AMHYX
Invesco High-Yield-A
High-Yield Income Focus
Invesco High-Yield-A (AMHYX) is designed to provide investors with a high level of current income by primarily investing in publicly-traded, non-investment grade debt securities. This focus on high-yield bonds, commonly referred to as junk bonds
At A Glance
Executive Summary
AMHYX offers a 6.71% yield with a focus on high current income from non-investment grade debt, outperforming peers with a 13.74% 1-year return.
High current income with 6.71% yield. Strong 1-year return of 13.74%. Diversified sector allocation with focus on Health Care and Technology.
Higher expense ratio at 1.05%. Non-investment grade debt increases risk. Limited exposure to government and securitized bonds.
allows the fund to offer a substantial yield of 6.71%, which is attractive for income-seeking investors. The fund also considers capital growth opportunities when selecting securities, providing a dual benefit of income and potential appreciation. This makes AMHYX particularly appealing to investors looking for higher returns in a low-interest-rate environment, albeit with increased risk due to the nature of the underlying assets.
Impressive Recent Performance
AMHYX has demonstrated impressive performance over the past year, with a 1-year return of 13.74%, significantly outperforming its benchmark, the BBG Barclay Agg Bond- US Composite TR Ix, which returned 7.85% over the same period. This strong performance can be attributed to the fund’s strategic allocation in high-yield bonds, which have benefited from favorable market conditions. The fund’s ability to generate superior returns compared to its benchmark highlights its effective management and the potential for continued success in delivering high income and capital appreciation to its investors.
Sector Allocation Strategy
The fund’s sector allocation is heavily weighted towards Health Care and Technology, comprising 51.34% and 19.99% of the portfolio, respectively. This strategic focus on sectors with strong growth potential and resilience in various economic conditions positions AMHYX to capitalize on emerging trends and innovations. Additionally, the fund’s exposure to cyclical sectors at 17.47% provides a balanced approach to capturing opportunities during economic upswings. This diversified sector allocation not only enhances the fund’s growth prospects but also mitigates risks associated with over-concentration in any single sector.
Risk and Volatility Management
AMHYX exhibits a commendable risk management profile, as evidenced by its risk metrics. With a beta of 0.54, the fund demonstrates lower volatility compared to the broader market, indicating a more stable investment option for risk-averse investors. The fund’s Sharpe Ratio of 1.44 and Treynor Ratio of 10.81 further underscore its ability to deliver superior risk-adjusted returns. Additionally, the fund’s downside risk, measured by a downside risk (UI) of 0.50, and a max drawdown of -1.7%, reflect its resilience in adverse market conditions, making it a reliable choice for investors seeking high income with controlled risk exposure.
Competitive Expense Ratio
While AMHYX’s expense ratio of 1.05% is higher than some of its peers, it remains competitive within the high-yield bond category. This expense ratio is justified by the fund’s strong performance and the expertise of its management team in navigating the complexities of the high-yield market. Investors should weigh the cost against the fund’s ability to deliver superior returns and high income, as evidenced by its recent performance. For those prioritizing income and growth potential, the expense ratio may be a worthwhile trade-off for the benefits offered by AMHYX.
Comparison with Similar Funds
When compared to similar funds such as TRPrice Credit Opportunities-Inv (PRCPX), Virtus Seix High Yield-A (HYPSX), and Eaton Vance High Income Opportunities-A (ETHIX), AMHYX stands out with its higher 1-year return of 13.74%. While its expense ratio is slightly higher, the fund compensates with a robust yield and strong performance metrics. The fund’s strategic sector allocation and risk management further differentiate it from its peers, making it a compelling choice for investors seeking high income and growth potential in the high-yield bond space.
Investor Suitability and Considerations
AMHYX is particularly suitable for investors seeking high current income and willing to accept the risks associated with non-investment grade debt. The fund’s focus on high-yield bonds offers the potential for substantial returns, making it an attractive option for income-focused investors. However, the higher risk profile due to the nature of junk bonds necessitates a careful assessment of individual risk tolerance. Investors should also consider the fund’s expense ratio and compare it with the benefits of its strong performance and yield. Overall, AMHYX is best suited for those with a moderate to high-risk appetite looking for income and growth opportunities.
Conclusion: A High-Income Opportunity
Similar Securities
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PAIHX offers a 6.37% yield with a focus on high yield bonds, boasting a strong 1-year return of 14.35% and a low beta of 0.42.
WAHYX: Western Asset High Yield-I | High Yield Junk Bond Fund
WAHYX offers a high yield of 7.53% with a focus on U.S. dollar-denominated junk bonds, providing strong returns for risk-tolerant investors.
SHIAX: Western Asset Short-Duration High Inc-A | High-Yield Corporate Bond Fund
SHIAX offers a high yield of 7.27% with a diversified portfolio of corporate bonds, outperforming its benchmark with a 12.26% 1-year return.
ACTHX: Invesco High-Yield Municipal-A | Tax-Exempt Income with High Yield
ACTHX offers a 5.14% yield with a focus on medium and lower-grade municipal securities, providing tax-exempt income for high-risk investors.
FRHIX: Franklin High-Yield Tax-Free Income-A1 | High-Yield Tax-Free Municipal Bonds
FRHIX offers a high tax-free yield with a 4.47% return, focusing on lower-rated municipal bonds. It stands out with a 14.30% 1-year return and a 0.68% expense ratio.
Futher Reading
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