What are the key strategic priorities for Invesco in the coming years, following an eventful 2025?

Andrew Schlossberg outlined four main areas: personalization in wealth management (ETFs, SMAs, models), demand for income (fixed income platform), flow growth in Asia and Europe, and private markets expansion into wealth management and defined contribution, alongside technology innovation. “I mean one is the enormous shift in personalization that's going on around the world, but in particular, in the wealth management channels and then even more in particular, in the United States... The other area is the flow growth expectations that we have because of money in motion, demographic shifts and the like in Asia and in Europe, in particular... And then we've been talking about private markets into wealth management, but I think the less discussed industry-wide, it's been the opportunity in retirement and defined contribution...”

Can management provide more detail on the progression of expenses throughout FY26 to reach the $3.275 billion guidance?

Allison Dukes detailed expectations for compensation (midpoint of 38-42% of revenue, noting Q1 seasonality), hybrid platform implementation costs ($10M-$15M/quarter) and incremental running costs (building to $10M/quarter), and the impact of the Canadian business divestiture ($5M-$10M negative operating income impact in Q3/Q4). “I mean, let me see if I can give you a little bit of color. I think that [ 3.275 ] again, I'll just make sure that's clear, that's kind of based on that AUM level of around excuse me, $2.3 trillion towards the end of April, and that's kind of all things being equal, and we don't consider market in any of that.”

How will increasing costs for shelf space on platforms like Schwab impact Invesco's economics for ETFs and other products?

Andrew Schlossberg stated that while platform fees are evaluated against distribution value, the shift from mutual funds to ETFs will see mutual fund fees decline. He emphasized that new platform fees would focus on new assets, and that the overall cost of ETFs and the lack of legacy mutual fund services mean that Invesco does not expect a material impact, evaluating changes case-by-case. “But all of this said, to your specific question, we don't see this having a material impact at all, and we'll continue to evaluate any changes case by case at the firm levels, at the product positioning levels for outcomes we expect with clients and also long-term economics.”

IVZ

Invesco (IVZ) Q1 FY26 earnings call: guidance and Q&A

Q: What are the reasonable expectations for securities lending funding from the QQQ product?

Andrew Schlossberg stated that while securities lending is eligible for QQQ, the opportunities are not "super large" given the size and concentration of positions, and they don't see it as a huge opportunity. “Securities lending is definitely something we have eligible for the Q2. I mean, given the size and the concentration of some of those positions, the opportunities are there, but they're not super large. And we'll continue to evaluate ways, but that's not -- we don't see that as a huge opportunity.”

Earnings call· Mar 2026 (Q1 FY26)· Financials· Apr 28, 2026

Source: earnings call transcript

Executive summary

Invesco Q1 FY26 — Strong Inflows and Operating Leverage

Invesco delivered strong Q1 FY26 results, driven by significant net long-term inflows and robust operating leverage, with the operating margin expanding to 34.5%. The firm continues to prioritize strategic growth areas like ETFs, fixed income, and private markets, while also strengthening its balance sheet and increasing capital returns to shareholders. Management remains focused on disciplined execution and innovation to navigate evolving market conditions and drive profitable growth.

Highlights

Net long-term inflows of $21.8 billion, marking 11th straight quarter of inflows and 4% annualized organic growth.
Global liquidity inflows of $11.6 billion, ending with over $200 billion in AUM.
Adjusted diluted EPS of $0.57, up 30% YoY from $0.44.
Operating margin improved by 300 basis points YoY to 34.5%.
ETF and index AUM reached a record $638 billion (or over $1 trillion including QQQ), with $19 billion net inflows (11% annualized organic growth).

Concerns

Market volatility drove a $42 billion decline in AUM during the quarter.
Fundamental equity segment experienced net outflows of $2.4 billion, despite positive highlights.
Alternative credit saw net outflows of $400 million, driven by bank loan products.
Canadian business partnership expected to close end of Q2, resulting in a modest negative operating income impact of $5 million to $10 million per quarter for Q3/Q4 FY26.

