T. Rowe Price Group, Inc: 2Q26 Slightly Ahead But Expecting Increased Outflows Looking Into 2H26

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T. Rowe Price Group, Inc: 2Q26 Slightly Ahead But Expecting Increased Outflows Looking Into 2H26

net revenue of $1.91bn, in line with our model. While Q4 2.44 2.49 2.51

overall AUM continued to rise with market beta tailwinds, fee rates continued FY 9.72 10.28 10.30

to compress in 2Q26. Here, 2Q26 fee rates (excl. perf fees) were 38.1bps, down

Style Exposure

from 1Q26’s 38.4bps. The overhang from the legacy equity mutual fund

business continues to remain a drag on overall fee rate trends (as well as flows).

While we have not observed considerable compression at the product level, the

mix headwinds likely persist for some time despite some pockets of success

with higher fee alternative products.

• 2Q26 outflows improve but headwinds persist. TROW delivered overall net

outflows of $6.5bn in 2Q26, improving from 1Q26 outflows of $13.7bn. 2Q26

had two sizable wins that supported net sales (Vanguard and defined

contribution). That said, we do not envision incremental sizable wins for

TROW in the near-term. Equity outflows remain elevated with $13.5bn of net

redemptions in 2Q26, while fixed income products modestly offset with

positive net sales of $4.6bn (after 1Q26 inflows of $3.5bn). Separately, ETFs

continue to be a bright spot, with 34 ETFs now in TROW’s lineup, with ~$30bn

of total AUM, which generated ~$4bn of inflows during 2Q26 (vs. $3bn in

1Q26).

• 2H26 LT outflows to deteriorate; air pocket in target date. While 2Q26’s

improving q/q outflow picture was supportive of TROW efforts to reinstill

growth, the near-term outlook remains bleak. 2H26 outflows are set to

deteriorate relative to 1H26, as some of the wins in 1H26 wll not repeat and an

air pocket of activity looms in the target date business. While 2H26 will likely