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3 Investment Management Stocks to Look At Despite Industry Challenges
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The Zacks Investment Management industry faces headwinds from persistent fee compression, rising technology and AI-related expenses, and growing private credit concerns. The shift toward low-cost passive products is expected to constrain revenue growth, while elevated compliance costs and potential credit risks could weigh on profitability. Intensifying competition is also driving consolidation, though integration challenges remain.
Nevertheless, steady ETF inflows, retirement contributions and growing demand for wealth management solutions should support assets under management (AUM) growth. Companies like BlackRock (BLK - Free Report) , Ameriprise Financial (AMP - Free Report) and Invesco (IVZ - Free Report) remain relatively well-positioned to navigate these challenges, supported by diversified platforms and strategic initiatives.
About the Industry
The Zacks Investment Management industry comprises companies that manage securities and funds for clients to meet specified investment goals. The companies earn by charging service fees or commissions. Investment managers, also called asset managers, manage hedge funds, mutual funds, private equity, venture capital and other financial investments for third parties. By appointing an investment manager for one’s assets, investors get more diversification options than if they manage their assets independently. Investment managers invest their clients’ assets in different asset classes, depending on their needs and risk-taking abilities. Hence, the diversification, which investors get by appointing asset managers to manage their assets, helps reduce the impacts of volatility and ensures steady returns over time.
3 Themes Influencing the Investment Management Industry
Fee Pressure to Limit AUM Growth Benefits: The investment management industry continues to benefit from rising exchange-traded fund (ETF) adoption, steady retirement contributions and growing demand for wealth management solutions. However, the ongoing shift toward low-cost passive funds and index-based products is expected to pressure management fees, limiting revenue growth despite expanding AUM. The migration from traditional mutual funds to lower-fee ETFs could further constrain revenue yields, particularly for active managers struggling to differentiate their offerings.
Moreover, growing concerns surrounding private credit, including liquidity constraints, valuation uncertainty and potential borrower defaults, could dampen investor appetite for higher-fee alternative investment products. Slower fundraising in private markets, coupled with market volatility and uncertain interest rate trends, may weigh on net inflows and asset valuations.
Elevated Expenses to Squeeze Margins: Investment managers continue to increase spending on artificial intelligence (AI), automation, cybersecurity and digital infrastructure to enhance operational efficiency and meet evolving client expectations. However, substantial upfront investments, technology integration costs and the need for specialized talent are expected to keep operating expenses elevated in the near term, while productivity gains may take time to materialize.
Additionally, regulatory requirements surrounding fee transparency, data protection, cybersecurity and alternative investments could increase compliance and risk management costs. The need to continuously upgrade technological capabilities and strengthen operational resilience is likely to sustain spending pressures. Consequently, rising technology and regulatory expenses could weigh on operating margins and constrain industry profitability in the near term.
Industry Consolidation to Create Growth Opportunities: The investment management industry is witnessing increasing emphasis on mergers, acquisitions and strategic partnerships as firms seek to expand their geographic reach, diversify investment capabilities and strengthen distribution networks. Acquisitions of specialized investment managers, particularly those offering private markets, infrastructure and other differentiated strategies, could help traditional asset managers broaden their product portfolios and access new client segments. Partnerships between asset managers, wealth management platforms and retirement service providers could facilitate access to broader investor bases and new distribution channels. Larger firms may benefit from enhanced scale, cross-selling opportunities and a more diversified revenue mix. However, integration challenges and acquisition-related costs remain potential hurdles.
Zacks Industry Rank Indicates Dismal Prospects
The Zacks Investment Management industry is a 36-stock group within the broader Zacks Finance sector. The industry currently carries a Zacks Industry Rank #193, which places it at the bottom 22% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates underperformance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s positioning in the bottom 50% of the Zacks-ranked industries is because of a relatively weak earnings outlook for the constituent companies in aggregate. The aggregate earnings estimate revisions show that analysts are losing confidence in this group’s growth potential. Since November 2025-end, the industry’s most recent earnings estimates for the current year have been revised 7.4% lower.
Despite near-term industry challenges, we present a few stocks from the industry that you may want to keep on your radar for long-term gains. But before that, let us check out the industry’s recent stock market performance and valuation picture.
Industry vs. Broader Sector
In the past two years, the Zacks Investment Management industry has underperformed the S&P 500 Index and its sector. Stocks in the industry have collectively lost 17.3%, while the S&P 500 composite has rallied 30.7% and the Zacks Finance Sector has appreciated 19%.
