Invesco International Small-Mid Company Fund Q2 2024 Review

seekingalpha08-14

Invesco International Small-Mid Company Fund Class A shares underperformed the MSCI ACWI ex-US SMid Index during the quarter.We believe the variable effect of higher capital costs on corporate ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2459767196?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/167454627/image_167454627.jpg","is_english":true,"pubTime":"2024-08-14 11:30","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2459767196","market":"sh","top_or_hot":-1,"title":"Invesco International Small-Mid Company Fund Q2 2024 Review","media":"seekingalpha","content":"<div>\n<p>Invesco International Small-Mid Company Fund Class A shares underperformed the MSCI ACWI ex-US SMid Index during the quarter.We believe the variable effect of higher capital costs on corporate ...</p>\n\n<a href=\"https://seekingalpha.com/article/4714304-invesco-international-small-mid-company-fund-q2-2024-review\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Invesco International Small-Mid Company Fund Q2 2024 Review</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nInvesco International Small-Mid Company Fund Q2 2024 Review\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-14 11:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4714304-invesco-international-small-mid-company-fund-q2-2024-review><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Invesco International Small-Mid Company Fund Class A shares underperformed the MSCI ACWI ex-US SMid Index during the quarter.We believe the variable effect of higher capital costs on corporate ...</p>\n\n<a href=\"https://seekingalpha.com/article/4714304-invesco-international-small-mid-company-fund-q2-2024-review\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4141","symbol_name":"半导体产品","start_time":0,"source_url":"https://seekingalpha.com/article/4714304-invesco-international-small-mid-company-fund-q2-2024-review","article_id":"2459767196","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/167454627/image_167454627.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2459767196","pubTimestamp":1723606200,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Invesco International Small-Mid Company Fund Class A shares underperformed the MSCI ACWI ex-US SMid Index during the quarter.We believe the variable effect of higher capital costs on corporate earning","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4141":"半导体产品","DSGX":"笛卡尔物流系统集团","BK4550":"红杉资本持仓","PGPHF":"Partners Group Holding Zug Namen-Akt","BK4134":"信息科技咨询与其它服务","MSUXF":"Misumi Group, Inc.","NAV":"纳威司达","CCDBF":"CCL Industries Inc.","BK4078":"消费电子产品","BK4512":"苹果概念","YMATF":"Azbil Corp","BK4135":"资产管理与托管银行","OBIIF":"Obic Co. Ltd.","DSRLF":"Diasorin S.R.L.","BRKR":"布鲁克","BK4566":"资本集团","SPXSF":"SPIRAX GROUP PLC","IE0009354923.USD":"JANUS HENDERSON US VENTURE \"A2\" (USD) ACC","IVZ":"美国景顺集团","BK4023":"应用软件","BK4190":"消闲用品","BK4126":"金属与玻璃容器","BK4161":"工业机械","BK4515":"5G概念","LU0757428866.USD":"THREADNEEDLE (LUX) GLOBAL SMALLER COMPANIES \"AE\" (USD) ACC","CZMWF":"Carl Zeiss Meditec AG","QCOM":"高通","LU0081259029.USD":"UBS (LUX) EQUITY FUND - TECH OPPORTUNITY \"P\" (USD) ACC","NVDA":"英伟达","BK4157":"电子设备和仪器","LU0321505439.SGD":"Schroder ISF Global Dividend Maximiser A Acc SGD","VZIO":"Vizio Holding Corp.","BK4588":"碎股","XINXF":"New Wk SE ","BK4535":"淡马锡持仓","MPZAF":"Mips Ab","NICE":"NICE系统","BK4121":"生命科学工具和服务","BK4527":"明星科技股"},"translate_title":"景顺国际中小型公司基金2024年第二季度回顾","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"YMATF":1,"NICE":1,"NAV":1,"MSUXF":1,"MPZAF":1,"OBIIF":1,"PGPHF":1,"IVZ":1,"DSRLF":1,"DSGX":1,"CZMWF":1,"CCDBF":1,"BRKR":1,"SPXSF":1,"XINXF":1,"VZIO":1,"NVDA":0.9,"US10Y.BOND":0.67,"US2Y.BOND":0.67,"US30Y.BOND":0.67,"US3Y.BOND":0.67,"US5Y.BOND":0.67,"US6M.BOND":0.67,"US7Y.BOND":0.67,"US12M.BOND":0.67,"US912797HE00.BOND":0.6,"US912797GW17.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GK78.BOND":0.6,"QCOM":0.6},"content_text":"Invesco International Small-Mid Company Fund Class A shares underperformed the MSCI ACWI ex-US SMid Index during the quarter.We believe the variable effect of higher capital costs on corporate earnings and returns is what will matter going forward.Longer term, we believe secular trends will support the fund’s holdings.   scyther5 Key takeaways   The fund underperformedClass A shares underperformed the MSCI ACWI ex-US SMid Index during the quarter. This was due to short-term spending patterns in segments of information technology ('IT') and health care where the fund is invested. Longer term, we believe secular trends will support the fund’s holdings.   Capital costs matterIn our view, equity valuations have largely been adjusted to account for higher capital costs. However, we believe the variable effect of higher capital costs on corporate earnings and returns is what will matter going forward.   Time-tested disciplineWe will continue to practice our time-tested discipline: seeking to invest in consistently profitable companies with high internal rates of return on their capital, that fund operations through internal cash flow without the need for bank financing, and that have strong balance sheets.   