OIDAX
Invesco International Diversified-A
Global Diversification with a Growth Focus
The Invesco International Diversified-A (OIDAX) fund is designed to provide investors with high total returns through a combination of capital appreciation and income. As a fund-of-funds
At A Glance
Executive Summary
OIDAX offers diversified international exposure with a focus on growth, featuring a high allocation to non-U.S. equities and a competitive yield.
Global diversification with high non-U.S. equity exposure. Focus on growth with a diversified sector allocation. Managed by Invesco, a reputable fund family.
Higher expense ratio compared to similar funds. Negative alpha indicating underperformance against benchmark. High downside risk with a significant max drawdown.
it invests in a variety of Oppenheimer global or international funds, offering a diversified approach to international investing. This structure allows investors to gain exposure to a wide range of international markets and sectors, making it an attractive option for those looking to diversify their portfolios beyond domestic equities. The fund’s primary objective is growth, aligning with its category as a Foreign-Large Growth fund, which typically focuses on companies with strong growth potential outside the United States.
Performance Analysis: A Mixed Bag
OIDAX has shown a mixed performance over various time frames. Over the past year, the fund has delivered a return of 12.17%, which is commendable but falls short of its benchmark, the MSCI ACWI xUS DivAdj Index, which returned 17.25% over the same period. The fund’s five-year annualized return stands at 2.53%, while its inception return is 5.41%. These figures suggest that while the fund has potential, it has struggled to consistently outperform its benchmark. The negative alpha of -5.10% further indicates that the fund has not been able to generate returns above the expected level given its risk profile, as measured by its beta of 1.08.
Sector and Asset Allocation: A Balanced Approach
OIDAX’s portfolio is well-diversified across various sectors, with significant allocations to Industrials (21.77%), Technology (21.31%), and Health Care (15.01%). This diversified sector allocation helps mitigate risks associated with sector-specific downturns. The fund’s asset allocation is heavily weighted towards non-U.S. equities, which constitute 92.31% of the portfolio, providing substantial international exposure. Additionally, the fund maintains a small allocation to cash (2.51%) and U.S. equities (4.55%), ensuring liquidity and some domestic market exposure. This balanced approach aligns with the fund’s objective of achieving growth through international diversification.
Risk Metrics: Navigating Volatility
The risk metrics for OIDAX highlight some areas of concern for potential investors. The fund’s beta of 1.08 indicates a slightly higher volatility compared to the market, while the Sharpe Ratio of -0.38 suggests that the fund has not been able to generate adequate returns for the level of risk taken. The fund’s downside risk, as measured by the Ulcer Index, is 2.95, indicating a moderate level of risk during market downturns. Additionally, the fund experienced a maximum drawdown of -8.6%, which is significant and may be a point of concern for risk-averse investors. These metrics suggest that while the fund offers growth potential, it also comes with a higher level of risk.
Comparative Analysis: Standing Among Peers
When compared to similar funds, OIDAX presents a mixed picture. For instance, BNY Mellon Worldwide Growth-A (PGROX) achieved a higher one-year return of 17.73% with a lower expense ratio of 1.13%. Similarly, Putnam International Equity-A (POVSX) and Federated Hermes Int’l Equity-A (PMIEX) also outperformed OIDAX with returns of 14.66% and 15.98%, respectively. These funds also offer lower expense ratios, making them potentially more attractive to cost-conscious investors. Despite these comparisons, OIDAX’s unique fund-of-funds structure and its focus on diversified international exposure remain key differentiators.
Expense Ratio: A Consideration for Cost-Conscious Investors
OIDAX’s expense ratio of 1.29% is relatively high compared to some of its peers, which may be a deterrent for cost-sensitive investors. For example, BNY Mellon Worldwide Growth-A (PGROX) and Federated Hermes Int’l Equity-A (PMIEX) offer lower expense ratios of 1.13% and 1.19%, respectively. While the higher expense ratio can be justified by the fund’s diversified international exposure and active management, investors should weigh this cost against the potential returns and benefits of investing in a fund-of-funds structure. It’s important for investors to consider whether the potential for higher returns and diversification justifies the additional cost.
Top Holdings: A Strategic Mix
The top holdings of OIDAX reflect its strategic focus on international growth opportunities. The fund’s largest holding is Invesco International Small-Mid Com R6 (OSCIX), which accounts for 29.88% of the portfolio, followed by Invesco EQV International Equity R6 (IGFRX) at 24.80% and Invesco Oppenheimer International Gr R6 (OIGIX) at 24.69%. These holdings indicate a strong emphasis on small to mid-cap international equities, which can offer significant growth potential. Additionally, the fund’s allocation to Invesco Developing Markets R6 (ODVIX) at 19.70% highlights its commitment to capturing growth in emerging markets. This strategic mix of holdings aligns with the fund’s growth objective and provides investors with exposure to a diverse range of international opportunities.
Conclusion: Is OIDAX Right for You?
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Futher Reading
https://finance.yahoo.com/quote/OIDAX/”>Yahoo: Invesco International Diversified-A
https://ftcloud.fasttrack.net/web/chart/OIDAX
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