Wed, Sep. 21, 12:10 PM
- Smart Beta ETFs may be key for the next leg of industry growth, says asset manager analyst William Katz. Further, he expects to see a narrowing of winners, with low probability for newer entrants to pick up sizable market share gains. The key areas of opportunity, he says, are fixed-income, non-U.S., and institutional channels, with growth there coming from further declines in active management and single-stock trading.
- Back to being an early entrant: Katz says there's +0.81 correlation between the age of an ETF and AUM, and 71% of first-mover funds have the highest AUM for their category. For these reasons, current leaders like iShares (NYSE:BLK), Vanguard, State Street (NYSE:STT), PowerShares (NYSE:IVZ), and Schwab (NYSE:SCHW) should remain among the largest ETF sponsors.
Fri, Sep. 16, 8:31 AM
- Just 9.5% of actively-managed large-cap domestic equity funds beat the S&P 500 in the five year ended August 31 - the worst 5-year record since 1999, according to Morningstar. By comparison, in the five years ended 2010, nearly 50% topped the S&P.
- The lame results haven't gone unnoticed, with investors yanking $422B from roughly 3K mutual funds in the past five years, and putting that money and more into passive vehicles (ETFs).
- In the year ended June 30, 85% of large-cap stock funds, 88% of mid-cap funds, and 89% of small-cap funds failed to match their bogeys. "Pretty appalling," says S&P's Aye Soe. "Given the choppiness in the markets we would have expected the active managers to come out looking better.”
- Interested parties include BlackRock (NYSE:BLK), WisdomTree (NASDAQ:WETF), Franklin Resources (NYSE:BEN), Legg Mason (NYSE:LM), Gamco (NYSE:GBL), Janus (NYSE:JNS), Calamos (NASDAQ:CLMS), Invesco (NYSE:IVZ), T. Rowe Price (NASDAQ:TROW), AllianceBernstein (NYSE:AB), Affiliated Managers (NYSE:AMG), Federated Investors (NYSE:FII), Waddell & Reed (NYSE:WDR), Artisan Partners (NYSE:APAM)
Mon, Sep. 12, 4:25 PM
Thu, Aug. 25, 3:02 PM
- LPL Financial (LPLA +0.3%) in December will launch its no Transaction Fee Mutual Fund initiative, with the costs to be borne by the asset managers. To date, nine providers have signed up, including AllianceBernstein (AB +0.4%), BlackRock (BLK -0.3%), Invesco (IVZ -0.2%), and Legg Mason (LM -0.5%).
- While it's an incremental negative for the asset managers thanks to higher distribution costs eating into margins, says Katz, it could pay off in stronger inflows as investors will be paying less - thus making the mutual funds closer in cost to ETFs.
- It will be interesting to see how ETF sponsors - notably WisdomTree (NASDAQ:WETF) - react as their margins potentially get squeezed, says Katz.
Wed, Aug. 24, 1:02 PM
- Two big headwinds to worry about, according to Barclays Kenneth Hill: 1) Regulation is likely to force more money into passive products; 2) A market correction as the bull market has been partly masking poor inflows.
- Regulation: "Despite its somewhat innocuous initial assessment, the Department of Labor’s fiduciary standard will prove to be a sizable catalyst for change," says Hill. "We see it making it more likely that the industry will increasingly play it safe to avoid potential conflicts or unintended negative outcomes ... This likely means more low-priced passive in the place of high-priced active products."
- While M&A could be a boon, it will help only those firms with attributes worth acquiring; smaller active players could be left to sink. He favors names with scale and balance/diversified growth prospects across active, passive, and alternative channels like Invesco (NYSE:IVZ), BlackRock (NYSE:BLK), and even Legg Mason (NYSE:LM) at the expense of those that do not, like Franklin Resources (NYSE:BEN).
Tue, Aug. 9, 4:55 PM| Tue, Aug. 9, 4:55 PM | 3 Comments
Thu, Jul. 28, 7:44 AM
Thu, Jul. 28, 7:21 AM
- Q2 adjusted net income of $233M or $0.56 per share vs. $271.4M and $0.63 one year ago.
- Revenue of $856.6M fell 8.5% Y/Y, and adjusted operating income of $330.4M fell 15.3%.
- Ending AUM of $779.6B rose 1% for the quarter, and fell 3% Y/Y. Total net inflows of $2.7B during quarter, with active flat and long-term passive drawing in $4.5B. The QQQ saw outflows of $3.8B, and money markets inflows of $2B.
- $200M of stock bought back during quarter at average price of $27.14 each.
