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Why Franklin Resources Jumped 11.1% in December

By Rich Duprey - Jan 3, 2021 at 3:48PM

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The investment manager closed out the year with a strong rally and new opportunities.

What happened

Shares of Franklin Resources ( BEN -1.79% ) rose 11.1% in December, a rally that began just before Thanksgiving as the asset management industry consolidated and got ready for a new worldwide competitive race.

So what

Franklin Resources kicked off the escalation after it completed its acquisition of Legg Mason for $4.5 billion in August that brought its combined assets under management to $1.5 trillion. It was followed by Charles Schwab buying TD Ameritrade, Eaton Vance buying Water Oak Advisors, and BlackRock acquiring Aperio Group.

Financial advisor discussing investments with couple

Image source: Getty Images.

In December, it then launched a new, turnkey robo-advisor service called Tango, a digital wealth management tool for advisors that has the potential to be popular with advisors underserved by typical custodians.

Using machine learning and proprietary algorithms, Tango will automate the creation of financial plans for investors while helping advisors by implementing goals-based decision-making capabilities.

BEN Chart

BEN data by YCharts

Now what 

The markets are enthused by Franklin Resources' potential, and sees further growth for itself. This Dividend Aristocrat also announced its quarterly dividend (which currently yields 4.5% annually) will rise 4% to $0.28 per share.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Franklin Resources, Inc. Stock Quote
Franklin Resources, Inc.
$31.82 (-1.79%) $0.58
The Charles Schwab Corporation Stock Quote
The Charles Schwab Corporation
$76.53 (-1.11%) $0.86
BlackRock, Inc. Stock Quote
BlackRock, Inc.
$900.33 (-0.47%) $-4.28
Eaton Vance Corp. Stock Quote
Eaton Vance Corp.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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