Invesco Wholesale Australian Smaller Companies Fund - Class A Monthly Report

Transcription

1 Invesco Wholesale Australian Smaller Companies Fund - Class A Monthly Report 31 May 2018 Performance analysis (periods to 31 May 2018) Fund Managers Andre Roberts Ritchard Longmire CJ Tsai Portfolio Manager - Neil Lahy Nicole Schnuderl (maternity leave) Net performance Periods Fund % Benchmark % Value added % 1 month months months year years p.a years p.a years p.a years p.a Calendar year to date Financial year to date Since inception p.a The Fund returns are shown after ongoing fees and assumes reinvestment of income. Past returns are not a reliable indicator of future returns. Future returns may be affected by a range of factors including economic and market influences. Net distribution growth splits Periods Distribution % Growth % Total % 3 months months year years p.a years p.a years p.a years p.a Net risk profile Periods Tracking error % Information Ratio 1 year years p.a years p.a years p.a years p.a Since inception p.a Invesco Wholesale Australian Smaller Companies Fund - Class A Monthly report

2 Fund Facts at a glance Asset class Australian equities Management style Fundamental, active, core Objective 1 To provide long-term capital growth and distributions by investing in small companies listed on the Australian share market, predominantly outside the S&P/ASX 100 Index Benchmark From inception to 31/12/88 = ASX All Ordinaries ex 50 Leaders From 1/1/89 = ASX All Ordinaries ex 100 Leaders From 1/1/91 = ASX Small Ordinaries Index From 1/4/00 = S&P/ASX Small Ordinaries Accumulation Index Risk profile High Time horizon 7 years Distribution frequency Half-yearly Inception date 31/3/88 Minimum investment $20,000 MER/ICR 1.25% Buy/Sell Spread 0.35%/0.35% APIR code CNA0812AU 1 Invesco does not guarantee that the Fund will achieve its objective. Sector attribution Sector 3 Months % 1 year % 3 years % Consumer Discretionary Consumer Staples Energy Financials Ex Lpt Health Care Industrials Information Technology Listed Property Trusts Materials Ex Metals and Mining Metals and Mining Other Real Estate Telecommunication Services Utilities [Cash] Residual Total Attribution is calculated on cumulative gross performance data. Fund analysis (as at 31 May 2018) Assets under management A$m Fund AUM: Strategy AUM: Market capitalisation allocation Ranges Fund % Benchmark % Active weight % Cash Sector allocation Sector Fund % Benchmark % Active weight % Consumer Discretionary Consumer Staples Energy Financials Ex Lpt Health Care Industrials Information Technology Materials Ex Metals and Mining Metals and Mining Other Real Estate Telecommunication Services Utilities [Cash] Invesco Wholesale Australian Smaller Companies Fund - Class A Monthly report

3 Five largest overweight positions IDP Education Ltd Lovisa Holdings Ltd Whitehaven Coal Limited St. Barbara Ltd Sandfire Resources NL Five largest underweight positions Reliance Worldwide Corp. Ltd Worleyparsons Limited NIB Holdings Ltd Nextdc Limited Nufarm Limited largest holdings Whitehaven Coal Limited Beach Energy Limited Mineral Resources Limited St. Barbara Ltd Costa Group Holdings Ltd Altium Seven Group Holdings Limited IDP Education Ltd Regis Resources Limited Nine Entertainment Co. Holdings Pty Ltd Note: Security selection will change. You should not rely on this statement in making an investment decision about any security, but should make your own independent enquiries. 3 Invesco Wholesale Australian Smaller Companies Fund - Class A Monthly report

