T. Rowe Price Group's September 2025 AUM Growth: Navigating Outflows and Interest Rate Shifts

In September 2025, T. Rowe Price Group reported preliminary AUM of $1.77 trillion, reflecting a complex interplay of market dynamics, shifting interest rates, and evolving investor sentiment. Despite this robust AUM figure, the firm experienced net outflows of $2.0 billion for the month, with total quarterly outflows of $7.9 billion, including $0.8 billion from manager-driven distributions. This analysis explores how T. Rowe Price navigated these challenges amid a high-interest-rate environment and what it reveals about broader market trends.

AUM Growth Amid Persistent Outflows

T. Rowe Price's September AUM growth was driven primarily by market appreciation rather than net inflows, as AUM Climbs 6.9%. Equity assets under management (AUM) stood at $885 billion, fixed income (including money market) at $208 billion, multi-asset at $618 billion, and alternatives at $56 billion, according to an AUM breakdown. While the firm's target-date retirement portfolios-accounting for $553 billion in AUM-remained a stable anchor, the broader asset classes faced headwinds from investor caution.

The firm's Q2 2025 AUM grew to $1.68 trillion, a 6.9% year-over-year increase, but this was accompanied by accelerating outflows, with Q2 net outflows reaching -$14.9 billion, up from -$3.7 billion in Q2 2024, as shown in the Q2 2025 slides. This trend underscores a structural shift in investor behavior, as clients increasingly favor passive strategies and ETFs, challenging traditional active management models, according to Monexa.

Interest Rates and Market Sentiment: A Double-Edged Sword

The Federal Reserve's September 2025 rate cut-reducing the federal-funds rate by 25 basis points to a target range of 4.00%–4.25%-marked the beginning of a new easing cycle. While this move aimed to address weakening job growth and downside risks to employment, its impact on asset flows was nuanced. T. Rowe Price's Global Asset Allocation Viewpoints highlighted a "balanced outlook on risk assets," supported by fiscal stimulus and earnings growth but tempered by trade tensions and moderating economic growth.

Fixed income markets, in particular, faced pressure. T. Rowe Price adopted an underweight position in bonds, citing inflationary risks from tariffs and a regime shift favoring corporate bonds and emerging markets over developed market sovereigns, as noted in its 2025 Midyear Investment Outlook. This aligns with broader market expectations: as Treasury yields rose in anticipation of higher inflation, shorter-duration bonds and high-yield credit became more attractive, while long-duration assets underperformed, according to a markets.com analysis.

Equity markets, meanwhile, saw a broadening of opportunities. T. Rowe Price reduced its concentration in U.S. mega-cap stocks and emphasized value equities and select emerging markets, reflecting a strategic pivot to capitalize on trade policy shifts and fiscal expansion in Germany, as described in its Global Market Outlook. This shift was mirrored in asset flows, with multi-asset and alternatives categories showing resilience, growing to $618 billion and $56 billion, respectively, by September's end, as noted in AUM Hits $1.73T.

Strategic Adaptation: ETFs, Alternatives, and Retirement Portfolios

To counter persistent outflows, T. Rowe Price has expanded its ETF and alternative investment offerings, leveraging these products to attract capital in a low-fee environment, the firm said in its Global Asset Allocation Viewpoints. The firm's collaboration with Goldman Sachs to develop diversified public and private market solutions further underscores its focus on innovation in retirement and wealth management through a strategic collaboration.

Long-term performance remains a cornerstone of T. Rowe Price's value proposition. Over 10 years, 62% of its U.S. funds outperformed the Morningstar median, covering 78% of AUM, the Global Asset Allocation Viewpoints noted. However, short-term challenges persist, with only 35% of funds outperforming in one-year horizons, the Q2 slides showed. This dichotomy highlights the tension between active management's long-term strengths and the immediate pressures of fee compression and client retention.

Conclusion: A Test of Resilience

T. Rowe Price's September 2025 AUM figures reflect both the challenges and opportunities of navigating a high-interest-rate environment. While outflows persist, the firm's strategic emphasis on multi-asset portfolios, alternatives, and retirement solutions positions it to weather market volatility. As the Federal Reserve signals further rate cuts in 2025, investors will likely reallocate capital toward inflation-protected assets and emerging markets-sectors where T. Rowe Price's active management expertise can shine, according to the Global Asset Allocation Viewpoints.

For now, the firm's ability to balance long-term performance with short-term adaptability will determine its success in an era of shifting interest rates and fragmented investor sentiment.