A Performance Breakdown of the Invesco Pacific Growth Fund (TGRAX)



Returns of the Invesco Pacific Growth Fund (TGRAX)

From a purely NAV (net asset value) return standpoint, in the one year period ended January 2016, TGRAX was the second best-performing fund among the nine funds chosen for this review. As a benchmark for all funds in this review, we’ll look at the MSCI AC Asia-Pacific Index.

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Standard deviation

Standard deviation is used for assessing risks associated with an investment. Simply put, it measures the deviation of a series of returns from its average. A wide deviation reflects high fluctuation in returns, resulting in higher risk, and vice-versa.

For the one-year period ending January 2016, the standard deviation for TGRAX stood at 14.9%. The MSCI AC Asia-Pacific Index had a standard deviation of 16.1% in the same period while the arithmetic average of the standard deviation of all funds in this review came in at 15.3%. Hence, the returns of TGRAX were less volatile than both the peer group average and the index.

The Sharpe Ratio

For realized returns, the Sharpe Ratio assesses the average return of a risk-free asset or security (like US Treasuries of a certain maturity) over its total risk, as represented by its standard deviation. The higher the Sharpe Ratio, the better the risk-adjusted performance.

The Sharpe Ratio for TGRAX for the one-year period ending January 2016 stood at -0.03. This risk-adjusted measure stood at -0.62 for the index. The TGRAX’s risk-adjusted measure, though negative, was the best among the nine funds in this review.

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Other metrics

The information ratio shows the consistency of the fund manager along with measuring his ability to generate excess returns over a benchmark. Given the benchmark, the information ratio of TGRAX was 2.15 for the one-year period ending January 2016, making it one of two funds with an information ratio of above 2, the other being the Fidelity Pacific Basin Fund (FPBFX). Meanwhile, the fund’s beta stood at 0.88, making it less susceptible to volatility compared to the index.

A note for investors

TGRAX invests in Taiwan Semiconductor Manufacturing (TSM), Tencent Holdings (TCEHY), Mitsubishi UFJ Financial Group (MTU), CNOOC (CEO), and China Mobile (CHL). And the fund had a great 2015, generating the most alpha among the funds in this review, with a high information ratio that shows the consistency of the fund managers in generating returns. These quantitative measures make TGRAX seem like a strong investment, but an analysis of longer-period performance would still serve potential investors.

Continue to the next part for an introduction to the Vanguard Pacific Stock Index Fund Investor Shares (VPACX).


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