(Reuters) - Asset manager Invesco beat Wall Street estimates for third-quarter profit on Tuesday, helped by strong inflows and higher fees as its assets under management (AUM) hit a record high of $1.8 trillion.

WHY IT'S IMPORTANT

Growing expectations of a soft landing for the U.S. economy and optimism around the Federal Reserve's policy easing have boosted investor confidence, driving a market rally and inflows into investment products such as exchange-traded funds.

This surge has increased the value of AUMs and the fees earned by asset managers such as Invesco.

BY THE NUMBERS

Atlanta, Georgia-based Invesco's investment management fees rose to $1.1 billion in the third quarter from $1 billion a year ago.

Excluding one-time costs, the company earned a profit of $199.8 million, or 44 cents per share, in the three months ended Sept. 30, compared with analysts' average estimate of 43 cents, according to data compiled by LSEG.

The company's total net flows stood at $12.7 billion, compared with the total net outflow of $9.9 billion a year ago.

Invesco's performance fees, which is earned when returns meet certain previously agreed-upon criteria, rose 40% in the third quarter.

CONTEXT

Invesco is a global independent investment management firm with branches in more than 20 countries. The fees it earns from managing clients' assets is its chief source of revenue.

The company faced softer inflows in recent years as elevated interest rates on bank deposits boosted the appeal of safe-haven assets such as cash.

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

(Reporting by Prakhar Srivastava in Bengaluru; Editing by Shreya Biswas)