Posted inHead To Head

HEAD-TO-HEAD: Invesco vs Pictet AM

FSA compares two Japanese equity funds: the Invesco Japanese Equity Advantage Fund and the Pictet Japanese Equity Selection Fund.
by Francis Nikolai Acosta

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The Invesco and Pictet funds versus their benchmark indices. Source: FE Analytics. In US dollars.

Performance

According to FE data, the Invesco fund has outperformed its benchmark on a three-, five- and 10-year basis.

Cumulative performance

Fund / benchmark

3 years

 5 years

10 years
Invesco Japanese Equity Advantage

30.68

 39.56

132.53
     Index: TSE Topix

28.56

 29.46

88.90
Pictet Japanese Equity Selection

31.95

 22.36

70.67
     Index: MSCI Japan

29.23

 27.40

85.59
Source: FE Analytics

On a yearly basis, the Invesco fund also tends to outperform the market, given its strong emphasis on quality.

“The Invesco fund tries to outperform the market regardless of what the current market condition is. They also seem to do well in a down market,” he added.

Discreet annual performance

Fund / benchmark

YTD 2019

 2018 2017 2016 2015

2014
Invesco Japanese Equity Advantage

7.31

 -9.34 29.86 5.14 9.26

-1.11
     Index: TSE Topix

7.72

 -13.73 26.55 3.46 11.69

-3.4
Pictet Japanese Equity Selection

8.02

 -16.48 25.41 3.64 6.7

-4.04
     Index: MSCI Japan

8.48

 -12.58 24.39 2.73 9.9

-3.72
Source: FE Analytics

Turning to the Pictet fund, Ng believes that the product’s performance depends on whether value stocks are in favour.

“If value stocks rally, the Pictet fund will benefit. But if there is a market rotation toward growth companies, the Pictet fund will underperform,” he said.

Taking 2016 as an example, he said that deep value stocks were favoured during the second half of the year and the Pictet product returned 14.6% while the Invesco fund only returned 3.1%.

“But for the full year 2016, the Invesco fund still outperformed. That means that in the first half, the Invesco fund’s outperformance was stronger in magnitude.”

In terms of volatility, the Invesco fund is less volatile than the Pictet product, according to data from FE.

Three-year annualised volatility

Fund / Index

Volatility
Invesco Japanese Equity Advantage

12.49
     Index: TSE Topix

12.39
Pictet Japanese Equity Selection

13.62
     Index: MSCI Japan

12.15
Source: FE Analytics

 

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