The Invesco Wholesale Australian Share Fund aims to provide long-term capital growth and distributions by investing in securities listed on the Australian sharemarket. The fund uses S&P/ASX 300 Accumulation Index as the benchmark.
During the month of September, equity markets in Australia posted negative returns with the ASX 300 declining as the higher for longer sentiment gained momentum. Despite this, the energy sector demonstrated resilience, while real estate and information technology stocks performed poorly. Towards the end of the month, fresh highs for the US 10-year yield and rising oil prices weighed on ASX 300. The CPI figure announced in August rose to 5.2% in line with expectations, while core inflation fell to 5.5%. At the same time, retail sales increased slightly during the month of August and the unemployment rate remained steady.
In September, Momentum detracted slightly, while Value and Quality had a positive impact on performance over the month. On the other hand, stock specific effects, which are not attributable to any proprietary factor, had a negative impact.
Impact from active sector weights, which are a by-product of the multi-factor optimisation process, was positive over the month. Here, both our overweight in the Energy sector and our underweight in Property Trusts had a positive impact, while our underweight in the Consumer Staples sector contributed negatively to results.
Contributors to performance
Over September, the Australian multi-factor model performed positively. Value outperformed Quality and Momentum, but all three factors ended the month in positive territory. Within Momentum, Earnings Momentum outperformed Price Momentum. Consumer discretionary, health care and IT were the best performing sectors.
Within our Australian universe, the highest rated stocks identified by our multi-factor model outperformed the broader market, while the least attractively rated stocks underperformed.
What is Invesco WS Aus Share Invesco WS Aus Share is an Managed Funds investment product that is benchmarked against ASX Index 200 Index and sits inside the Domestic Equity - Large Cap Neutral Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Invesco WS Aus Share has Assets Under Management of 57.47 M with a management fee of 0.44%, a performance fee of 0.00% and a buy/sell spread fee of 0.4%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Invesco WS Aus Share has returned 7.12% in the last month. The previous three years have returned 8.69% annualised and 13.86% each year since inception, which is when the Invesco WS Aus Share first started.
How is risk measured in this investment product?
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Invesco WS Aus Share first started, the Sharpe ratio is 0.37 with an annualised volatility of 13.86%. The maximum drawdown of the investment product in the last 12 months is -6.94% and -50.87% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product?
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Invesco WS Aus Share has a 12-month excess return when compared to the Domestic Equity - Large Cap Neutral Index of -3.61% and -0.68% since inception.
Does the investment product produce Alpha over its Peers?
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Invesco WS Aus Share has produced Alpha over the Domestic Equity - Large Cap Neutral Index of -0.41% in the last 12 months and -0.07% since inception.
What are similar investment products?
For a full list of investment products in the Domestic Equity - Large Cap Neutral Index category, you can click here for the Peer Investment Report.
What level of diversification will Invesco WS Aus Share provide?
Invesco WS Aus Share has a correlation coefficient of 0.98 and a beta of 1.12 when compared to the Domestic Equity - Large Cap Neutral Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers?
For a full quantitative report on Invesco WS Aus Share and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Invesco WS Aus Share with the ASX Index 200 Index?
For a full quantitative report on Invesco WS Aus Share compared to the ASX Index 200 Index, you can click here.
Can I sort and compare the Invesco WS Aus Share to do my own analysis?
To sort and compare the Invesco WS Aus Share financial metrics, please refer to the table above.
Has the Invesco WS Aus Share been independently verified by SMSF Mate?
This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
How can I invest in Invesco WS Aus Share?
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Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Invesco WS Aus Share. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - August 31, 2023 During the month of August, equity markets in Australia posted negative returns with the ASX 300 declining due to weak sector performances from utilities, consumer staples and industrials. The Reserve Bank of Australia opted to hold interest rates at 4.1% citing the fact that past increases had shown signs of cooling demand. It is now forecasting inflation falling back to target in late 2025. In addition, Australia’s unemployment rate rose by 20bps from 3.5% to 3.7%, while the Q2 year-on-year wage growth slowed to 3.6%, below estimates of 3.7%.
In August, Value detracted slightly, while Momentum and Quality had a positive impact on performance over the month. On the other hand, stock specific effects, which are not attributable to any proprietary factor, had a negative impact.
Impact from active sector weights, which are a by-product of the multi-factor optimisation process, was positive over the month. Here, both our overweight in the Energy sector and our underweight on the Health Care sector had a positive impact, while our underweight on the Gold sector contributed negatively to results.
Contributors to performance
Over August, the Australian multi-factor model posted positive results, with Quality, Momentum and Value ending the month in positive territory. All three factors showed a constant positive performance over the whole month. Among the factors, Quality was the strongest in the model.
Within our Australian universe, the highest rated stocks identified by our multi-factor model outperformed the broader market, while the least attractively rated stocks underperformed.
Performance Commentary - July 31, 2023 Australian equities were broadly positive in July, benefiting from the pause in RBA rate hikes. Led by Energy and Financials, most sectors bounced off their lows for the month, with the exception of staples and health care. The gap between earnings and dividend yields vs. AU 10Y has continued to narrow, while dividend yields are now at parity with bond yields. Valuations are above average, while earnings momentum is still lagging.
