Invesco faces market risk from fluctuating AUM values, securities prices, interest rates, and foreign exchange rates. Potential declines in market values could negatively impact revenues and profitability. Legal proceedings and regulatory investigations pose a risk of significant losses. The company's exposure to credit risk from cash and cash equivalent deposits, and debt, is also a concern. Changes in AUM mix toward lower-yielding products could reduce revenue yield.
Financial Upside
Invesco has strong AUM, with record levels of $1.8 trillion. Significant net long-term inflows, primarily from ETFs, are a positive sign. The company has a strong balance sheet with over $1 billion in cash and a zero balance on its credit agreement. Repurchasing 1.5 million common shares demonstrates a commitment to returning capital to shareholders. Diversification across investment capabilities, distribution channels, and geographies mitigates market risks.
