| Fund Company | Invesco Canada Ltd. |
| Fund Type | Canadian Focused Equity |
| Rating | D |
| Style | Large Cap Blend |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Fair |
| TFSA Suitability | Fair |
| Manager | Clas Olsson since October 1997 Jason Holzer since April 1999 Richard Nield since August 2003 |
| MER | 2.65% |
| Code | AIM 303 – Front End Units AIM 301 – DSC Units |
| Minimum Investment | $500 |
Analysis: This Canadian focused equity fund is managed by Clas Olsson, Jason Holzer and Richard Nield using their “EQV” approach that focuses on a company’s earnings, quality and valuation. They look for high quality businesses that have the potential for accelerating or above average earnings growth that is sustainable, and is trading at an attractive valuation.
The portfolio is well diversified, holding just under 70 positions in a wide range of countries and sectors. The top ten make up 30% of the fund. Geographically the focus is on Canada, which is home to 60% of the fund, but it does have holdings across the U.S., Europe and Asia. Over a quarter of the fund is currently in Energy names, which is a slight overweight position. It is significantly underweight in financials and materials.
Shorter term performance has been strong, outpacing the S&P/TSX Composite and most of its peer group. As of January 31, the one year return was 8.3%, compared with 5.0% for the index. Longer term, it has lagged the index, but is in the upper half of the peer group.
Volatility has been lower than both the index and the peer group. Historically, it has done a decent job at protecting to the downside when markets fall, but has unfortunately not fully participated on the upside when markets rally.
In a recent commentary, the managers stated that they are somewhat cautious about the underlying growth and market fundamentals. They believe that most of the market returns have been driven by central bank easing, but have not noticed any significant improvement in the economic environment. They continue to find that valuations outside of the U.S. are quite attractive, despite the headline risk. The fund is defensively positioned.
Considering the above, it is our opinion that this is an average fund for most investors. It has a respected management team at the helm and offers a well diversified portfolio with a below average volatility profile. Unfortunately the return profile has been somewhat average, which leads us to believe that while this isn’t a bad fund, there are better options available for most investors.