T. Rowe Price Group ((TROW)) has held its Q3 earnings call. Read on for the main highlights of the call.
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T. Rowe Price Group’s recent earnings call was a mixed bag of optimism and caution. The company celebrated significant achievements in assets under management (AUM) growth, strategic partnerships, and product expansions. However, these positives were counterbalanced by challenges such as net outflows, struggles in equity performance, and broader market headwinds. The firm is actively managing expenses and refining its strategy to maintain its competitive edge.
Record AUM
T. Rowe Price reached a milestone with an end-of-period high of $1.77 trillion in assets under management as of September 30, 2025. This achievement underscores the company’s robust asset management capabilities and its ability to attract and retain investor capital.
Strong Investment Performance
The company reported impressive investment performance, particularly in its fixed income and Target Date fund assets. Over 70% of fixed income fund assets outperformed their peer groups across all reported periods, while the Target Date franchise saw 81%, 71%, and 98% of fund assets beating their peers over 3-, 5-, and 10-year periods, respectively.
Strategic Collaboration with Goldman Sachs
A notable highlight was the announcement of a strategic collaboration with Goldman Sachs. This partnership aims to deliver diversified public and private market solutions for retirement and wealth investors, enhancing T. Rowe Price’s service offerings.
Expansion in Asia
T. Rowe Price expanded its footprint in Asia by introducing two new retirement allocation funds. This marks the first time a U.S. asset manager has provided retirement-focused products to retail investors in Hong Kong and Singapore, signaling a strategic move into growing markets.
ETF Growth
The company’s ETF business continues to thrive, reaching $19 billion in AUM. Notably, 12 ETFs have surpassed $500 million, and 5 have exceeded $1 billion, reflecting strong investor interest and confidence in T. Rowe Price’s ETF offerings.
Emerging Markets Initiative
T. Rowe Price launched the Emerging Markets Blue Economy Bond strategy, securing over $200 million in commitments. This initiative aims to address critical water challenges, showcasing the company’s commitment to sustainable investment solutions.
Strong Financial Position
The firm maintains a robust financial position with over $4.3 billion in cash and discretionary investments, providing a solid foundation for future growth and strategic investments.
Share Buybacks
In Q3, T. Rowe Price repurchased $158 million worth of shares, bringing the total buybacks for the year to over $525 million. This move demonstrates the company’s commitment to returning value to shareholders.
Net Outflows
Despite several large institutional wins, the company reported $7.9 billion in net outflows for Q3 2025, primarily driven by outflows in U.S. equities. This presents a challenge that the company is actively addressing.
Equity Performance Challenges
The one-year performance of the Target Date fund assets was weaker, with only 43% beating their peers. This underperformance was attributed to challenges in equity building blocks, which the company is working to overcome.
Expense Management and Reduction
T. Rowe Price incurred $28.5 million in nonrecurring costs, mainly for severance and related compensation, as part of its expense management efforts. The company reduced its headcount by 4% since December 31, 2024, to streamline operations.
Challenging Market Environment
The market environment has been difficult since November 2024, characterized by narrow markets and underperformance in quality and value factors. T. Rowe Price is navigating these challenges with strategic adjustments.
Forward-Looking Guidance
Looking ahead, T. Rowe Price remains optimistic about its growth prospects. The company plans to launch new public-private market solutions in collaboration with Goldman Sachs by mid-2026. Despite the $7.9 billion in net outflows, positive net flows were recorded in fixed income, multi-asset, and alternatives. The firm is also executing an expense management program, aiming for a low single-digit controllable expense growth rate in 2026 and 2027.
In summary, T. Rowe Price’s earnings call reflected a balanced sentiment of achievement and caution. While the company celebrated record AUM and strategic partnerships, it also acknowledged challenges in equity performance and market conditions. The firm’s proactive approach to expense management and strategic collaborations positions it well for future growth, despite current headwinds.