Guidance & targets

Category	Target	Timeline	Confidence
Operating expenses	$3.275 billion range high materiality	FY26	High
Non-GAAP effective tax rate	25% to 26% range medium materiality	Q2 · FY26	High
Total payout ratio (common dividends + share buybacks)	near 60% high materiality	FY26	High
Hybrid investment platform implementation costs	$10 million to $15 million range per quarter medium materiality	Q2-Q4 FY26	High
Incremental operating expense from hybrid platform AUM	build towards $10 million a quarter medium materiality	later this year · FY26	High
Cost savings from hybrid investment platform	at least $60 million high materiality	CY27 · FY27	High
Operating expense variability	approximately 25% variable medium materiality	ongoing	High
Operating margin	mid-30s on a path to high 30s high materiality	intermediate to longer-term	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Asia Pacific Produced very strong net inflows. Annualized organic growth: 17%	—	—	—	—
EMEA Produced very strong net inflows. Annualized organic growth: 8%	—	—	—	—
ETF and Index Capability Achieved record AUM and strong net inflows across diverse products. Launched 4 new active ETFs. Ending AUM: $638 billionEnding AUM (including QQQ): over $1 trillionNet inflows: $19 billionAnnualized organic growth: 11%	—	—	—	—
Fundamental Fixed Income Strong attribution across geographies and channels, driven by institutional inflows in investment-grade products and fixed income SMAs. Net long-term inflows: $3.7 billionAnnualized organic growth: 5%	—	—	—	—
China JV Demonstrated benefits of diversified platform, driven by Fixed Income Plus strategies. Launched 14 funds with $2.5 billion total AUM. Margins continue to improve. Record high AUM: $142 billionNet long-term inflows: $8.7 billionAnnualized organic growth: 31%Fixed Income Plus AUM: $40 billion	—	—	—	high 50s to low 60s
Private Markets Driven by direct real estate, particularly the real estate debt fund for U.S. wealth management. Modestly offset by net outflows in alternative credit ($400 million from bank loan products). Net inflows: $400 millionReal estate debt fund (Invesco Real Estate Income Trust) AUM: $5 billion	—	—	—	—
Multi-asset capabilities Driven by institutional quantitative equity strategies. Net inflows: $4.7 billion	—	—	—	—
Fundamental Equities Smallest net outflows in nearly 9 years. U.S. value equities turned to net inflows. Global Equity Income Fund was top-selling retail active fund in Japan. Included $1.2 billion net outflows from developing markets fund. Net outflows: $2.4 billionGlobal Equity Income Fund AUM: $23 billionGlobal Equity Income Fund net inflows: $3 billion	—	—	—	—

IVZ operating KPIs by quarter

IVZ operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Long-term net inflows	$21.8B Net long-term inflows were $21.8 billion, marking the 11th straight quarter of net inflows and representing annualized organic growth of 4%. Source: earnings call transcript	$45.1B Net long-term inflows during the period were a record $45.1 billion, marking the 12th straight quarter of net inflows and representing annualized organic growth of nearly 9%. Source: earnings call transcript	+106.9%
Assets under management (AUM) Global Liquidity	$200B+ It is also worth noting that we generated $11.6 billion in global liquidity inflows and we ended the period with over $200 billion in AUM. Source: earnings call transcript	$215B Additionally, we generated $13.2 billion in global liquidity inflows ending the period with $215 billion in AUM. Source: earnings call transcript	—
Assets under management (AUM) Active ETF	$20B+ We have built a robust active ETF platform currently managing over $20 billion in assets, which increases to more than $35 [ billion ] when you include index strategies implemented by our active teams. Source: earnings call transcript	$25B We currently manage $25 billion in active ETFs across more than 40 products and the AUM base increases to more than $40 billion when including index strategies that are executed by our active investment teams. Source: earnings call transcript	—
Long-term net inflows Fundamental Fixed Income	$3.7B So let's move on to fundamental fixed income were regarded a very healthy $3.7 billion in net long-term inflows or 5% annualized organic growth with strong attribution across geographies and channels. Source: earnings call transcript	$400M While we report on this slide, net inflows of a modest $0.4 billion for the quarter, when you widen the scope to include the fixed income flows from our ETF and China JV, it expands our overall asset class net long-term inflows to $14 billion during the quarter or 11% annualized organic growth. Source: earnings call transcript	-89.2%
Assets under management (AUM) SMA	$37B Our entire SMA platform, which also includes a portion of equity assets, now stands at $37 billion in AUM. Source: earnings call transcript	<$40B Our entire US wealth management SMA platform which also includes a portion of equity assets now stands at nearly $40 billion in AUM. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline
4 new active ETFs	launch	Q1 FY26
14 funds (China JV)	launch	Q1 FY26
Invesco Core+ Real Estate Trust	launch	Q1 FY26
QQQ (International expansion)	expansion	This year (FY26)

