T. Rowe Price (NASDAQ:TROW) revealed its Q3 2023 results during an earnings conference call, reporting robust performance in its US equity and multi-asset strategies. The company also announced the launch of five new active ETFs and the expansion of its ETF franchise. However, net outflows for Q3 amounted to $17.4 billion, primarily due to US large cap equity products. Despite this, the company remains optimistic about improved flows in 2024.
Key takeaways from the call include:
- Over 70% of T. Rowe Price's US equity mutual funds outperformed their peers.
- The company launched the T. Rowe Price OHA select Private Credit Fund and opened new offices in London and Baltimore.
- Adjusted earnings per share for Q3 2023 were $2.17, up from $2.02 in Q2 2023.
- Assets under management (AUM) at the end of Q3 stood at $1.35 trillion, down 3.8% from Q2.
- The company repurchased nearly 1.4 million shares for just over $150 million year-to-date.
- T. Rowe Price expects Q4 flows to be worse than recent trends, with weakness in November and December.
The company has been focusing on managing expense growth and driving efficiency to invest in strategic initiatives for future growth. As part of this effort, the company consolidated associates at its Owings Mills, Maryland campus and reduced the amount of space occupied in its Colorado Springs buildings. The company reported over $200 million in cost savings over the past 12 months and returned about $992 million to stockholders through buybacks and dividends year-to-date.
T. Rowe Price is also enhancing its business, data, and technology architecture to support its strategic initiatives. The company sees commercial opportunity in ESG offerings and incorporates ESG into its investment decision-making process. Furthermore, the company's active ETF offering has gained critical mass, and it is targeting the US wealth channel, particularly RIAs, for distribution.
The company discussed its long-term strategy, emphasizing the potential impact of changes in the ESG space on investment decisions. It also highlighted its target date franchise's strong performance, with gross sales up 10% year-over-year. T. Rowe Price believes it has a competitive advantage over passive offerings and has made investments to improve their fees.
In terms of the OCredit offering, T. Rowe Price recently reached effectiveness and is focused on building a distribution syndicate in the wealth channel. They are launching on a few advisory platforms and have plans for follow-on offerings in the future. The company expressed confidence in the combination of OHA's performance history and T. Rowe Price's presence in the wealth channel. The call concluded with optimism for improved flow in 2024 and confidence in the progress made by the company's associates.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.