Equities An increasingly connected world
Our work in the Invesco Global Consumer Trends strategy is focused on trying to understand the big changes in consumer behaviour that follow from increased connectivity.
June 3, 2021
Article
Invesco Global Consumer Trends Fund
May 24, 2021
Invesco Global Consumer Trends Fund
Our thoughts on consumer trends
We believe it’s a compelling time to invest in the consumer space because it’s a period of disruption, where share is shifting rapidly between companies. We believe consumer habits are rapidly changing with the introduction of new technology. Technology is changing where we shop, how we shop, how we consume media, how we travel, and as a result: how we spend our discretionary income.
These changes are global, not regional, and technology is removing many of the barriers for global commerce while this is happening. These changes are driving large shifts in market share between companies, creating winners and losers and an excellent environment for bottom-up fundamental research and stock picking – the keystone of our investment process.
Investment risks
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For complete information on risks, refer to the legal documents. The value of investments and any income will fluctuate (this may partly be the result of exchange-rate fluctuations) and investors may not get back the full amount invested. As this fund is invested in a particular sector, you should be prepared to accept greater fluctuations in the value of the fund than for a fund with a broader investment mandate.
We are positioned in a number of long-term secular growth areas that are benefitting from this disruption and taking share. These areas include:
- Connectivity / Mobile Device: Mobile devices are driving an inflection point in internet connectivity where the developed market is spending more time on-line and the emerging market is gaining access to the internet for the first time, thereby changing consumer behavior in both markets.
- E-Commerce: E-commerce is at a point of inflection as we begin to penetrate the largest commerce verticals of food, consumables and auto.
- Social Media & Online Advertising: Social media is driving increased user engagement and through improved targeting driving advertising share shift and monetization growth.
- Digital Media: On-line video is driving increased viewer engagement and monetization growth, and is taking share from traditional media.
- Video Games: Video game companies are well positioned for an expanding addressable market and margins through more downloadable content, mobile graphics processing power and eSports momentum.
- Music: The music industry is shifting from a single-serve distribution model to the value capture distribution model.
- Cable & Satellite: Demand for fixed broadband and wireless infrastructure is growing.
From a cyclical perspective, we believe we are in the later stages of the consumer cycle. The current environment of low unemployment, high consumer confidence, rising interest rates, and rising commodity prices, are all late cycle signals.
Just because it is late cycle, does not mean that it’s a bad time to invest in consumer. It means that you should be selective with your cyclical exposure given few areas remain cyclically depressed with room for recovery. Our near-term cyclical positioning in the portfolio includes:
- US Housing / Household Durables: Spending on US housing and home-related durable goods is still below historical average levels and is positioned to grow as the Millennial generation, born between 1980 and 2000, gets married, forms households, has children, and spends money on homes and durable goods.
- Low-End US Consumer / US Tax Cut Beneficiaries: The recent changes in US tax policy have provided additional discretionary income for low-end consumers. Low-end retailers and restaurants are poised to benefit from increased low-end consumer spending.
We are underweight autos, traditional media, and traditional “brick and mortar” retail.
Ido Cohen and Juan Hartsfield, Portfolio managersWe are at a turning point, where consumer behavior is changing fundamentally and very rapidly through the introduction of new technologies. This change is leading to considerable shifts in market share between companies.
Strategy
Shopping, travel, games, TV, reading, keeping in touch with friends: There is barely an area of leisure that the technology revolution hasn’t changed at a rapid pace. The Invesco Global Consumer Trends Fund invests globally in the shares of companies whose business model is aimed at changed leisure and consumer behaviour.
- Sustainable change. The fund managers specifically invest in companies that they believe have considerable long-term growth potential.
- Active management. The experienced fund managers specifically look for companies whose growth opportunities they consider to be underestimated. For this purpose, they analyse fundamental data, valuations and possible risk factors.
- Flexible approach. The fund managers closely monitor changing leisure and consumer trends. As a result, they can react quickly and invest in companies that they see as promising.
Fund profile
| Fund name | Invesco Global Consumer Trends Fund |
| Fund managers | Ido Cohen and Juan Hartsfield |
| Launch date | 03 October 1994 |
| Legal Status | Luxembourg SICAV with UCITS status |
| Fund currency | USD |
| Fund size | USD 2.04 billion |
| Reference index¹ | MSCI World Consumer Discretionary Index-ND |
| Entry charge | Up to 5.00% |
| Ongoing charge | 1,87% |
| ISIN code | LU0052864419 (USD, acc.) |
| Morningstar Rating™2 | ***** |
Costs may increase or decrease as result of currency and exchange rate fluctuations. Consult the legal documents for further information on costs.
The investment concerns the acquisition of units in an actively managed fund and not in a given underlying asset.
1 The fund is not managed in reference to a benchmark.
2 Any reference to a ranking, a rating or an award provides no guarantee for future performance results and is not constant over time. © 2022 Morningstar. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
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Important information
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Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. For more information on our funds and the relevant risks, please refer to the share class-specific Key Investor Information Documents (available in local language), the Annual or Interim Reports, the Prospectus, and constituent documents, available from www.invesco.eu. A summary of investor rights is available in English from www.invescomanagementcompany.lu. The management company may terminate marketing arrangements. This marketing document is not an invitation to subscribe for shares in the fund and is by way of information only, it should not be considered financial advice. This does not constitute an offer or solicitation by anyone in any jurisdiction in which such an offer is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. Persons interested in acquiring the fund should inform themselves as to (i) the legal requirements in the countries of their nationality, residence, ordinary residence or domicile; (ii) any foreign exchange controls and (iii) any relevant tax consequences. As with all investments, there are associated risks. This document is by way of information only. Asset management services are provided by Invesco in accordance with appropriate local legislation and regulations. The fund is available only in jurisdictions where its promotion and sale is permitted. Not all share classes of this fund may be available for public sale in all jurisdictions and not all share classes are the same nor do they necessarily suit every investor. Fee structure and minimum investment levels may vary dependent on share class chosen. Please check the most recent version of the fund prospectus in relation to the criteria for the individual share classes and contact your local Invesco office for full details of the fund registration status in your jurisdiction. This fund is domiciled in Luxembourg.
This article is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.
