5 / 5 Stars
5 5 2 4 4
Zacks Investment Research
5 (Strong Sell)
Standard & Poor's
4 / 5 Stars
#18 in Diversified Emerging Mkts
U.S. News evaluated 202 Diversified Emerging Mkts Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
The fund has returned -8.17 percent over the past year, 1.49 percent over the past three years, 19.27 percent over the past five years, and 11.93 percent over the past decade.
|Trailing Returns||Updated 02.28.2014|
|Year to date||-2.6%|
|3 Years (Annualized)||1.5%|
|5 Years (Annualized)||19.3%|
|10 Years (Annualized)||11.9%|
The Invesco Developing Markets fund has a longer investment horizon than many funds in its category, and focuses on companies with strong franchises and longer-term earnings growth prospects. As a result, the fund tends to invest in a broad mix of both value and growth stocks across a range of market capitalizations.
As of March 05, 2014, the fund has assets totaling almost $3.43 billion invested in 66 different holdings. Its portfolio consists of foreign value and growth stocks, mostly in the medium- to large-cap range.
Fund manager Steve Cao took advantage of the recent economic downturn to buy high-quality but undervalued firms. Fomento Economico, a Mexico-based soft drink company, and Chinese bank China Merchants were added to the portfolio in 2010, increasing the fund's already hefty exposure to the consumer discretionary sector and beefing up its holdings in the financial industry. The fund has returned -8.17 percent over the past year and 1.49 percent over the past three years.
Since its 1994 inception, the fund has consistently beat its benchmark and peers, returning 19.27 percent over the past five years and 11.93 percent over the past decade.
Fund manager Steve Cao keeps about 70 to 100 stocks in this fund and tends to favor consumer goods companies that cater to domestic demand. The fund's holdings are relatively diverse, and individual stocks generally don't exceed 5 percent of total assets. Unlike many of its peers in the emerging markets category, this fund doesn't just focus on growth stocks. Morningstar classifies the fund as large-blend, meaning that it has a broadly diversified portfolio across market capitalizations, and value and growth stocks. "We actively manage the portfolio by picking stocks, that's our key investment philosophy," Cao says. "We build our portfolio stock by stock. We don't do any macro focus, no top-down country or sector focus or allocation, and we don't follow or try to match any benchmark." The fund's turnover rate is also fairly low relative to its category. Cao says ideally, he would like to hold onto his stocks picks "forever," but says he tends to have at least a two- to three-year horizon for holding each investment.
Role in Portfolio
Morningstar has not assigned a role to this portfolio.
Steve Cao and Borge Endresen assumed control of the fund as co-leads in 2003. Prior to joining Invesco in 1997, Cao worked at Boatmen's Trust as an international equity analyst. Endresen joined Invesco in 1999 and previously worked as an associate financial consultant at Merrill Lynch. Mark Jason supports Cao and Endresen as a co-manager.
Invesco Developing Markets Fund has an expense ratio of 1.38 percent.
Emerging markets tend to be more volatile than developed markets.