CAAMX
Invesco Select Risk Mod Conserv Inv-A
A Balanced Approach to Conservative Investing
The Invesco Select Risk Mod Conserv Inv-A (CAAMX) is designed for investors seeking a balanced approach to conservative investing. As a fund of funds, CAAMX strategically allocates 60% of its assets to fixed-income funds and 40% to equity funds. This allocation aims to provide a total return consistent with a lower level of risk compared to the broader stock market. The fund’s conservative nature is reflected in its low beta of 0.42, indicating reduced volatility and a focus on capital preservation. This makes CAAMX an attractive option for risk-averse investors looking for steady growth and income.
At A Glance
Executive Summary
CAAMX offers a conservative mix of 60% bonds and 40% equities, with a 0.94% expense ratio and 2.26% yield, ideal for risk-averse investors.
Balanced exposure to bonds and equities Low beta of 0.42 for reduced volatility Strong 1-year return of 15.15%
Higher expense ratio compared to peers Negative three-year return Limited upside potential
Performance in a Volatile Market
CAAMX has demonstrated resilience in a volatile market, with a notable 1-year return of 15.15%. This performance is particularly impressive given the fund’s conservative allocation strategy. However, the fund’s three-year return is negative at -0.90%, highlighting the challenges faced in recent years. Despite this, the fund’s 10-year annualized return of 3.52% suggests a long-term growth potential. The fund’s performance is benchmarked against the S&P 500 Total Return Index, which had a 1-year return of 37.62%. While CAAMX underperformed the benchmark, its lower risk profile and focus on capital preservation provide a different value proposition for investors.
Strategic Asset Allocation
CAAMX’s strategic asset allocation is a key feature that sets it apart. With 63.72% of its assets in bonds and 27.98% in U.S. equities, the fund offers a diversified exposure to both fixed-income and equity markets. The bond allocation is further diversified across corporate, government, and securitized sectors, providing a stable income stream. The equity portion includes a significant allocation to technology (22.83%) and financials (13.33%), sectors known for their growth potential. This balanced approach aims to mitigate risk while capturing growth opportunities, making CAAMX suitable for conservative investors seeking a diversified portfolio.
Comparative Analysis with Peers
When compared to similar funds, CAAMX stands out for its balanced approach and conservative risk profile. Similar funds like Empower Moderately Cnsrv Prfl-Inv (MXDPX) and Fidelity Adv Asset Manager 40-A (FFNAX) offer slightly higher 1-year returns of 15.78% and 15.81% respectively, but with lower expense ratios. CAAMX’s expense ratio of 0.94% is higher than its peers, which may be a consideration for cost-conscious investors. However, CAAMX’s focus on capital preservation and steady income makes it a compelling choice for those prioritizing stability over aggressive growth.
Risk Metrics and Volatility
CAAMX’s risk metrics highlight its conservative nature, with a low standard deviation of 1.86% and a beta of 0.42, indicating reduced volatility compared to the broader market. The fund’s alpha of -22.51% and Sharpe ratio of -3.50 suggest challenges in generating excess returns relative to its risk. However, the fund’s downside risk is limited, with a maximum drawdown of -3.6%, demonstrating its resilience in market downturns. These metrics underscore CAAMX’s suitability for investors seeking a conservative investment with a focus on capital preservation and reduced volatility.
Sector and Market Cap Diversification
CAAMX offers a well-diversified portfolio across various sectors and market capitalizations. The fund’s equity allocation includes significant exposure to technology (22.83%), financials (13.33%), and industrials (12.21%), providing growth potential in key sectors. Additionally, the fund’s market cap allocation is diversified, with investments in small, medium, and large-cap stocks, ensuring a broad exposure to different market segments. This diversification helps mitigate sector-specific risks and enhances the fund’s ability to capture growth opportunities across the market.
Income Generation and Yield
With a yield of 2.26%, CAAMX provides a steady income stream for investors. The fund’s income generation is supported by its significant allocation to fixed-income securities, including corporate and government bonds. This focus on income generation aligns with the fund’s objective of providing a total return consistent with a lower level of risk. The fund’s yield is competitive within its category, offering a reliable source of income for conservative investors seeking stability and regular payouts.
Conclusion: A Conservative Choice for Risk-Averse Investors
In conclusion, the Invesco Select Risk Mod Conserv Inv-A (CAAMX) is a compelling choice for conservative investors seeking a balanced approach to risk and return. With its strategic allocation to bonds and equities, the fund offers a diversified portfolio that aims to provide steady growth and income. While the fund’s expense ratio is higher than some peers, its focus on capital preservation and reduced volatility makes it an attractive option for risk-averse investors. CAAMX’s performance in a volatile market, coupled with its income generation capabilities, underscores its suitability for those prioritizing stability and steady returns.
Similar Securities
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PIAFX: Invesco Multi-Asset Income-A | Diversified Income for Conservative Investors
PIAFX offers a 6.18% yield with diversified income sources, ideal for conservative investors. Its 0.85% expense ratio is competitive.
INPAX: American Funds Conservative Gr & Inc-A | Conservative Growth & Income Fund
INPAX offers a balanced approach with a 3.81% yield and a focus on dividend stocks and bonds, suitable for conservative investors.
OACIX: Invesco Select Risk Conservative Inv-A | Income-Focused Asset Allocation
OACIX offers a conservative approach with 70% fixed income allocation, a 2.98% yield, and a 0.89% expense ratio, ideal for income-focused investors.
CAAMX: Invesco Select Risk Mod Conserv Inv-A | Balanced Conservative Investment
CAAMX offers a conservative mix of 60% bonds and 40% equities, with a 0.94% expense ratio and 2.26% yield, ideal for risk-averse investors.
Futher Reading
https://www.morningstar.com/funds/xnas/CAAMX/quote
https://finance.yahoo.com/quote/CAAMX/”>Yahoo: Invesco Select Risk Mod Conserv Inv-A
https://ftcloud.fasttrack.net/web/chart/CAAMX
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