Legg Mason (LM) February AUM Declines On Equity Net Outflows
Zacks Investment Research | Mar 12, 2020 09:22PM ET
Shares of Legg Mason Inc. (NYSE:LM) have declined about 3% following the announcement of its assets under management (AUM) for February 2020. The company reported 2.1% fall in AUM balance from the previous month. Preliminary month-end AUM came in at $789.4 billion, down from the January 2020 figure of $806 billion.
The company’s February AUM displayed $2.1-billion fixed income net inflows and alternative net inflows of $0.8 billion, partly offset by equity net outflows of $1.4 billion and liquidity net outflows of $1.6 billion. Negative foreign-exchange impact of $2 billion was an unfavorable factor.
Legg Mason’s equity AUM at the end of February declined 8.3% from the prior-month figure to $191.5 billion. Fixed income AUM was up slightly sequentially to $459.8 billion. Further, alternative assets increased marginally to $76 billion.
A considerable fall in fixed income AUM, partially offset by a slight rise in equity and alternative AUM resulted in long-term AUM of $727.3 billion. The figure marked a 2% decrease from the previous month. Also, liquid assets, which are convertible into cash, were down 2.4% to $62.1 billion.
Our Viewpoint
Legg Mason’s diverse product offerings and investment strategies will likely continue to attract investors, which along with improving AUM balance are likely to support revenue growth. Further, the company’s focus on expanding product offerings bodes well for the long term. However, continued equity AUM outflows may pose a threat to overall net inflows. Also, increased costs might dampen bottom-line growth.
Shares of the company have rallied 22.5% over the past six months against a 28.7% decline recorded by the Zacks Investment Research
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