Invesco, issuer of 242 exchange-traded funds, reported a rocky fourth quarter as market volatility pushed investors away from index and other so-called passive funds.
Passive fund inflows for the issuer of the $148.3 billion Invesco QQQ Trust (QQQ) shrank 32% to $7.3 billion from a year ago, according to a press release. For the full year, flows into passive funds, which include most ETFs, more than halved to $27.8 billion from 2021.
Actively managed funds, which charge investors larger fees, shed $28.3 billion last year, compared with 2021’s $18.2 billion in inflows. Invesco’s total assets under management rose 19.3% year over year to $1.6 trillion.
Worst Year in Decades for Markets
“The fourth quarter concluded a year of significant headwinds and volatility in global markets,” Invesco’s CEO Martin Flanagan said during the firm’s fourth-quarter earnings call with analysts and investors. He went on to point to how the “worst markets we’ve seen in decades,” and rising COVID rates and policy changes in China led to a “challenging organic growth dynamic in our industry.”
Big ETF issuers reported mixed results this quarter. Charles Schwab Corp. last week reported ETF assets dropped 6%, while ETF-related revenue increased. BlackRock Inc., the largest ETF issuer, saw inflows slow alongside a 15% decline in ETF-related income. Meanwhile, State Street Corp. said ETF assets under management slumped 14% last year.
Invesco’s adjusted diluted earnings per share came in at $0.39 for the fourth quarter, topping Bloomberg-polled analysts’ estimates of $0.36, while falling from $0.86 from the year prior.
Shares of the Atlanta-based company dropped 1.4% to $18.64 during midday trading.
Contact Shubham Saharan at [email protected]