GTSAX
Invesco SmallCap Growth-A
Introduction to Invesco SmallCap Growth-A
The Invesco SmallCap Growth-A (GTSAX) is a mutual fund designed to achieve long-term capital growth by investing primarily in small-cap equity securities. With a focus on issuers that have the potential for significant capital appreciation, this fund is tailored for investors seeking aggressive growth opportunities. The fund’s strategy includes a diversified portfolio with a significant allocation to technology and healthcare sectors, which are known for their growth potential. Additionally, GTSAX allows for up to 25% of its assets to be invested in foreign securities, providing an international dimension to its investment strategy. This fund is part of the Invesco family, known for its expertise in managing growth-oriented portfolios.
At A Glance
Executive Summary
GTSAX offers high growth potential with a 41.82% 1-year return, focusing on small-cap equities. Competitive in its category with a 1.17% expense ratio.
High 1-year return of 41.82%. Strong focus on small-cap growth. Diverse sector allocation with tech and healthcare.
Higher expense ratio at 1.17%. Volatility with a beta of 1.39. No yield for income-focused investors.
Impressive Recent Performance
GTSAX has demonstrated remarkable performance over the past year, boasting a 1-year return of 41.82%, significantly outperforming its benchmark, the S&P 500 Total Return Index, which returned 37.62% over the same period. This impressive performance can be attributed to the fund’s strategic focus on small-cap growth stocks, which have benefited from favorable market conditions and investor sentiment towards high-growth potential companies. The fund’s ability to capitalize on market trends and its adept stock selection have been key drivers of its recent success. Investors looking for high returns in the small-cap space may find GTSAX’s recent performance particularly appealing.
Sector Allocation and Growth Potential
The sector allocation of GTSAX is heavily weighted towards technology (22.13%) and healthcare (22.56%), sectors that are often associated with high growth potential. This strategic allocation reflects the fund’s focus on capturing growth opportunities in industries that are at the forefront of innovation and development. Additionally, the fund has significant exposure to industrials (20.38%) and cyclical sectors (11.90%), which can provide diversification and potential upside during economic expansions. The fund’s sector allocation is designed to balance growth potential with diversification, making it a compelling choice for investors seeking exposure to dynamic and rapidly evolving industries.
Risk and Volatility Considerations
Investors should be aware of the inherent risks and volatility associated with GTSAX. The fund has a beta of 1.39, indicating higher volatility compared to the broader market. This is typical for small-cap growth funds, which tend to experience larger price swings due to their focus on smaller, potentially more volatile companies. The fund’s standard deviation of 5.58% and a max drawdown of -11.3% further highlight the potential for significant fluctuations in value. While the fund’s alpha of 4.16% suggests it has outperformed its benchmark on a risk-adjusted basis, investors should be prepared for periods of heightened volatility.
Competitive Expense Ratio and Peer Comparison
GTSAX has an expense ratio of 1.17%, which is competitive within the small-cap growth category. When compared to similar funds such as Oberweis SmallCap Opportunities (OBSOX) and Allspring Discovery SmallCap Growth-A (EGWAX), GTSAX’s expense ratio is slightly higher, but its recent performance justifies the cost. The fund’s ability to deliver superior returns, as evidenced by its 1-year return of 41.82%, positions it favorably against peers like Segall Bryant & Hamill SmallCap Gr-Ret (WTSGX) and Carillon Eagle SmallCap Growth-A (HRSCX). Investors should weigh the fund’s expense ratio against its performance and potential for future growth when considering it for their portfolio.
Portfolio Composition and Top Holdings
The portfolio of GTSAX is composed primarily of U.S. equities, with a 95.04% allocation, and a small portion in non-U.S. equities at 4.64%. The fund’s top holdings include Tenet Healthcare Corp (1.64%), Guidewire Software Inc (1.50%), and TMX Group Ltd (1.42%), reflecting its focus on companies with strong growth prospects. The fund’s emphasis on small-cap stocks is evident, with 71.33% of its market cap allocation in small companies. This focus on smaller companies allows the fund to tap into growth opportunities that may not be available in larger, more established firms, providing investors with exposure to potentially high-reward investments.
Suitability for Growth-Oriented Investors
GTSAX is particularly well-suited for investors with a high risk tolerance who are seeking aggressive growth opportunities. The fund’s focus on small-cap growth stocks, combined with its strategic sector allocation, makes it an attractive option for those looking to capitalize on the potential for significant capital appreciation. However, due to its higher volatility and lack of yield, it may not be suitable for income-focused investors or those with a low risk tolerance. Investors should consider their investment objectives and risk appetite when evaluating GTSAX as a potential addition to their portfolio.
Conclusion: A High-Potential Small-Cap Fund
In conclusion, the Invesco SmallCap Growth-A (GTSAX) stands out as a high-potential investment option for those seeking exposure to small-cap growth stocks. With its impressive recent performance, strategic sector allocation, and competitive expense ratio, GTSAX offers a compelling opportunity for growth-oriented investors. While the fund’s higher volatility and lack of yield may not suit all investor profiles, those with a focus on capital appreciation and a willingness to accept higher risk may find GTSAX to be a valuable addition to their investment strategy. As always, investors should conduct thorough due diligence and consider their individual financial goals before investing.
Similar Securities
SCSMX: ClearBridge SmallCap Growth-C | Small Cap Growth Fund Analysis
SCSMX offers exposure to small-cap growth stocks with a high expense ratio of 1.93%. It underperforms its benchmark but provides diversification in tech and healthcare.
PSGIX: BlackRock Advantage SmallCap Growth-Inst | High Growth Potential in Small-Cap Equities
PSGIX offers high growth potential with a 43.12% 1-year return, focusing on small-cap U.S. equities with a competitive 0.5% expense ratio.
FSGRX: Franklin SmallCap Growth-A | Small-Cap Growth Investment
FSGRX offers robust small-cap growth with a 45.07% 1-year return, outperforming its benchmark. Ideal for growth-focused investors.
GTSAX: Invesco SmallCap Growth-A | High-Potential Small-Cap Investment
GTSAX offers high growth potential with a 41.82% 1-year return, focusing on small-cap equities. Competitive in its category with a 1.17% expense ratio.
PNSAX: Putnam SmallCap Growth-A | High Growth Potential in Small-Cap Stocks
PNSAX offers high growth potential with a 50.52% 1-year return, focusing on U.S. small-cap stocks. Its 1.21% expense ratio is competitive for its category.
Futher Reading
https://finance.yahoo.com/quote/GTSAX/”>Yahoo: Invesco SmallCap Growth-A
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