Performance evaluation of the Invesco Pacific Growth Fund
The Invesco Pacific Growth Fund – Class A (TGRAX) has been an above average performer for all the periods shown in the graph below. In the YTD period, the one we’re analyzing, the fund ranked third. We have graphed its performance against two combinations of ETFs: the Vanguard FTSE Pacific ETF (VPL) with the Vanguard FTSE Emerging Markets ETF (VWO) and the iShares Core MSCI Pacific ETF (IPAC) with the iShares MSCI Emerging Markets ETF (EEM).
Let’s look at what has contributed to the fund’s good YTD performance.
Portfolio composition and contribution to returns
Both consumer-focused sectors, discretionary and staples, have been the biggest drags on the fund’s returns in 2016. Japan’s Yamaha Motor has dragged discretionary stocks down. Meanwhile, South Korean companies Nongshim and Ottogi have hurt the staples sector. A silver lining for these sectors is that for both, there are a few stocks that are sizable positive contributors, and thus have helped the sectors reduce their losses.
Mitsubishi UFJ Financial Group (MTU) and Westpac Banking (WBK) have been detrimental to financials, but positive contributors have ensured that the contribution from the sector is marginally positive. MTU and WBK aren’t part of the portfolio anymore.
The information technology sector has been vital in helping the fund out of negative territory in 2016. Tencent Holdings Limited (TCEHY) and Taiwan Semiconductor Manufacturing (TSM) have powered the sector ahead. Though energy stocks don’t form part of TGRAX anymore, exposure to CNOOC (CEO) earlier in the year still makes the sector a positive contributor.
TGRAX has done better than both combinations of ETFs that we outlined earlier in the article. A concern regarding the fund is its extremely high rate of portfolio turnover. However, even after that, the fund has performed well. For those investors who aren’t too worried by frequent changes in a portfolio, TGRAX is an option for investing in Asia-Pacific.
Let’s now move on to the Vanguard Pacific Stock Index Fund – Investor Shares (VPACX).