Invesco Ltd. (IVZ) reported preliminary assets under management (AUM) of $668.6 billion at the end of April 2011, marking an increase of 4.2% from $641.9 billion at the end of March 2011. The improvement in AUM was driven by positive returns from financial markets, net flows and decreased foreign currencies volatility against the U.S. dollar (helped improve AUM by $5.8 billion).
Invesco’s preliminary AUM, excluding exchange traded funds (ETFs), Unit Investment Trust (UIT), and passive funds, stood at $571.4 billion at the end of April 2011, up 3.7% from $550.2 billion in the prior month.
As of April 30, 2011, Invesco reported average assets of $651.1 billion. However, average assets, excluding ETF, UIT and passive funds, totaled $556.7 billion.
At the end of April, Invesco’s total equity assets were $316.6 billion, showing an improvement of 4.5% from $303.0 billion in the prior month. Similarly, the company’s total fixed income assets increased 2.1% to $142.6 billion from $139.7 billion in March 2011.
At April end, Invesco recorded $46.3 billion in balanced assets, up 3.6% compared with March 2011. Money market AUM was $75.8 billion (including $70.9 billion in institutional money market AUM and $4.9 billion in retail money market AUM), reflecting a spike of 6.8% from the prior-month money market AUM of $71.0 billion. Alternative AUM also notched up 4.6% to $87.3 billion in April from $83.5 billion in the prior month.
Peer Performance
On May 9, Franklin Resources Inc. (BEN), one of the peers of Invesco, reported preliminary month-end AUM of $733.1 billion of its subsidiaries as of April 30, 2011. This was up 4.2% from $703.5 billion as of March 31, 2011.
Our Viewpoint
Improving long-term investment performance, propelled by a gradual recovery in the global equity market, is likely to boost Invesco’s operating results over the mid to long term. Though rising operating expenses will remain near-term headwinds, significant improvement in operating leverage from Invesco’s cost control initiatives is expected over the long term.
Invesco is also poised to benefit from improved global investment flows due to its broad diversification. However, we remain concerned about increased redemptions and a volatile U.S. dollar.
Invesco currently retains a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating. Also, considering the fundamentals, we are maintaining our long-term “Neutral” recommendation on the stock.
FRANKLIN RESOUR (BEN): Free Stock Analysis Report
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