Oct. 9, 2014, 4:16 PM| 1 Comment
Sep. 24, 2014, 12:37 PM
- While the probe into whether Pimco juiced the returns of its Total Return ETF highlights the boosted regulatory scrutiny the entire asset management industry faces, it nevertheless offers an opportunity for Pimco's rivals to pick up market share, says Citi's William Katz.
- "First order beneficiaries," says Katz, are BlackRock (BLK +0.6%), AllianceBernstein (AB -0.3%), and Legg Mason (LM -0.1%), followed by Franklin Resources (BEN +0.7%) and Invesco (IVZ). He's quick to point out the gains should be marginal and general industry pressure on fixed income likely looms more important. One who should escape heightened regulatory oversight is WisdomTree (WETF +0.2%) thanks to its minor fixed income business.
Sep. 9, 2014, 3:28 PM
- "We'd like to see more consistent execution before calling for multiple expansion," says Morgan Stanley's Betsy Graseck, keeping her Equal-weight rating on Invesco (IVZ -1.6%) after meeting with management.
- "Current headwinds from Perpetual and IBRA outflows keep us from baking in a higher multiple relative to peers right now." Also to be a big boon for Invesco (along with just about every other financial services company): Higher interest rates.
Aug. 1, 2014, 10:42 AM
- The risk of of major outflows following the departure of a key U.K fund manager has been significantly reduced," says analyst Brian Bedell, noting not much money exited in Q2 and the strong performance thus far of the new fund manager.
- Additionally, organic growth rates are improving across several products and he see a sales mix shift into higher-fee products going into next year. Combined, you've got catalysts for pushing Invesco's (IVZ +1.3%) P/E ratio closer to that of the S&P 500 vs. the current 5-10% discount.
- He upgrades to Buy with price target lifted to $43 from $39.
- Previously: Invesco beats by $0.06, misses on revenue
Jul. 31, 2014, 7:42 AM
Jun. 9, 2014, 10:28 AM
- The ETF price war in Europe looks to escalate even further as U.S. fund managers eye the continent for their own expansion plans. Invesco PowerShares (IVZ) last year picked Bryon Lake to lead its European operations and is now looking to hire sales and marketing staff.
- Privately-owned fast-growing First Trust - with $89B in AUM - has hired two senior executives after entering Europe one year ago. "There is no reason why we cannot repeat our U.S. success in Europe," says the company's Derek Fulton.
- WisdomTree (WETF) sent its Zach Hoscoe to the InsideETFs conference in Amsterdam last week, but he played coy on the company's plans. The current betting, however, says the WisdomTree will launch European products before year's end after February's purchase of London-based Boost.
May. 20, 2014, 5:38 PM
May. 15, 2014, 4:48 PM
- BlackRock (BLK), says analyst Brian Bedell. starting the stock with a Buy and $358 price target, is best positioned among the large-cap asset managers and has three catalysts over the next year: 1) Rising organic growth, 2) Continued strong execution, 3) The likelihood the company will not be judged a SIFI by regulators.
- T. Rowe Price - also a Buy and with $93 price target - catalysts: 1) Inflection to improved inflows after a rough 2013, 2) Continued traction in target date funds, 3) Continued margin improvement.
- Invesco (IVZ) rates only a Hold and $39 price target, with Bedell saying the risk of elevated outflows in Europe could weigh on the shares and provide a better entry point.
- Also rated a Buy is Affiliated Managers Group (AMG).
May. 1, 2014, 7:39 AM
Apr. 14, 2014, 11:12 AM
- A check of some mutual fund managers after TIAA-CREF agrees to buy Nuveen for $6.5B find Janus (JNS +2.9%), Invesco (IVZ +1.2%), Affiliated Managers (AMG +1.4%), and Federated Investors all posting gains. Acquisitions in this industry don't happen too often as key assets - star fund managers - can pick up and leave pretty much when they choose.
- Top tick? Nuveen's P-E owner Madison Dearborn purchased the company for $6.3B in June 2007. TIAA-CREF chief Roger Ferguson's purchase today takes Madison out at near breakeven.
Apr. 11, 2014, 12:46 PM
- Extrapolating JPMorgan's Q1 results to some other banks, KBW sees a modest positive "read-across" to Citigroup (C -0.6%) and a neutral to Goldman Sachs (GS -1.6%) and Morgan Stanley (MS -1.6%).
- As for JPMorgan's results in asset management, KBW says a 9% Q/Q drop in revenues provides a "modestly disappointing," but not "a significant negative" read-across for peers. The team's favorites in the sector remain Affiliated Managers (AMG -0.7%), Invesco (IVZ -0.3%), and BlackRock (BLK -0.1%).
- JPMorgan earnings coverage
Apr. 10, 2014, 3:21 PM
- The latest data from Invesco (IVZ -2.1%) suggests U.K.-related attrition is manageable and no major increase in retail redemptions have taken place, says Citi's William Katz, maintaining his Buy rating and $47 price target.
