Invesco Q3 2024 $IVZ (-0,63 %)

Financial performance:

Invesco recorded an annualized organic growth rate in net inflows from long-term investments of 5.2% in the third quarter of 2024, representing inflows of USD 16.5 billion. This growth was mainly driven by strong inflows into ETFs and index strategies of USD 17.7 billion. At the same time, however, the company recorded net outflows in Fundamental Equities and APAC Managed Strategies, which amounted to USD 6.3 billion and USD 0.8 billion respectively.

Balance sheet analysis:

The company ended the quarter with cash and cash equivalents of $1,044.9 million, maintaining a net cash position with cash on hand exceeding debt by $155 million. This reflects a solid balance sheet as the credit facility was undrawn and the company has a debt to equity ratio of 0.26x, excluding preferred stock.

Income Statement:

Operating income increased 2.2% quarter-over-quarter to $1,515.4 million. However, the operating result fell significantly by 51.4% to USD 100.5 million, which is mainly due to a one-off, non-cash acceleration in remuneration expenses.

Cash flow analysis:

Cash flow from operating activities totaled $438.4 million, indicating a stable cash generation capability. In addition, the company repurchased 1.5 million shares of common stock for $25 million during the quarter, indicating a focus on returning capital to shareholders.

Key metrics and profitability:

Adjusted operating margin improved to 31.6% from 30.9% in the prior quarter, driven by higher average assets under management (AUM) and effective expense management. Adjusted diluted earnings per share (EPS) increased slightly to USD 0.44 from USD 0.43 in the previous quarter.

Segment analysis:

• ETFs and Index: Strong performance with net inflows of USD 17.7 billion, driven by products such as the S&P 500 Equal Weight and QQQM.
• Fundamental Fixed Income: Recorded net inflows of $5.9 billion, supported by investment grade bond and municipal bond mandates.
• Fundamental Equities: Experienced net outflows of $6.3 billion, indicating challenges in this segment.

Competitive Analysis:

Invesco is well positioned competitively thanks to its diversified global footprint and strong ETF platform. The company focuses on high-demand areas such as private markets and uses its asset management channels to generate further growth.

Management forecasts and comments:

Management is optimistic about future growth, particularly in Asia Pacific and private markets. They expect continued positive operating leverage and remain committed to improving shareholder returns through regular returns.

Risks and opportunities:

• Opportunities: Expansion in the Asia-Pacific region, particularly through joint ventures in China and India, and growth in private markets.
• Risks: Volatility in global markets, particularly in China, and ongoing geopolitical uncertainties could impact performance.

Summary and strategic implications:

Invesco's strategic focus on strengthening its balance sheet, increasing capital returns and achieving profitable growth positions the company well for future success. The ability to attract capital inflows in high-demand areas such as ETFs and fixed income, while managing costs efficiently, supports the long-term growth strategy. However, challenges in fundamental equities and market volatility remain points to watch.

Overall, Invesco is using its global footprint and diversified investment capabilities to navigate market uncertainties and take advantage of growth opportunities, but the way things are going at the moment is not good enough, so the stock remains on the watchlist.

Positive statements:

• Strong net inflows: Invesco reported an annualized organic growth rate in net inflows from long-term investments of 5.2% in the third quarter of 2024, totaling $16.5 billion. This was driven by strong inflows into ETFs and index strategies.
• Improved operating margin: Adjusted operating margin increased to 31.6% from 30.9% in the prior quarter, reflecting effective expense management and higher average assets under management (AUM).
• Strong balance sheet: The company maintained a net cash position with cash on hand exceeding debt by $155 million. This reflects a robust balance sheet as no credit facility was utilized.
• Return of capital to shareholders: Invesco repurchased 1.5 million shares of common stock for $25 million during the quarter, underscoring its commitment to returning capital to shareholders.
• Growth in ETFs and Fixed Income: The ETFs and Index segment generated $17.7 billion in net inflows, while Fundamental Fixed Income saw $5.9 billion in net inflows, highlighting the strong performance in these areas.

Negative statements:

• Significant decline in operating income: Operating income fell 51.4% to $100.5 million, primarily due to a one-time, non-cash acceleration of compensation expense.
• Net outflows in Fundamental Equities: The Fundamental Equities segment experienced net outflows of $6.3 billion, indicating challenges in this area.
• Global market volatility: Continued market volatility, particularly in China, poses a risk to Invesco's performance and could impact future results.
• Decline in net income: Net income attributable to Invesco Ltd. decreased 58.4% from the previous quarter, reflecting difficulties in maintaining profitability.
• Higher operating expenses: Total operating expenses increased 10.8% from the prior quarter due to the one-time compensation expense and other factors.

