Canada's Top Fund Prospects in 2024: Invesco Select Canadian

This new addition to our list of Canadian funds to watch this year has a revamped risk process that's prompted a turnaround.

Michael Dobson 20 March, 2024 | 4:52AM
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Canadian flag on back of boat

Read the rest of Morningstar Canada's Q1 2024 Prospect List here.

Why Did It Catch Our Eye?

Invesco Select Canadian Equity’s performance has turned around since Alan Mannik became lead manager in March 2016. The three- and five-year returns for the F share class also rank in the top decile in the competitive Canadian-focused category.

What Is It?

Mannik and the Invesco Canadian equity team employ a concentrated, benchmark-agnostic strategy that aims to hold positions for five years. It invests more than half its assets in Canada; historically, it has stayed close to a 55%/45% split between Canadian and non-Canadian stocks. They invest like business owners, looking past near-term turmoil if companies have promising long-term fortunes. Turnover has been very low; it ranged from 2% to 23% from 2017 to 2022.

Why Is It on the List?

Mannik’s style and consistency have always been favorable, but performance began to turn around in 2021 when Mannik tapped Invesco’s portfolio risk group in Houston, Texas for ways to add diversification and control behavioral biases. This new lens dampens potential problems stemming from their high conviction style. The team, for example, now reevaluates holdings once they hit certain loss limits and looks at correlations between current holdings and prospective ideas.

Mannik has had the most successful stretch of his tenure since and ranked in the category’s 5% over the three years ended in February 2024.

Performance Over Time – Growth of $10,000 Trailing Five Years

Morningstar Category Average: Canadian Focused Equity

Source: Morningstar Direct.

 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Invesco Select Canadian Equity F34.31 CAD-0.04Rating

About Author

Michael Dobson  is a Manager Research Analyst at Morningstar Canada.

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