An increase in assets under management helped to lift the profits of Franklin Resources Inc. to $81 million in the second quarter, 6.5% more than a year earlier.
Franklin, a top seller of mutual funds through banks, reported $21.9 billion in new money in the second quarter. The inflow boosted assets under management to $147.7 billion, 14.7% more than a year before.
Much of the new money went into the company's international funds.
Franklin, based in San Mateo, Calif., has been struggling to retain its market share in the bank channel. Banks have been selling domestic stock funds, but Franklin's emphasis is on portfolios that invest in U.S. bonds or international stocks.
In the second quarter, though, Franklin's bank sales began to pick up. Banks contributed 20% to total sales, up from an all-time low of 15% at the end of last year, said Gregory Johnson, president of Franklin Distributors, the company's sales arm.
"As banks move up the learning curve, they are beginning to sell more international funds," he said.
Stock funds make up only 12% of Franklin's assets under management. But the company addressed that problem in June, when it announced plans to acquire Heine Securities Corp., an investment advisory firm with $17 billion in assets under management.
Mr. Johnson added that the recent downturn in the stock market has helped him against such companies as Aim Management Group, a Houston- based stock fund company that last year became a formidable competitor through banks.
Franklin's earnings were also fueled by an appreciation of assets already in its portfolios. Mutual fund companies make most of their money by charging investors for managing the assets.
Franklin also has stemmed redemptions in bond funds, particularly since the stock market began getting volatile earlier in the year.
