HEAD-TO-HEAD: Invesco versus Schroders

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Investment approach

The two funds aim to generate long-term capital growth, but deploy contrasting investment strategies and styles in order to achieve their objectives.

“Schroders has a growth tilt, whereas Invesco has a value bias,” said Share.

There is perhaps a greater emphasis on posting consistently strong returns at the Schroder fund, while Invesco “looks for sustainable value by identifying ‘cheap’ stocks during a market downturn or when a disruptive event, such as a management change, causes a temporary mark-down in their price,” she said.

Schroders is also “more benchmark aware” than Invesco, and its actively-managed portion of its portfolio is 58%, compared with 76% in the Invesco fund which often takes big sector bets.

“The result is that the Schroders fund is typically more diversified than the Invesco fund, and is less inclined to take high conviction, high concentration positions,” said Share.

Schroders holds between 40 and 90 individual stocks, and Invesco owns between 30 and 60.

Both funds are supported by teams of analysts, and they adopt a bottom-up stock-picking approach.

However, Invesco also seems to make allocation decisions based on sector analysis. It has no exposure to financial or property stocks, “probably because of corporate governance concerns”, according to Share.

In contrast it has a large overweight to the consumer discretionary sector, double the 15% weighting in the MSCI Golden Index.

“The Schroder fund stays much closer to the benchmark,” said Share.

Source: Morningstar, FE Analytics

Market Exposure:

Sector Weightings (31 May 2019)

Source: Fund factsheets

Top 5 holdings (31 May 2019)

Source: Fund factsheets, 31 May 2019

Countries (31 May 2019)

Source: Fund factsheets, 31 May 2019

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