Jan 28 (Reuters) - Asset manager Invesco IVZ.N on Tuesday beat Wall Street estimates for fourth-quarter profit, as rising investor allocations to equities boosted inflows and fee income on managed assets.

WHY IT'S IMPORTANT

Equity markets have rallied as anticipation of a corporate-friendly fiscal and regulatory policy under the Trump administration has fueled investor optimism.

The Federal Reserve's 100-basis-point rate cuts in the later half of 2024 further revived investor interest in passively managed mutual and exchange traded funds – Invesco's core offerings – as safe havens like cash and treasury bonds see dwindling yields.

BY THE NUMBERS

Invesco ended the quarter with $1.85 trillion in assets under management as of Dec. 31, up 16.4% from a year ago, also boosting the corresponding investment management fees.

Invesco's investment management fees rose 12.4% to $1.13 billion during the reported quarter.

The Atlanta, Georgia-based asset manager reported an adjusted profit of $237.3 million, or 52 cents per share, for the October-to-December quarter, compared with analysts' average estimate of 47 cents, according to data compiled by LSEG.

Total net flows stood at $60.9 billion, compared with total net outflows of $8.3 billion a year ago.

Invesco's performance fees, earned when returns meet agreed-upon expectations, rose 75% in the quarter.

CONTEXT

An independent investment management firm, Invesco provides retail and institutional solutions to clients across 120 countries.

Asset inflows suffered in recent years as investors favored cash and treasury bonds amid heightened interest rates.

Earlier this month, larger peer BlackRock BLK.N also reported a higher fourth-quarter profit and a record high AUM.

(Reporting by Ateev Bhandari in Bengaluru; Editing by Shailesh Kuber)

((Ateev.Bhandari@thomsonreuters.com;))