Invesco goes global
INVESCO has launched a global theme fund for the Australian retail and wholesale markets.
INVESCO has launched a global theme fund for the Australian retail and wholesale markets.
The company launched its first theme fund in Canada three years ago and now has $20 billion under management globally.
Theme funds have an investment strategy based on specific sectors, such as natural resources, telecommunications or healthcare, and the manager invests in those sectors in markets around the world.
Traditionally, most global funds have based their investment strategy on areas such as Asia or North America.
INVESCO chief investment officer Derek Webb says globalisation of companies is making regional investment strategies meaningless.
“Globalisation of markets and companies means geographic location is becoming secondary to the company’s brand, product and growth opportunities,” he says.
“Modern infrastructure and telecommunications have enabled world-class companies to utilise resources from anywhere and reach any market in the world.”
Webb says the model INVESCO developed for theme funds outperformed the MSCI World Index by 10 per cent over an 18-year period. The Canada theme fund has given returns of 29.10 per cent over two years, compared to the MSCI World Index which returned 21.77 per cent during the same period.
The theme funds are divided into seven sectors, each of which has an investment of between three and 12 stocks in each theme. The fund has between 50 and 80 stocks in total, out of about 20,000 stocks that are available globally. No holdings are above 3 per cent, to allow for diversification.
Stocks are sold when there is a negative on earnings, Webb says, and this gives a tracking error of 5.8 per cent against MSCI.
For advisers the new retail theme fund is offering an upfront 4 per cent fee and a trail of 0.35 per cent. Minimum investment is $1000.
The wholesale fund has a minimum investment of $50,000 and an MER of 1.1 per cent. The management fee is 0.75 per cent.
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