Manager perspective and outlook Equity markets opened the second quarter with a correction, giving back much of the previous quarter’s gain. However, after bottoming in mid-April, the US and emerging markets recovered lost ground and advanced further while developed non-US equities lagged. As in recent quarters, attention centered on the US Federal Reserve (Fed) and the outlook for US interest rate policy. Fed guidance signaled only one rate cut this year and not before September “at the earliest.” Equities rose after the news, which we believe shows valuations have been adjusted for higher capital costs. However, we think the variable effect of higher capital costs on corporate earnings and returns is what matters going forward. The fund underperformed for the quarter primarily due to recent spending patterns in IT and health care. Spending on software and IT consulting has slowed while companies have continued to formulate AI strategies. Once strategies are in place, we anticipate activity will pick up for IT consultants that help companies execute them. In health care, the growth pattern of many equipment and consumable suppliers has been disrupted: first boosted by a COVID-induced demand spike and now slowed by clients’ need to work off overstocked inventory. While this has caused volatility in quarter-to-quarter returns and share price movements, we believe the underlying secular growth trends supporting these companies remain in place. Portfolio positioning Our high conviction, low turnover portfolio has a consistent structure that changes little from quarter to quarter. We are benchmark independent, bottom-up investors, focusing on company fundamentals rather than using a “top-down” perspective to overweight or underweight any sector or region. We seek companies supported by structural growth trends in the global economy; that have significant pricing power; can fund operations and growth with operating cash flow; and have strong balance sheets. We find the bulk of our targets in the industrials, health care and IT sectors. We historically tend to avoid the utilities and real estate sectors, which are viewed as bond proxies, and sectors with many industries whose products are commoditized, such as energy and materials. We added three new positions during the quarter. Carel Industries is an Italian designer, manufacturer and distributor of HVAC and refrigeration systems. We believe it has leading positions in the market for “clean” refrigerants. We find Carel’s business model, operating margins, capital returns, prospects and valuation attractive. Coway is a Korea-based company with a door-to-door distribution model for air and water filtering and purification. Its after-sales services provide a high portion of revenues. In our opinion, Coway’s track record for return on invested capital is attractive. Park Systems, based in South Korea, is the market share leader in atomic force microscopes (AFMs), sold primarily to the semiconductor industry. As semiconductor chip sizes have shrunk, demand for AFMs has risen because conventional electronic microscopes cannot scan nodes smaller than 20 nanometers (a nanometer is about the size of an atom). In our opinion, Park Systems is well-placed to benefit from the continuing miniaturization trend in semiconductors. We exited one position. New Work (OTCPK:XINXF), based in Germany, operates Xing, a professional social-media platform comparable to LinkedIn, and Kununu, a workplace-review platform comparable to Glassdoor. Dominance of these platforms in German-speaking markets attracted us to the company. In the process of transforming its social networks to business recruiting tools, New Work began shifting to a subscription business model. As we have seen with every other internet platform/software company that made this transition, profits initially softened. The share price declined. During the quarter, New Work’s 70% majority owner bought the remainder of the shares, taking the company private. Top issuers (% of total net assets)     Fund Index   Obic Co Ltd (OTCPK:OBIIF) 2.30 0.09   Carl Zeiss Meditec AG (OTCPK:CZMWF) 1.82 0.03   Partners Group Holding AG (OTCPK:PGPHF) 1.58 0.00   Descartes Systems Group Inc/The (DSGX) 1.54 0.09   DiaSorin SpA (OTCPK:DSRLF) 1.54 0.02   Nice Ltd (NICE) 1.38 0.11   VZ Holding AG (VZIO) 1.36 0.00   Azbil Corp (OTCPK:YMATF) 1.35 0.03   CCL Industries Inc (OTCPK:CCDBF) 1.29 0.08   Spirax Group PLC (OTCPK:SPXSF) 1.24 0.08  As of 06/30/24. Holdings are subject to change and are not buy/sell recommendations. \nClick to enlarge Sector breakdown (% of total net assets)    Top countries (% of total net assets)    Performance highlights The fund outperformed most in the consumer discretionary sector due to stock selection and its underweight position, and in the real estate sector due to the usual underweight position. The fund underperformed in the health care, IT and materials sectors, all due to stock selection. Contributors to performance Alpha Financial Markets, based in the UK, provides consulting services to the asset management business. During the quarter, Alpha Financial received an all-cash takeover bid from private equity firm Bridgepoint and the shares rose close to the offer price. Sdiptech (OTC:SDTHF), a