Invesco Hit by $7.7B 3Q Outflows
Lower fee collection cuts revenue as investors flee bonds and stocks.
Invesco, issuer of 242 exchange-traded funds, wasn’t safe from the third quarter’s market woes as investors pulled money from funds amid tumbling equity prices and recession fears.
The Atlanta-based firm posted $7.7 billion in net long-term outflows, excluding money market funds and management-fee earning investment vehicles. That was wider than the $6.8 billion in outflows in last year’s third quarter, the company said today in a statement. Revenue fell 5.5% to $1.45 billion as the company collected fewer fees as assets dropped.
Big asset managers are all feeling the sting as falling stock prices push investors from riskier investments into safer, lower-fee options. State Street Corp. last week announced $14 billion in net outflows from ETFs in the last quarter, while Charles Schwab Corp.’s ETF revenue and assets under management also posted steep declines. BlackRock Inc.’s iShares similarly felt the heat as ETF inflows retreated by more than half compared with the same time last year.
"The challenging industry backdrop continued in the third quarter,” CEO Marty Flanagan said on an earnings call Tuesday. “Investors continued to react with caution and sought risk-off trades.”
Meanwhile, investors piled $10 billion into money market funds, often considered safe havens during times of economic uncertainty, nearly three times the $3.5 billion the segment pulled in for the third quarter of 2021.
Third-quarter adjusted earnings per share fell 12% to $0.34 from $0.39 for 2022, missing Zacks Consensus Estimate of $0.43.
Invesco’s assets under management fell $1.3 trillion, down 5% from the nearly $1.4 trillion held during the same period last year. Equity-focused products continued to take a hit, shedding $7.4 billion, while balanced products and alternatives collectively lost $6.8 billion. Meanwhile, fixed income products pulled in $7.4 billion.
ETFs lost $300 million in outflows during the quarter, Allison Dukes, chief financial officer, said during the earnings call, adding that “demand for ETF slowed industrywide.”
Contact Shubham Saharan at [email protected]
