CHTRX
Invesco Charter-A
Introduction to Invesco Charter-A
Invesco Charter-A (CHTRX) is a mutual fund designed to provide investors with growth of capital, while also offering current income as a secondary objective. The fund achieves this by investing primarily in dividend-paying common stocks that have strong prospects for both capital appreciation and dividend income. As a large-cap fund, CHTRX focuses on well-established companies with significant market capitalization, providing a blend of stability and growth potential. Managed by Invesco, a reputable name in the investment industry, this fund is tailored for investors seeking a balance between growth and income, with a particular emphasis on large-cap equities.
At A Glance
Executive Summary
CHTRX offers growth with dividend income, focusing on large-cap stocks. It has a competitive 1-year return of 37.56% and a 1.03% expense ratio.
Strong 1-year return of 37.56%. Focus on large-cap, dividend-paying stocks. High correlation with S&P 500, offering market-like exposure.
Higher expense ratio at 1.03%. Negative alpha and Sharpe ratio. Limited yield at 0.29%.
Performance Highlights: A Year of Growth
In the past year, Invesco Charter-A has delivered an impressive 1-year return of 37.56%, closely aligning with its benchmark, the S&P 500 Total Return Index, which posted a 37.62% return. This performance underscores the fund’s ability to capture market gains effectively, making it an attractive option for growth-oriented investors. Despite its strong annual performance, the fund’s alpha is slightly negative at -0.11%, indicating that it has not outperformed the benchmark on a risk-adjusted basis. However, its beta of 0.98 suggests that the fund’s volatility is nearly identical to the market, providing investors with a familiar risk profile.
Portfolio Composition: A Focus on Technology
The portfolio of Invesco Charter-A is heavily weighted towards the technology sector, which constitutes 31.90% of its holdings. This significant allocation reflects the fund’s strategy to capitalize on the growth potential of tech giants such as Microsoft Corp, NVIDIA Corp, and Apple Inc, which are among its top holdings. The fund also maintains substantial positions in other sectors like healthcare (11.98%) and financials (13.19%), providing diversification across industries. This sector allocation strategy is designed to balance growth opportunities with stability, leveraging the robust performance of technology stocks while mitigating risks through exposure to other sectors.
Risk Metrics: Understanding the Volatility
Invesco Charter-A exhibits a beta of 0.98, indicating that its price movements are closely aligned with the broader market. The fund’s standard deviation of 3.55% suggests moderate volatility, which is typical for a large-cap equity fund. However, the Sharpe ratio of -0.01 and Treynor ratio of -0.11 highlight some concerns regarding risk-adjusted returns, as these metrics suggest that the fund has not been adequately compensated for the risks taken. Additionally, the fund’s maximum drawdown of -8.3% over a short period indicates potential vulnerability during market downturns, although its quick recovery suggests resilience.
Comparative Analysis: How CHTRX Stacks Up
When compared to similar funds, Invesco Charter-A holds its ground with a competitive 1-year return of 37.56%. For instance, Columbia Contrarian Core-A (LCCAX) and Boston Common ESG Impact US Equity (BCAMX) have slightly lower returns of 34.85% and 36.56%, respectively. However, CHTRX’s expense ratio of 1.03% is higher than its peers, such as Eaton Vance Tax-Managed Growth 12-A (EXTGX) with an expense ratio of 0.89%. This higher cost could be a consideration for cost-sensitive investors. Despite this, CHTRX’s strong performance and strategic sector allocation make it a compelling choice for those prioritizing growth.
Investor Suitability: Who Should Consider CHTRX?
Invesco Charter-A is particularly well-suited for investors seeking growth through exposure to large-cap, dividend-paying stocks. Its focus on technology and other high-growth sectors makes it ideal for those with a higher risk tolerance looking to capitalize on market upswings. The fund’s high correlation with the S&P 500 (98.65%) offers investors market-like exposure, which can be appealing for those who prefer to track the broader market’s performance. However, the fund’s higher expense ratio and modest yield of 0.29% may not be suitable for income-focused investors or those seeking low-cost investment options.
Expense Considerations: Balancing Cost and Performance
The expense ratio of Invesco Charter-A stands at 1.03%, which is relatively high compared to some of its peers. This cost factor is crucial for investors to consider, as it can impact net returns over time. While the fund’s strong performance may justify the higher expense for some, cost-conscious investors might weigh this against the potential benefits. It’s important to note that the fund’s management team leverages its expertise to select high-potential stocks, which could offset the higher costs through superior returns. Nonetheless, investors should assess whether the fund’s performance aligns with their financial goals and cost expectations.
Conclusion: A Strategic Choice for Growth Seekers
Invesco Charter-A stands out as a strategic choice for investors seeking growth through large-cap, dividend-paying stocks. Its impressive 1-year return of 37.56% and strategic sector allocation, particularly in technology, underscore its potential for capital appreciation. While the fund’s higher expense ratio and modest yield may deter some, its alignment with the S&P 500 and focus on high-growth sectors make it an attractive option for those with a growth-oriented investment strategy. Investors should consider their risk tolerance and investment objectives to determine if CHTRX aligns with their portfolio needs.
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