Invesco AUM Increases in February - Analyst Blog

Invesco Ltd. IVZ reported higher preliminary month-end assets under management (AUM) for Feb 2014. The AUM for the month was $791.2 billion, up 3.4% from $764.9 billion at the end of Jan 2014.

Favorable market returns and net inflows were the primary factors behind the rise. Further, foreign exchange led to a $2.6 billion increase in AUM. In February, Invesco's preliminary average total AUM was $774.9 billion and preliminary average active AUM was $635.8 billion.

At the end of February, Invesco's total equity AUM rose 5.4% from the prior month to $390.8 billion. Fixed income AUM increased 1.6% from the prior month to $175.5 billion.

Additionally, Invesco's balanced AUM was $54.8 billion, up 5.2% from $52.1 billion at the end of Jan 2014.  Also, alternative AUM came in at $90.7 billion in the reported month, growing 2.4% from the prior-month level. However, the company's money market AUM declined 1.5% from Jan 2014 level to $79.4 billion.

Among other investment managers, Franklin Resources Inc. BEN announced preliminary AUM of $882.2 billion by its subsidiaries for Feb 2014, which marked a 2.9% rise from $857.2 billion as of Jan 2014. Further, Legg Mason Inc. LM is expected to announce its preliminary AUM for the month of Feb 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 #3 (Buy). Another asset manager worth considering is Fortress Investment Group LLC FIG with a Zacks Rank #1 (Strong Buy).