Invesco Stock And 2 Asset Managers Riding The Bond ETF Reset

Global bond markets are back in the spotlight as long term yields climb to levels not seen in decades, squeezing borrowers and shaking assumptions about inflation, debt and equity valuations. That shift is creating fresh winners and losers across the ETF and index world. This article looks at three stocks from a Global Sovereign Bond ETF Issuers & Fixed-Income Index Providers screener that appear well placed, and explains why their exposure to this rate shock matters for your portfolio.

The three stocks below are just a starting sample from this Global Sovereign Bond ETF Issuers & Fixed-Income Index Providers idea. The full screen surfaces 40 more companies that show similarly interesting business profiles and risk and health characteristics not covered here. To identify and analyze the highest conviction ways to play bond focused ETFs and fixed income indices, go straight to the Global Sovereign Bond ETF Issuers & Fixed-Income Index Providers screener.

Invesco (IVZ)

Overview: Invesco is a global investment manager that runs equity and fixed income mutual funds and ETFs for clients ranging from individuals to pension funds and sovereign wealth funds, including strategies that can track or package government bond markets. Its broad ETF and bond fund lineup places Invesco in the path of investors looking for simple, index-linked ways to access sovereign and fixed income yields.

Operations: Invesco generates about US$6.9b in revenue from Investment Management, with the Americas contributing roughly US$5.2b and the rest coming from Asia-Pacific and EMEA.

Market Cap: US$14.4b

Invesco gives you exposure to the use of bond ETFs and fixed income indices at a time when long term yields are resetting higher and investors are rethinking how they want to hold government and corporate debt. The company runs a broad suite of mutual funds and ETFs, including defined maturity BulletShares bond ETFs and large index products, and management has highlighted record long term inflows and higher operating margins in recent quarters. At the same time, Invesco is still working through revenue pressure, past losses and funding risk, and its dividend is not yet well covered by earnings. The key issue for investors is how this mix of ETF growth potential and profitability recovery will develop from here.

Invesco’s ETF inflows and margin recovery story is only half the picture. The real question is what the bond reset could mean for its future earnings profile and capital returns. Get the fuller context in the analysis report for Invesco

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Invesco and the two other stocks in this list are just a few examples that surfaced from a single screener. Use our customisable Screener to combine filters like valuation, balance sheet strength, risks and dividends into a shortlist that fits your approach, or browse any of our curated Investing Ideas.

Acadian Asset Management (AAMI)

Overview: Acadian Asset Management is a Boston based, publicly owned asset manager that builds quantitative portfolios across public equity, fixed income and alternative assets for individuals and institutions. Its ability to run systematic bond and multi asset strategies puts Acadian in the path of investors looking for rules based exposure to yields and fixed income indices as global bond markets reset.

Operations: Acadian generates about US$654 million in revenue from its Quant & Solutions segment, with roughly US$458 million coming from the United States and around US$161 million from clients outside the US.

Market Cap: US$3.3b

Acadian Asset Management may warrant a closer look for investors who expect rising yields to continue to influence demand for systematic bond and multi asset solutions. The company reports record assets under management, double digit revenue growth forecasts and strong recent flow momentum, supported by interest in systematic credit and macro strategies that tap into fixed income and currency markets. At the same time, high leverage, debt that is not well covered by operating cash flow and a mixed multi year earnings record mean that funding conditions and volatility in markets may have a greater impact here than for some peers. A key consideration for investors is how that combination of quantitative capabilities, fixed income exposure and balance sheet risk might interact as global bond markets remain in focus.

Acadian’s accelerating interest in systematic credit and macro is only part of the story. The bigger question is how that appetite interacts with its leverage and flow momentum; the 2 key rewards and 4 important warning signs (3 are major!) quietly lays this bare.

Liontrust Asset Management (LSE:LIO)

Overview: Liontrust Asset Management is a London based investment manager that runs equity, fixed income and multi asset funds for clients around the world. This means it can capture flows from investors who are reallocating toward bond funds and income strategies as yields rise. Its focus on active stock and bond selection, including sustainable funds, offers an alternative to passive indices for investors who want more targeted exposure than a broad market tracker.

Operations: Liontrust generated about £134 million in revenue from Investment Management.

Market Cap: £181 million

Rising global bond yields are leading more investors to reconsider how they split money between equities, passive trackers and active bond funds, which puts Liontrust Asset Management in an interesting spot. The company combines fixed income capabilities and sustainable strategies with an active approach. Management argues this can help reduce concentration risk in equity indices and reposition portfolios as rates and inflation reset. At the same time, earnings and margins have come under pressure, the dividend is not well covered by current profits and the stock trades on a premium P/E, so expectations are already elevated. If you want to understand whether renewed demand for bond and quality focused funds can offset fee pressure and past underperformance, Liontrust is worth a closer look.

Liontrust’s mix of fixed income and sustainable funds could be masking a very different future for its earnings and dividend. The 1 key reward and 1 important warning sign might reveal the twist in this story investors are missing.

Seeking Alternatives Before The Crowd

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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