Fund performance
Both of the funds deliver higher dividend yields than that of their respective benchmarks. While Threadneedle’s yield tends to be higher, one has to note that Invesco is often willing to trade off yields in return for better capital appreciation.
For the latest positioning of the two funds, Threadneedle is adding more defensive exposure while Invesco is leaning towards economically sensitive stocks due to attractive valuation.
A look at cumulative performance returns:
| Period | Threadneedle (%) | Invesco (%) |
|
6 months |
-7.08 | -3.01 |
| 1 year | 3.46 | 0.48 |
|
3 years |
27.12 | 30.63 |
| 5 years | 22.32 | 67.02 |
A snapshot of discrete annual performance to last quarter end:
| Period | Threadneedle (%) | Sector (%) |
| 1 year | -0.8 | 0.83 |
| 3 years | 19.77 | 25.85 |
| 5 years | -0.02 | -3.00 |
| Period | Invesco (%) | Sector (%) |
| 1 year | -4.51 | -5.79 |
| 3 years | 23.43 | 18.06 |
| 5 years | 6.25 | -5.68 |
A look at both funds’ volatility:
| Beta | Volatility | |
| Threadneedle | 1.0 | 10.00 |
| Invesco | 0.93 | 9.38 |
| MSCI AC World | – | 9.70 |
| MSCI World | – | 9.18 |
Ng noted that for investors seeking protection, Threadneedle’s returns and record would look appealing. For investors with a greater risk appetite, Invesco will be a suitable choice.
“Invesco could perform better going forward as the condition of stock markets stabilise. On the other hand, Threadneedle could offer better downside protection as uncertainties remain,” Ng said.
“Invesco will suit investors who value a balance between income and growth, while those who have a higher income focus can consider Threadneedle,” he added.
Management fees
Invesco offers class A entry – which allows investors to enter with a lower investment amount – at the annual management fee of 1.4% and latest ongoing charge at 1.71%. The charges for the comparable share class of the Threadneedle fund (Class 1) are 1.5% and 1.63% respectively.
Ng said that the fees of both funds are within the market range.
Conclusion
Taking both a short-term and a long-term view, Ng said that Invesco fares better. “The Invesco fund’s stock selection process has allowed it to consistently deliver strong risk-adjusted performance in both rising and falling markets,” according to Ng.
“Looking at FE crown ratings for both strategies, the Threadneedle fund is rated one crown while the Invesco fund is rated two crowns. This shows our conviction in Invesco’s strategy both in the short and long term,” Ng noted.
