Martin L. Flanagan President and CEO Invesco...

Thriving in the new world order

Martin L. FlanaganPresident and CEOInvesco Ltd.

All information as of Sept. 30, 2012, unless otherwise noted. Please refer to the Appendix for important information.

Our discussion today

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The world is changing around us

Staying ahead of trends in the US


Some of the top in-demand jobs in 2012 …

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… didn’t exist in 2005.

Source: US Labor Department “Job openings and labor turnover survey,” 2011; US News & World Report, Oct. 5, 2011

Almost half of the revenue of S&P 500 companies …

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Source: RBC Capital Markets Research, Capital IQ. Data as of December 31, 2011. As referenced in businessinsider.com article entitled, “A Breakdown of Where S&P 500 Companies Get Overseas Business”.

… comes from overseas.

72 percent of Apple’s total revenue …

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… is derived from products you couldn’t purchase five years ago.

Source: Apple earnings reports 2007 – 2012; as of Sept. 30, 2012.

During the course of this presentation …

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402 babies will be born in the US

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Source: U.S. Census Bureau, International Program (International Database) http://www.census.gov/population/international/data/idb/region.php (Oct. 11, 2012)

402 babies1,644 babies will be born in China

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402 babies1,644 babies2,370 babies will be born in India

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402 babies1,644 babies2,370 babies4,416 potential new investors

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Global population has grown to 7 billion people worldwide

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314

1,3431,205

12781 206 63 66 61

US China India Japan Germany Brazil UK France Italy

Sources: Invesco; USA Today; US Census Bureau, Population Division, International Programs Center — data estimate as of July 2012; CIA World Fact Book, Eurostat

People, in millions(in order of GDP)

China’s 2020 GDP projection is equal to the combined GDPs of several countries

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Sources: HSBC, CEIC, IMF, CIA as of December 2011. Actual results may differ from current projections.

Zambia

Israel

Kenya

Switzerland

Kazakhstan

$500bn–$1,000bn

$100bn–$500bn

Below $100bn

Egypt

Thailand

Malaysia

Netherlands

South Africa

Nigeria

Denmark

SaudiArabia

KoreaArgentina

Colombia

Turkey

Canada

Russia

Belgium

Venezuela

Singapore

GreeceIran

Spain

IndonesiaPoland

Argentina

Australia

Sudan

Sri Lanka

Above $1,000bn

Disposable income is expected to grow exponentially in developing countries

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Sources: Bloomberg L.P., Invesco as of December 2011. Actual results may differ from current expectations.

No. of Households(Millions)

0

50

100

150

200

250

300

1991 1996 2001 2006 2011e 2016e 2020e

China

India

Russia

BrazilJapan

US

Household disposable income more than US$10,000

China US India Brazil Japan Russia

Established markets currently have the lion’s share of $52 trillion global AUM …

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4,390

23,207

15,374

1,446 379 4,372 345 1,428 1,3800

5,000

10,000

15,000

20,000

25,000

AsiaPacific

ex Japan

UnitedStates

WesternEurope

LatinAmerica

EasternEurope

Japan Africa MiddleEast

Canada

Green color in chart denotes developed economies as defined by the IMF’s World Economic Outlook Report, April 2012.Source: McKinsey & Company Global Banking Pools; Empirical Research Partners, as of August 2012.Note: Includes all institutional and retail AUM.

Total AUM 2011 Estimates US$Billions

… However, China and other emerging markets are experiencing the greatest growth

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Green color in chart denotes developed economies as defined by the IMF’s World Economic Outlook Report, April 2012 Source: McKinsey & Company Global Banking Pools; Empirical Research Partners, as of August 2012.Note: Includes all institutional and retail AUM.

12.3

5.8 6.37.3

11.9

2.9

7.2

11.8

4.3

0

2

4

6

8

10

12

14

Asia Pacificex Japan

UnitedStates

WesternEurope

LatinAmerica

EasternEurope

Japan Africa MiddleEast

Canada

Total AUM Growth 2011-2014 Estimated CAGR %

Summary of significant global trends

US remains the dominant market

Critical to be an established market leader in developed markets

Strong presence in emerging markets a key driver of long-term success

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Key US market realities

21

1 Post-crisis uncertainty and broad structural reform creating instability

2 Risk mitigation driving evolution of asset allocation

3 Aging US population driving need for income solutions

4 Increased market complexity accelerating need for advice

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Post-crisis uncertainty and broad structural reform creating instability

Advisors and investors are concerned

Uncertainty around tax policy

Eurozone crisis

Government debt and impending fiscal cliff

Market volatility

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1

Increased legislation driving financial reform

Government spending to drive employment

Enduring market volatility

Prolonged investor anxiety

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The Great Depression





The Great Recession

Then and now1





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The Great Depression





Globalization

Aging population

The Great Recession

Then and now1

Lack of confidence in peripheral Eurozone countries continues

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1

Greece to leave Euro Zone on June 18(CNBC)

Did Europe missits chance?September 11(CNN Money)

Soros tells Germany “lead or leave euro”September 9(Investment Week)

Eurozone set for deeper recessionSeptember 6(fundweb)

Why adopting the euro is a trap for some nationsSeptember 10(NBC)

Merkel tries to calm uproar over Eurozone crisis plansAugust 26(Economic Times)

Euro crisis down to confidence, not currency, says German Foreign MinisterAugust 31(CNN)

The Collapse of Europe’s Welfare State Exposes its False Hopes —Is America NextAugust 29(Forbes)

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0

20

40

60

80

100

120

140

1940 1960 1980 2000

Projected Actual

Sources: US Office of Management and Budget data through Dec. 31, 2011, Congressional Budget Office’s (CBO) January 2011 baseline budget projections

Percent of GDP

Total US government debt is approaching 100% of GDP

1

2017

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Other Federal Spending

Social Security

Medicare and Medicaid

Interest

0

5

10

15

20

25

30

1962 1987 2012 2037 2062 2087

Source: Congressional Budget Office (CBO), The Long-Term Budget Outlook, July 2012; extended-baseline scenario

Percent of GDP

The importance of restoring confidence1

28

Source: Bloomberg L.P. , Invesco. Data as of September 30, 2012.VIX is based on real-time option prices, which reflect investors' consensus view of future expected stock market volatility. During periods of financial stress, which are often accompanied by steep market declines, option prices - and VIX - tend to rise. The greater the fear, the higher the VIX level. As investor fear subsides, option prices tend to decline, which in turn causes VIX to decline. It is important to note, however, that past performance does not necessarily indicate future results.

0

10

20

30

40

50

60

70

Dec-99 May-01 Oct-02 Mar-04 Aug-05 Jan-07 Jun-08 Nov-09 Apr-11 Sep-12

Uncertainty driving market volatility and investor anxiety

1

VIX - CBOE Market Volatility Index

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Post-crisis uncertainty and broad structural reform creating instability

How to stay ahead of the trend

Stay invested for the long term

Find low-volatility opportunities

Create risk-balanced portfolios to prepare for various outcomes

Invest in equities for the long term

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1

Risk mitigation driving evolution of asset allocation

Advisors are focused on managing risk

Increasing allocations to income (equity and fixed)

Alternatives are no longer alternative

Growth of risk parity and world allocation strategies

Blending of mutual funds and ETFs in client portfolios

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2

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Source: Invesco RIA Survey conducted by Cogent Research, 2012. Results based on web survey of 189 registered investment advisors with $50M+ in AUM.

Delivering absolutereturn11%

Other12%

Exceeding a benchmark12%

Wealth preservation25%

Managing risk40%

Invesco research indicates advisors are focused on managing risk post-crisis

2

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-200

-100

0

100

200

300

400

2006 2007 2008 2009 2010 2011 YTD 7/12

Alternative Fixed Income US Equities International/Global Equities

Source: Strategic Insight 7/31/12 (LT-OE Mutual Funds & ETFs; Includes fund of funds). Values represent sum of annual net flows for each category.

US$Billions

Flows into fixed income underscore challenges of risk mitigation

2

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2001: $27B

Source: Simfund. Data as of July 31, 2012. Includes fund of funds.

2012: $374B

Real Estate Bank Loan Nontraditional BondCommodities Broad Basket Global Real Estate Long/Short EquityEquity Precious Metals Market Neutral Multi-alternativeCurrency Managed Futures Bear MarketTrading-Based

Alternative mutual fund assets have experienced significant growth and diversification

2

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Source: Simfund. Data as of July 31, 2012. Includes fund of funds.

2001: $208B 2012: $1,287B

Balanced andTarget Risk

Target Date World Allocation Retirement Income

Major shift from traditional balanced funds to target date and world allocation funds

2

40% of advisors use a blend of active investments and ETFs now more than ever.

Source: Invesco RIA Survey conducted by Cogent Research, 2012. Results based on web survey of 189 registered investment advisors with $50M+ in AUM.

5,236 7,005 8,109 8,031 9,200 10,100 11,100 12,200

536

7861,005 1,061

1,3001,400

1,5001,700

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2008 2009 2010 2011 2012E 2013E 2014E 2015E

Mutual Funds ETFs

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Source: Strategic Insight and Cerulli. 2012-2015 estimated projections, not actual figures.

Projected Mutual Fund and ETF Assets (US$Billions)

ETF growth continues2

Risk mitigation driving evolution of asset allocation


Identify and understand risk before you try to mitigate it

Reconsider sources of risk

Adjusting asset allocation mix could improve portfolio outcomes


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2

Aging US population driving need for income solutions

A wave of baby boomers retiring soon

Money moving from DB to DC plans

Increasing interest in retirement income products

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What the industry has been expecting…

Baby boomers are hitting retirement age NOW

The real money in motion is from DC plans to IRAs

Advisors prefer to build their own retirement income portfolios

What’s actually happening today…

3

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3.1 4.0 4.9 6.6 9.0 12.316.6 20.0

25.631.7

35.340.1

52.2

69.4

0

10

20

30

40

50

60

70

80

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030

Source: U.S. Bureau of the Census (middle series projections)

Estimated Number of Individuals in US Age 65+(millions)

Baby boomers have started to turn 653

E E

10,000 baby boomers will file for Social Security benefits every day for the next 20 years.

Source: “Annual Performance Plan for FY 2012,” Social Security Administration

Social Securitytrust fund exhausted by 2033.

Sources: Social Security Online Actuarial Publications, “Status of the Social Security and Medicare Programs, A Summary of the 2012 Annual Reports,” Social Security and Medicare Boards of Trustees

20

25

30

35

40

45

50

2000 2002 2004 2006 2008 2010 2012E 2014E 2016E

DB DC IRA

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Sources: Department of Labor, ICI, U.S. Census Bureau, Federal Reserve, PBGC, EBRI, Cerulli Associates

Retirement Market Assets by Segment (%)

IRA assets growing at the fastest rate3

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Source: Cerulli Associates. Advisor Portfolio Construction Dynamics. 2011.

Annuitization12%

Retirement Income Funds6%

Dividend-paying equity mutual funds31%

Bond mutual funds41%

What Advisors “Always Use” for Retirement Income

Advisors prefer to build retirement income portfolios

3

Aging US population driving need for income solutions


Provide advice to DC plan participants for IRA rollover capture

Deliver strategies to meet today’s investor income needs

Identify diversified sources of income in today’s market

Ensure that income strategies take into account tomorrow’s outcomes


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3

Increased market complexity accelerating need for advice

Key Trends

Markets are becoming more complex

Consumers live in a customized world

Discretionary advice is growing rapidly

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4

For students starting a 4-year technical degree …

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Sources: U.S. Department of Labor Employment & Training Administration, U.S. Department of Commerce, Survey of the Use of Biotechnology in U.S. Industry and U.S. Bureau of Labor Statistics

… half of what they learn in their first year of study will be outdated by their third year.

More time

Limited information

Domestic markets

Stocks and bonds

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Then

Limited time

Unlimited data

Global markets

Broad array of investment solutions

Now

Increasing complexity for investors4

Sources: Phoenix Marketing International, Cerulli Associates. Reasons Investors Do Not Intend to Work with an Advisor Regarding Retirement Planning by Retirement Stage, 2011.

41% of pre-retirees are not working with an advisor because they “have not gotten around to it.”

Generic

Buy an album

Select a shoe style

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Then

Personalized

Build your own playlist

“Choose your outsole, cushioning, colors — even weather protection”

Solutions

Now

Customization is expected4

Products

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0

500

1000

1500

2000

2500

3000

2008 2009 2010 2011 1Q 2012

UMA Program

Rep As PortfolioManager

Rep As Advisor

Mutual Fund Advisory

SMA Advisory*

1268.8

1683.9

* SMA Advisory accounts and assets for 2009, 2010 and 2011 are different from the last issue of Central due to firms restating and receiving actual data.

Sources: Money Management Institute, Dover Financial Research

Managed SolutionsAUM (US$Billions)

Managed solutions business continues to grow

4

2136.2 2269.22480.7

Increased market complexity accelerating need for advice


Build relationships by delivering value

Provide a clear framework to turn data into actionable information

Offer easy, tailored solutions that holistically meet investor needs

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4


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Focused on distinct client needs

Ability to capitalize on global opportunities

Broadly diversified

Ability to effectively deliver tailored solutions

Being indispensable to clients

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Martin L. FlanaganPresident and CEOInvesco Ltd.

All information as of Sept. 30, 2012, unless otherwise noted. Please refer to the Appendix for important information.

Appendix

Important InformationThe opinions expressed are those of Mr. Flanagan, are based upon current market conditions and are subject to change without notice.

This presentation is for informational purposes only. This is not to be construed as an off to buy or sell any financial instruments and should not be relied upon as the sole factor in an investment making decision. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing.

This presentation does no form part of any prospectus.

While great care has been taken to ensure that the information contained herein is accurate, no responsibility can be accepted for any errors, mistakes, or omissions or for any action taken in reliance thereon.

Asset management services are provided by Invesco in accordance with appropriate local legislation and regulations.

Forward-looking statementsThis presentation, and comments made in the presentation today, may include “forward-looking statements.” Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow and capital expenditures, industry or market conditions, AUM, acquisitions, debt and our ability to obtain additional financing or make payments, regulatory developments, demand for and pricing of our products and other aspects of our business or general economic conditions. In addition, words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “forecasts,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements.Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. There can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our most recent Form 10-K and subsequent Forms 10-Q, filed with the Securities and Exchange Commission.You may obtain these reports from the SEC’s website at www.sec.gov. We expressly disclaim any obligation to update the information in any public disclosure if any forward-looking statement later turns out to be inaccurate.

For additional information, contact the Invesco representative in your local jurisdiction.

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Martin L. Flanagan President and CEO Invesco...

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