Last week, Invesco Ltd. (IVZ) announced a 2.0% rise in its preliminary month-end assets under management (AUM) for the month of July 2012. The company’s AUM for the reported month was $659.5 billion compared with $646.6 billion at the end of June.
The increase in Invesco’s AUM was a result of encouraging market returns and total net inflows. Also, favorable foreign exchange led to a $0.5 billion hike in AUM. During the period, the company had long-term net inflows in both active and passive AUM, with the former witnessing more influx.
In the month under review, Invesco’s preliminary Active AUM was recorded at $548.3 billion, reflecting approximately a 1.7% hike from $539.0 billion in the prior month. Likewise, preliminary Passive AUM was $111.2 billion, up 3.3% compared with $107.6 billion in the prior month.
As of July 31, 2012, Invesco’s total average assets stood at $654.8 billion, while the total value of average active assets came in at $545.2 billion.
At July-end, Invesco’s total equity assets grew 1.7% to $288.6 billion from $283.8 billion recorded in the last month. Similarly, the company’s fixed income assets improved 2.6% to $159.7 billion from $155.6 billion in June.
Invesco’s balanced assets summed up to $53.4 billion, growing 3.7% from the previous month. Further, alternative AUM inched up 1.5% to $86.0 billion from $84.7 billion recorded in the prior month.
Moreover, Invesco’s money market AUM came in at $71.8 billion in the reported month, marginally increasing by 1.1% from $71.0 billion recorded in June 2012.
Peer Performance
Among Invesco’s peers, Franklin Resources Inc. (BEN) declared its preliminary month-end AUM for July 2012. The company reported preliminary AUM of $718.7 billion for its subsidiaries, as of July 31, 2012, reflecting a rise of 1.6% from $707.1 billion as of June 30, 2012. However, it declined 3.8% from $747.2 billion as of July 31, 2011.
Our Take
Invesco’s broad diversification strategy positions it comfortably to benefit from enhanced global investment flows. However, the unstable U.S. dollar, volatile equity markets and mounting competition make us apprehensive. Moreover, the operating leverage is anticipated to improve substantially over the long term due to the company’s cost-control measures.
Invesco currently retains a Zacks #4 Rank, which translates into a short-term Sell rating. Considering the fundamentals, we also maintain a long-term Underperform recommendation on the stock.
FRANKLIN RESOUR (BEN): Free Stock Analysis Report
INVESCO LTD (IVZ): Free Stock Analysis Report
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