Deals & partnerships

Barings Innovative partnership to further penetrate wealth management and defined contribution markets with private markets products.

One of the recently announced partnerships to augment existing Invesco strategies.

LGT Capital Innovative partnership to further penetrate wealth management and defined contribution markets with private markets products.

One of the recently announced partnerships to augment existing Invesco strategies.

CI (Canadian business) Partnership in the Canadian business, involving a transition of AUM and a sub-advisory relationship.

Transition of about $19 billion in AUM.

Risks & headwinds

Heightened market volatility Q1 FY26

Drove a $42 billion decline in AUM during Q1 FY26.

Mitigation:Benefits of broad scale, diversified global platform; strong net long-term inflows and liquidity inflows mostly offset market impact.

Geopolitical uncertainty, sharp moves in energy prices, and changing interest rate expectations Q1 FY26

Weighed on public markets, contributing to heightened volatility.

Mitigation:Diversified global platform helps navigate such environments.

Competition in NASDAQ 100 ETFs Ongoing

NASDAQ expanded licensing to allow 2 additional U.S.-listed ETFs to track the NASDAQ 100.

Mitigation:QQQ's dominant position supported by unmatched liquidity, tight spreads, deep options markets, and immense brand recognition; new competitors pay same licensing fee; belief that attention will create larger asset pool.

Net outflows in fundamental equities Q1 FY26

$2.4 billion net outflows in Q1 FY26.

Mitigation:Smallest outflows in nearly 9 years; strong gross sales; U.S. value equities turned to net inflows; continued positive flows in global, international, and regional equities from Asia Pacific and EMEA.

Net outflows in alternative credit Q1 FY26

$400 million net outflows in Q1 FY26.

Mitigation:Exclusively driven by bank loan products (BK ETF redemptions); Invesco's alternative credit platform has 0 software exposure, dry powder, diversification, and extensive experience; current turbulence has not impacted long-term views.

Negative operating income impact from Canadian business divestiture Q3 and Q4 FY26

$5 million to $10 million negative operating income impact per quarter.

Mitigation:Expected to improve over time as the sub-advisory relationship with CI grows.

What to watch in Q2 FY26

Canadian business operating income impact

Q3 FY26

Current Not yet impacted (expected to close end of Q2 FY26)

Target $5M-$10M negative operating income impact per quarter

Why it matters

This will be the first quarter reflecting the financial impact of the Canadian business divestiture, which management expects to be negative initially.

The only other thing I'd point to is just a reminder that we are entering into our partnership in the Canadian business. We expect that to close with CI at the end of the second quarter. And that is a transition of about $19 billion in AUM, and that has a modestly negative operating income impact for the last -- the third and the fourth quarter of this year is that will be a loss of operating income to the tune of kind of $5 million to $10 million, which we expect to improve over time as we continue to really execute the sub-advisory relationship with CI and grow that relationship overall.

Find out whether IVZ delivers this. Inve re-checks your case every morning.

