Invesco falls on $1.2 billion charge, but ETF inflows stay high

Invesco Ltd. reported a more than $1 billion charge as customers pulled more cash than expected from its products in the fourth quarter, hampering its cost-savings efforts and sending shares falling in early trading.

The investment management company’s profit was curtailed by a non-cash charge of $1.2 billion related to earlier purchases of retail mutual fund contracts, according to a statement Tuesday. Excluding the charge, adjusted earnings were 47 cents per share, beating the average analyst estimate of 40 cents.

Invesco reported net outflows of $8.3 billion as people pulled more than $18 billion out of its money market funds in the quarter, below the average estimate of about $8.78 billion of inflows.

Shares fell as much as 8.1% in morning trading in New York, the worst intraday drop since June 2022.

A bright spot for the exchange traded fund giant, which runs the famous $230 billion Invesco QQQ fund, were ETF net long-term inflows of $12.4 billion. Invesco, which recently launched a spot Bitcoin ETF, added more money to its ETFs than any other US sponsor every week of this year so far.

CEO Andrew Schlossberg is trying to simplify the business since taking the helm in June, targeting $50 million of annual cost savings by the end of this year. The company took $22 million of expenses in the fourth quarter related to those efforts.

The fourth quarter “felt like a clear the decks backdrop for Invesco and the go-forward picture looks better,” Evercore ISI analyst Glenn Schorr wrote in a note after the results.

Ending assets under management increased 12.5% from a year earlier to about $1.59 billion.