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Invesco Reports Dip in Nov. AUM - Analyst Blog

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Invesco Ltd. ( IVZ ) has reported a decline in its preliminary month-end assets under management (AUM) for the month of November 2011. The company's AUM for the reported month fell 2.1% to $622.4 billion from $635.7 billion at the end of October 2011.

Negative market returns are chiefly responsible for the decrease in Invesco's November AUM. Additionally, the $2.9 billion drop in the AUM during the month under review was driven by foreign exchange.

Invesco's preliminary AUM, excluding Exchange Traded Funds (ETFs), Unit Investment Trust (UIT) and passive funds, stood at $527.7 billion at the end of November 2011, down 2.2% from $539.6 billion in the prior month.

As of November 30, 2011, Invesco's average assets stood at $621.7 billion, while the total value of average assets, excluding ETFs, UIT and passive funds, came at $528.9 billion.

At November end, Invesco's total equity assets stood at $269.6 billion, down 3.5% from $279.5 billion, recorded in the preceding month. Similarly, the company's total fixed income assets decreased 0.6% to $147.6 billion from $148.5 billion as of October 2011.

During the month under review, Invesco's balanced assets were $43.8 billion, down 1.1% from the prior month. Additionally, alternative AUM dropped 2.8% to $86.6 billion during the reported month from $89.1 billion in the prior month.

However, Invesco's money market AUM stood at $74.8 billion (including $70.3 billion in institutional money market AUM and $4.5 billion in retail money market AUM) in November, improving nearly 1.0% from $74.3 billion, recorded in October 2011.

Peer Performance

Last week, Franklin Resources Inc. ( BEN ), one of the peers of Invesco, reported its preliminary month-end AUM for November 2011. The company reported preliminary AUM of $675.8 billion for its subsidiaries, as of November 30, 2011, reflecting a decrease of 2.6% from $694.1 billion as of October 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 increased redemptions and a volatile U.S. dollar.

Invesco currently retains a Zacks #3 Rank, which translates into a short-term 'Hold' rating. Also, considering the fundamentals, we are maintaining our long-term "Neutral" recommendation on the stock.

FRANKLIN RESOUR ( BEN ): Free Stock Analysis Report

INVESCO LTD ( IVZ ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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