Corrects paragraph 4 to say AUM rose $169 billion year-on-year, not $8.4 billion

Feb 4 (Reuters) - Asset manager T. Rowe Price Group TROW.O reported a higher fourth-quarter profit on Wednesday, as a stock market rally boosted the value of clients' assets.

U.S. equity markets were propelled in 2025 by artificial intelligence-related optimism and hopes for U.S. Federal Reserve rate cuts.

The Dow, the S&P 500 and the Nasdaq all notched double-digit gains in 2025, their third straight year in the green, a run last seen during 2019-2021.

T. Rowe's assets under management rose $169 billion to $1.8 trillion in the reported quarter from a year earlier. Investment advisory fees, typically a percentage of the AUM, rose 4.2% to $1.74 billion.

AUM mainly depends on two factors: the performance of investments and money flowing in and out of the funds.

Profit attributable to T. Rowe stockholders was $434.2 million, or $1.99 per share, in the three months ended December 31, compared with $428.3 million, or $1.92 per share, a year earlier.

Net revenue rose 6% to $1.93 billion in the reported quarter.

Last year, T. Rowe struck a deal with Goldman Sachs GS.N under which the Wall Street giant will invest as much as $1 billion in the company as part of a partnership to offer alternative investments for retirement accounts.

T. Rowe's net client outflows were $25.5 billion in the quarter. The firm's active buying and selling strategies have lost their sheen in recent years due to the growing popularity of low-cost passive funds, which track an underlying asset or index.

T. Rowe stock slipped 9.5% in 2025, underperforming the benchmark S&P 500 index.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Sahal Muhammed)

((ArasuKannagi.Basil@thomsonreuters.com;))