Invesco Ltd. (IVZ) reported a rise in its preliminary month-end assets under management (:AUM) for Jul 2013. The AUM for the month was $729.4 billion, up 3.4% from $705.6 billion at the end of Jun 2013.
Favorable market returns, increase in money market AUM and positive long-term inflows were the primary reasons for the rise. Additionally, foreign exchange led to a $0.9 billion increase in AUM.
In July, Invesco’s preliminary active AUM was $600.8 billion, up 3.2% from the prior month. Likewise, preliminary passive AUM grew 4.0% from Jun 2013 to $128.6 billion.
At the end of July, Invesco’s total equity AUM jumped 5.7% to $339.8 billion from $321.4 billion at the end of Jun 2013. However, fixed income AUM dropped 0.5% from the prior month to $172.2 billion.
Further, Invesco’s balanced AUM rose 3.8% to $51.6 billion in July. Its money market AUM totaled $80.6 billion, increasing 3.6% from the previous month. Moreover, alternative AUM came in at $85.2 billion in the reported month, rising 1.9% from the prior-month level.
Notably, all the figures have been adjusted by excluding Atlantic Trust’s balanced and equity AUM of $21.9 billion and $0.5 billion, respectively. The latter is to be sold to Canadian Imperial Bank of Commerce (CM) for $210 million.
Among other investment managers, Franklin Resources Inc. (BEN) announced preliminary AUM of $834.1 billion by its subsidiaries for July, up 2.3% from the prior month. Similarly, for Legg Mason Inc. (LM) preliminary AUM was $656 billion for July, increasing 1.8% from the last 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, Invesco is poised to benefit from improved global investment flows, given its broad diversification.
Currently, Invesco carries a Zacks Rank #4 (Sell).
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