2 / 5 Stars
1 1 5 3 1
Zacks Investment Research
5 (Strong Sell)
Standard & Poor's
3 / 5 Stars
#73 in Mid-Cap Blend
U.S. News evaluated 135 Mid-Cap Blend 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 23.01 percent over the past year, 10.70 percent over the past three years, 14.31 percent over the past five years, and 7.76 percent over the past decade.
|Trailing Returns||Updated 06.30.2014|
|Year to date||7.7%|
|3 Years (Annualized)||10.7%|
|5 Years (Annualized)||14.3%|
|10 Years (Annualized)||7.8%|
Over its history, the Invesco Mid Cap Core Equity fund has been a solid vehicle for investing in mid-size companies. But it has hit a rough patch recently. While the fund often performs much better than similar funds in bear markets compared with bull markets, 2010 was the first year in manager Ronald Sloan’s tenure that it ranked in the bottom 10 percent of its category.
As of July 03, 2014, the fund has assets totaling almost $2.63 billion invested in 78 different holdings. Its portfolio primarily consists of mid-cap stocks, some large-cap U.S. stocks, and an unusually large amount of cash.
That cash stake, which accounted for 19 percent of assets at the end of 2010, is a safety feature the fund uses to withstand volatility. The cash can be an advantage during downturns but causes the fund to lag its peers in bull markets. In 2010, however, much of the fund’s underachievement was due to stock selection. Holdings such as Boston Scientific and People’s United Financial have dragged the fund down so far in 2011. The fund has returned 23.01 percent over the past year and 10.70 percent over the past three years.
Over the long term, however, the fund has performed much better and beats its average peer’s 10-year trailing return. The fund has a low turnover rate, holding the average security for about four years. It also holds significantly more dividend stocks than its competitors. What differentiates the fund the most, however, is management’s tendency to make huge bets on specific sectors. As of the end of 2010, healthcare and industrials, combined, made up 42 percent of the fund’s portfolio. The fund has returned 14.31 percent over the past five years and 7.76 percent over the past decade.
Ronald Sloan searches the mid-cap universe for high-growth stocks with lower valuations. He tends to buy new positions at or less than 0.5 percent of the portfolio, If he sees room for growth, he may increase the position, but rarely allows a single position to grow to more than 3 percent of the portfolio.
Role in Portfolio
Role in portfolio: Morningstar calls this fund a core holding.
Ronald Sloan has led the fund since 1998. Douglas Asiello and Brian Nelson joined him in 2007 as co-managers. Sloan served as president of Verissimo research and management from 1993 to 1998.
Invesco Mid Cap Core Equity Fund has an expense ratio of 1.16 percent.
The fund’s expense ratio is slightly less than the category average, but its 5.5 percent sales charge is rather pricey compared with the competition. This load will drastically reduce returns over the long term.