2-Year Price Performance
Industry's Current Valuation
One might get a good sense of the industry’s relative valuation by looking at its price-to-tangible book ratio (P/TB), which is commonly used for valuing investment management companies because of large variations in their earnings from one quarter to the next.
The industry currently has a trailing 12-month P/TB of 3.82X. This compares with the highest level of 7.58X, the lowest level of 2.80X and the median of 4.49 over the past five years. The industry is trading at a significant discount compared with the market at large, as the trailing 12-month P/TB for the S&P 500 composite is 10.63X, which the chart below shows.
Price-to-Tangible Book Ratio (TTM)
As finance stocks typically have a low P/TB ratio, comparing investment managers with the S&P 500 may not make sense to many investors. However, the comparison of the group’s P/TB ratio with that of its broader sector seems more meaningful.
When we compare the group’s P/TB ratio with the broader Finance sector, it seems the group is trading at a decent discount. The Zacks Finance sector’s trailing 12-month P/TB of 5.98X for the same period is above the Zacks Investment Management industry’s ratio, which the chart below shows.
Price-to-Tangible Book Ratio (TTM)
3 Investment Management Stocks to Consider
BlackRock: The New York, NY-based Zacks Rank #3 (Hold) company is the largest asset manager in the United States in terms of assets. Its diversified product portfolio, extensive global distribution network and growing presence in alternative investments have been supporting top-line growth. As of Sept. 30, 2026, BlackRock’s AUM reached a record $15.49 trillion, up 15% year over year.
BLK continues to strengthen its competitive position through strategic acquisitions, including Global Infrastructure Partners, HPS Investment Partners, Preqin, ElmTree Funds and SpiderRock. These acquisitions have expanded its capabilities across private credit, infrastructure, real estate, data analytics and customized wealth solutions. During the third quarter of 2026, the company recorded $15 billion in private markets net inflows, while private markets fundraising reached $68 billion over the trailing 12 months. These initiatives are expected to diversify revenues and support long-term growth.
BlackRock’s strong ETF franchise, diversified investment offerings and global distribution capabilities position it well to benefit from growing demand for passive investing, retirement solutions and alternative assets. In the third quarter of 2026, the company recorded $205 billion in net inflows, reflecting broad-based demand across asset classes and geographies. Its scale and technology capabilities should help it navigate industry-wide fee compression and intensifying competition.
Over the five years ended 2025, BlackRock’s AUM and GAAP revenues witnessed compound annual growth rates (CAGRs) of 10.1% and 8.4%, respectively. The momentum continued in the first nine months of 2026, with revenues increasing 25.1% year over year to $21.53 billion. Given its focus on expanding iShares ETF operations, private markets and technology-driven investment solutions, AUM and revenue growth are expected to continue, although fee pressure and market volatility remain concerns.
In the past six months, shares of BlackRock have gained 14%. Over the past seven days, the Zacks Consensus Estimate for the company’s 2026 earnings has been unchanged at $57.82 per share.
Price & Consensus: BLK
Ameriprise: Headquartered in Minneapolis, MN, Ameriprise provides financial planning and related services through its Advice & Wealth Management, Asset Management, and Retirement & Protection Solutions segments. As of Sept. 30, 2026, the company’s total assets under management, administration and advisement were $1.78 trillion, up 8% year over year.
Over the five years ended 2025, the company’s GAAP net revenues and AUM/AUA witnessed CAGRs of 9.2% and 9%, respectively. The momentum continued in the first nine months of 2026, with GAAP net revenues increasing 10% year over year to $14.87 billion. Strong advisor recruitment, rising fee-based assets and record advisor productivity of $1.2 million are expected to support revenue growth. Moreover, expanding AI capabilities across advisor workflows should enhance efficiency and client engagement.
Ameriprise continues to optimize its business portfolio to strengthen its focus on higher-growth, fee-based operations. Its acquisition of BMO Financial Group’s EMEA asset management business expanded its global footprint, while Ameriprise Bank continues to support business diversification. The recent transition of 258 Huntington Bank advisors, with $28 billion in client assets expected to transfer through early 2027, should strengthen its wealth management franchise and support organic growth.
However, Ameriprise remains vulnerable to equity market fluctuations and changes in client activity, which could affect asset valuations and fee-based revenues. Further, persistent net outflows in its Asset Management segment remain concerning. In the third quarter of 2026, the segment recorded $9.3 billion in net outflows. Rising technology investments and operating expenses could also constrain profitability to some extent despite the company’s strong wealth management performance.
In the past six months, AMP shares have gained 11%. Over the past seven days, the Zacks Consensus Estimate for the company’s 2026 earnings has been revised higher to $46.29. The company currently carries a Zacks Rank #3.
Price & Consensus: AMP
Invesco: Headquartered in Atlanta, GA, Invesco operates as an independent investment manager, offering a diversified range of investment products and services. As of Sept. 30, 2026, its AUM stood at $2.54 trillion, up 19.4% year over year. Despite a decline in 2022, the company’s AUM witnessed a CAGR of 10% over the five years ended 2025. The growth momentum continued in the first nine months of 2026, supported by market appreciation and client inflows.
IVZ continues to strengthen its ETF franchise and diversify its investment offerings to accelerate AUM growth. In the third quarter of 2026, the company generated $35.1 billion in net long-term inflows, including $28.5 billion from ETFs and Index strategies and $6.7 billion from QQQ. Its focus on QQQ’s liquidity, scale and competitive positioning, along with an expanding active ETF lineup and partnerships with Barings and LGT Capital, should support client acquisition, and broaden its presence across private wealth and retirement markets.
Invesco has been undertaking initiatives to improve operating efficiency and profitability. The divestiture of its Canadian fund management business and restructuring of its India partnership have streamlined operations while preserving strategic market exposure. Additionally, the rollout of its hybrid investment platform is expected to enhance scalability and operational efficiency. These efforts contributed to improving profitability, with the adjusted operating margin expanding to 40.7% in the third quarter of 2026 from 34.2% in the year-ago quarter.
Invesco’s diversified geographic presence across the Americas, the Asia Pacific and Europe, the Middle East, and Africa remains a key growth driver. In the third quarter of 2026, the company recorded net long-term inflows of $15.9 billion in EMEA and $8.9 billion in the Asia Pacific. As of Sept. 30, 2026, AUM in these regions reached $414 billion and $375.4 billion, respectively, while its China joint venture’s AUM stood at $166.3 billion. This geographic diversification, coupled with expanding distribution capabilities, should support sustained inflows and long-term AUM growth.
In the past six months, IVZ shares have gained 7.6%. In the past seven days, the Zacks Consensus Estimate for the company’s 2026 earnings has been revised lower to $2.80. Currently, Invesco also carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
Image: Bigstock
3 Investment Management Stocks to Look At Despite Industry Challenges
The Zacks Investment Management industry faces headwinds from persistent fee compression, rising technology and AI-related expenses, and growing private credit concerns. The shift toward low-cost passive products is expected to constrain revenue growth, while elevated compliance costs and potential credit risks could weigh on profitability. Intensifying competition is also driving consolidation, though integration challenges remain.
Nevertheless, steady ETF inflows, retirement contributions and growing demand for wealth management solutions should support assets under management (AUM) growth. Companies like BlackRock (BLK - Free Report) , Ameriprise Financial (AMP - Free Report) and Invesco (IVZ - Free Report) remain relatively well-positioned to navigate these challenges, supported by diversified platforms and strategic initiatives.
About the Industry
The Zacks Investment Management industry comprises companies that manage securities and funds for clients to meet specified investment goals. The companies earn by charging service fees or commissions. Investment managers, also called asset managers, manage hedge funds, mutual funds, private equity, venture capital and other financial investments for third parties. By appointing an investment manager for one’s assets, investors get more diversification options than if they manage their assets independently. Investment managers invest their clients’ assets in different asset classes, depending on their needs and risk-taking abilities. Hence, the diversification, which investors get by appointing asset managers to manage their assets, helps reduce the impacts of volatility and ensures steady returns over time.
3 Themes Influencing the Investment Management Industry
Fee Pressure to Limit AUM Growth Benefits: The investment management industry continues to benefit from rising exchange-traded fund (ETF) adoption, steady retirement contributions and growing demand for wealth management solutions. However, the ongoing shift toward low-cost passive funds and index-based products is expected to pressure management fees, limiting revenue growth despite expanding AUM. The migration from traditional mutual funds to lower-fee ETFs could further constrain revenue yields, particularly for active managers struggling to differentiate their offerings.
Moreover, growing concerns surrounding private credit, including liquidity constraints, valuation uncertainty and potential borrower defaults, could dampen investor appetite for higher-fee alternative investment products. Slower fundraising in private markets, coupled with market volatility and uncertain interest rate trends, may weigh on net inflows and asset valuations.
