Mutual-fund providers concede it will take a lot of cost-cutting to offset recent steep income drops.
T. Rowe Price Group Inc., which reported dropped earnings of 68 percent Wednesday, reduced staff by 5.5 percent, according to the Wall Street Journal.
T. Rowe is in line with a string of fund firms which, according to the Journal, have seen falling profits:
“Franklin’s stock assets in the U.S. have shrunk by 54%, or $97 billion, since the beginning of last year. It was the same story for other big players. American Funds, Fidelity Investments and Vanguard Group saw their stock fund assets shrink, 47%, 51% and 44%, respectively, according to data from Morningstar Inc. All of these companies have seen increases in their bond funds and money-market funds, but those generate lower fees than stock funds.