In this piece, we will take a look at the 11 best asset management stocks to buy now. If you want to skip our overview of financial markets, then you can take a look at the 5 Best Asset Management Stocks to Buy Now.
The U.S. finance industry is a global behemoth unparalleled by any other nation. American banks, such as the Wall Street behemoth JPMorgan Chase & Co. (NYSE:JPM), investment holding companies like Warren Buffett's Berkshire Hathaway Inc. (NYSE:BRK-A), hedge funds such as Ken Fisher and Ken Griffin's Fisher Asset Management and Citadel Investment, and asset managers like Blackstone Inc. (NYSE:BX) are behemoths in their respective industries.
Each of these firms and their industries play a specific role in the financial sector. Hedge funds typically seek to use client capital and leverage to engage in complex strategies that have led to their owners becoming some of the richest people in the world (you can read (16 Richest Hedge Fund Managers in the World to find out whose sits at the top of the billionaire pyramid). Banks, as we all know, move money all over the world and work with the Federal Reserve to ensure that financial market participants have enough money to finance their business operations and investments.
Similarly, asset managers also rely on client money to grow its value over time and take a cut from the profits. This business is so lucrative, that some of the biggest asset management stocks in the world such as Blackstone Inc. (NYSE:BX), BlackRock, Inc. (NYSE:BLK), and Apollo Global Management, Inc. (NYSE:APO) are corporate behemoths worth hundreds of billions of dollar in market value. This far outstrips hedge funds, and despite the fact that few hedge funds are publicly traded entities, the difference between hedge funds and asset managers is not well understood.
Therefore, before we delve deeper into the best asset management stocks, it's important to understand how the two are similar and different. After all, Insider Monkey's research has shown that hedge fund stock picks tend to outperform stock markets significantly, yet the total assets under management of Ray Dalio's Bridgewater Associates are lower than Apollo Global's cash and investment assets. Therein lies the difference between hedge funds and asset managers, as the former's high tolerance for risk often sees their services limited to those with the biggest risk appetite or the most money.
Since asset management stocks are publicly traded, their operations are also far more transparent than those of a hedge fund. This is because every asset management stock is required to file its quarterly and annual reports, along with reports of other material changes with the S.E.C. 413
Yet, just like every other stock, asset management stocks are also subject to tailwinds and headwinds. After all, if one can't directly invest with an asset manager, the next best thing might be to buy its stock to gain some exposure to professional players' understanding of the economy. Intuitively speaking, asset managers tend to do well when markets are also performing well. They invest in a myriad of sectors such as the stock market, the currency markets, the bond markets, and commodities. The performance of these markets, and by extension asset management stocks, depends on several factors such as interest rates, economic growth, political conflict, and global supply chain disruptions. For instance, the latest U.S. strikes in Syria were reported in the press soon after 4 p.m. Eastern time, or just in time for market close, and Central Command's press release followed after 4:30 p.m.
The start of February is proving to be a great couple of days for asset management penny stocks. As of February 2, 2024, asset management stocks such as Royalty Management Holding Corporation (NASDAQ:RMCO), Puyi Inc. (NASDAQ:PUYI), and The Marygold Companies, Inc. (NASDAQ:MGLD) are posting high single digit share price gains. Other established firms, such as the ones that we've mentioned above are displaying a mixed bag of performance. While Blackstone and Blackrock are down year to date, Apollo Global Management, Inc. (NYSE:APO)'s shares are up close to 13% year to date.
This shows that asset management stocks are able to stand on their own despite turmoil in other financial sectors. The start of 2024 is seeing the U.S. regional banking sector start to tremble once again after New York Community Bancorp, Inc. (NYSE:NYCB) absorbed hundreds of millions of dollars as a contingency against office real estate loans and surprise investors during the fourth quarter of 2023.
With this important context about asset management stocks, let's take a look at the best asset management stocks. Some notable picks are KKR & Co. Inc. (NYSE:KKR), Apollo Global Management, Inc. (NYSE:APO), and BlackRock, Inc. (NYSE:BLK).
