ACPSX
Invesco Core Plus Bond-A
Introduction to Invesco Core Plus Bond-A
The Invesco Core Plus Bond-A (ACPSX) is a mutual fund designed to provide total return by investing primarily in investment-grade fixed income securities. With a focus on the Barclays Capital U.S. Aggregate Index, this fund aims to deliver consistent income while maintaining a relatively low risk profile. As part of the Intermediate Bond category, ACPSX is tailored for investors seeking a balance between income and capital preservation. The fund’s strategy involves allocating at least 80% of its net assets to fixed income securities, making it a suitable choice for those looking to diversify their portfolios with a stable income-generating asset.
At A Glance
Executive Summary
ACPSX offers a 4.63% yield with a focus on investment-grade bonds, outperforming its benchmark with a 10.64% 1-year return.
Strong 1-year return of 10.64%. High yield of 4.63%. Investment-grade bond focus.
Higher expense ratio of 0.75%. Recent underperformance over three years. Limited sector diversification.
Performance Highlights and Benchmark Comparison
ACPSX has demonstrated a strong performance over the past year, achieving a 10.64% return, which surpasses its benchmark, the BBG Barclay Agg Bond- US Composite TR Ix, which returned 7.85% over the same period. This outperformance can be attributed to the fund’s strategic allocation in investment-grade bonds and its effective management of interest rate risks. Despite a challenging market environment, ACPSX has managed to maintain a competitive edge, showcasing its ability to adapt and thrive. Investors looking for a fund that consistently outperforms its benchmark may find ACPSX an attractive option.
Portfolio Composition and Asset Allocation
The portfolio of ACPSX is heavily weighted towards bonds, with an allocation of 111.34% in this asset class, indicating the use of leverage to enhance returns. The fund’s bond sector allocation is diversified across corporate (31.68%), government (20.60%), and securitized (36.03%) sectors, providing a balanced exposure to various fixed income segments. Notably, the fund holds a significant portion in cash (11.36%), which can be utilized for strategic opportunities or to manage liquidity. This diversified approach helps mitigate risks associated with any single sector, making ACPSX a robust choice for investors seeking stability and income.
Risk Metrics and Volatility Analysis
ACPSX exhibits a relatively low risk profile, as evidenced by its beta of 0.95, indicating that it is slightly less volatile than the market. The fund’s alpha of 2.79% suggests that it has generated returns above the expected level given its risk, highlighting effective management. With a Sharpe ratio of 0.50, ACPSX offers a reasonable risk-adjusted return, balancing potential gains with the inherent risks. The fund’s standard deviation of 1.61% further underscores its stability, making it an appealing option for risk-averse investors. Additionally, the fund’s downside risk (UI) of 1.30 indicates a limited potential for loss, enhancing its appeal as a conservative investment.
Yield and Income Generation Potential
One of the standout features of ACPSX is its attractive yield of 4.63%, which is higher than many of its peers in the Intermediate Bond category. This yield is a result of the fund’s strategic focus on investment-grade bonds, which offer a reliable income stream. For income-focused investors, ACPSX provides a compelling opportunity to enhance portfolio returns through regular interest payments. The fund’s ability to maintain a high yield while managing risk effectively makes it a suitable choice for those seeking steady income without excessive exposure to market volatility.
Comparative Analysis with Similar Funds
When compared to similar funds such as PACE Intermediate Fixed Income-A (PIFAX) and Eaton Vance Total Return Bond-A (EBABX), ACPSX holds its ground with a competitive 1-year return of 10.64%. Although its expense ratio of 0.75% is higher than some peers, the fund compensates with a robust yield and strong performance metrics. For instance, MassMutual Diversified Bond-R5 (MDBSX) offers a higher yield of 9.24% but with a different risk profile. Investors should weigh these factors when considering ACPSX, as it provides a balanced approach to income generation and risk management.
Max Drawdown and Recovery Analysis
ACPSX experienced a maximum drawdown of -3.1%, with a drawdown length of 2 months and a recovery length of 2 months, indicating a relatively quick rebound from market downturns. This resilience is a testament to the fund’s effective risk management strategies and its focus on high-quality fixed income securities. The ability to recover swiftly from drawdowns is crucial for investors seeking stability and long-term growth. ACPSX’s performance during periods of market stress highlights its potential as a reliable component of a diversified investment portfolio.
Conclusion: Suitability for Income-Focused Investors
In conclusion, Invesco Core Plus Bond-A (ACPSX) stands out as a strong contender for income-focused investors seeking a blend of yield and stability. With a high yield of 4.63% and a proven track record of outperforming its benchmark, ACPSX offers a compelling investment opportunity. While the fund’s expense ratio is higher than some peers, its strategic allocation in investment-grade bonds and effective risk management make it a worthwhile consideration. Investors looking for a fund that balances income generation with risk mitigation will find ACPSX to be a suitable addition to their portfolios.
Similar Securities
PYTRX: Putnam Core Bond-Y | Diversified Fixed Income Strategies
PYTRX offers a 4.58% yield with a low 0.39% expense ratio, focusing on diversified fixed income strategies to outperform inflation.
WACPX: Western Asset Core Plus Bond-I | Diversified Fixed Income Investment
WACPX offers a 4.71% yield with a diversified bond portfolio, outperforming its benchmark with a 1-year return of 8.78%.
OPIGX: Invesco Core Bond-A | Growth and Income with Stability
OPIGX offers a competitive 4.52% yield with a focus on investment-grade bonds, maintaining stability with a low max drawdown of -3.7%.
JAFIX: Janus Henderson Flexible Bond-T | Intermediate Bond Investment
JAFIX offers a 4.68% yield with a focus on investment-grade debt, maintaining a low expense ratio of 0.68% and strong risk metrics.
MAHQX: BlackRock Total Return-Inst | Competitive Yield & Bond Exposure
MAHQX offers a 4.70% yield with a low 0.45% expense ratio, outperforming its benchmark with a 1-year return of 8.54%.
Futher Reading
https://finance.yahoo.com/quote/ACPSX/”>Yahoo: Invesco Core Plus Bond-A
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