This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Fund Firms Take Stage

The market's October swoon may have already caused investors to forget the third-quarter rally. If so, this week's earnings reports from asset managers should jog their memories, even if valuation concerns keep a lid on share prices.

"Average assets under management rose last quarter, and that's how the group makes its money, so you should see some strong performances," says Matt Snowling, analyst at Friedman Billings Ramsey. "We won't see the effects of the recent market pullback until next quarter."

For the benefit of those traders whose memories have taken a pounding along with their positions since the start of this month, the S&P 500 and the Russell 2000 indices were up 3.1% and 4.4%, respectively, from July through September. The Nasdaq Composite rose 4.6% over that time.

In turn, the average diversified U.S. equity fund was up 4.7%, according to Lipper, a healthy return that has forced a number of analysts to up their earnings estimates for the likes of Alliance Capital Management (AC), T. Rowe Price (TROW - Get Report) and even beleaguered Janus Capital (JNS - Get Report) in recent weeks.

Analysts have had to ratchet up their estimates even more for asset managers with strong international fund offerings, such as Franklin Resources (BEN - Get Report), after another strong performance by stocks overseas. The average non-U.S. fund was up 11% last quarter, with the average emerging markets fund up 17%.

"U.S. money is looking for an alternative," says Snowling. "And when it comes to distribution, Franklin is second to none."

Franklin reported September ending assets under management of $452.4 billion, up 6.3% over the prior quarter. The San Mateo, Calif., company releases fourth-quarter earnings Thursday, and analysts surveyed by Thomson First Call will be looking for a profit of $1.02 a share on sales of $758 million. A year earlier, the company earned 79 cents a share and had sales of $882 million.

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BLK $365.40 0.00%
BEN $51.18 0.00%
C $53.07 0.00%
LM $53.47 0.00%
JNS $17.75 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs