What happened

Franklin Resources (BEN -0.41%) spiked 6.1% just after the opening bell at 9:39 a.m. ET on Thursday and was up 4.3% at the closing bell to $26.53.

The asset manager, which runs the Franklin Templeton fund family, among others, rose on a better-than-expected earnings report released Thursday that beat analysts' estimates.

So what

It is no doubt a difficult market for asset managers, given that the overall market is hovering around bear market territory. Asset managers earn fees based on assets under management, and when those assets go down, so does fee income.

The firm's assets under management were down 7% from the previous quarter and 11% year over year to $1.38 trillion. As a result, revenue was down 2% from the previous quarter and 7% year over year to $2 billion. Analysts had expected about $1.5 billion in revenue. Adjusted net income was $416 million, or $0.82 per share, down 15% year over year. Analysts estimated adjusted earnings per share of $0.75.

Franklin Resources may have fared better than other asset managers -- including T. Rowe Price, which also posted earnings Thursday and missed estimates -- due to a 60% increase in alternative assets, offsetting declines in equity and fixed income totals.

"As investors look to reposition their portfolios, we've seen interest in our alternative and multi-asset strategies which both experienced strong net inflows during the quarter," Franklin Resources President and CEO Jenny Johnson said.

Now what

This is not a great market for asset managers in general, but Franklin Resources may continue to outperform. In the most recent quarter, it acquired Lexington Partners, a private equity investor. It also announced the acquisition of Alcentra, a European alternative credit manager.

These acquisitions should help bolster Franklin's already growing alternative asset management business, which accounts for about 16% of revenue and doesn't correlate to public markets.

For income investors, it is worth noting that Franklin has an excellent dividend of $0.29 per share, with a 4.65% yield. It is a Dividend Aristocrat that has increased its dividend for 40 consecutive years.