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SAN MATEO, Calif. - Franklin Resources (NYSE:BEN), Inc., known as Franklin Templeton (NYSE:BEN), reported a decrease in assets under management (AUM) to $1.63 trillion as of October 31, 2024, down from $1.68 trillion at the end of September. The investment firm attributed the decline to negative market conditions and significant long-term net outflows, including a substantial $17.8 billion from its subsidiary Western Asset Management.
Equity assets stood at $618.2 billion, while fixed income comprised $524.6 billion of the total AUM. Alternative assets amounted to $247.9 billion, which includes $0.3 billion from the closure of the Macro (BCBA:BMAm) Opportunities funds on October 29, 2024. Multi-asset class investments were reported at $174.4 billion, and cash management rounded out the total with $65.6 billion.
Western Asset Management, a part of Franklin Templeton's network, experienced a notable decrease in AUM from $353.3 billion in September to $328.3 billion in October, reflecting the broader trend of outflows and market downturns.
Franklin Templeton, with a presence in over 150 countries, has been a global player in investment management for more than 75 years. The company offers a wide range of financial services, including equity, fixed income, alternative investments, and multi-asset solutions. It employs over 1,500 investment professionals and maintains offices in key financial markets worldwide.
Despite the downturn in AUM, Franklin Templeton continues to emphasize its mission of delivering superior investment management and technology solutions to its clients. The company advises investors to regularly review the Investor Relations and News Center sections of its website for significant updates.
As per the press release statement, the financial results are preliminary, and forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations. These risks include market volatility, investment performance, operational, competition, technology, regulatory, and other legal factors.
Investors are cautioned against relying solely on forward-looking statements, which are based on current expectations and are inherently uncertain. Franklin Templeton does not undertake any obligation to publicly update forward-looking statements in light of new information or future events.
In other recent news, Franklin Resources, a global investment management organization, has been facing challenges due to concerns about its Western Asset Management Company (WAMCO) division and leverage issues. The company's outlook was adjusted by TD Cowen, which reduced the price target from $20.00 to $18.50, maintaining a Hold rating on the company's shares. The adjustment was made amid an ongoing regulatory investigation into WAMCO and expected significant Fixed Income (FI) attrition. The firm also adjusted its fiscal year 2024 earnings estimate for Franklin Resources downward by nearly 10%.
Despite these challenges, Franklin Resources reported a 22% increase in assets under management (AUM) to $1.68 trillion and an 8% rise in adjusted operating revenues to $6.6 billion for the fiscal year. However, the company also disclosed net outflows totaling $32.6 billion and a decrease in performance fees from $383 million to $293 million. In a strategic shift, Franklin Resources aims to raise $100 billion in private markets over the next five years and significantly expand its ETF and Canvas AUM, investing in technology to improve client services and operational efficiency. These recent developments highlight the company's efforts to navigate a challenging market environment.
InvestingPro Insights
Franklin Resources, Inc. (NYSE:BEN) faces challenges in its asset management business, as reflected in the recent decline in AUM. However, InvestingPro data provides additional context to the company's financial position and outlook.
Despite the recent setbacks, Franklin Templeton maintains a solid dividend profile. An InvestingPro Tip highlights that the company has maintained dividend payments for 44 consecutive years, demonstrating a commitment to shareholder returns even in challenging market conditions. This is further supported by the current dividend yield of 5.89%, which may be attractive to income-focused investors.
The company's financial health appears stable, with InvestingPro data showing a revenue of $8.478 billion over the last twelve months as of Q4 2024. Moreover, Franklin Templeton's price-to-book ratio of 0.87 suggests that the stock may be undervalued relative to its book value, potentially offering a margin of safety for investors.
Another InvestingPro Tip indicates that analysts predict the company will be profitable this year, which aligns with the firm's long-standing position in the investment management industry. This positive outlook is crucial as Franklin Templeton navigates the current market volatility and client outflows.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights that could provide a deeper understanding of Franklin Resources' financial position and future prospects.
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