Target-date growth boosts T. Rowe's assets in the first quarter

T. Rowe Price Group reported $772.7 billion in assets under management as of March 31, up 3.5% from three months earlier and up 8.6% from a year earlier, according to the company's earnings statement Wednesday. Net inflows for the first quarter were $1.9 billion, compared with net outflows of $5.1 billion in the previous quarter and net inflows of $8.8 billion in the first quarter of 2014. T. Rowe reported net inflows of $3.4 billion into the firm's mutual funds for the quarter ended March 31, which included net inflows of $2.1 billion into the stock and blended asset funds, $1.6 billion of net inflows into the fixed-income funds, and net outflows of $300 million from its money market funds. (More: Target date fund costs continue decline, thanks to competition, new low-cost funds) The net outflows from the other investment portfolios were largely concentrated among institutional separate account clients that redeemed from large-cap U.S. equity strategies. Mutual fund assets were $497.2 billion as of March 31, up 4% from Dec. 31 and up 10% from March 31, 2014. T. Rowe Price reported $160.9 billion in target-date portfolios, up 8% from three months earlier and up 24% from a year earlier. Net income for the quarter came to $309.5 million, 2% lower than the previous quarter but 2% higher than the first quarter of 2014. Net revenue, meanwhile, totaled $1.03 billion, flat from the previous quarter but up 8% from the year-earlier quarter. (More: Few target date fund managers eat their own cooking) Christopher Shutler, equity research analyst at William Blair & Co., wrote in a note to clients that although his firm expects “muted flows in the coming quarters as the firm's international distribution efforts will take time to season, T. Rowe's track record for strong investment performance should continue to reward patient investors.” Mr. Shutler added: “In the interim, accelerating target-date flows, a growing dividend … 2.1% yield excluding any special dividend … reasonable valuation, and low expectations provide stability.” James Comtois is a reporter at sister publication Pensions & Investments