Invesco Ltd. (IVZ) 2024 Q2 Earnings Call Summary

Optimistic Highlights

Record High AUM: Invesco ended the quarter with over $1.7 trillion in AUM, up 12% from the prior year, marking a record high.
Net Long-Term Flows: Garnered $16.7 billion of net long-term flows, a 6% annualized organic growth rate, marking the best quarter in over two years.
ETF Franchise Growth: ETF inflows, excluding the QQQ, were $12.8 billion in the second quarter, with the franchise reaching a record high of $415 billion in long-term ETF AUM.
Positive Operating Leverage: Revenues up over 3% from the first quarter, with operating margin expanding by over 270 basis points to 30.9%.
Asia Pacific Strength: Exceptionally strong net long-term inflows of $6.7 billion in assets managed in the Asia Pacific region, led by the China JV.

Market Volatility: The market environment remained choppy, impacting client investment behavior and business results.
Narrow Market Returns: The theme of narrow market returns continued, with the S&P 500 equal weighted index declining by 3% in the quarter.
Fixed Income Challenges: The Bloomberg global ag index declined by 1% in the quarter, indicating challenges in the fixed income market.
Active Fundamental Equity Outflows: Continued pressure with $6.3 billion in fundamental equity net outflows during the quarter.

ETF and Active Strategy Focus: Invesco is focusing on innovation and market share growth in ETFs, alongside improving the quality and performance of active equity strategies.
Private Markets and Technology: Emphasis on expanding private market capabilities into wealth management and deploying next-generation technology across the firm.
Financial Flexibility Improvement: Strengthening the balance sheet and generating operating leverage to deliver better returns for shareholders.

Q: Can you clarify the fee rate range adjustment for ETFs and multi-assets? (Glenn Schorr, Evercore)
A: The adjustment is due to ongoing mix shift, not actual fee adjustments. (Allison Dukes)
Q: Could you expand on the green shoots for fixed income and the dynamics in China? (Glenn Schorr, Evercore)
A: Fixed income demand is accelerating, partly due to RFP volume and a shift towards longer-duration assets. In China, strong demand is driven by fixed income and balanced strategies, with expectations for continued growth. (Andrew Schlossberg)
Q: How should we think about the lower professional related fees in G&A? (Brennan Hawken, UBS)
A: Professional related fees in G&A are expected to be lumpy quarter-to-quarter. (Allison Dukes)
Q: Can you discuss the outlook for Japan and the opportunity for ETFs there? (Michael Cyprys, Morgan Stanley)
A: Japan presents a growing opportunity, especially in retail, with reforms and market shifts driving demand for ETFs and other investment strategies. (Andrew Schlossberg)
Q: How are you leveraging improved performance in fundamental equities in the sales process? (Brian Bedell, Deutsche Bank)
A: Focused on improving net flow rate through better investment performance and client demand, with optimism for growth in active ETFs. (Andrew Schlossberg)