OAMIX
Invesco Select Risk Moderate Inv-A
Balanced Approach to Asset Allocation
The Invesco Select Risk Moderate Inv-A (OAMIX) is designed to provide investors with a balanced approach to asset allocation, aiming for long-term growth of capital and current income. The fund strategically allocates its assets with a target weighting of 45% in fixed income, 35% in U.S. equity, 10% in international equity, and 10% in other asset classes. This diversified allocation is intended to mitigate risk while providing steady returns, making it an attractive option for investors seeking moderate risk exposure. The fund’s balanced nature allows it to capitalize on both equity growth and fixed income stability, offering a comprehensive investment solution for those looking to balance risk and reward.
At A Glance
Executive Summary
OAMIX offers a balanced approach with 45% fixed income and 35% U.S. equity, featuring a competitive expense ratio of 0.88%.
Balanced exposure to equities and fixed income; Competitive expense ratio; Suitable for moderate-risk investors
Lower recent performance compared to benchmark; Negative alpha and Sharpe ratio; Limited upside potential
Performance Analysis and Recent Trends
OAMIX has shown varied performance over different time frames, with a notable 19.02% return over the past year, which is impressive but still lags behind its benchmark, the S&P 500 Total Return Index, which posted a 37.62% return. The fund’s five-year annualized return stands at 5.18%, and its ten-year return is 5.24%, indicating consistent, albeit moderate, growth over the long term. However, the fund’s alpha of -18.64% and Sharpe ratio of -2.24 suggest that it has not been able to generate returns commensurate with its risk level, highlighting areas for potential improvement in its investment strategy.
Sector and Market Cap Allocation Insights
OAMIX’s sector allocation is heavily weighted towards technology, which comprises 23.60% of the portfolio, followed by financials at 13.63% and industrials at 12.38%. This allocation reflects a strategic focus on sectors with growth potential and stability. In terms of market capitalization, the fund invests significantly in extra-large cap stocks, which make up 18.98% of the portfolio, followed by medium cap stocks at 16.63%. This distribution suggests a preference for established companies with strong market positions, which can provide stability and potential for growth, aligning with the fund’s balanced investment strategy.
Risk Metrics and Volatility Considerations
The risk metrics for OAMIX indicate a relatively low volatility profile, with a beta of 0.58, suggesting that the fund is less volatile than the market. However, the fund’s negative alpha of -18.64% and Treynor ratio of -32.01 highlight challenges in achieving risk-adjusted returns. The standard deviation of 2.40% and downside risk of 1.39% further emphasize the fund’s conservative risk approach. Despite these metrics, the fund’s max drawdown of -4.4% over a short period indicates resilience in market downturns, which can be appealing to investors seeking stability in volatile markets.
Comparative Analysis with Similar Funds
When compared to similar funds, OAMIX presents a mixed picture. While its expense ratio of 0.88% is competitive, its recent performance lags behind peers such as the Osterweis Growth & Income (OSTVX) and Boston Trust Asset Management (BTBFX), which have posted higher one-year returns of 20.45% and 20.12%, respectively. Additionally, these funds offer higher yields and similar or lower expense ratios, making them attractive alternatives for investors seeking higher returns. However, OAMIX’s balanced approach and sector diversification may still appeal to those prioritizing risk management over short-term gains.
Top Holdings and Strategic Investments
OAMIX’s top holdings include a mix of Invesco’s own funds, such as the Invesco Core Bond R6 (OPBIX) at 16.18% and the Invesco Russell 1000® Dynamic Mltfct ETF (OMFL) at 11.03%. This strategic selection of holdings reflects a focus on both growth and income, with a significant portion allocated to fixed income securities to provide stability. The inclusion of the Invesco NASDAQ 100 ETF (QQQM) and Invesco S&P 500® Pure Value ETF (RPV) further diversifies the portfolio, offering exposure to both growth and value equities. This diversified approach is designed to enhance the fund’s ability to navigate varying market conditions.
Expense Ratio and Cost Efficiency
OAMIX offers a competitive expense ratio of 0.88%, which is relatively low for a balanced fund, making it an attractive option for cost-conscious investors. This cost efficiency is crucial for long-term investors, as lower expenses can significantly enhance net returns over time. The fund’s expense ratio compares favorably with similar funds, providing a cost-effective way to gain diversified exposure to both equities and fixed income. This aspect of the fund is particularly appealing to investors who prioritize minimizing costs while maintaining a balanced investment strategy.
Conclusion: Suitability for Moderate-Risk Investors
In conclusion, the Invesco Select Risk Moderate Inv-A (OAMIX) stands out as a balanced fund that offers a strategic mix of equity and fixed income investments, making it suitable for moderate-risk investors. While its recent performance has been below its benchmark, the fund’s diversified asset allocation and competitive expense ratio provide a solid foundation for long-term growth and income. Investors seeking a balanced approach with a focus on risk management may find OAMIX to be a fitting addition to their portfolio, particularly those who value stability and cost efficiency over short-term gains.
Similar Securities
BAGPX: BlackRock 60/40 Target Allocation-InvA | Balanced Asset Allocation Fund
BAGPX offers a balanced 60/40 equity-to-bond allocation with a 0.63% expense ratio, suitable for moderate-risk investors seeking capital appreciation and income.
FCFWX: American Funds Retirement Inc-Enhcd F1 | Balanced Growth and Income Fund
FCFWX offers a balanced approach with a 2.79% yield and a 0.68% expense ratio, focusing on income and growth with moderate risk.
JABLX: Janus Henderson VIT Balanced-Inst | Balanced Growth and Income Fund
JABLX offers a balanced strategy with 50-60% equities and 40-50% income securities, featuring a competitive 0.62% expense ratio.
FKINX: Franklin Income-A1 | Balanced Income and Growth Fund
FKINX offers a 5.46% yield with a balanced portfolio, outperforming peers in income generation and capital appreciation potential.
FBFWX: American Funds Retirement Inc-Mod F1 | Balanced Income & Growth for Retirees
FBFWX offers a balanced approach with a 0.67% expense ratio, 3.01% yield, and diversified holdings, ideal for retirees seeking income and growth.
Futher Reading
https://finance.yahoo.com/quote/OAMIX/”>Yahoo: Invesco Select Risk Moderate Inv-A
https://ftcloud.fasttrack.net/web/chart/OAMIX
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