| Fund Company | Invesco Canada Ltd. |
| Fund Type | International Equity |
| Rating | C |
| Style | Large Cap Growth |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Fair |
| TFSA Suitability | Fair |
| Manager | Clas Olsson since July 2000 Jason Holzer since July 2000 |
| MER | 2.88% |
| Code | AIM 633 – Front End Units AIM 631 – DSC Units |
| Minimum Investment | $500 |
Analysis: This non-north American equity fund is managed by Clas Olsson and his Austin, Texas based team using a bottom up stock selection process that they refer to as “earnings, quality and valuation”, or EQV. Essentially, they are looking for companies that are likely to experience above average earnings growth, have high quality and sustainable earnings, and are trading at a reasonable valuation. They tend to favour companies that are able to generate solid organic revenue growth, have pricing power in their markets, strong balance sheets and offer a more defensive growth profile.
They have the flexibility to invest in both large and mid cap stocks that are located in Western Europe and the Pacific basin, but the focus tends to be more on the larger cap names. It is a very well diversified, holding approximately 80 names, with the top ten making up just over 20% of the fund.
Performance, particularly the longer term numbers are very strong compared with other international funds, posting first quartile returns more often than not. Shorter term however, while performance has been positive, it has lagged both the MSCI EAFE Index and its peer group. A big reason for this underperformance has been the fund’s European holdings. First, they were underweight the region, and second, their holdings simply did not deliver the returns expected.
Looking ahead, they remain cautious on the market. A lot of the market growth in the second half of last year was the result of central bank activity. Economic activity is only now starting to show some signs of improvement. Despite this macro headwind, their bottom up process allows them to continue to find interesting investment opportunities that meet their EQV criteria.
On balance, we like this fund for investors who are looking for actively managed exposure to international equities. There are other high quality international products available that offer comparable risk reward profiles including Mawer International Equity, Renaissance International Equity, and Omega Consensus International Equity. Cost conscious investors may want to consider the Mawer offering over this one because of its lower MER.