflows, a $17.7 billion decrease from foreign exchange revaluations and $10.9 billion of market depreciation. Greg Johnson, president and CEO, said in a conference call with analysts that Franklin intended to enter the marketplace with smart beta ETF's and rule-based ETF's through acquiring a company, building capabilities itself, or a combination of the two.
Mr. Jonson said the company offers one exchange-traded fund and it “needs friends.” He offered no timetable on additional ETF strategies.
Net income of $504.2 million in the quarter was down 17% from the previous quarter and down 13% from a year earlier.
The company said currency fluctuations, as the U.S. dollar rose against other currencies, affected overall earnings in the latest quarter.
Franklin has 12% of its AUM in foreign currency.
The company reported operating revenue of $2 billion in the quarter, flat from the previous year and down 6% year over year.