In the first quarter, net long-term inflows were $24.5 billion.
Net -- this follows net long-term inflows of nearly $18 billion in the second half of last year, and this represents nearly a 9% annualized long-term organic growth rate, led by net flows into ETFs, continued strength in fixed income and net inflows into the balanced funds.
Retail flows significantly improved in the quarter and were $21.2 billion out of $24.5 billion of the net long-term flows.
Our ETFs, excluding the Qs, generated net long-term inflows of $16.8 billion.
This is also a record for the firm, which contributed significantly to the $10 billion of net long-term inflows generated in the Americas.
Invesco's U.S. ETFs, excluding the Qs, captured 6.7% of the U.S. industry net ETF inflows.
This is more than two times our 3% market share.
Within private markets, we launched two CLOs, which raised $800 million.
MassMutual has committed over $1 billion to various strategies, including providing a credit facility to one of our private market funds.
We had net long-term inflows of $6.5 billion within active fixed income.
And within active global equities, our nearly $50 billion developing markets fund, key capability acquired in the Oppenheimer transaction, saw $1.3 billion of inflows.
Net long-term inflows into Asia Pac were $16.7 billion in the first quarter, following $17 billion of net inflows in the second half of 2020.
The China JV launched nine new funds with $6.2 billion of net long-term inflows.
In addition, our solutions-enabled institutional pipeline has grown meaningfully and accounts for over 60% of our pipeline at the end of the quarter.
But I would note, we generated positive operating leverage, producing an operating margin of 40.2% for the quarter.
The Board also approved a 10% increase in the quarterly dividend to $0.17 per share.
Our investment performance improved in the first quarter, with 70% and 76% of actively managed funds in the top half of peers on a five year and a 10-year basis, respectively.
Additionally, we've expanded the population of AUM included in performance disclosures by about $150 billion for each period presented through the addition of benchmark-relative performance data for institutional AUM, where pure rankings do not exist.
We ended the quarter with just over $1.4 trillion in AUM.
Of the $54 billion in AUM growth, approximately $25 billion is a function of increased market values.
Our diversified platform generated net long-term inflows in the first quarter of $24.5 billion, representing 8.8% annualized organic growth.
Active AUM net long-term inflows were $7.5 billion or 3.4% annualized organic growth rate.
In passive AUM, net long-term inflows were $17 billion or a 31.3% annualized organic growth rate.
The retail channel generated net long-term inflows of $21.2 billion in the quarter, an improvement from roughly flat performance in the fourth quarter, driven by the positive ETF flows.
Institutional channel generated net long-term inflows of $3.3 billion in the quarter.
Our ETFs, excluding the QQQ suite, generated net long-term inflows of $16.8 billion, including meaningful net inflows into our higher-fee ETFs.
Net ETF inflows in the U.S. were focused on equities in the first quarter, including a high level of interest in our SandP 500 Equal Weight ETF, which had $4 billion in net inflows in the quarter.
In addition to the SandP 500 Equal Weight ETF, we had five other ETFs that reported net inflows of over $1 billion each.
These six ETFs represented $10 billion in net inflows for the quarter.
It's also worth noting that our Invesco NASDAQ Next Gen 100 ETF, the QQQJ, surpassed the $1 billion AUM mark in the quarter following its inception in October of 2020.
You'll note that the Americas had net long-term inflows of $10 billion in the quarter, an improvement of $7.8 billion from the fourth quarter.
Asia Pacific delivered one of its strongest quarters ever with net long-term inflows of $16.7 billion.
$9.4 billion of these net inflows were from Greater China, including $8.5 billion in our China JV.
The balance of the flows in Asia Pacific were comprised of $3 billion from Japan, $1.9 billion from Singapore and the remaining $2.3 billion was generated from several other countries in the region.
Net long-term inflows for EMEA excluding the U.K. were $3.7 billion driven by retail flows, including particularly strong net inflows of $1.2 billion into our Global Consumer Trends Fund, the growth equities capability, which saw demand from across the EMEA region.
ETF net inflows in EMEA were $1.6 billion in the quarter, including interest in a wide variety of U.S.- and EMEA-based ETFs.
Notably, we saw net inflows of $0.5 billion into our blockchain ETF and $400 million into one of our newly launched ESG ETFs in the quarter, the Invesco MSCI USA ESG Universal-Screened ETF.
And finally, the U.K. experienced net long-term outflows of $5.9 billion in the quarter driven by net outflows in multi-asset, institutional quantitative equities and U.K. equities.
Equity net long-term inflows of $9.8 billion reflect some of the capabilities I've mentioned, including the Developing Markets Fund, the Global Consumer Trends Fund and ETFs, including our SandP 500 Equal Weight ETF.
We continue to see strength in fixed income across all channels and markets in the first quarter with net long-term inflows of $7.6 billion.
This following net inflows of $8.2 billion in fixed income in the fourth quarter.
It's worth noting that the net inflows in the balanced asset class of $7.3 billion arose largely from China.
