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Invesco's April AUM Dips Slightly - Analyst Blog

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Invesco Ltd. (IVZ) announced a marginal 0.7% decline in its preliminary month-end assets under management (AUM) for the month of April 2012. The company's AUM for the reported month was $668.4 billion compared with $672.8 billion at the end of March 2012.

Invesco's April AUM decline was a result of total net outflows and market depreciation offsetting inflows from foreign exchange worth $2.3 billion. Total net outflows included $2.6 billion worth of payment for Invesco PowerShares QQQ and $0.9 billion active fixed income outflow from the UK.

Invesco's preliminary Active AUM totaled $559.1 billion at the end of April 2012, reflecting a 0.2% decrease from $560.2 billion in the prior month. Moreover, in the quarter under review, preliminary Passive AUM was $109.3 billion down 2.9% compared with $112.6 billion in March 2012.

As of April 30, 2012, Invesco's average assets stood at $667.3 billion, while the total value of average active assets came in at $556.3 billion.

At April-end, Invesco's total equity assets declined 1.8% to $299.8 billion from $305.2 billion in March 2012. However, the company's fixed income assets modestly grew 0.3% to $155.5 billion from $155.0 billion in March 2012.

During April, Invesco's balanced assets summed up to $51.4 billion, increasing 1.8% from the previous month. Further, alternative AUM also inched up 0.1% to $87.7 billion during April from $87.6 billion recorded in the prior month.

Further, Invesco's money market AUM arrived at $74.0 billion (including $70.0 billion in institutional money market AUM and $4.0 billion in retail money market AUM) in April, slightly going down 0.7% from $74.5 billion, recorded in March 2012.

Peer Performance

Earlier this week, Franklin Resources Inc. (BEN) declared its preliminary month-end AUM for April 2012. The company reported preliminary AUM of $726.4 billion for its subsidiaries, as of April 30, 2012, displaying a marginal increase from $725.7 billion as of March 31, 2012.

Our Take

Long-term investment performance of Invesco has been improving owing to the recovering global equity market, which is further expected to boost the company's operating results. Moreover, the operating leverage is anticipated to improve substantially over the long term due to the company's cost control initiatives.

Invesco's broad diversification comfortably positions it to benefit from enhanced global investment flows. However, the volatile U.S. dollar and mounting competition make us apprehensive.

Invesco currently retains a Zacks #2 Rank, which translates into a short-term Buy rating.


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