Invesco Ltd. (IVZ) announced a 1.5% rise in its preliminary month-end assets under management (AUM) for the month of August 2012. The company’s AUM for the reported month was $669.7 billion compared with $659.5 billion at the end of July.
The increase in Invesco’s AUM was a result of encouraging market returns and total net inflows. In addition, favorable foreign exchange of $1.7 billion was recorded. During the period, the company had long-term net inflows in both active and passive AUM.
Further, Invesco sustained a disposition of $1.7 billion in AUM associated to the earlier announced sale of certain European Collateral Loan Obligations (CLO) contracts. The decline in AUM pertaining to these did not affect net flows for the month as it was recorded as an asset disposition.
In the month under review, Invesco’s preliminary Active AUM was recorded at $553.8 billion, reflecting approximately a 1.0% hike from $548.3 billion in the prior month. Likewise, preliminary Passive AUM was $115.9 billion, up 4.2% compared with $111.2 billion in the last month.
As of August 31, 2012, Invesco’s total average assets stood at $660.9 billion, while the total value of average active assets came in at $549.4 billion.
At the end of August, Invesco’s total equity assets grew 2.3% to $295.2 billion from $288.6 billion recorded at the end of July. Similarly, the company’s fixed income assets improved 2.1% to $163.1 billion from $159.7 billion in July.
Invesco’s balanced assets summed up to $55.5 billion, growing 3.9% from the previous month. However, alternative AUM fell nearly 1.9% to $84.4 billion from $86.0 billion recorded in the prior month.
Moreover, Invesco’s money market AUM came in at $71.5 billion in the reported month, marginally falling by 0.4% from $71.8 billion recorded in July 2012.
Peer Performance
Earlier this week, Franklin Resources Inc. (BEN) declared preliminary AUM of $731.0 billion by its subsidiaries for the month of August 2012. The company’s AUM witnessed a rise of 1.7% from $718.7 billion as of July 31, 2012. Moreover, it increased 2.0% from $716.4 billion as of August 31, 2011.
Our Viewpoint
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.
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INVESCO LTD (IVZ): Free Stock Analysis Report
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