QUOTE AND NEWS
Benzinga  Apr 11  Comment 
In a report published Friday, Morgan Stanley analysts maintained an Equal-Weight rating on Franklin Resources, Inc (NYSE: BEN), with a price target of $60. The analysts estimate +$0.2B of net long-term inflows for the company in March, with the...
Market Intelligence Center  Apr 10  Comment 
After closing Thursday at $52.14, Franklin Resources Inc. (BEN) presents an attractive opportunity to get a 2.40% return in just 98 days, which is an annualized return of 8.94% (for comparison purposes only). To enter this trade, sell one Jul. '15...
Jutia Group  Apr 9  Comment 
[Marketwired] - Franklin Resources, Inc. today reported preliminary month-end assets under management by the company's subsidiaries of $880.6 billion at March 31, 2015, compared to $894.1 billion at February 28, 2015, ... Read more on this. ...
Jutia Group  Mar 25  Comment 
[Marketwired] - Franklin Resources, Inc. today announced the pricing of its public offering of $400 million aggregate principal amount of its 2.850% Notes due 2025 at an issue price of 99.827%. The offering is expected ... Read more on this. ...
Market Intelligence Center  Mar 3  Comment 
MarketIntelligenceCenter.com's patented algorithms have identified an attractive covered-call trade on Franklin Resources Inc. (BEN). Look at the Jan. '16 $49.50 covered call for a net debit in the $47.70 area. This trade has a duration of 318...
Jutia Group  Feb 9  Comment 
[Marketwired] - Franklin Resources, Inc. today reported preliminary month-end assets under management by the company's subsidiaries of $871.6 billion at January 31, 2015, compared to $880.1 billion at December 31, 2014, ... Read more on this. ...
Reuters  Feb 6  Comment 
Hidden behind a pile of sand, a tank points its gun towards Libya's biggest oil port on the other side of an invisible frontier that now divides the north African nation.
Jutia Group  Jan 30  Comment 
[Marketwired] - Franklin Resources, Inc. today announced net income of $566.4 million or $0.91 per diluted share for the quarter ended December 31, 2014, as compared to $640.6 million or $1.02 per diluted share for the ... Read more on this. ...




 

With nearly $600 billion in Assets under management (AUM)[1], Franklin Resources (NYSE: BEN) is the 29th largest asset manager in the world.[2] Retail investors in Franklin mutual funds account for 69% of assets under management.[3]

Franklin Resources is also sensitive to American investors' (73% of new sales[4]) portfolio allocation decisions. With management fees accounting for 58% of Franklin's revenue,[5] international exposure directly impacts Franklin's operating revenue. A higher equity/international mix increases Franklin's management fee revenue, while a shift towards fixed-income decreases it, because Franklin charges customers higher management fees on international and equity funds than domestic and fixed income ones.

Company Overview

Franklin manages international and domestic equity, bond, and hybrid mutual funds for over 22 million retail, institutional, and high-net worth clients.[6] Strong equity markets, acquisitions, and net fund inflows have helped the asset manager triple Assets Under Management (AUM), which is the total money Franklin invests for all its customers, since 2002.[3]

  • Management fees are what customers pay the investment managers to advise, manage and implement investment decisions and also to cover administrative costs. The amount fluctuates between funds, with international equity typically charging the highest and domestic fixed-income the lowest.
  • Underwriting and distribution charges are sale costs and commissions charged to the purchaser of mutual funds. The expense can range from 0-5.75% and be front-loaded (buyer of fund pays upfront), level (annually), or back-ended (when the buyer sells fund shares).[7]

Franklin offers mutual funds with 12b-1 fees, which are sales commissions directed to the advisor, in order to promote the selling of its funds to retail customers. Franklin essentially distributes the sales charge to the advisor that sold it, and profits mainly from the management fee.

Business & Financial Metrics[8]

In 2009, BEN generated a net income of $896.8 million on revenues of $4.19 billion. This represents a 43.5% decrease in net income and a 30.5% decrease in operating revenues from 2008, when the company earned $1.59 billion on $6.03 billion in revenues.

Key Trends & Forces

International equity and bonds affect Franklin's AUM.

The company's foreign investments as a percent of Assets under management (AUM) is 59%[1]. This international exposure almost triples industry peer, T. Rowe Price Group (TROW), whose AUM consist of 20% international positions[9]. This exposure will benefit Franklin more than competitors when foreign assets appreciation is higher than domestic ones, but the opposite is true if the U.S. is stronger than international markets. A strong U.S. dollar and better relative Gross Domestic Product growth compared to the world are typically bullish for U.S. positions.

Competition

Franklin Resources competes directly with traditional mutual fund companies like Eaton Vance (EV), T. Rowe Price Group (TROW), and Janus Capital Group (JNS). The company competes not only for customers, but also, for investment managers. A manager with a good track record of outperformance will cost more, but at the same time, outperformance leads to larger relative increases in Assets under management (AUM). Performance is a key to obtaining new investors and keeping existing ones, especially when a fund has a large retail investor class that is more likely to switch between mutual funds. Asset managers also compete for access to financial advisors, because they make investment decisions for their clients. Franklin offers share classes with a 12b-1 fee, or sales commission, to entice advisors to sell its funds.

Franklin Resources also competes with close end funds and Exchange Traded Funds for assets. Companies like Barclays (BCS) offer ETFs that give investors more tax management options and lower management fees on average[10].

References

  1. 1.0 1.1 Form 10-Q 3Q 2008, Item 2, Pg. 27
  2. Pensions & Investments Website
  3. 3.0 3.1 Franklin Resources Investor Presentation
  4. (BEN) Form 10-K, FY 2007, Item 6, Pg. 65
  5. Franklin Templeton UK Website
  6. (Ben) Form 10-K, FY 2007, item 1, Pg.10
  7. BEN 2009 10-K pg. 37  
  8. Wikinvest (TROW) Author: Dave Cleveland
  9. iShares Education Center
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki