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Top 5 Investment Management Stocks to Enrich Your Portfolio
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The investment management industry, which consists of companies that manage securities and funds for clients to meet specified investment goals, has seen impressive growth in the past year. The Zacks-defined Financial – Investment Management Industry has provided 24.8% returns in the past year, ahead of the S&P 500 Index’s return of 22.2%.
At present, the interest rate is in the range of 5.25-5.5%, its highest in more than 22 years. While the Fed paused rate hikes and signaled rate cuts in 2024, the current high interest rate environment is expected to continue to support margins to some extent in the near term.
Client activities remain decent to support asset under management (AUM) growth. Specifically, client activity increased in the second half of last year after the Fed announced a pause in rate hikes.
Thus, supported by overall asset inflows, growth in AUM is expected to continue. Asset managers’ top lines are, therefore, likely to be positively impacted by higher performance fees and investment advisory fees, which constitute the majority of their revenues.
According to Precedence Research, the global asset management market size was nearly $506 billion in 2023, which is estimated to increase to $685 billion in 2024. The global AUM is expected to reach around $10,479 billion by 2033, at a CAGR of 35.4% from 2024 to 2033.
The research firm also reported that the U.S. asset management market size was nearly $138.9 billion in 2023, which is estimated to increase to $189.1 billion in 2024. The U.S. AUM is expected to reach around $3,034.5 billion by 2033, at a CAGR of 36.1% from 2024 to 2033.
Finally, a preliminary estimate revealed that a massive $1.4 trillion entered U.S. money market funds primarily due to an extremely high interest rate regime, with cash yielding around 5%. A systematic decline in the market interest rate will shift a major part of these gigantic funds to equity markets, especially for portfolio management purposes.
Our Top Picks
We have narrowed our search to five investment management stocks that have strong growth potential for the rest of 2024. These stocks have seen positive earnings estimate revisions in the last 60 days. Each of our picks sports either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
T. Rowe Price Group Inc. (TROW - Free Report) is a publicly owned investment manager. TROW provides its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. TROW launches and manages equity and fixed-income mutual funds.
TROW’s focus on enhancing product offerings, efforts to broaden distribution reach to international markets as well as strategic acquisitions will likely aid its top line. This is further supported by a solid asset AUM balance which is diversified across various asset classes, client bases and geographies.
Zacks Rank #1 T. Rowe Price Group has an expected revenue and earnings growth rate of 10.7% and 18.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the last 30 days.
Hamilton Lane Inc. (HLNE - Free Report) is a private equity firm specializing in early venture, emerging growth, turnaround, middle market, mature, mid-venture, bridge, buyout, distressed/vulture, loan, and mezzanine in growth capital companies.
HLNE prefers to invest in energy, industrials, consumer discretionary, health care, real estate, information technology, utilities, and consumer services. HLNE prefers to invest in Africa/Middle East, Asia/Pacific, Europe, Latin America and the Caribbean, the United States and Canada.
Zacks Rank #1 Hamilton Lane has an expected revenue and earnings growth rate of 10.7% and 15.3%, respectively, for the current year (ending March 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 30 days.
Janus Henderson Group plc (JHG - Free Report) is an asset management holding entity. JHG provides services to institutional, retail, and high-net-worth clients. JHG manages separate client-focused equity and fixed-income portfolios. Janus Henderson Group also manages equity, fixed-income, and balanced mutual funds for its clients. JHG invests in public equity and fixed-income markets, as well as in real estate and private equity.
Zacks Rank #1 Janus Henderson Group has an expected revenue and earnings growth rate of 12.9% and 16.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last seven days.
SEI Investments Co. (SEIC - Free Report) is a publicly owned asset management holding company. SEIC’s global presence, diverse product offerings, a solid balance sheet, strategic acquisitions and robust AUM balance are expected to support top-line growth. We project SEIC’s total revenues and AUM to witness a CAGR of 6.4% and 3.5%, respectively, over the next three years.
SEIC’s plans to expand inorganically, technological innovations and the increasing demand for the SEI Wealth Platform across financial institutions are expected to further aid its financials.
Zacks Rank #2 SEI Investments has an expected revenue and earnings growth rate of 9.8% and 21.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.2% over the last 30 days.
Artisan Partners Asset Management Inc. (APAM - Free Report) will likely witness growth in AUM balance driven by the addition of investment strategies. Further, a diverse AUM base in equity and fixed-income asset classes is another positive. This, along with APAM’s diverse product offerings, will likely support revenue growth. APAM’s decent liquidity position will help meet debt obligations in the near term.
Zacks Rank #2 Artisan Partners Asset Management has an expected revenue and earnings growth rate of 11.3% and 18.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last seven days.
