As prospects brightened in the U.S. and sovereign debt issues in Europe appeared contained, developed markets assumed leadership during the quarter, gaining 9% versus a respectable 7.3% return for the emerging markets index, yet for all of 2010 emerging markets returned 18.9% outpacing the 11.8% return for developed markets.
This strength has continued into 2011 with U.S. blue-chip stocks posting their biggest January gain in 14 year's. Against the backdrop of strong equity markets our portfolios have performed well with most of our strategies outperforming their benchmarks in 2010.
By the end of the fourth quarter all but one of our strategies three year records we ahead of their benchmarks, an important milestone both for our existing clients and new business prospects. Another benefit of this improving record is that we earned modest performance based fees during the fourth quarter.
As our AUM has rebounded to 15.6 billion at December 31st, and 16.1 billion at January 31st, and we have kept a close eye on expenses, our operating margins have improved to 53.2% in the fourth quarter and cash flow continues to be robust. In December the company declared a $0.15 per share year-end dividend in addition to the $0.03 per share dividend declared with our earnings release last night returning excess cash to our shareholders. We expect to continue to payout between 70% and 80% of our earnings on an annual basis borrowing any currently unforeseen funding needs or new growth initiatives.On the product strategy front, I’m pleased to report that our emerging markets launch client which we discussed on our last call funded in November, and we've had serious expressions of interest from others about investing in this strategy. Read the rest of this transcript for free on seekingalpha.com