Elevated Expenses to Squeeze Margins: Investment managers continue to increase spending on artificial intelligence (AI), automation, cybersecurity and digital infrastructure to enhance operational efficiency and meet evolving client expectations. However, substantial upfront investments, technology integration costs and the need for specialized talent are expected to keep operating expenses elevated in the near term, while productivity gains may take time to materialize.
Additionally, regulatory requirements surrounding fee transparency, data protection, cybersecurity and alternative investments could increase compliance and risk management costs. The need to continuously upgrade technological capabilities and strengthen operational resilience is likely to sustain spending pressures. Consequently, rising technology and regulatory expenses could weigh on operating margins and constrain industry profitability in the near term.
Industry Consolidation to Create Growth Opportunities: The investment management industry is witnessing increasing emphasis on mergers, acquisitions and strategic partnerships as firms seek to expand their geographic reach, diversify investment capabilities and strengthen distribution networks. Acquisitions of specialized investment managers, particularly those offering private markets, infrastructure and other differentiated strategies, could help traditional asset managers broaden their product portfolios and access new client segments. Partnerships between asset managers, wealth management platforms and retirement service providers could facilitate access to broader investor bases and new distribution channels. Larger firms may benefit from enhanced scale, cross-selling opportunities and a more diversified revenue mix. However, integration challenges and acquisition-related costs remain potential hurdles.
Zacks Industry Rank Indicates Dismal Prospects
The Zacks Investment Management industry is a 36-stock group within the broader Zacks Finance sector. The industry currently carries a Zacks Industry Rank #193, which places it at the bottom 22% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates underperformance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s positioning in the bottom 50% of the Zacks-ranked industries is because of a relatively weak earnings outlook for the constituent companies in aggregate. The aggregate earnings estimate revisions show that analysts are losing confidence in this group’s growth potential. Since November 2025-end, the industry’s most recent earnings estimates for the current year have been revised 7.4% lower.
Despite near-term industry challenges, we present a few stocks from the industry that you may want to keep on your radar for long-term gains. But before that, let us check out the industry’s recent stock market performance and valuation picture.
Industry vs. Broader Sector
In the past two years, the Zacks Investment Management industry has underperformed the S&P 500 Index and its sector. Stocks in the industry have collectively lost 17.3%, while the S&P 500 composite has rallied 30.7% and the Zacks Finance Sector has appreciated 19%.
2-Year Price Performance
Industry's Current Valuation
One might get a good sense of the industry’s relative valuation by looking at its price-to-tangible book ratio (P/TB), which is commonly used for valuing investment management companies because of large variations in their earnings from one quarter to the next.
The industry currently has a trailing 12-month P/TB of 3.82X. This compares with the highest level of 7.58X, the lowest level of 2.80X and the median of 4.49 over the past five years. The industry is trading at a significant discount compared with the market at large, as the trailing 12-month P/TB for the S&P 500 composite is 10.63X, which the chart below shows.
Price-to-Tangible Book Ratio (TTM)
As finance stocks typically have a low P/TB ratio, comparing investment managers with the S&P 500 may not make sense to many investors. However, the comparison of the group’s P/TB ratio with that of its broader sector seems more meaningful.
When we compare the group’s P/TB ratio with the broader Finance sector, it seems the group is trading at a decent discount. The Zacks Finance sector’s trailing 12-month P/TB of 5.98X for the same period is above the Zacks Investment Management industry’s ratio, which the chart below shows.
Price-to-Tangible Book Ratio (TTM)
3 Investment Management Stocks to Consider
BlackRock: The New York, NY-based Zacks Rank #3 (Hold) company is the largest asset manager in the United States in terms of assets. Its diversified product portfolio, extensive global distribution network and growing presence in alternative investments have been supporting top-line growth. As of Sept. 30, 2026, BlackRock’s AUM reached a record $15.49 trillion, up 15% year over year.
BLK continues to strengthen its competitive position through strategic acquisitions, including Global Infrastructure Partners, HPS Investment Partners, Preqin, ElmTree Funds and SpiderRock. These acquisitions have expanded its capabilities across private credit, infrastructure, real estate, data analytics and customized wealth solutions. During the third quarter of 2026, the company recorded $15 billion in private markets net inflows, while private markets fundraising reached $68 billion over the trailing 12 months. These initiatives are expected to diversify revenues and support long-term growth.
BlackRock’s strong ETF franchise, diversified investment offerings and global distribution capabilities position it well to benefit from growing demand for passive investing, retirement solutions and alternative assets. In the third quarter of 2026, the company recorded $205 billion in net inflows, reflecting broad-based demand across asset classes and geographies. Its scale and technology capabilities should help it navigate industry-wide fee compression and intensifying competition.
