First quarter profit of Legg Mason Inc. has gone down by 4.2 per cent as the investors continued to pull back their funds from the company.

Most affected were the fixed-income business and investments put in the stock markets of the asset management company.

Said Chairman and Chief Executive Mark R. Fetting that while the sales were better than the company had expected, this is the reason why the investors had moved from market-directed funds to the once that gave higher fees.

The shift can be clearly seen from the fact that the company saw an increase in the positive inflow into its equity fund, which was the highest in last four years.

In total Legg saw an equity inflow of $700 million that happened after its closed-ended fund was able to raise $1.3 billion.

Still, it saw an outflow of $9.4 billion on the side of fixed-income. This is higher than what it was in the fourth quarter of last fiscal.

Post the announcement, the shares of the company went down by more than 2 per cent to end at around $28.