Invesco Ltd. (IVZ) reported a 3.7% increase in its preliminary month-end assets under management (AUM) for the month of January 2012. The company’s AUM for the reported month was $648.3 billion, up from $625.3 billion at the end of December 2011.
Invesco’s January AUM primarily benefited from positive market returns, foreign exchange and long-term net inflows. Foreign exchange led to a $2.2 billion rise in the AUM during the month under review.
Invesco’s preliminary Active AUM stood at $543.6 billion at the end of January 2012, growing 2.8% from $529.0 billion in the prior month. Moreover, in January 2012, preliminary Passive AUM was $104.7 billion compared with $96.3 billion in December 2011.
As of January 31, 2012, Invesco’s average assets stood at $639.6 billion, while the total value of average active assets came at $539.1 billion.
At January-end, Invesco’s total equity assets improved 6.1% to $287.6 billion from $271.0 billion in December 2011. Similarly, the company’s total fixed income assets inched up 2.0% to $152.0 billion from $149.0 billion as of December 2011.
During the month under review, Invesco’s balanced assets were $47.0 billion, rising 6.1% from the prior month. Additionally, alternative AUM grew 2.0% to $88.4 billion during the reported month from $88.7 billion in the prior month.
However, Invesco’s money market AUM stood at $73.3 billion (including $69.0 billion in institutional money market AUM and $4.3 billion in retail money market AUM) in January, dipping nearly 1.0% from $74.0 billion, recorded in December 2011.
Peer Performance
Earlier this week, Franklin Resources Inc. (BEN) reported its preliminary month-end AUM for January 2012. The company reported preliminary AUM of $704.3 billion for its subsidiaries, as of January 31, 2012, reflecting a surge of 5.1% from $670.3 billion as of December 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 the increased redemptions and a volatile U.S. dollar.
Invesco currently retains a Zacks #2 Rank, which translates into a short-term ‘Buy’ rating.
FRANKLIN RESOUR (BEN): Free Stock Analysis Report
INVESCO LTD (IVZ): Free Stock Analysis Report
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