Home Business The Current State of the Asset Management Industry

The Current State of the Asset Management Industry

When you purchase through our sponsored links, we may earn a commission. By using this website you agree to our T&Cs.

Both Citigroup Inc. (NYSE: C) and Stifel Nicolaus Corp (NYSE: SF) have released their assessment of asset managers, based on performance as of the end of August, 2012. The analysis and observations converge on many points. Citi’s Asset Manager Global Performance Tracker sums up the performance of the largest U.S. and global equity and fixed income mutual funds, closed-end funds, ETFs, and UCITs  amounting to $1T in AUM  for the 3rd quarter of 2012 so far.

The Good News

Citi: The overall performance has been good so far, especially in July, 2012. Trends were up and strong in equities (composite index up 2.4 percent) and fixed income (up 50 bps). Both equity funds and weighted average equity funds were ahead of the Morningstar category by 7bps and 18 bps.

SN: Equities and fixed income funds performed well and gained speed in June/July, volatility is gradually easing.

The Bad News

The comparative performance across asset managers followed a downward trend, as 8 out of the 13 managers under Citi’s scrutiny underperformed the Morningstar category.

The Best and Worst Performers

In equities,  AllianceBernstein (NYSE: AB) , Waddell & Reed (NYSE: WDR), Legg Mason (NYSE: LM),  T. Rowe Price Group, Inc. (NASDAQ: TROW), and Manning and Napier (NYSE: MN) came off as leaders, as their performance was up in the range of 3-3.2 percent in August. The worst in equities were Affiliated Managers Group (NYSE: AMG) ,  BlackRock Inc (NYSE: BLK (NYSE: BLK) , Franklin Resources Inc. (NYSE: BEN) , and Artio Global Investors Inc.  (NYSE: ART), the performance was still positive but  fell in the lower range (+1.6 to 1.9 percent in August) .

In the fixed income category, Artio Global Investors Inc.  (NYSE: ART), Waddell & Reed (NYSE: WDR), Eaton Vance Group (NYSE: EV), T. Rowe Price Group, Inc. (NASDAQ: TROW),  Affiliated Managers Group (NYSE: AMG) , and Invesco Ltd (NYSE:IVZ) were up in the range of 0.7 -1 percent. In contrast, The Charles Schwab Corporation (NYSE: SCHW), Federated Investors (NYSE: FII), Franklin Resources Inc. (NYSE: BEN), and Legg Mason (NYSE: LM) lagged in the Morningstar category.

The Current State of the Asset Management Industry

Top Picks

Citi favors US companies and asset managers over non-US companies and broker dealers. Citi’s top pick in Traditional managers is Affiliated Managers Group (NYSE: AMG), followed by Invesco Ltd (NYSE:IVZ), Federated Investors (NYSE: FII),  AllianceBernstein (NYSE: AB), and WisdomTree Investments, Inc. (NASDAQ: WETF). In Alternative managers, Citi likes Och-Ziff Capital Management Group LLC  (NYSE: OZM), Kohlberg Kravis Roberts & Co (NYSE: KKR), and The Blackstone Group LP (NYSE: BX). In pair trades, Citi recommends BEV as the best, while a combination of IVZ/JNS and AMG/TROW are also favored.

Stifel Nicolaus favors  large diversified companies, such as BlackRock Inc (NYSE: BLK) (Buy, $176.93) and Invesco Ltd (NYSE:IVZ) (Buy, $23.82) as defensive positions, while Franklin Resources Inc. (NYSE: BEN) (Buy, $117.59) and The Blackstone Group LP (NYSE: BX) (Buy, $13.23) serve as contrarian value plays. SF made the biggest changes in their estimation of  JNS, followed by TROW (Hold, $61.99), LM (Hold, $24.75), WDR (Buy, $30.50), & Franklin Resources Inc. (NYSE: BEN).


Our Editorial Standards

At ValueWalk, we’re committed to providing accurate, research-backed information. Our editors go above and beyond to ensure our content is trustworthy and transparent.

Tabinda Hussain

Want Financial Guidance Sent Straight to You?

  • Pop your email in the box, and you'll receive bi-weekly emails from ValueWalk.
  • We never send spam — only the latest financial news and guides to help you take charge of your financial future.