Why the Invesco Global Opportunities Fund?

Invesco Australia is a privately owned investment manager that provides services to institutional investors, financial advisors, and direct investors. It manages equity, fixed income, and balanced portfolios as well as investing in fixed income markets across the globe. The firm also has exposure to real estate and property. It employs fundamental and quantitative analysis with a bottom up stock picking approach to filter and select its investments. The firm is based in Melbourne. Invesco Australia Limited operates as a subsidiary of Invesco Ltd. The company manages more than $972.6bn in assets on behalf of clients worldwide via a comprehensive range of asset classes, investment styles and geographies. Nearly 7,000 employees focused on client needs across the globe with on ground presence in 25 countries.

The Global Opportunities Fund aims to provide long-term capital growth through a portfolio of global equities. It is not managed against a benchmark like most other funds, but the MSCI All Country World Net Total Return is used as a reference benchmark. The Fund primarily invests in global equities that are listed in developed or developing markets that generally have a minimum market capitalisation of US$1bn. The approach take is more of an active and research driven approach. The research team identifies significantly undervalued companies and leverages these opportunities through a bottom-up and fundamental investment process. Invesco basically seeks out companies with the following characteristics:

  • Has an attractive valuation.
  • Can deliver sustainable returns through the economic cycle.
  • Strong characteristics and fundamentals.
  • Solid management.
  • Disciplined capital allocation strategy.

The team also looks to identify whether there is an asymmetry between the expected rewards and risks taken. In order to limit the risks taken, the team will generally hold less than 40 stocks at any one time. However the fund does not borrow or raise money against the fund. Cash held in the fund can be anywhere from 0-5%. Usually it seeks to be fully invested at all times.

Why the Value Bucket?

The Invesco Global Opportunities Fund fits neatly into the Value bucket due to its fundamental value approach to selecting investments. The aim is to find undervalued companies that have been mispriced. They provide the greatest returns because they tend to revert to their intrinsic value. This means the fund may hold positions for five years or more. Almost every business must be a quality businesses. That is one that can deliver through economic cycles, one that has robust fundamentals and solid management. Once the team is confident that the company is undervalued, the team will take a position in the company and hold it for a 3-5 year average holding period.

Performance & Top Holdings

The fund’s yearly performance has been remarkably strong, returning 19.47% in 2017. Since inception the fund has produced 21.40% which outperformed by 4.14%. The fund’s strong performance has come from its approach to selecting investments. The top holdings in the portfolio are financials (26.48%), Energy (17.85%), Industrials (15.48%), Consumer Cyclical (12.27%) and Healthcare (9.43%).  The Top 5 countries the fund is exposed to are: US 30.66%, UK 26.57%, Germany 11.21%, Canada 6.34% and Brazil 5.75%. The top 10 holdings in the portfolio are:

Here are the portfolio parameters:

  • 45 stocks
  • Minimum stock position size 1.2%, maximum 8%
  • Maximum of 10% of portfolio in companies with <US$2.5bn market cap
  • Exposure to a minimum of 5 GICS sectors
  • Maximum emerging markets exposure: 25% of portfolio
  • Cash < 5%.

What is interesting about the investment style is the funds tilt towards energy stocks. Invesco believes the global oil demand is set to soar as the number of automobiles in India rise. This is despite the current Electric Vehicle (EV) revolution that is underway. Oil demand for transport will be the biggest contributor.


The Invesco Global Opportunities Fund is suitable for investors who seek to generate returns from a high quality portfolio of undervalued global assets. The fund allows its investors to diversify their existing portfolio through the exposure to US, UK, Pacific, Japan and Latin America. The Fund does offer investors a range of benefits. These include: Access to a specialist global investment manager with significant resources, a focus towards long term capital growth, exposure to a diversified portfolio of global shares and the ability to regularly access your funds. However, investors must be aware that there is substantial risk associated with this fund. It is unavoidable. The value of your investment in the fund is not guaranteed and its underlying assets can rise and fall. The amount of any income distributed can vary. The specific risks exposed to this fund are:

  • Market risk which is the risk that relates to investment markets.
  • Fund risk is the risk that the fund could terminate.
  • Emerging market risk are risks that securities in developing countries may be negatively affected by inflation, devaluation of currencies, higher transaction costs, delays and adverse political movements.
  • Foreign Currency risks are risk of incurring losses in relation to the value of overseas investments as a result of movements in currency.

There are a number of ways to gain international exposure to your portfolio and there are also a lot of reasons to do it. For one a large portion of the population lives in the US, UK and Emerging markets. Therefore it makes to have a sizable percentage of your portfolio exposed to these countries. Some of the EM world may be developing, but will eventually catch up with the rest of the developed world. International exposure also gives investors access to stocks in the advanced nations outside of Australia and provides diversification which is important to cushion the blow if one area of a portfolio tanks. Diversifying across global markets can help counter some of the losses you could face if China or Australia suffers a downturn. This reduces the risk of your entire investment portfolio being derailed in the event that your local economy slumps. Another big benefit of looking offshore is the opportunity to gain exposure to a broader range of investments than those available in the Australian market. Overall, there are very limited options for investing in overseas. We think Invesco does a good job of doing this but offshore is not without risk. So it’s important to consider the country specific and currency risks involved.