Q&A highlights

What are the reasonable expectations for securities lending funding from the QQQ product?

Andrew Schlossberg stated that while securities lending is eligible for QQQ, the opportunities are not "super large" given the size and concentration of positions, and they don't see it as a huge opportunity.

“Securities lending is definitely something we have eligible for the Q2. I mean, given the size and the concentration of some of those positions, the opportunities are there, but they're not super large. And we'll continue to evaluate ways, but that's not -- we don't see that as a huge opportunity.”

asked by Brennan Hawken · answered by Andrew Schlossberg

3 min read 7 chapters

Detailed narrative

Strategic Priorities and Growth Drivers

Invesco is focused on profitable organic growth by leveraging high-demand, scalable investment capabilities like fixed income and ETFs. The firm emphasizes its global footprint, particularly in Asia Pacific and EMEA, which collectively represent nearly $700 billion of AUM. Additionally, Invesco is expanding its private markets business into wealth management through existing strategies and new partnerships with Barings and LGT Capital, while also innovating in areas like active ETFs, SMAs, and digital assets.

First Quarter Asset Flow Performance

Despite heightened market volatility driven by geopolitical uncertainty and changing interest rate expectations, Invesco achieved $21.8 billion in net long-term inflows, marking its 11th consecutive quarter of positive flows and an annualized organic growth rate of 4%. The firm also garnered $11.6 billion in global liquidity inflows, ending the period with over $200 billion in AUM.

Growth was broad-based, spanning active and passive strategies, wealth management and institutional channels, and strong contributions from Asia Pacific (17% annualized organic growth) and EMEA (8% annualized organic growth).

ETF and Index Platform Scaling

Invesco's ETF and index capability reached a record AUM of $638 billion, or over $1 trillion including the QQQ. The platform saw nearly $19 billion in net inflows, representing 11% annualized organic growth, driven by diverse products in equity and fixed income, including record inflows for its S&P 500 ETF and strong demand for QQQM.

The firm launched four new active ETFs, expanding its active ETF platform to over $20 billion in assets, or $35 billion including index strategies.

QQQ Competitive Dynamics

Management addressed the expansion of NASDAQ licensing for two additional U.S.-listed ETFs tracking the NASDAQ 100. Invesco asserts that its flagship QQQ fund's dominant position is protected by unmatched liquidity, tight spreads, deep options markets, and immense brand recognition built over 25 years, minimizing dependence on being the sole licensed product.

The new competitor funds will pay the same 8 basis point licensing fee, and Invesco believes the increased attention will expand the overall asset pool for the benchmark.

China JV and Private Markets Momentum

The China JV delivered another strong quarter with a record AUM of $142 billion and $8.7 billion in net long-term inflows, achieving a 31% annualized organic growth rate. This growth was primarily driven by Fixed Income Plus strategies and supported by the launch of 14 new funds.

In private markets, Invesco posted $400 million in net inflows, led by direct real estate, particularly its real estate debt fund for the U.S. wealth management channel, which reached $5 billion in AUM in just over two years. The firm also launched the Invesco Core+ Real Estate Trust for U.S. defined contribution plans.

Expense Management and Operating Leverage

Invesco demonstrated significant operating leverage, with adjusted operating income and margin showing substantial improvement year-over-year. The operating margin improved by 300 basis points to 34.5%. The firm expects FY26 operating expenses to be around $3.275 billion, with approximately 25% variability to net revenue changes.

Management anticipates at least $60 million in cost savings from its hybrid investment platform in CY27, with run-rate savings building throughout the year.

Capital Management and Balance Sheet Strength

The company continued to strengthen its balance sheet, redeeming a $500 million senior note in January. It increased common share repurchases to $40 million (1.6 million shares) in Q1, and the Board authorized an additional $1 billion in share repurchases.

Invesco targets a total payout ratio of nearly 60% for FY26, combining common dividends and buybacks, and expects leverage ratios to improve as the year progresses.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.