) reported a drop in its preliminary month-end assets under
management (AUM) for Jun 2013. The AUM for the month was $705.6
billion, down 3.3% from $729.6 billion at the end of May 2013.
Unfavorable market returns, reduction in money market AUM and
negative long-term flows were the primary reasons for the drop.
Additionally, foreign exchange led to a $0.2 billion decline in
AUM. At the end of second-quarter 2013, Invesco's average assets
were $719.8 billion while the total value of average active
assets was $593.9 billion.
In June, Invesco's preliminary active AUM was $581.9 billion,
down 3.1% from the prior month. Further, preliminary passive AUM
was $123.7 billion, down 4.3% from the prior-month level.
At the end of June, Invesco's total equity AUM fell 1.3% to
$321.4 billion from $330.7 billion recorded at the end of May
2013. Moreover, fixed income AUM decreased 2.8% from the prior
month to $173.1 billion.
Moreover, Invesco's balanced AUM fell 3.9% to $49.7 billion. Its
money market AUM totaled $77.8 billion, falling 5.9% from the
previous month. However, alternative AUM came in at $83.6 billion
in the reported month, falling 3.4% from the prior-month level.
Notably, all the figures have been adjusted by excluding Atlantic
Trust's balanced and equity AUM of $21.2 billion and $0.5
billion, respectively. The latter is to be sold to
Canadian Imperial Bank of Commerce
) for $210 million.
Among other investment managers,
Franklin Resources Inc.
) announced preliminary AUM of $815.0 billion by its subsidiaries
for June, down 3.7% from the prior month. Another investment
Legg Mason Inc.
) is expected to announce preliminary AUM for June by the middle
of this month.
We expect Invesco's cost-control initiatives to improve its
operating leverage significantly over the long term.
Additionally, meaningful capital deployment activities continue
to enhance shareholder value. However, the volatile U.S. dollar,
high debt levels and rising expenses remain plausible concerns.
Overall, the company is poised to benefit from improved global
investment flows, given its broad diversification.
Invesco is scheduled to release fiscal third-quarter 2013 results
on Jul 31, 2013. The Zacks Consensus Estimate for the quarter is
52 cents. The earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) for Invesco is 0.00% for the second quarter. This, along with
its Zacks Rank #3 (Hold), reduces the chances for a positive
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