Franklin's Stock Slips on Shrunken Funds

The San Mateo, Calif.-based company reported investments under management of $591.1 billion at the end of March, down from $600.1 billion in the preceding month. The company's stock funds led the decline, contracting to $328.2 billion from $339.3 billion.

While stocks in general sustained a rough month in March, analysts said the market did not decline enough to explain everything. Most likely, clients withdrew about $3 billion from their stock funds, Sandler O'Neill & Partners analyst Michael Kim wrote in a research report.

Most of Franklin Resources' $1.7 billion in annual revenue comes from charging fees to manage clients' investments. When people withdraw money, Franklin Resources collects lower fees.

Kim estimated clients withdrew $7 billion during the first quarter, while in the first quarter last year clients poured in $10 billion.

Shares of Franklin Resources lost $4.08, or 3.9 percent, to $99.93. The stock is down about 12.5 percent for the year and 25 percent in the last six months.