Invesco Global Dividend Income, managed by a value-style team that has a strong long-term performance record with a similar mandate for U.S. investors, was launched today by Invesco Canada Ltd.
The lead manager is Meggan Walsh, a senior portfolio manager and head of the dividend value team for an affiliate, Invesco Advisers Inc. Based in Houston, she has been the lead manager since the end of 2002 of the US$22.6-billion Invesco Diversified Dividend, whose Class A shares have a 5-star Morningstar Rating in their large-cap value peer group. The fund's Morningstar Analyst Rating is Silver, the second highest rating.
Though the Walsh-led team invests primarily in the U.S., they also diversify into other countries. An Invesco Canada spokesperson said the broad market benchmark for Invesco Global Dividend Income is the MSCI World Index, and the secondary style benchmark is the MSCI World Value Index.
The managers seek to identify stocks in multiple sectors that not only have above-market yields, but also the financial strength to pay dividends that are consistent and sustainable. These may include ordinary dividends, stock dividends or share repurchases. The investment process involves analyzing the potential for increases in earnings and free cash flow over a two- to three-year period. In selecting stocks, the team may also take account of general industry and economic trends.
In a 2016 report on the U.S.-based fund, Morningstar analyst Susan Wasserman praised management for the fund's ability to hold up well in down markets. "The team puts stock ideas through bear-case scenarios to test viability in down markets and their overall risk/reward. A stock's base case must have at least 3-to-1 upside from its bear case to enter the portfolio." Wasserman wrote. "Once in the portfolio, the team will sell a holding if its fundamentals deteriorate or it hits its target price."
Walsh, who along with her team also manages Invesco Dividend Income for U.S. investors, established Invesco's diversified-dividend investment process in 2002. Her investment experience includes more than 19 years as an equity manager, and before that she also managed fixed-income securities for more than 10 years.
Also new today to the Invesco Canada line-up is Invesco Global Monthly Income, a fund of funds for which the new Walsh-managed Invesco Global Dividend Income will be the equity component. The fixed-income portion will hold units of Invesco Global Bond and Invesco Global High Yield Bond.
The target asset allocation is 60% equities and 40% fixed income, though the asset mix will be actively managed by the Invesco Fixed Income (IFI) team, consisting of managers drawn from Invesco operations in the United States, the United Kingdom and Canada.
Both new funds will make regular monthly distributions based on a target distribution rate or an aggregate yearly dollar amount per unit, which will typically be reset at the beginning of each calendar year but is subject to change at Invesco Canada's discretion. Portions of the distributions may consist of return of capital, so the distribution yield will differ from the dividend yield.
The management fee (not including fund expenses) of Invesco Global Dividend Income is 2% for the Series A units, which has several load options and pays embedded commissions to dealers, and 0.85% for Series F for fee-based advisory accounts. For Invesco Global Monthly Income, the fee is 1.80% for Series A and 0.80% for Series F.
Though high-minimum series of both funds are available at reduced fees, the cheapest purchase option for small investors is Series PTF. These are fee-based platform-traded funds, available through selected brokerage firms and other money managers that can conduct transactions in exchange-traded securities and have a PTF dealer agreement with Invesco Canada.
