Like other funds in Invesco’s Trimark lineup, the
Trimark U.S. Companies Fund is fairly concentrated, holding around 40 names, with a sector mix that is
much different than its benchmark. At the end of March, the fund was
overweight in technology and healthcare, which has given the portfolio a
bit of a growth tilt, and has pushed valuation levels above those of the
The fund has been managed by
Jim Young since October 1999, a fairly long tenure in this business. Young uses
Trimark’s fundamentally-driven, quality-focused, bottom-up approach to
picking stocks. He aims to find what he believes are well managed,
high-quality companies that have a distinct proprietary advantage, are
industry leaders, and are trading at a level that is below what he believes
is their true worth.
Top holdings at April 30 included insurer
Chubb Ltd. (NYSE: CB), bank
PNC Financial Services Group Inc. (NYSE: PNC), biotech firm
Celgene Corp. (NYSE: CELG), home improvement retailer
Lowe’s Cos. Inc. (NYSE: LOW), and medical device maker
Stryker Corp. (NYSE: SYK).
Part of the reason for the fund’s higher valuation levels is that Young is
willing to “pay up” for quality and growth potential. This growth tilt has
paid off for the fund in the three months ended April 30, as investors
rotated back into growth names. The fund gained a first-quartile 13.2%,
handily outpacing both the S&P 500 with a 10.4% return and the Global
Equity peer group at 8.8%.
Looking ahead, one of the trends the manager sees evolving over the next
few quarters is the accelerating rate of change that is beginning to
undermine many business models. He is looking to find companies that are
embracing, and in many cases driving, these changes.
One worry I have with this strategy is that in a rapidly changing
environment, there are often few winners and many losers, so there is
little room for error, particularly in a portfolio as concentrated as
Trimark U.S. Companies Fund’s is. However, if Young is able to identify the
winners, the impact to the portfolio can be substantial.
As with most U.S. equity funds, I don’t expect this fund to outpace the
index, particularly over the long-term. But the concentrated portfolio
gives Trimark U.S. Companies Fund the potential to outperform over shorter
periods of time.
Trimark U.S. Companies Fund
Invesco Canada Ltd.
Large Cap Growth
Jim Young since October 1999
AIM1743 (Front-end load)
Dave Paterson, CFA, is the Director of Research, Investment Funds for
D.A. Paterson & Associates Inc., a consulting firm specializing in providing research and due
diligence on a variety of investment products. He is also the publisher
Dave Paterson’s Top Funds Report,
offering regular commentary and in-depth analysis of Canada’s top
investment funds. He uses a unique analytical approach to identify
funds with strong, risk-adjusted returns, and regularly publishes his
insights and analyses in Fund Library.
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