- CC at 9 ET
- Previously: Invesco beats by $0.02, beats on revenue (July 28)
- IVZ flat premarket
Thu, Jul. 28, 6:59 AM
Wed, Jul. 27, 5:30 PM
- AB, ABMD, ACIW, ACOR, ADP, AEP, ALKS, ALLE, ALXN, AMT, APD, ARIA, AZN, BC, BCC, BCO, BCOR, BEN, BG, BGCP, BHI, BMS, BMY, BSX, BWA, BWEN, BZH, CAB, CBG, CBM, CELG, CFX, CIT, CL, CLF, CLFD, CME, CMS, COMM, COP, COR, CRR, CRS, CS, CSH, CVI, CVRR, CWT, DBD, DFT, DLX, DOW, DSX, EME, EPD, EQM, EQT, EXLS, F, FCFS, FCN, FI, FIG, FITB, FLY, FSS, GLOP, GNC, GOV, GPI, GPN, GRUB, GTLS, HCA, HEES, HOG, HP, HSY, HTH, IART, IDA, IGT, INCR, INGR, IP, IPGP, IRDM, ITC, ITG, IVC, IVZ, KEM, LAD, LAZ, LDOS, LEA, LKQ, LLL, LPG, MA, MCS, MD, MDP, MDWD, MINI, MITK, MJN, MKTX, MMC, MNRO, MPC, MPLX, MSCI, MTH, MTRN, MVIS, NAP, NEWM, NICE, NMR, NOV, NTCT, NYT, OAK, ODFL, ORI, OSK, PAG, PCG, PES, PF, PJC, PNR, POT, PRLB, PTEN, PX, RDN, RDS.A, RPM, RTN, SCG, SEE, SERV, SFE, SPB, SPGI, SQBG, SQNS, STNG, SXC, SXCP, TCK, TFX, TGI, THRM, TKR, TMO, TPX, TREE, TRI, TZOO, UAN, UBSI, UTHR, VC, VGR, VIVO, VNTV, WCC, WILN, WRLD, WST, WWE, YNDX, ZBH
Mon, Jul. 25, 4:31 AM
- The Brexit led to severe withdrawals at M&G, Schroders (OTCPK:SHNWY), Fidelity and Invesco (NYSE:IVZ) in June, as equity funds domiciled in Europe suffered their largest monthly redemptions since September 2011.
- Investors pulled at least €1B from the each of the four large investment groups, which are either based in the U.K. or have large hubs in the country.
Tue, Jul. 12, 4:31 PM
- IVZ June 30 total AUM of $779.6B dips from $791.1B a month earlier.
- Equity AUM of $348.8B vs. $360.1B. Fixed-income AUM of $196.3B vs. $194.5B.
- Active AUM of $646.1B down from $657.7B.
- Passive AUM of $133.5B vs. $133.4B.
Thu, Jul. 7, 1:35 PM
- Continuing to benefit from the trend toward low-cost, index-tracking funds, Vanguard Group pulled in $148B in the first half of the year, topping last year's record H1 haul of $140B.
- The fund giant sports four of the top 10 ETF inflow recipients so far this year, the S&P 500 Index Fund (NYSEARCA:VOO), the FTSE Developed Markets ETF (NYSEARCA:VEA), the REIT Index Fund (NYSEARCA:VNQ), and the Total Bond Market Index Fund (NYSEARCA:BND).
- Eyeing with envy: BEN, LM, GBL, CLMS, JNS, IVZ, TROW, AB, AMG, FII, WDR, APAM
Thu, Jun. 30, 11:29 AM
- Net outflows for Invesco's (IVZ +1.4%) EMEA business were $228M the day after the vote result, more than offsetting inflows of $137M the day before. Inflows have been modestly positive since.
- For the company overall, there were net inflows of $1.3B from June 1 to June 29.
- The largest impact to Invesco and other asset managers, says the company, will be from NAV/FX declines. Invesco has hedged 75% of its pound-based operating income through March 2017 through the use of put options.
- Invesco intends to quicken the pace of buybacks, by entering an accelerated share repurchase deal with Morgan Stanley for $150M of company stock. Final settlement of this plan is expected no later than Q3.
Wed, Jun. 29, 1:59 PM
- It's stock price already struggling over the past months, Invesco (NYSE:IVZ) tumbled another 20% or so in the two session after the Brexit vote amid fears of its exposure to the U.K. and a downgrade from Citi's William Katz.
- The selloff has gotten out of hand, says Wells Fargo's Christopher Harris, even as he cuts his EPS estimate for 2016 to $2.22 from $2.40 and his price target to $29-$33 from $36-$40 (current is $24.72).
- He notes the midpoint of his price range plus the dividend implies a total return opportunity of 35%.
- "One could make the argument that the move in IVZ’s stock has wiped out the value of well over half of the entire U.K. operation," he says.
- The stock's higher by 3.1% today.
Fri, Jun. 24, 3:13 PM
- With London's status as a financial hub, Brexit raises questions over just how firms - including U.S. asset managers - will do business on the Continent from the City (such as selling financial products) under the new regime.
- The good news, says Citi's William Katz, is the poor performance of most of the sector means investors may have already priced in falling NAVs and AUM.
- The worst of the fallout, says Katz, will hit those managers with the largest presence in the U.K., including Invesco (IVZ -13%) and Affiliated Mangers Group (AMG -10.8%). Again, the recent struggles for both these stocks means the blow could be softer than feared.
- While the whole affair could make for good buying opportunities for private-equity funds, that doesn't mean the stock prices of players like Carlyle Group (CG -2.8%), Blackstone (BX -5%), KKR (KKR -6%), Fortress (FIG -3.9%), and Oaktree (OAK -1.7%) couldn't come under a great deal of pressure in the short term.