2024-07-03 16:27:35 ET
Summary
- The asset management industry saw strong performance post-2020, but returns have been lackluster due to economic stagnation and fee competition.
- T. Rowe is struggling to compete with technologically focused powerhouses like Vanguard and BlackRock, which are seeing greater AUM growth due to their lower fees.
- Low investor cash allocations today may be a limiting factor for year-ahead AUM growth.
- Low-interest rates should not benefit T. Rowe if they coincide with a consumer-driven recession, as that would likely lead to a stock market decline.
- TROW's valuation is sensible if we assume its income should remain stable, but macroeconomic conditions may adversely affect its profitability.
The asset management financial services industry had a very strong performance coming out of 2020 as many people saw their savings levels increase. As QE and stimulus efforts caused an influx of market activity, many new participants joined, looking to ride the wave in asset prices. However, since interest rates and inflation rose, asset market returns, particularly in bonds, have been lackluster, leading to lower growth and profitability for asset managers....
Read the full article on Seeking Alpha
For further details see:
T. Rowe Price: AUM Stagnation Likely To Continue, With Heightened Outflow Risks