In July, Momentum detracted slightly, while Value and Quality had a significantly positive impact on performance over the month. Stock specific effects, which are not attributable to any proprietary factor, had a positive impact as well.
Impact from active sector weights, which are a by-product of the multi-factor optimisation process, was slightly negative over the month. Here, our marginal underweight in the Consumer Staples sector had a negative impact, while our overweight in the Consumer Discretionary and Energy sectors contributed positively to returns.
Contributors to performance
Over July, the Australian multi-factor model posted moderately positive results, with Quality and Value ending the month in positive territory. Momentum had a weak start to the month but was able to manage a flat performance to end the month. Among the factors, Value was the strongest in the model, while Quality was close behind.
Within our Australian universe, the highest rated stocks identified by our multi-factor model were flat, while the least attractively rated stocks outperformed.
Performance Commentary - June 30, 2023 Over June, the Australian multi-factor model moved back into positive territory, with Quality and Value posting strong results. Momentum had a good start to the month but declined in the last few trading days to end the month flat. Value was the strongest factor in the model with all underlying signals contributing positively.
Within our Australian universe, the highest rated stocks identified by our multi-factor model performed in line with the broader market, while the least attractively rated stocks underperformed.
Performance Commentary - April 30, 2023 The Australian equity market had a positive month in April, supported by the upgraded growth outlook in Europe. Nearly every sector in the ASX 200 was in the green for the month, with technology and industrials leading the gains, and materials being the only sector in the red. The March quarter inflation figures for Australia showed a headline rate of 7.0% and a core rate of 6.6%, with services inflation still being strong. March’s labour market data was better than expected, however there are indications that future job gains may be harder to achieve. With the mixed economic sentiments, the Reserve Bank of Australia (RBA) paused on rate hikes in April, but it is uncertain whether the hiking cycle is over.
In April, Momentum and Quality had a slightly positive impact on performance, whereas Value contributed negatively to active returns over the month. Stock specific effects, which are not attributable to any other factor, had a negative impact on active returns.
Impact from active sector weights, which are a by-product of the multi-factor optimisation process, was negative over the month. Here, our marginal overweight in the Materials sector had a negative impact on returns.
Performance Commentary - March 31, 2023 Australian equities eked out a small positive return in March, led by Gold stocks. The RBA raised its overnight cash rate target by 25 basis points to 3.6%, the tenth consecutive meeting with a rate rise announcement. Some bank failures in the US forced the Federal Reserve to introduce additional liquidity measures to support confidence and minimise the risk of contagion. Real Estate was the worst-performing sector as US banking issues and tight credit amplified existing concerns regarding Commercial Real Estate (CRE). Value outperformed Growth, largely due to strong returns for Resources, while Quality outperformed both as investors sought out lower risk equities in response to US banking concerns.
In March, Momentum and Value had no significant impact on performance, whereas Quality had a positive contribution to active returns over the month. Stock specific effects, which are not attributable to any other factor, had a negative impact on active returns.
Impact from active sector weights, which are a by-product of the multi-factor optimisation process, was negative over the month. Here, our underweight in Real Estate assisted, while the underweights in Gold and Health Care detracted.
Performance Commentary - February 28, 2023 Australia’s equity market declined during the month of February. Comments by US Federal Reserve officials, pointing towards a more prolonged restrictive monetary policy, led stocks to fall. Investors’ concerns over falling spot prices caused prices of Material stocks to fall significantly, putting further downward pressure on the index. February coincides with interim and final reporting season for the majority of Australian companies and this led to significant dispersion in returns.
Contribution from our multi-factor model was negative in February, despite moderately positive predictive power of the model. Momentum and Quality both contributed negatively to performance, whereas Value had a positive contribution to active returns over the month. The Stock specific effects, which are not attributable to any other factor, had a negative impact on active returns.
Impact from active sector weights, which are a by-product of the multi-factor optimisation process, was neutral over the month. An overweight in the Energy sector contributed positively to the performance and was offset by a negative contribution due to an underweight of the Information Technology sector.
Performance Commentary - January 31, 2023 Australian equities rallied over the month of January. The strong start to the year was mostly driven by a positive flow of news that indicated US inflation may moderate and reduce the forecast peak of monetary policy target interest rates. Sentiment was further supported in Australia with optimism regarding China’s reopening and somewhat lower than expected Australian employment numbers. Consumer Discretionary and Materials stocks led the market higher, while Utilities and Energy lagged.
Our multi-factor model had a slightly negative effect on the active performance in January. Value and Quality contributed slightly positively to relative return during the month, while Momentum had a negative impact on returns. Stock-specific effects, which are not attributable to any other factor, weighted negatively on performance.
Impact from active sector weights, which are a by-product of the multi-factor optimisation process, was neutral over the month. While our underweight in the utilities sector and our underweight in the health care sector added positively to performance, our overweight in the energy sector and underweight in financials sector had a negative impact on performance.
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