T. Rowe Price Bled $8.2 Billion More in July as AUM Slips From June Peak

T. Rowe Price told investors on August 12 that assets under management fell to $1.87 trillion at the end of July, down from $1.893 trillion on June 30, according to the company's own press release. Net outflows for the month hit $8.2 billion.

That's on top of the $6.5 billion in net client outflows the firm reported for the full second quarter, according to a transcript of the July 31 earnings call published by The Motley Fool. Baltimore-based T. Rowe Price has now strung together quarters of outflows even as the overall pot of money it manages keeps growing, mostly because stocks went up.

Break down the numbers and the pattern gets clearer. Equity assets dropped from $919.4 billion in June to $896 billion in July, according to the company's asset table. Multi-asset strategies fell slightly too, from $690 billion to $687 billion. Fixed income held flat at $222 billion. Alternatives stayed at $62 billion.

Translation: people are pulling money out of T. Rowe's stock funds faster than the market rally can cover for it.

The active management problem won't go away

This isn't a one-month blip. On the July 31 earnings call, CEO Rob Sharps and CFO Jen Dardis walked analysts through a quarter where the firm's effective fee rate slipped to 38.1 basis points, down from 38.4 in the first quarter, according to the Motley Fool transcript. The company blamed "vehicle mix shifts toward lower-fee strategies." Clients keep moving into cheaper products.

Equity outflows alone hit $13.5 billion in the second quarter. Multi-asset and fixed income brought in some money to offset it, $0.4 billion and $4.6 billion respectively, but it wasn't close to enough.

T. Rowe Price isn't hiding from any of this. The numbers are public, the call was on the record, and management didn't dodge the outflow question. There's a real bright spot buried in the data: 98% of the firm's target-date retirement fund assets outperformed Morningstar peers over a 10-year basis, according to the earnings call. Target-date assets themselves grew from $561 billion at year-end 2025 to $620 billion by July 31, according to the company's asset table, roughly two-thirds of it market gains and inflows into that specific franchise even as the rest of the equity book shrank.

The firm is also not standing still on fees. Its ETF lineup held $30 billion across 34 funds at quarter's end after $4.4 billion in net inflows, and its separately managed account platform grew to $20 billion across 43 products with placement now at 35 sponsor platforms, according to the transcript. Those are the two areas where the industry has been moving money for years, and T. Rowe is at least showing up there.

Buybacks are doing some of the work

With outflows persistent, management has leaned on stock repurchases to prop up per-share numbers. T. Rowe bought back $157 million of stock in the second quarter, bringing year-to-date buybacks to $497 million, or about 2.5% of shares outstanding, according to the earnings call transcript.

That's part of why adjusted diluted EPS came in at $2.57 for the quarter, up from $2.52 in Q1 2026 and $2.24 a year earlier. Adjusted net revenue rose 8.5% year-over-year to $1.9 billion, driven mainly by investment advisory revenue climbing to $1.7 billion from $1.57 billion.

So the earnings picture looks fine on paper. Higher average AUM from market gains, a shrinking share count from buybacks, and cost discipline are covering for the fact that clients keep walking out the door. The firm's balance sheet still shows $4.4 billion in cash and discretionary investments, according to the transcript, giving it room to keep buying back stock or make acquisitions if it wants.

Context that matters: this is an industry-wide story, not just T. Rowe's

The outflow trend at T. Rowe Price is showing up against a backdrop where money overall is still flooding into asset management, just not into traditional stock-picking shops. Private credit funds run by Ares Management, Blackstone, Blue Owl Capital and Golub Capital are pulling in record fundraising even as their loan books show default rates at five-year highs, according to a Wall Street Journal analysis reported by InvestmentNews. Fitch Ratings pegged the private credit default rate at a record 6% through the second quarter of 2026.

That's a different corner of the market than T. Rowe's core equity and multi-asset business, but it points to the same underlying dynamic: investor dollars are chasing yield and lower fees wherever they can find them, whether that's index funds, ETFs, or private credit vehicles, and traditional active managers are having to fight harder for every dollar they keep.

The question for T. Rowe Price is whether its growth areas, ETFs, SMAs, and target-date funds, can scale fast enough to offset continued equity outflows before buybacks run out of room to mask the trend. The firm's full-year expense guidance calls for adjusted operating costs to grow 4% to 7% over 2025's $4.6 billion base, according to the earnings call, meaning expenses are rising even as the core business keeps shrinking on a net-flow basis.