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Money Management

Franklin Resources lists AUM of $737.3 billion, down 2%

Franklin Resources had $737.3 billion in assets under management as of March 31, the company's second quarter, down 2% from the end of the last quarter of 2017 and flat compared to a year earlier, according to Franklin's earnings release issued Thursday.

Net outflows in the latest quarter were $10 billion, compared with net outflows of $2.3 billion in the previous quarter and net outflows of $11 billion in the year prior period.

"Outflows remain a challenge," particularly with the company's value investing strategies, Gregory Johnson, Franklin chairman and CEO, said in the earnings call. However, Mr. Johnson added, he expects increased volatility in the markets, along with rising interest rates and the cyclical nature of growth vs. value investing, to give a boost to Franklin's value investments, which have lagged during what he called "one of the longest periods of growth investing outperformance" in the past decade.

Equity assets totaled $309.3 billion in the latest quarter, down 4% from the previous quarter and 0.2% below the year-ago period. Fixed-income assets were $280.2 billion, down 1% for the quarter and 0.6% for the year, and multiasset and balanced assets were a combined $137.6 billion, down 4% and 3%, respectively. Cash totaled $10.4 billion, up 58% from three months earlier and 73% higher than a year earlier.

Franklin's first-quarter operating revenues totaled $1.618 billion, up 0.1% from the previous quarter and 1% higher than the first three months of 2017. Net income of $443 million in the latest quarter followed a net loss of $583 million in the last quarter of 2017 and net income of $421 million in the prior year's first three months.