The asset management industry has grown rapidly and is poised for further expansion in the upcoming years, fueled by the growing demand across various industries and customers, expanding market viability, and introduction of cutting-edge technologies.
Despite enhanced market volatility, investors could consider watching quality asset management stocks T. Rowe Price Group, Inc. (TROW), Affiliated Managers Group, Inc. (AMG), and SEI Investments Company (SEIC) in July.
The asset management industry is accelerating at a rapid rate driven by increasing disposable income, shift in investors’ power, expanding investible assets, and rising popularity of passive investments. This is further navigated by rapid digitalization and the adoption of advanced technologies.
The global asset management market size is accounted for $685.09 billion in 2024, and is projected to reach about $10.48 trillion by 2033, exhibiting growth at a CAGR of 35.4%. During the forecast period, factors including early adoption of advanced technologies, and growing number of market players will navigate the market.
Also, regionally, the growth of the asset management market can be attributed to the surging demand for asset management solutions in industries, such as healthcare, transportation, and oil and gas. And adoption of advanced technologies like AI, IoT, and cloud computing also contribute to the market growth.
Further, the global digital asset management market is expected to hit around $20.60 billion by 2032, expanding at a CAGR of 15.8%.
In light of these encouraging trends, let’s look at the fundamentals of the three best Asset Management stocks, beginning with number 3.
Stock #3: T. Rowe Price Group, Inc. (TROW)
TROW is a publicly owned investment manager. The entity offers its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. The firm launches and manages equity and fixed income mutual funds.
On July 16, TROW’s OHA, a leading global credit-focused alternative asset manager, and One Investment Management, a global alternative investment manager, entered into a partnership to invest in European private credit having initial investable capital of up to $5 billion to help address the needs of European borrowers.
Both firms will benefit from the strategic partnership’s size and scale, and their combined sourcing and origination capabilities.
On July 11, TROW reported preliminary month-end assets under management of $1.57 trillion as of June 30, 2024. Its preliminary net outflows were $2.60 billion for June 2024 and $3.70 billion for the quarter-ended June 2024. Also, the company’s preliminary quarterly net flows include $1.1 billion of Manager-driven distributions.
On July 10, TROW launched its first federally tax-free fixed income exchange-traded fund to its active ETF roster. T. Rowe Price Intermediate Municipal Income ETF began trading on 10th July on NASDAQ exchange.
During the first quarter that ended March 31, 2024, TROW’s net revenues increased 13.8% year-over-year to $1.75 billion. Its adjusted net operating income grew 31.1% from the year-ago value to $692.40 million. Adjusted net income attributable to T. Rowe Price and adjusted EPS came in at $548.50 million and $2.38, up 40.9% and 40.8% from the prior year’s quarter, respectively.
Analysts expect TROW’s revenue for the second quarter (ended June 2024) to increase 10.6% year-over-year to $1.78 billion and its EPS for the same quarter is expected to grow 12.1% year-over-year to $2.26. Furthermore, the company has topped the consensus EPS and revenue estimates in each of the trailing four quarters.
Shares of TROW have gained 5.6% over the past month and 13.3% over the past six months to close the last trading session at $120.75.
TROW’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
TROW has a B grade for Quality and Momentum. It is ranked #13 out of 51 stocks in the Asset Management industry.
To check other POWR Ratings of TROW for Value, Growth, Stability, and Sentiment, click here.
Stock #2: Affiliated Managers Group, Inc. (AMG)
AMG operates as an investment management company which offers investment management services to mutual funds, institutional clients, retails and high net worth individuals. The company provides advisory or sub-advisory services to mutual funds.
On May 17, AMG acquired a minority equity interest in Suma Capital, a pan-European private markets firm that invests in the transition to a lower carbon economy. The partnership marked AMG’s ninth private markets affiliate, which will further evolve its business toward secular growth areas.
During the first quarter that ended March 31, 2024, AMG reported consolidated revenue of $499.90 million and its income before income taxes grew 8.8% from the year-ago value to $254.10 million. The company’s net income and EPS came in at $198.70 million and $4.14, up 5.4% and 19.3% year-over-year, respectively.
In addition, the company’s adjusted EBITDA rose 19.8% year-over-year to $259.80 million.
Analysts expect AMG’s revenue and EPS for the second quarter (ended June 2024) to grow 1.1% and 3.5% year-over-year to $518.03 million and $4.60, respectively. Moreover, the company surpassed the consensus EPS estimates in each of the trailing four quarters, which is impressive.
Over the past month, the stock has surged 16.5% and 16.2% over the past six months to close the last trading session at $171.86.
AMG’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.
AMG has a B grade for Momentum and Quality. It is ranked #11 among 51 stocks within the Asset Management industry.
To see the other ratings of AMG for Sentiment, Growth, Value, and Stability, click here.
Stock #1: SEI Investments Company (SEIC)
SEIC is a publicly owned asset management holding company which provides wealth management, retirement and investment solutions, asset management, asset administration, investment processing outsourcing solutions, financial services, and investment advisory services to its clients.
On April 2, SEIC introduced a range of enhancements to its Separately Managed Account (SMA) and Unified Managed Account (UMA) solutions offered through the Managed Account Solutions program, which consist launch of additional internally-managed and third-party investment options, reduced costs, and technology updates that bolster tax optimization.
The enhancements have been designed to help advisors better serve mass-affluent, high-net-worth, and ultra-high-net-worth investors.
On March 21, SEIC announced that U.S. wealth managers using the SEI Wealth PlatformSM can view and manage assets custodied with third parties via an advanced integration with SWP's proprietary core accounting engine.
The improvised technology coupled with the strength of SEIC’s operational processing and reconciliation services allows the enhanced aggregation of high-fidelity data.
For the first quarter that ended March 31, 2024, SEIC’s total revenue rose 9.1% year-over-year to $511.58 million. Its income from operations grew 23.7% from the year-ago value to $125.85 million. The company’s net income and EPS came in at $131.40 million and $0.99, reflecting increases of 22.8% and 25.3% from the prior year’s quarter, respectively.
Analysts expect SEIC’s revenue and EPS for the second quarter (ended June 2024) to grow 7.1% and 16.8% year-over-year to $523.80 million and $1.04, respectively. Moreover, the company surpassed the consensus EPS estimates in all four trailing quarters, which is remarkable.
Over the past six months, SEIC’s stock has surged 10.6% and 12.3% over the past year to close the last trading session at $69.83.
SEIC’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall grade of B, translating to a Buy in our proprietary rating system.
SEIC has a B grade for Momentum, Stability, and Quality. It is ranked #3 among the 51 stocks within the same industry.
To see the other ratings of SEIC for Growth, Value, and Sentiment, click here.
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TROW shares were trading at $118.40 per share on Wednesday afternoon, down $2.35 (-1.95%). Year-to-date, TROW has gained 12.31%, versus a 18.14% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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