Invesco Ltd. (IVZ) has reported significant decline in its preliminary month-end assets under management (AUM) for the month of September 2011. Its AUM for the reported month dropped 4.9% to $598.4 billion from $629.4 billion at the end of August 2011, mainly due to the effects of negative market returns. Further, foreign exchange lowered the AUM by $7.0 billion during the month under review.
Invesco’s preliminary AUM, excluding Exchange Traded Funds (ETFs), Unit Investment Trust (UIT) and passive funds, stood at $511.0 billion at the end of September 2011, down 5.1% from $538.2 billion in the prior month.
As of September 30, 2011, Invesco’s average assets stood at $632.7 billion, while average assets, excluding ETFs, UIT and passive funds, totaled $541.3 billion.
At September end, Invesco’s total equity assets plunged 8.4% from $276.4 billion recorded in the preceding month to $253.2 billion. Similarly, the company’s total fixed income assets inched down 1.5% to $146.7 billion from $149.0 billion in August 2011.
During the month under review, Invesco’s balanced assets were $41.5 billion, down 4.4% from August 2011. Additionally, alternative AUM dropped 5.0% to $83.4 billion during the reported month from $87.8 billion in the prior month.
However, Invesco’s money market AUM stood at $73.6 billion (including $69.1 billion in institutional money market AUM and $4.5 billion in retail money market AUM) in September, improving 1.1% from $72.8 billion in August 2011.
Peer Performance
On October 10, Franklin Resources Inc. (BEN), one of the peers of Invesco, reported its preliminary month-end AUM for September 2011. The company reported preliminary AUM of $659.9 billion for its subsidiaries, as of September 30, 2011, reflecting a decrease of 7.9% from $716.4 billion as of August 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. Although the operating leverage is expected to improve significantly over the long term because of Invesco’s cost control initiatives, rising operating expenses will remain a near-term headwind to the company.
Though Invesco is poised to benefit from improved global investment flows resulting from its broad diversification, we remain concerned about increased redemptions and a volatile U.S. dollar.
Invesco currently retains a Zacks #4 Rank, which translates into a short-term ‘Sell’ rating. However, considering the fundamentals, we are maintaining our long-term “Neutral” recommendation on the stock.
FRANKLIN RESOUR (BEN): Free Stock Analysis Report
INVESCO LTD (IVZ): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment