BEN Witnesses Steady Rise in AUM: What's Driving the Rally?

Core Insights - Franklin Resources, Inc. (BEN) reported preliminary assets under management (AUM) of $1.62 trillion for July 2025, reflecting a slight increase from the previous month due to market gains and flat long-term net inflows, which included $3 billion of long-term net outflows at Western Asset Management [1][10]. AUM Breakdown - Equity assets reached $662.8 billion, marking a 1% increase from the previous month. Multi-asset AUM was $184.7 billion, also up nearly 1%. Cash management balance increased marginally to $72 billion. However, fixed income AUM declined to $440 billion, and alternative AUM fell to $257.5 billion [2]. Growth Trends - Over the last five fiscal years ending in 2024, BEN's AUM experienced a compound annual growth rate (CAGR) of 3.1%, with continued growth in the first nine months of fiscal 2025. Strategic acquisitions have played a significant role in supporting this growth [3]. Strategic Partnerships and Acquisitions - In July 2024, Franklin partnered with Japan's SBI Holdings to focus on ETFs and emerging asset classes, including digital assets and cryptocurrencies. The acquisition of Putnam Investments in January 2024 is expected to enhance Franklin's growth in the retirement sector, increasing its defined contribution AUM to over $100 billion [4]. Diversification Efforts - Franklin's strategy to diversify into asset classes with growing client demand is anticipated to drive AUM growth. A regionally-focused distribution model has improved BEN's non-U.S. business, resulting in favorable net flows [5]. Competitor Performance - Competitors like Invesco and T. Rowe Price have also shown AUM growth. Invesco's AUM grew at a CAGR of 8.5% over the last five years, while T. Rowe Price's AUM saw a CAGR of 2.3% over the past four years [6][8]. Price Performance and Valuation - Franklin's shares have increased by 24.4% in 2025, contrasting with a marginal decline in the industry. The company trades at a forward price-to-earnings (P/E) ratio of 10.91, which is below the industry average [9][11]. Earnings Estimates - The Zacks Consensus Estimate indicates a year-over-year decline of 13% in fiscal 2025 earnings, with a projected growth of 14.7% for fiscal 2026. Earnings estimates for both years have been revised upward over the past 30 days [12].