Posted inIndustry viewsHead To Head

Head-to-head: Threadneedle vs Invesco

For investors around the world, 2015 is turning into a year best forgotten. Stocks, commodities and currency funds are suffering, and even the tiny gains in bonds are being gobbled up by inflation.

Threadneedle holds 75 to 95 stocks. Recently, the team has been reducing its holdings in economically-sensitive stocks and adding more defensive holdings to cushion its fund against risks associated with a possible US rate hike, the Greece debt crisis and the instability among emerging economies.

Invesco has a much less defensive play. The fund is led by Nick Mustoe, Invesco Perpetual’s CIO, who took over in December 2012 when his predecessors Paul Boyne and Doug McGraw stepped down. Mustoe makes high conviction calls, and this is demonstrated in the fund’s allocation – it only holds between 40 to 70 stocks.

Mustoe is a strong believer of the bottom-up approach; his regional equity teams usually possess deep local market knowledge.

Stocks are selected based on the individual attributes of the company, while taking into consideration industry and macroeconomic factors. Invesco’s average investment horizon is three years, after which an evaluation process will be done. The team will consider selling stocks when they are fully valued or when there are better opportunities elsewhere.

A snapshot of portfolio allocation:

  Threadneedle fund Invesco fund
Launch 27 June, 2007 3 March, 2011
AUM $2,400m $812.82m
Number of holdings  75-79 40-70
Top countries

US – 39.3%

UK-16.0%

Germany – 6.9%

Japan – 5.9%

Australia – 5.6%

US – 29.9%

UK-26.3%

Switzerland – 9.9%

France – 6.4%%

Germany – 5.6%

Top sectors

Financials – 24.7%

Consumer discretionary – 18%

Consumer staples – 13%

Industrials – 10.9%

Healthcare – 7.5%

Financials – 30.5%

Industrials – 14.1%

Healthcare – 12.4%

Energy – 9.7%

Consumer staples – 9%

Top holdings

Reynolds American – 2.4%

General Electric – 2.2%

Six Flags Entertainment Corp – 2.2% 

mperial Tobacco – 2.1%

Unilever – 2.1%

Novartis – 3.6%

BT – 3.4%

Legal & General – 3.1%

British American Tobacco – 3%

Intesa Shampoo – 2.8%

Part of the Mark Allen Group.