Forecast: ETFs are expected to reach USD 35 trillion in assets worldwide by 2035

Hi folks.

ETFs, which currently manage USD 13 trillion in assets, are expected to grow to USD 35 trillion by 2035, a three-fold increase. This forecast is based on a compound annual growth rate (CAGR) of 10%, which seems quite modest compared to the last decade's 17% and the previous decade's 25%. Nevertheless, the more moderate growth is considered likely as market returns may be less impressive in the future.

The advantages of ETFs, such as low costs, liquidity during the trading day, tax efficiency and flexibility, will continue to attract investors and traders. This will lead to an increase in new products, innovative designs and more sales strategies. Long-term structural changes overseas also favor ETFs, while various mutual fund share classes in the US will encourage further inflows of capital.

Direct indexing, which has been seen as a threat by some, appears to be less of an issue, while tokenization may have a future role to play, but not in the foreseeable future. In fact, tokenization could even benefit ETFs.

These developments suggest that ETFs will continue to play a dominant role in global financial markets and grow significantly. Companies such as $BLK Vanguard, $IVZ (-0,63 %) or $AMUN (-0,37 %) will benefit significantly from this trend. The question here will be which company can take the biggest slice of the pie. My secret tip here would be $BLK 😉.

Chart via: @thetrinianalyst (X)

Post idea: Eric Balchunas (LinkedIn)

$VWRL (-0,08 %) and $VWCE (-0,11 %) are doomed 👍

They will sink into insignificance and disappear from the scene sooner rather than later. Getquin will have to look for new favorites. And it won't $UKW (+1,15 %) .

At least if the opinion of Invesco ( $IVZ (-0,63 %) ) goes. Invesco published namely another ETF on the FTSE All World, which beats the counterpart of Vanguard by 0.07% with a TER of 0.15%. With a beginner's deposit of a paltry €1,000,000, that's still €700 per year! Enough for a coffee at $SBUX (-0,58 %) in Munich. Welcome $FTWG (-0,26 %) 🍕

And what does the community do? Quickly sell everything, buy new and pay lots of taxes? Nothing at all, except ponder every night whether to switch? Switch the savings plan to Invesco and endure an ugly duplication in the portfolio? Or just keep leveraging the money? Tell me in the comments!

Source:

https://www.invesco.com/de/de/invesco-ftse-all-world-ucits-etf.html

Probably the best-known listed asset manager in the world is Blackrock. The company has great key figures and is in my portfolio. Unfortunately, however, the valuation is currently a bit high. With a P/E ratio of 23, the stock is trading well above its 15-year average of 19.

But even apart from Blackrock, there are some interesting investment opportunities from the asset manager sector. Besides State Street, one of them is Invesco. The original company was founded back in 1935. Today, the company employs about 7,000 people in 25 countries. Assets under management currently stand at $1.5 trillion, which is an increase of more than 25% over the previous year.

Invesco is particularly active in China. The asset management industry there currently has about $3.5 trillion in assets under management. This is expected to rise to over $6 trillion by 2025.

Invesco is dutifully smaller compared to Blackrock. Its market capitalization is about $10.5 billion (compare Blackrock: $136 billion). The expected P/E ratio for 2022 is about 7, and the current dividend yield is over 3%.

I will watch the stock more closely in the future and possibly take an initial position.

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𝗜𝗣𝗢𝘀 🔔

CI&T - The price of CI&T's initial public offering has been announced. Shares are expected to begin trading on the New York Stock Exchange under "CINT" on November 10, 2021. A total of 13,043,478 shares of common stock will be offered at $15 per share. CI&T is a global digital specialist and end-to-end digital transformation partner for over 50 large enterprises. It also has a global presence in 8 countries.

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𝗠𝗮𝗿𝗸𝗲𝘁𝘀 🏛️

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𝗖𝗿𝘆𝗽𝘁𝗼 💎

ING Group ($INN1 (+0,45 %)) - ING's CIO, Annerie Vreugdenhil, announced at the Singapour FinTech Festival that the bank with the orange lion and the ad featuring Dirk Nowitzki is currently working on a DeFi (Decentralised Finance) P2P lending project. It is doing this in cooperation with the Dutch financial regulator AFM. The big bank's ambition to become part of the crypto world became known at the latest through the whitepaper they published in early 2021 about the ways in which banks can learn from what is happening in the crypto space. As a strong collaborative partner, ING cited Aave ($AAVE/EUR (+5,43 %)) - a project that offers interest on over-collateralized crypto assets without the need for an intermediary.

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