(New York)

One of the weakest sectors over the last year has been asset management. If you take a close look at some top asset managers, including Invesco, BlackRock, etc, you will see that many are down 20% or more. The growth of passives, pressure on fees, and weak inflows have all combined to bring down the managers. According to Barron’s they look like big bargains. BlackRock, T.Rowe, Franklin Resources, and Legg Mason look like the good bets. There are some great payers in the group too, with Invesco and BlackRock both sporting yields over 4% and AllianceBernstein paying a whopping 8.6%.

FINSUM: Yes, the industry’s traditional model is under fire, but those with very good scale will win out. Therefore, we do think the very top managers are a good buy, especially at these valuations/yields.