Franklin Resources, Inc. (BEN), State Street Corporation (STT): Grow Your Assets With These Asset Management Companies

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With recovery in the global economy and volatility in the global equity, bond, and currency market, demand is increasing for fund management companies. These companies, with their expertise and distinctive strategies, are managing and advising individuals as well as corporations. For these services, the companies charge fees which are considered the main source of revenue.

Franklin Resources, Inc. (NYSE:BEN)

Three such asset management companies are focused on enhancing their assets under management and are expecting to generate higher revenue in the future. Find how these companies are managing funds and improving their finances, resulting in growth for investors.

Strong servicing fee and foreign exchange management

State Street Corporation (NYSE:STT) posted its first-quarter results ended in March. It reported year-over-year revenue growth of 2%, to $2.47 billion, which was strongly driven by its investment servicing fee. This fee is earned for serving as a custodian of financial assets on behalf of institutional investors. With the strong growth in equity markets and growing net new business, its servicing fee total rose to $1.17 billion in the first quarter, reporting year-over-year growth of 9%. The company is charging a servicing fee of 0.0181% on daily average valuation of assets under custody and administration, or AUC.

The company offers its asset services in more than 100 geographic markets globally. This enables it to offer competitive fees to its clients. Last year, it gained new asset servicing contracts worth $551 billion, out of which $70 billion is expected to be installed by the second-half of 2013. Moreover, in the first quarter, the company gained a new asset servicing contract worth $223 billion with 39 new alternative asset servicing mandates including real estate and commodities management.

With competitive servicing fees and its reputation to attract clients, it will continue to attain business. It expects the assets under custody to rise by 10% to $26.81 trillion in 2013 and $29.21 trillion in 2014. Moreover, it expects servicing fees to total around $4.64 billion by the end of this year and $5.15 billion next year.

Additionally, it’s trading services, which includes foreign exchange trading and brokerage, reported quarter-over-quarter growth of 15.6% to $281 million. This growth was primarily driven by high volumes and increased volatility in currency markets. State Street Corporation (NYSE:STT), with the expertise and electronic trading channel, manages a high volume of foreign exchange transactions and takes benefit of market volatility.

Simultaneously, with the improving global scenario, many multinational corporations are enhancing their global footprint, and the company, with its proficiency in managing and hedging foreign exchange transactions, expects to gain new business in the future. Thus, the company‘s trading service fee will grow approximately 6% to $1.07 billion this year and $1.16 billion by 2014.

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