11 Best Asset Management Stocks to Buy Now
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Our Methodology
To make our list of the best asset management stocks, we ranked the 40 biggest stocks in terms of their market capitalization by the number of hedge funds that had bought their shares as of Q3 2023. Out of these, the top stocks were chosen.
For these best asset management stocks, we used hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Janus Henderson Group plc (NYSE:JHG) is a British asset management company headquartered in London, the United Kingdom. Despite financial conditions remaining turbulent in the U.S. and the U.K., the firm has beaten analyst EPS estimates in all four of its latest quarters, with the fourth quarter marking high double digit AUM performance for 3, 5, and 10 year benchmarks.
By the end of last year's third quarter, 27 out of the 910 hedge funds covered by Insider Monkey's research had bought and owned a stake in Janus Henderson Group plc (NYSE:JHG). Nelson Peltz's Trian Partners was the firm's largest shareholder through its $822 million investment.
Janus Henderson Group plc (NYSE:JHG) joins Apollo Global Management, Inc. (NYSE:APO), KKR & Co. Inc. (NYSE:KKR), and BlackRock, Inc. (NYSE:BLK) in our list of the best asset management stocks.
Affiliated Managers Group, Inc. (NYSE:AMG) is an American firm that caters to the needs of businesses and individuals. It's one of the most highly rated stocks on our list, as analysts have set an average share price target of Strong Buy.
As of September 2023 end, 28 out of the 910 hedge funds part of Insider Monkey's database had invested in the firm. Affiliated Managers Group, Inc. (NYSE:AMG)'s biggest hedge fund investor is John W. Rogers's Ariel Investments as it holds a $154 million stake.
Northern Trust Corporation (NASDAQ:NTRS) is a diversified financial firm that enables banks and others to conduct their transactions, and it also acts as a wealth manager. Unlike several other asset management stocks on our list, the firm has been struggling on the financial front as of late as it has missed analysts' EPS estimates in two out of its four latest quarters.
For their Q3 2023 shareholdings, 33 out of the 910 hedge funds part of Insider Monkey's survey counted themselves as Northern Trust Corporation (NASDAQ:NTRS) shareholders. The largest stakeholder among these was John W. Rogers's Ariel Investments as it owned 2.5 million shares that were worth $178 million.
8. Brookfield Corporation (NYSE:BN)
Number of Hedge Fund Shareholders In Q3 2023: 33
Brookfield Corporation (NYSE:BN) is a specialized asset management company that is best known for its investments in the real estate and energy industries. After its multi billion dollar acquisition bid in Australia failed in late 2023, the firm sought to assuage investors in January 2024 when its real estate subsidiary announced a share repurchase on the Canadian stock exchange.
Insider Monkey scoured through 910 hedge funds for their September quarter of 2023 shareholdings to discover that 33 had held a stake Brookfield Corporation (NYSE:BN).
State Street Corporation (NYSE:STT) is one of the oldest companies in the world since it was set up in 1792. Another diversified financial firm, it also offers investment management and associated services. February 2024 is proving to be a crucial month for the firm as it marked the completion of a major acquisition of a global outsourced trading firm.
As of September 2023 end, 40 out of the 910 hedge funds profiled by Insider Monkey were the firm's shareholders. State Street Corporation (NYSE:STT)'s biggest hedge fund investor is Natixis Global Asset Management's Harris Associates as it owns $439 million worth of shares.
Ameriprise Financial, Inc. (NYSE:AMP) is one of the biggest asset and wealth management stocks in the world as it has more than ten thousand employees. Its shares are rated Buy on average, and the average share price target is $418.
During Q3 2023, 43 out of the 910 hedge funds covered by Insider Monkey's research had invested in Ameriprise Financial, Inc. (NYSE:AMP). Andreas Halvorsen's Viking Global was the largest shareholder through its $571 million stake.
KKR & Co. Inc. (NYSE:KKR), Ameriprise Financial, Inc. (NYSE:AMP), Apollo Global Management, Inc. (NYSE:APO), and BlackRock, Inc. (NYSE:BLK) are some top asset management stocks.
