What a tie-up means for investors

How long does it take IRS to process taxes?

[ad_1]

rssfeeds.usatoday.com

Franklin Resources and rival Legg Mason are joining forces. So what does the $4.5 billion combination of two of the world’s largest asset managers mean for you? 

Average investors shouldn’t expect the acquisition of Legg Mason by Franklin to fix the decadelong challenges that the industry has faced with passive investing’s rise, analysts caution.

Active asset managers have struggled in recent years as investors have shifted away from stock picking to passive investments like low-cost funds. And those hurdles will likely continue for the combined company, which will manage a combined $1.5 trillion in assets.  

Active investors try to beat the market by picking winning stocks that have fallen out of favor, whereas passive funds track market barometers like the Standard & Poor’s 500 index.

“Average investors need a low-cost investment vehicle that performs well, and both of these firms have had challenges on that front,” says Cathy Seifert, equity analyst at CFRA Research. “There have been so many other changes in the asset management landscape that have impacted the average investor, but this deal is probably not one of them.”

Coronavirus:Restaurants struggle amid fears of outbreak

Pier 1 store closings:These locations are slated to shutter. Is yours on the list?

A child's folded paper finger toy is shown, with the words stocks, bonds, commodities, and mutual funds written on it.

In November, brokerage firm Charles Schwab agreed to buy TD Ameritrade for about $26 billion. Janus Henderson and Standard Life Aberdeen were each formed following mergers in 2017.

Investors should expect more consolidation in the sector along the lines of the Franklin-Legg Mason deal, analysts say

“What remains to be seen is whether this combined firm will look to acquire a passive asset manager to better round out their asset mix,” Seifert says. “I wouldn’t rule it out.”

[ad_2]

Source link

Published
Categorized as Business

By Bernice Caldwell

Bernice is one of the finest authors Industry News Today portal has until now. Bernice's linguistic and well-written technique is one of the plus points that have the readers glued to her articles. Bernice currently heads the Healthcare and Services domain as her knowledge on the medical topics is immense. She has just joined the Industry News Today portal 6 Months back but the love for writing can be very well seen. She may be short on experience but it has definitely not stopped her from presenting some of the finest articles. Bernice is currently a very well-known personality on the portal to have shown her skillful writing in such a limited time span.

Leave a comment

Your email address will not be published. Required fields are marked *