Invesco Ltd. (IVZ) reported a fall in its preliminary month-end assets under management (:AUM) for Jan 2014. The AUM for the month was $764.9 billion, down 1.8% from $778.7 billion at the end of Dec 2013.
Unfavorable market returns and net outflows were the primary reasons for the decline. Further, foreign exchange led to a $2.0 billion decrease in AUM. In January, Invesco’s preliminary average total AUM was $771.0 billion and preliminary average active AUM was $632.8 billion.
At the end of January, Invesco’s total equity AUM fell 3.2% from the prior month to $370.9 billion. The company’s money market AUM totaled $80.6 billion, down 2.5% from Dec 2013. Further, the company’s balanced AUM was $52.1 billion, decreasing 2.3% from $53.3 billion as the end of Dec 2013.
However, Invesco’s fixed income AUM nudged up 0.6% from the prior month to $172.7 billion. Additionally, alternative AUM came in at $88.6 billion in the reported month, inching up 0.8% from the prior-month level.
Among other investment managers, Franklin Resources Inc. (BEN) announced preliminary AUM of $857.2 billion by its subsidiaries for Jan 2014, which marked a 2.5% fall from $879.1 billion as of Dec 2013. Further, Legg Mason Inc. (LM) is expected to announce its preliminary AUM for the month of Jan 2014 later this week.
Invesco’s operating leverage is likely to improve significantly over the long term, driven by cost-control initiatives. Further, the rebound in the equity market and improvement in global investment flows will act as catalysts. However, the company’s high debt levels and rising expenses remain concerns.
Currently, Invesco carries a Zacks Rank #2 (Buy). A better-performing company in the same industry with a Zacks Rank #1 (Strong Buy) is Waddell & Reed Financial, Inc. (WDR).
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