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Top 5 Investment Management Stocks to Enrich Your Portfolio
The investment management industry, which consists of companies that manage securities and funds for clients to meet specified investment goals, has seen impressive growth in the past year. The Zacks-defined Financial – Investment Management Industry has provided 24.8% returns in the past year, ahead of the S&P 500 Index’s return of 22.2%.
At present, the interest rate is in the range of 5.25-5.5%, its highest in more than 22 years. While the Fed paused rate hikes and signaled rate cuts in 2024, the current high interest rate environment is expected to continue to support margins to some extent in the near term.
Client activities remain decent to support asset under management (AUM) growth. Specifically, client activity increased in the second half of last year after the Fed announced a pause in rate hikes.
Thus, supported by overall asset inflows, growth in AUM is expected to continue. Asset managers’ top lines are, therefore, likely to be positively impacted by higher performance fees and investment advisory fees, which constitute the majority of their revenues.
According to Precedence Research, the global asset management market size was nearly $506 billion in 2023, which is estimated to increase to $685 billion in 2024. The global AUM is expected to reach around $10,479 billion by 2033, at a CAGR of 35.4% from 2024 to 2033.
The research firm also reported that the U.S. asset management market size was nearly $138.9 billion in 2023, which is estimated to increase to $189.1 billion in 2024. The U.S. AUM is expected to reach around $3,034.5 billion by 2033, at a CAGR of 36.1% from 2024 to 2033.
Finally, a preliminary estimate revealed that a massive $1.4 trillion entered U.S. money market funds primarily due to an extremely high interest rate regime, with cash yielding around 5%. A systematic decline in the market interest rate will shift a major part of these gigantic funds to equity markets, especially for portfolio management purposes.
Our Top Picks
We have narrowed our search to five investment management stocks that have strong growth potential for the rest of 2024. These stocks have seen positive earnings estimate revisions in the last 60 days. Each of our picks sports either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
T. Rowe Price Group Inc. (TROW - Free Report) is a publicly owned investment manager. TROW provides its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. TROW launches and manages equity and fixed-income mutual funds.
TROW’s focus on enhancing product offerings, efforts to broaden distribution reach to international markets as well as strategic acquisitions will likely aid its top line. This is further supported by a solid asset AUM balance which is diversified across various asset classes, client bases and geographies.
Zacks Rank #1 T. Rowe Price Group has an expected revenue and earnings growth rate of 10.7% and 18.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the last 30 days.
Hamilton Lane Inc. (HLNE - Free Report) is a private equity firm specializing in early venture, emerging growth, turnaround, middle market, mature, mid-venture, bridge, buyout, distressed/vulture, loan, and mezzanine in growth capital companies.
HLNE prefers to invest in energy, industrials, consumer discretionary, health care, real estate, information technology, utilities, and consumer services. HLNE prefers to invest in Africa/Middle East, Asia/Pacific, Europe, Latin America and the Caribbean, the United States and Canada.
Zacks Rank #1 Hamilton Lane has an expected revenue and earnings growth rate of 10.7% and 15.3%, respectively, for the current year (ending March 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 30 days.
Janus Henderson Group plc (JHG - Free Report) is an asset management holding entity. JHG provides services to institutional, retail, and high-net-worth clients. JHG manages separate client-focused equity and fixed-income portfolios. Janus Henderson Group also manages equity, fixed-income, and balanced mutual funds for its clients. JHG invests in public equity and fixed-income markets, as well as in real estate and private equity.
Zacks Rank #1 Janus Henderson Group has an expected revenue and earnings growth rate of 12.9% and 16.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last seven days.
SEI Investments Co. (SEIC - Free Report) is a publicly owned asset management holding company. SEIC’s global presence, diverse product offerings, a solid balance sheet, strategic acquisitions and robust AUM balance are expected to support top-line growth. We project SEIC’s total revenues and AUM to witness a CAGR of 6.4% and 3.5%, respectively, over the next three years.
SEIC’s plans to expand inorganically, technological innovations and the increasing demand for the SEI Wealth Platform across financial institutions are expected to further aid its financials.
Zacks Rank #2 SEI Investments has an expected revenue and earnings growth rate of 9.8% and 21.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.2% over the last 30 days.
Artisan Partners Asset Management Inc. (APAM - Free Report) will likely witness growth in AUM balance driven by the addition of investment strategies. Further, a diverse AUM base in equity and fixed-income asset classes is another positive. This, along with APAM’s diverse product offerings, will likely support revenue growth. APAM’s decent liquidity position will help meet debt obligations in the near term.
Zacks Rank #2 Artisan Partners Asset Management has an expected revenue and earnings growth rate of 11.3% and 18.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last seven days.