Swedish company, provides public infrastructure control systems for water treatment, transportation, building climate control and security. During the quarter Sdiptech announced earnings that exceeded analysts’ forecasts. Restore is a UK-based document storage and management company, much like Iron Mountain (not a fund holding) in the US. During the quarter, the share price reacted favorably to the company’s release of revenue and guidance numbers. MISUMI (OTCPK:MSUXF), based in Japan, distributes precision machine parts to specialized industries such as hospitals and restaurants and to manufacturers. Its customers appear more sensitive to reliability and delivery speed than price. The company reported earnings and provided guidance during the quarter and the share price reacted favorably. Mips (OTCPK:MPZAF), based in Sweden, is the world’s leading supplier of interior safety systems for sports helmets. It has established a recognizable brand among end users, much as Intel did with “Intel Inside.” During the quarter, Mips raised its earnings guidance. Detractors from performance Carl Zeiss, based in Germany and the global leader in ophthalmic surgery lenses, has been supported by an aging world population and increasing access to health care in emerging markets. That said, shorter term sales volumes have slowed in the aftermath of COVID-related overstocking by customers. During the quarter, management issued a profit warning. NICE produces software to optimize call centers and customer service. The CEO announced he would be stepping down. After examining the issue thoroughly, we are comfortable that the business is fine, and he simply wants to take on new challenges. Sartorius, based in Germany, is a leading maker of precision equipment and components for research and production in the biologic drug industry. Sartorius’ sales have slowed after an above-trend period. In our opinion, the company’s clients are working off inventory. Bruker (BRKR), arguably the market leader in spectrometers, primarily for drug developers and researchers, is another supplier for whom inventory de-stocking has suppressed recent profit growth. ChemoMetec (OTCPK:CHHMF), based in Denmark provides cell counters for life science research. In a pattern familiar to us, post-COVID destocking has suppressed near-term growth. Top contributors (%)   Issuer Return Contrib. to return   Alpha Financial Markets Consulting plc 52.80 0.33   Sdiptech AB 25.49 0.22   Restore plc 25.67 0.16   MISUMI Group Inc. 25.80 0.16   Mips AB 21.47 0.15  \nClick to enlarge Top detractors (%)   Issuer Return Contrib. to return   Carl Zeiss Meditec AG -43.74 -1.16   NICE Ltd. -34.02 -0.62   Sartorius AG -40.92 -0.60   Bruker Corporation -32.02 -0.44   ChemoMetec A/S -28.99 -0.31  \nClick to enlarge       Quarter YTD 1 Year 3 Years 5 Years 10 Years Since inception   Class A shares (MUTF:OSMAX) inception: 11/17/97 NAV -5.37 -4.45 -0.31 -7.49 1.95 5.85 10.65     Max. Load 5.5% -10.57 -9.70 -5.80 -9.22 0.80 5.25 10.42   Class R6 shares (MUTF:OSCIX) inception: 12/29/11 NAV -5.29 -4.28 0.07 -7.15 2.33 6.27 10.60   Class Y shares (MUTF:OSMYX) inception: 09/07/05 NAV -5.30 -4.32 -0.07 -7.26 2.20 6.11 9.37   MSCI ACWI ex USA SMID Cap Index ('USD') -0.07 2.38 10.30 -1.65 5.05 3.92 -   Total return ranking vs. Morningstar Foreign Small/Mid Growth category (Class A shares at NAV)   - -  90% (114 of 127)   66% (81 of 116)   80% (90 of 115)   14% (10 of 79)  -  \nClick to enlarge  Expense ratios per the current prospectus: Class A: Net: 1.35%, Total: 1.35%; Class R6: Net: 0.99%, Total: 0.99%; Class Y: Net: 1.11%, Total: 1.11%. Performance quoted is past performance and cannot guarantee comparable future results; current performance may be lower or higher. Visit Country Splash for the most recent month-end performance. Performance figures reflect reinvested distributions and changes in net asset value (NAV). Investment return and principal value will vary so that you may have a gain or a loss when you sell shares. Returns less than one year are cumulative; all others are annualized. As the result of a reorganization on May 24, 2019, the returns of the fund for periods on or prior to May 24, 2019 reflect performance of the Oppenheimer predecessor fund. Share class returns will differ from the predecessor fund due to a change in expenses and sales charges. Index sources: Invesco, RIMES Technologies Corp. Please keep in mind that high, double-digit returns are highly unusual and cannot be sustained. Had fees not been waived and/or expenses reimbursed in the past, returns would have been lower. Performance shown at NAV does not include the applicable front- end sales charge, which would have reduced the performance. Class Y and R6 shares have no sales charge; therefore performance is at NAV. Class Y shares are available only to certain investors. Class R6 shares are closed to most investors. Please see the prospectus for more details. For more information, including prospectus and factsheet, please visit Invesco.com/OSMAX Not a Deposit Not FDIC Insured Not Guaranteed by the Bank May Lose Value Not Insured by any Federal Government Agency \nClick to enlarge  Original Post Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2459767196"}