Plan sponsors may wish to consider whether this investment news has any implications for the investment options available within their plans. Sun Life Assurance Company of Canada purchases units of the fund listed below, which is established as a segregated fund under the Insurance Companies Act (Canada).
Invesco Canada Ltd. (Invesco) recently announced that Senior Portfolio Manager (PM) Michael Hatcher and his team are no longer with the firm effective September 7, 2023. Hatcher was the Head of Global Equity on the Invesco Canada Equity team, and the PM of the Invesco Global Companies Fund (the fund). He was the primary decision maker on the Fund for the past 14 years. Departing Invesco with Hatcher were Marina Pomerantz (PM), Adam Kim (PM), Sunny Basi (PM), Carla Robinson (Associate PM), Sean Swift (Analyst), and Don Cruise (Product Director).
The Invesco Global Companies Fund is now managed by Senior PM Andrew Hall and his 8-person team based in Henley-on-Thames, U.K (Henley team). Emily Roberts is Hall’s back up PM on the Fund. Stephen Anness, Head of Global Equities, also supports the Fund. Portfolio managers and analysts within the Henley team are all generalists. They cover various sectors and stocks and give their perspectives across numerous industries. The global equity team can also leverage the research of the regional equity teams at the Henley Investment Centre.
Andrew Hall has been with the firm since 2013 and has been in the industry for 23 years. His prior experience includes company research on the sell-side with UBS Warburg and Merrill Lynch and beginning in 2009 buy-side research with Moore Europe Capital Management and Bramshott Capital LLP.
The Henley team currently manage the Invesco Global Equity Fund (UK), and the Invesco Global Companies will now be managed like this Fund. The Fund’s investment objective and benchmark will remain the same. The Fund will continue to be managed using fundamental research and a bottom-up investment approach. However, the Henley team will manage the Fund with different investment style, and process. The differences are outlined below:
| Team differences | Invesco Canada Team | Henley team |
|---|---|---|
| Style | Large Cap Value | Large Cap Core |
| Number of holdings | 35 | 50-60 |
| Cash allocation | Typical 5%, No Maximum | Typical 1-2%, Maximum |
Invesco completed the Fund’s transition to the new strategy in September 2023, with the exception of two legacy holdings being retained for capital gains management purposes. The Henley team is comfortable holding these two stocks. Plan members invested in Invesco Global Companies through non-registered plans can expect the transition to result in realized capital gains. Sun Life will report these capital gains on 2023 tax slips distributed in early 2024.
GRS Investment Solutions View:
Sun Life’s GRS Investment Solutions team met with Invesco on September 27, 2023, to discuss the changes. Stephanie Butcher, Head of Investments, Equity, at Invesco indicated that they made the change due to a higher level of confidence in Hall’s team and approach. Invesco felt that Hall’s team provided more flexibility to generate more consistent “all-season” performance. Unsurprisingly, Hall’s UK-based Global Equity strategy has outperformed Invesco Global Companies. However, the inception of the UK-based fund was in January 2020 and the track record is currently less than four years in length.
We found Hall’s team to be knowledgeable and the process and philosophy are clear and intuitive. We have no significant concerns with the new strategy. However, this is a completely new team and strategy than the original Invesco Global Companies fund. We’ve placed the fund on our Watch List in the “On Watch” category. We’ll continue to monitor the new team and strategy and will provide further updates as needed.
Do you have to take any action?
You and your members should review the new fund to ensure it continues to meet the needs of the plan and members.
Questions?
Please contact your Sun Life Group Retirement Services representative.