4 Monthly commentary Market review Small cap stocks continued upwards in May as the S&P/ASX Small Ordinaries Accumulation Index returned 3.70%. Within small-caps, both Industrials and Resources rose +3.8% and +3.3% respectively. The strongest performer in the Small Ordinaries was Wisetec (+46%), which lifted guidance and issued $100m in shares to a single global institutional investor, side-stepping the need to pay investment banking fees. Galaxy fell 15% on having to issue a number of provisions and impairments to its FY18 financials, resulting in it being the most heavily shorted name over the month. Contributors to performance In May the portfolio modestly outperformed its benchmark, being up +0.04%. Relative performance is based on different aspects; our stock selection model favours companies that in our view are attractively valued, have good earnings and price momentum, and show a high balance sheet quality. Stock selection was negative over the month, with good investment concept performance offset by a negative stock specific return. Regarding our four investment concepts, Earnings Momentum and Market Sentiment contributed positively with Management & Quality and Value being small detractors. From a sector perspective, our model showed good results particularly within Consumer Discretionary (where overweights to IDP Education, Lovisa and Super Retail Group were the main drivers), but detracted mainly within the Industrials sector. The fund s active style and sector exposure contributed positively. Sector and style exposure are residuals of our stock selection process. Market outlook and portfolio strategy The Fund s quantitative approach rates stocks based on four factors or concepts, namely Earnings Expectations, Market Sentiment, Management & Quality, and Value. The results of our analysis, for each of these concepts as well as combined, provide information about the predictive ability of our stock selection model. The expected predictive ability of our stock selection model was slightly negative over the month. Pleasingly the realised performance was nonetheless positive. Earnings Momentum and Market Sentiment were strong factors, whilst Quality and Value were negative. The relative return distribution of all stocks in the Australian universe showed that on average our most attractively viewed stocks underperformed slightly whereas stocks we regard as least attractive underperformed in line with what we d expect. The ex-ante tracking error of the fund was at 3.83% (ex post target 4%) at month-end. At 93%, the major part of our active risk is associated with stock-specific risk. A further 4% came from risk indices representing unintended style exposure within the portfolio. Industry risk contribution, a by-product of stock selection, represented 3%. Within a tight product specific range, the portfolio beta was 0.99 at month-end. 4 Invesco Wholesale Australian Smaller Companies Fund - Class A Monthly report

5 Contact Phone: Website: Important Information This document has been prepared by Invesco Australia Ltd (Invesco) ABN , Australian Financial Services Licence number , who can be contacted on freecall , by to or by writing to GPO Box 231, Melbourne, Victoria, You can also visit our website at This document contains general information only and does not take into account your individual objectives, taxation position, financial situation or needs. You should assess whether the information is appropriate for you and consider obtaining independent taxation, legal, financial or other professional advice before making an investment decision. A Product Disclosure Statement (PDS) for any Invesco fund referred to in this document is available from Invesco. You should read the PDS and consider whether a fund is appropriate for you before making a decision to invest. Invesco is authorised under its licence to provide financial product advice, deal in financial products and operate registered managed investment schemes. If you invest in an Invesco Fund, Invesco may receive fees in relation to that investment. Details are in the PDS. Invesco s employees and directors do not receive commissions but are remunerated on a salary basis. Neither Invesco nor any related corporation has any relationship with other product issuers that could influence us in providing the information contained in this document. Investments in the Invesco funds are subject to investment risks including possible delays in repayment and loss of income and principal invested. Neither Invesco nor any other member of the Invesco Ltd Group guarantee the return of capital, distribution of income, or the performance of any of the Funds. Any investments in the Funds do not represent deposits in, or other liabilities of, any other member of the Invesco Ltd Group. Invesco has taken all due care in the preparation of this document. To the maximum extent permitted by law, Invesco, its related bodies corporate, directors or employees are not liable and take no responsibility for the accuracy or completeness of this document and disclaim all liability for any loss or damage of any kind (whether foreseeable or not) that may arise from any person acting on any statements contained in this document. This document has been prepared only for those persons to whom Invesco has provided it. It should not be relied upon by anyone else. Copyright of this document is owned by Invesco. You may only reproduce, circulate and use this document (or any part of it) with the consent of Invesco. Invesco Wholesale Australian Smaller Companies Fund Class A Monthly Report MAY18