FSTUX
Invesco Dividend Income-Inv
Introduction to Invesco Dividend Income-Inv
The Invesco Dividend Income-Inv (FSTUX) is a mutual fund designed to provide investors with both income and long-term capital appreciation. As a Large Cap Value fund, it primarily invests in stocks that offer above-market yields, making it an attractive option for those seeking to earn income while preserving assets and building capital. Managed by Invesco, a reputable name in the investment industry, FSTUX aims to balance risk and reward by focusing on high-yielding, large-cap stocks. With an expense ratio of 0.94%, the fund offers a competitive edge in the equity-income category, appealing to investors who prioritize dividend income and value investing.
At A Glance
Executive Summary
FSTUX offers a 1.66% yield with a focus on high-yielding large-cap stocks, suitable for income and growth investors.
Focus on high-yielding stocks for income and growth. Strong sector allocation in Financials and Health Care. Competitive performance with a 26.50% 1-year return.
Higher expense ratio at 0.94% compared to peers. Negative alpha and Sharpe ratio indicate underperformance. Limited exposure to small-cap stocks.
Performance Analysis: A Year of Strong Returns
In the past year, FSTUX has delivered a robust return of 26.50%, showcasing its ability to generate significant income and capital appreciation for its investors. This performance is particularly noteworthy when compared to its benchmark, the S&P 500 Total Return Index, which posted a 37.62% return over the same period. While FSTUX’s return is slightly lower than the benchmark, it remains competitive within its category, especially considering its focus on high-yielding stocks. The fund’s annualized returns over five years stand at 9.04%, indicating consistent performance and the potential for long-term growth. Investors looking for a fund that balances income with growth potential may find FSTUX’s performance appealing.
Portfolio Composition: A Focus on Financials and Health Care
FSTUX’s portfolio is strategically allocated across various sectors, with a significant emphasis on Financials and Health Care, which together constitute over 37% of the fund’s holdings. This allocation reflects the fund’s strategy to invest in sectors that traditionally offer stable dividends and growth potential. Top holdings include industry giants like JPMorgan Chase & Co and UnitedHealth Group Inc, which are known for their strong financial performance and reliable dividend payouts. The fund’s sector allocation also includes substantial investments in Industrials and Defense, further diversifying its portfolio and reducing sector-specific risks. This diversified approach helps FSTUX maintain a balanced risk-reward profile, appealing to investors seeking stability and income.
Risk Metrics: Understanding the Fund’s Volatility
FSTUX exhibits a relatively low beta of 0.65, indicating that it is less volatile than the broader market. This lower volatility can be attractive to risk-averse investors who prefer stability over high-risk, high-reward investments. However, the fund’s negative alpha of -11.17% and Sharpe ratio of -1.14 suggest that it has underperformed relative to its risk-adjusted expectations. Additionally, the fund’s R-squared value of 67.30% indicates a moderate correlation with its benchmark, the S&P 500 Total Return Index. While the fund’s downside risk is relatively low, with a downside risk (UI) of 1.61, investors should be aware of its potential for underperformance in certain market conditions.
Comparative Analysis: How FSTUX Stacks Up Against Peers
When compared to similar funds, FSTUX holds its ground with a 1-year return of 26.50%, outperforming some peers like BNY Mellon Appreciation-Inv (DGAGX) with a 23.72% return. However, it falls slightly behind others such as Bright Rock Quality LargeCap-Inst (BQLCX), which achieved a 26.88% return. FSTUX’s expense ratio of 0.94% is higher than many of its peers, which may be a consideration for cost-conscious investors. Despite this, its focus on high-yielding stocks and a diversified sector allocation provides a unique value proposition. Investors should weigh these factors against their investment goals and risk tolerance when considering FSTUX as part of their portfolio.
Sector Allocation: A Strategic Approach to Income and Growth
FSTUX’s sector allocation is a testament to its strategic approach to achieving income and growth. With a 20.49% allocation in Financials and 16.55% in Health Care, the fund targets sectors known for their resilience and dividend-paying capabilities. The inclusion of sectors like Industrials and Defense, each accounting for over 10% of the portfolio, further enhances its growth potential. This diversified sector strategy not only aims to capture income through dividends but also seeks capital appreciation by investing in sectors with strong growth prospects. Such a balanced approach makes FSTUX an attractive option for investors looking to benefit from both income and growth opportunities.
Market Cap Allocation: Emphasizing Large-Cap Stability
FSTUX predominantly invests in large-cap stocks, with 50.21% of its portfolio allocated to this market cap segment. This focus on large-cap stocks provides stability and reduces volatility, as these companies are typically well-established with strong financials and consistent dividend payouts. Additionally, the fund allocates 25.46% to extra-large-cap stocks, further enhancing its stability. The remaining allocation includes 21.04% in medium-cap stocks, offering a blend of growth potential and income. This market cap distribution aligns with the fund’s objective of providing income and long-term capital appreciation, making it suitable for investors seeking a stable yet growth-oriented investment.
Conclusion: Is FSTUX the Right Choice for You?
Invesco Dividend Income-Inv (FSTUX) stands out as a compelling option for investors seeking a blend of income and growth through high-yielding large-cap stocks. Its strategic sector and market cap allocations provide a balanced approach to risk and reward, appealing to those who prioritize stability and income. However, potential investors should consider the fund’s higher expense ratio and recent underperformance in risk-adjusted metrics. FSTUX is best suited for value-focused investors who are comfortable with its risk profile and are looking for a fund that offers both income and the potential for capital appreciation. As always, investors should align their investment choices with their financial goals and risk tolerance.
Similar Securities
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LCEAX: Invesco Diversified Dividend-A | Equity-Income Large Cap Value Fund
LCEAX offers a diversified large-cap value portfolio with a 1.48% yield and a focus on equity-income, suitable for conservative growth investors.
LBISX: BrandywineGLOBAL Dvrsf US LargeCp Val-IS | Undervalued Large-Cap Growth
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JIDVX: Janus Henderson US Dividend Income-I | Dividend-Focused Equity Fund
JIDVX offers a 1.91% yield with a focus on U.S. dividend-paying equities, maintaining a competitive 0.79% expense ratio.
FISEX: Franklin Equity Income-A | High Income & Capital Appreciation
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Futher Reading
https://finance.yahoo.com/quote/FSTUX/”>Yahoo: Invesco Dividend Income-Inv
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