ASRCX
Invesco Global Real Estate Income-C
Introduction to ASRCX’s Investment Strategy
The Invesco Global Real Estate Income-C (ASRCX) fund is designed to provide investors with high current income, with capital appreciation as a secondary objective. This fund primarily invests in income-producing securities, including common stocks, preferred stocks, and convertible preferred shares, with a significant focus on real estate investment trusts (REITs). By allocating at least 80% of its assets to debt securities issued by REITs, ASRCX offers a unique opportunity for investors seeking exposure to the global real estate market. The fund’s strategy is particularly appealing to those looking for a steady income stream, as it leverages the income-generating potential of real estate assets.
At A Glance
Executive Summary
ASRCX offers high income with a 2.81% yield, focusing on real estate securities. It has a high expense ratio of 1.96% but provides global exposure.
High current income focus Global real estate exposure Diverse asset allocation
High expense ratio Negative risk metrics Underperformance compared to benchmark
Performance Analysis: A Mixed Bag
ASRCX has shown a mixed performance over various time frames. Over the past year, the fund has delivered a return of 13.88%, which is commendable. However, its longer-term performance has been less impressive, with a five-year annualized return of just 0.09% and a ten-year return of 1.95%. These figures suggest that while the fund can capitalize on short-term market opportunities, it struggles to maintain consistent growth over extended periods. Compared to its benchmark, the MSCI World DivAdj Index, which posted a 31.60% return over the past year, ASRCX has underperformed significantly. This underperformance highlights the challenges the fund faces in achieving its capital appreciation objective.
Risk Metrics: Navigating Volatility
The risk metrics for ASRCX indicate a challenging environment for the fund. With an alpha of -17.76% and a Sharpe ratio of -1.55, the fund has struggled to generate returns that justify its risk level. The beta of 0.66 suggests that the fund is less volatile than the market, which could be appealing to risk-averse investors. However, the downside risk (UI) of 3.76 and a max drawdown of -8.4% indicate potential vulnerabilities during market downturns. The fund’s correlation with its benchmark is relatively low at 62.37%, suggesting that it may not move in tandem with broader market trends, which could be a double-edged sword for investors.
Portfolio Composition: A Real Estate Focus
ASRCX’s portfolio is heavily concentrated in the real estate sector, with 100% of its sector allocation dedicated to real estate assets. This focus is reflected in its top holdings, which include major REITs such as Prologis Inc, Equinix Inc, and Public Storage. The fund’s asset class allocation further emphasizes its real estate orientation, with 43.84% in U.S. equity and 27.55% in non-U.S. equity. This global approach provides investors with diversified exposure to real estate markets across different regions. Additionally, the fund holds a significant portion of its assets in securitized bonds, accounting for 65.25% of its bond sector allocation, which supports its income-generating strategy.
Comparative Analysis: Standing Against Peers
When compared to similar funds, ASRCX presents a mixed picture. While it offers a higher yield of 2.81%, its expense ratio of 1.96% is considerably higher than those of its peers, such as Mundoval (MUNDX) and Franklin International Equity-C (LMGEX), which have expense ratios of 0.0151 and 0.0205, respectively. Additionally, ASRCX’s one-year return of 13.88% lags behind MUNDX’s 18.11% and LMGEX’s 14.13%. These comparisons highlight the need for potential investors to weigh the fund’s income potential against its cost and relative performance. Despite its higher yield, the fund’s overall value proposition may be less attractive due to its higher expenses and lower returns.
Investor Suitability: Who Should Consider ASRCX?
ASRCX is best suited for investors seeking high current income with a focus on real estate assets. Its global exposure to real estate markets makes it an attractive option for those looking to diversify their income sources beyond traditional equity and bond investments. However, potential investors should be aware of the fund’s high expense ratio and its underperformance relative to its benchmark and peers. The fund’s lower volatility, as indicated by its beta, may appeal to conservative investors who prioritize income stability over aggressive growth. Overall, ASRCX is a niche investment that caters to specific income-focused strategies within the real estate sector.
Expense Considerations: A Costly Investment
One of the critical considerations for potential investors in ASRCX is its expense ratio, which stands at 1.96%. This is relatively high compared to other funds in the same category, which could impact the net returns for investors. High expenses can erode the income generated by the fund, making it less appealing for cost-conscious investors. While the fund offers a competitive yield of 2.81%, the high expense ratio may offset some of the income benefits. Investors should carefully evaluate whether the fund’s income potential justifies its cost, especially when there are lower-cost alternatives available in the market.
Conclusion: Balancing Income and Cost
In conclusion, the Invesco Global Real Estate Income-C (ASRCX) fund offers a unique investment opportunity for those seeking high current income through real estate assets. Its global exposure and focus on income-producing securities make it a compelling choice for income-focused investors. However, the fund’s high expense ratio and underperformance relative to its benchmark and peers are significant drawbacks. Investors should weigh these factors carefully and consider whether the fund’s income potential aligns with their investment goals and risk tolerance. For those who prioritize income and are willing to accept higher costs, ASRCX could be a suitable addition to their portfolio.
Similar Securities
PAGEX: TRPrice Global Real Estate-Adv | Global Real Estate Investment
PAGEX offers global real estate exposure with a 2.24% yield and a focus on capital appreciation, despite a higher expense ratio of 1.15%.
ASRCX: Invesco Global Real Estate Income-C | High Income Real Estate Fund
ASRCX offers high income with a 2.81% yield, focusing on real estate securities. It has a high expense ratio of 1.96% but provides global exposure.
BARDX: iShares Developed Real Estate IxFd-InvA | Global Real Estate Exposure
BARDX offers a 4.27% yield with a focus on developed market real estate equities, providing a unique global exposure with a competitive expense ratio.
IGREX: Invesco Global Real Estate-R5 | Global Real Estate Investment
IGREX offers a 2.19% yield with a focus on global real estate, providing diversification and income potential. Its 0.98% expense ratio is competitive.
JERSX: Janus Henderson Global Real Estate-S | Global Real Estate Investment
JERSX offers global real estate exposure with a 2.45% yield, focusing on capital appreciation and income. High expense ratio but strong 1-year return.
Futher Reading
https://finance.yahoo.com/quote/ASRCX/”>Yahoo: Invesco Global Real Estate Income-C
https://ftcloud.fasttrack.net/web/chart/ASRCX
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