- At Artisan Partners Asset Mangement (APAM -8.1%), however, inflows appear to have disappeared, leaving the firm with small outflows. "We suspect the acceleration in U.S. Value outflows may be related to a lumpy mandate loss while we are encouraged by the initial disclosure of assets for High Yield," says Katz, maintaining his Buy rating and $72 price target.
- Taken together, and adding in figures from Franklin Resources (BEN -2.2%), "point(s) to uninspiring equities flows, which likely suggest tough(er) flow backdrop for the industry at large." Standing out, says Katz, may be Waddell & Reed (WDR -3.7%) which announced $3.5B in inflows QTD back in early March.
- Others: Gamco Investors (GBL -3.1%), Calamos (CLMS -0.6%), Janus (JNS -2.5%), T. Rowe Price (TROW -2.2%), AllianceBernstein (AB -1.9%), Affiliated Managers (AMG -5%), Federated Investors (FII -1.5%).
Mar. 26, 2014, 10:29 AM
- In a nice win for money-market fund providers like BlackRock (BLK +1.2%), Federated Investors (FII +4.3%), Invesco (IVZ +0.8%), Legg Mason (LM +2.5%), and Schwab (SCHW +1.1%), there's been a change of heart at the SEC regarding floating asset values.
- The WSJ's Andrew Ackman reports the commission will exempt a majority of funds from a rule requiring them to abandon their $1 share price and float in value like any other mutual fund. Supporters of the rule argue the float would get investors used to their funds "breaking the buck," and thus prevent panicky withdrawals in a crisis. The fund companies have fought hard against the proposal.
- It's also a blow to other regulators, including the Fed, who wanted to expand the floating value idea to more funds, including those catering to retail investors.
- Citi's William Katz on the report: "We believe the trust accounts and non-trading desk liquidity instruments might also get exempt, leaving loosely about $20B in AUM exposure to deeper reform risk. We believe such AUM is far lower than ~15% short interest currently bakes in, setting the stage for a significant short squeeze."
Mar. 19, 2014, 10:36 AM
- Expectations of $2B-$5B of quarterly inflows "leave little room for error" for WisdomTree (WETF -6.4%), says Citi's William Katz, who cut the stock to a Sell this morning. Stripping out the spectacular (and likely unrepeatable) success of the Japan Hedged Equity Fund, WisdomTree has hit this range just once in the last two years.
- There are better values in asset management elsewhere, says Katz, noting double-digit organic growth at Waddell and Reed (WDR -0.5%) and Artisan Partners (APAM -0.8%), but at far lower P/Es than WisdomTree's 39x. Then there's Invesco (IVZ -0.5%) - which runs PowerShares ETFs - enjoying margins nearly as large as WETF, but with a P/E ratio more than 50% smaller.
- Is WisdomTree - the only "pure play" ETF stock - deserving of a buyout premium? Maybe not, suggests Katz, noting insider selling, continued heavy investment in the business, and acquirers more interested in "seeking de novo growth in the passive arena."
- Earlier coverage
Feb. 19, 2014, 12:51 PM
- Invesco (IVZ) PowerShares announced that it will be shutting down 4 ETFs that had failed to gain traction in order to make way for new funds.
- The PowerShares KBW International Financial Portfolio (KBWX), MENA Frontier Countries Portfolio (PMNA), Dynamic MagniQuant Portfolio (PIQ) and Lux Nanotech Portfolio (PXN) will all close at the end of trading today.
- In totally these ETFs each had at least 3 years of trading, with PXN launching in 2005, but together had only $67 million in total assets.
- Related ETFs: PDP, QUAL, PWO, SIZE, IPF, IXG, AXFN, GAF
Feb. 18, 2014, 1:59 PM
- Invesco's (IVZ) ETF manager, PowerShares Capital Management LLC, is running with the success of the BuyBack Achievers Portfolio (PKW) and is launching its global counterpart at the end of February.
- The International BuyBack Achievers Portfolio (IPKW) will provide access to global corporations that have effected a net reduction in shares outstanding of 5% or more in the trailing 12 months.
- In a press release, Lorraine Wang, Invesco PowerShares global head of ETF products and research stated: "Our U.S.-focused flagship, PKW, has achieved a competitive long-term track record demonstrating the investment merit of the BuyBack Achievers methodology, and more broadly of smart beta. IPKW expands the range of tools investors can use to efficiently allocate the BuyBack achievers strategy across the globe."
- Other buyback ETFs: SYLD, FYLD
IVZ vs. ETF Alternatives
Invesco Ltd is an investment management companyoperating in more than 20 countries. Itprovides retail and institutional clients with an array of investment management capabilities.It has presence inthe institutional and retail markets.
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