In alternatives, net long-term inflows improved by $4.1 billion due to a combination of inflows in senior loan, commodities and newly launched CLOs during the quarter.
Our institutional pipeline grew to $45.5 billion at March 31 from $30.5 billion at year-end.
While there's always some uncertainty with large client funding, we're currently estimating that between 50% and 65% of the pipeline will fund in the second quarter, including the large indexing mandate.
Overall, the pipeline is diversified across asset classes and geographies, and our solutions capability enables 61% of the global institutional pipeline and created wins and customized mandates.
You'll notice that our net revenues increased $23 million or 1.8% from the fourth quarter as higher average AUM in the first quarter was partially offset by $71 million decrease in performance fees from the prior quarter.
The net revenue yield excluding performance fees was 35.7 basis points, a decrease of 0.3 basis point from the fourth quarter yield level.
This decrease was driven by lower day count in the first quarter that negatively impacted the yield by 0.8 basis point and higher discretionary money market fee waivers that negatively impacted the yield by 0.3 basis point.
Total adjusted operating expenses increased 0.7% in the first quarter.
The $5 million increase in operating expenses was driven by higher variable compensation as a result of higher revenue as well as the seasonal increase in payroll taxes and certain benefits, offset by the reduction in compensation related to performance fees recognized last quarter and savings that we realized in the quarter resulting from our strategic evaluation.
Through this evaluation, we will invest in key areas of growth, including ETFs, fixed income, China, solutions, alternatives and global equities while creating permanent net improvements of $200 million in our normalized operating expense base.
In the first quarter, we realized $16 million in cost savings.
$15 million of the savings was related to compensation expense.
The remaining $1 million in savings was related to facilities, which is shown in the property office and technology category.
The $16 million in cost savings were $65 million annualized, combined with the $30 million in annualized savings realized in 2020, brings us to $95 million or 48% of our $200 million net savings expectation.
As it relates to timing, we still expect approximately $150 million or 75% of the run rate savings to be achieved by the end of this year, with the remainder realized by the end of 2022.
Of the $150 million in net savings by the end of this year, we anticipate we will realize roughly 65% of the savings through compensation expense.
The remaining 35% would be spread across occupancy, tax spend and GandA.
The breakdown for the remaining $50 million in net cost saves in 2022 will be similar.
With $95 million of the expected $150 million in net savings by the end of this year already in the quarterly run rate, the degree of net savings per quarter will moderate going forward.
In the first quarter, we incurred $30 million of restructuring costs.
In total, we recognized nearly $150 million of our estimated $250 million to $275 million in restructuring costs that were associated with this program.
We expect the remaining transaction cost for the realization of this program to be in the range of $100 million to $125 million over the next two years, with roughly 1/2 of this amount occurring in the remainder of 2021.
We entered the second quarter with $1.4 trillion in AUM driven by net inflows and market tailwinds from the first quarter.
Adjusted operating income improved $18 million to $503 million for the quarter driven by the factors we just reviewed.
Adjusted operating margin improved 70 basis points to 40.2% as compared to the fourth quarter.
Most importantly, our degree of positive operating leverage reflected in our non-GAAP results was 2 times for the quarter, underscoring our focus on driving scale and profitability across our diversified platform.
Nonoperating income included $25.9 million in net gains for the quarter compared to $31.9 million in net gains last quarter as higher equity and earnings primarily from increased CLO marks were more than offset by lower market gains on our seed portfolio as compared to the prior quarter.
The effective tax rate for the first quarter was 24% compared to 21.7% in the fourth quarter.
We estimate our non-GAAP effective tax rate to be between 23% and 24% for the second quarter.
Our balance sheet cash position was $1.158 billion at March 31, and approximately $760 million of this cash is held for regulatory requirements.
We also paid $117 million on a forward share repurchase liability in January.
Despite the increased cash needs in the quarter, the revolver balance was 0 at the end of March, consistent with our commitment to improve our leverage profile.
Additionally, the remaining forward share repurchase liability of $177 million was settled in early April.
We also renegotiated our $1.5 billion credit facility, extending the maturity date to April of 2026 with favorable terms.
We believe we're making solid progress in our efforts to build financial flexibility and as such, our Board approved a 10% increase in our quarterly common dividend to $0.17 per share.
The share buybacks dating back to last year on slide 11, which reflects $45 million in the first quarter of this year, are related to vesting of employee share awards.

Summary:
In the first quarter, net long-term inflows were $24.5 billion.
Net -- this follows net long-term inflows of nearly $18 billion in the second half of last year, and this represents nearly a 9% annualized long-term organic growth rate, led by net flows into ETFs, continued strength in fixed income and net inflows into the balanced funds.
The Board also approved a 10% increase in the quarterly dividend to $0.17 per share.
It's also worth noting that our Invesco NASDAQ Next Gen 100 ETF, the QQQJ, surpassed the $1 billion AUM mark in the quarter following its inception in October of 2020.
We believe we're making solid progress in our efforts to build financial flexibility and as such, our Board approved a 10% increase in our quarterly common dividend to $0.17 per share.