Investment managers Franklin Resources Inc. (BEN) - Get Report and T. Rowe Price Group (TROW) - Get Report fell 6.7% and 3.8% respectively by the close of trading Wednesday following the release of their respective quarterly earnings reports. 

Franklin Resources swung to a profit of 54 cents per share after reporting a loss in the same period last year. However, the company was a dime per share short of analysts' expectations for the first quarter. 

"Volatility dominated global markets in the first fiscal quarter," said Greg Johnson, Chairman and CEO of Franklin Resources, Inc. "However, we believe periods of volatility are when active, professional investment management matters most. Despite the numerous ups and downs of the market, we're seeing examples of strengthening investment performance."

Revenue of $1.41 billion also just fell short of Wall Street's $1.43 billion guidance. 

Meanwhile, T. Rowe Price reported fourth quarter net income of $384 million, or $1.54 per share on revenue of $1.31 billion. Analysts on average were expecting the company to report earnings of $1.60 per share on revenue of $1.32 billion. 

"For the fourth quarter, increases in average AUM, revenues, and earnings per share were more muted, as steep equity declines drove our AUM lower, particularly in December. Amidst the increased market volatility, we were pleased with our relative investment performance versus our peers and continued strong gross sales momentum in the fourth quarter. Nonetheless, we realized net outflows due to elevated market volatility-driven redemptions, similar to broad industry net cash flow trends," said T. Rowe Price  CEO William J. Stromberg. 

Subpar returns and the rise of exchange traded funds have hurt the bottom line of mutual funds in recent quarters. Investors redeemed more than $300 billion from U.S. long-term mutual funds in 2018 through December 26, according to the Investment Company Institute. 

At the same time, investors put more than $300 billion into exchange-traded funds over the same period. 

That trend is expected to continue this year as traditional money-management companies are projected to have an average long-term growth rate below an already paltry 2%-3%, according to analysts at Credit Suisse.