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State Street’s Investment Management Division in Q2

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A look at Q1

State Street’s (STT) investment management division garners fee revenue from trading services, management and processing fees, and other revenue. The division’s total fee revenue rose 24% year-over-year in the first quarter.

The investment management division’s total AUM (assets under management) help the division generate management fees, which form a substantial portion of its total fee revenue. In the first quarter, State Street had ETF AUM of $629 billion, of which $48 billion was alternative investments and $3 billion was cash. Its fixed-income and equity asset AUM amounted to $65 billion and $513 billion, respectively.

What’s expected?

In the second quarter, the investment management division’s management fees are expected to rise sequentially, primarily because of the division’s AUM being boosted by equity market improvement. ETF flow is also a key factor in assessing the division’s performance.

In the first quarter, most of the investment management division’s AUM were deployed in North America, followed by the EMEA (Europe, the Middle East, and Africa) and the Asia-Pacific region. As of June 18, State Street’s market capitalization was $35.9 billion, whereas peers’ (XLF) market caps were as follows:

  • T. Rowe Price (TROW): $30.1 billion
  • Invesco (IVZ): $11.3 billion
  • BlackRock (BLK): $84.5 billion

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