Over the five years ended 2025, BlackRock’s AUM and GAAP revenues witnessed compound annual growth rates (CAGRs) of 10.1% and 8.4%, respectively. The momentum continued in the first nine months of 2026, with revenues increasing 25.1% year over year to $21.53 billion. Given its focus on expanding iShares ETF operations, private markets and technology-driven investment solutions, AUM and revenue growth are expected to continue, although fee pressure and market volatility remain concerns.
In the past six months, shares of BlackRock have gained 14%. Over the past seven days, the Zacks Consensus Estimate for the company’s 2026 earnings has been unchanged at $57.82 per share.
Price & Consensus: BLK
Ameriprise: Headquartered in Minneapolis, MN, Ameriprise provides financial planning and related services through its Advice & Wealth Management, Asset Management, and Retirement & Protection Solutions segments. As of Sept. 30, 2026, the company’s total assets under management, administration and advisement were $1.78 trillion, up 8% year over year.
Over the five years ended 2025, the company’s GAAP net revenues and AUM/AUA witnessed CAGRs of 9.2% and 9%, respectively. The momentum continued in the first nine months of 2026, with GAAP net revenues increasing 10% year over year to $14.87 billion. Strong advisor recruitment, rising fee-based assets and record advisor productivity of $1.2 million are expected to support revenue growth. Moreover, expanding AI capabilities across advisor workflows should enhance efficiency and client engagement.
Ameriprise continues to optimize its business portfolio to strengthen its focus on higher-growth, fee-based operations. Its acquisition of BMO Financial Group’s EMEA asset management business expanded its global footprint, while Ameriprise Bank continues to support business diversification. The recent transition of 258 Huntington Bank advisors, with $28 billion in client assets expected to transfer through early 2027, should strengthen its wealth management franchise and support organic growth.
However, Ameriprise remains vulnerable to equity market fluctuations and changes in client activity, which could affect asset valuations and fee-based revenues. Further, persistent net outflows in its Asset Management segment remain concerning. In the third quarter of 2026, the segment recorded $9.3 billion in net outflows. Rising technology investments and operating expenses could also constrain profitability to some extent despite the company’s strong wealth management performance.
In the past six months, AMP shares have gained 11%. Over the past seven days, the Zacks Consensus Estimate for the company’s 2026 earnings has been revised higher to $46.29. The company currently carries a Zacks Rank #3.
Price & Consensus: AMP
Invesco: Headquartered in Atlanta, GA, Invesco operates as an independent investment manager, offering a diversified range of investment products and services. As of Sept. 30, 2026, its AUM stood at $2.54 trillion, up 19.4% year over year. Despite a decline in 2022, the company’s AUM witnessed a CAGR of 10% over the five years ended 2025. The growth momentum continued in the first nine months of 2026, supported by market appreciation and client inflows.
IVZ continues to strengthen its ETF franchise and diversify its investment offerings to accelerate AUM growth. In the third quarter of 2026, the company generated $35.1 billion in net long-term inflows, including $28.5 billion from ETFs and Index strategies and $6.7 billion from QQQ. Its focus on QQQ’s liquidity, scale and competitive positioning, along with an expanding active ETF lineup and partnerships with Barings and LGT Capital, should support client acquisition, and broaden its presence across private wealth and retirement markets.
Invesco has been undertaking initiatives to improve operating efficiency and profitability. The divestiture of its Canadian fund management business and restructuring of its India partnership have streamlined operations while preserving strategic market exposure. Additionally, the rollout of its hybrid investment platform is expected to enhance scalability and operational efficiency. These efforts contributed to improving profitability, with the adjusted operating margin expanding to 40.7% in the third quarter of 2026 from 34.2% in the year-ago quarter.
Invesco’s diversified geographic presence across the Americas, the Asia Pacific and Europe, the Middle East, and Africa remains a key growth driver. In the third quarter of 2026, the company recorded net long-term inflows of $15.9 billion in EMEA and $8.9 billion in the Asia Pacific. As of Sept. 30, 2026, AUM in these regions reached $414 billion and $375.4 billion, respectively, while its China joint venture’s AUM stood at $166.3 billion. This geographic diversification, coupled with expanding distribution capabilities, should support sustained inflows and long-term AUM growth.
In the past six months, IVZ shares have gained 7.6%. In the past seven days, the Zacks Consensus Estimate for the company’s 2026 earnings has been revised lower to $2.80. Currently, Invesco also carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.