Invesco Telecommunications Fund continues to show a knack for surfing the big waves.
With a nearly 45 percent year-to-date return through mid- August, this fund has raced past most of its communications peers. Those results flow from the aggressive, go-anywhere style of manager Brian Hayward. Two of his main requirements for potential buys are industry-leading top-line growth and improving margins. He also uses themes to focus on fast-growing areas: Deregulation, surging data traffic, and the move to wireless are all areas of emphasis.
The resulting portfolio has one of the category's heaviest weighting in technology stocks, including a healthy dose of Internet names such as CMGI. Such plays have given the fund an edge over less-bold peers in 1999, but Hayward has also found success in other areas. Satellite broadcaster Echostar Communications has soared 200 percent, while fiber-optic play Metromedia Fiber and wireless infrastructure star Qualcomm have also had huge runs.
Recently, Hayward has cut back on former top-holding AOL and nudged up the fund's stake in stodgy RBOCs by a couple of percentage points. The fund is still pretty aggressive, though.
Although its volatility has been about average, holdings such as Echostar and CMGI expose it to more price risk than most of its rivals. Further, despite the recent dropping of Worldwide from the fund's name. Hayward says he will continue to invest globally and notes that emerging markets could figure into the fund's future.
That said, the fund has amply rewarded investors for its risks. Since Hayward's arrival in mid-1996, it has outpaced its average peer by better than 10 percentage points per year. Huge inflows have followed, but the fund is growing responsibly. Hayward recently added two analysts to help him stay abreast of the industry.
Fund manager: Brian B. Hayward
Largest investment sector: Phone services
Style: The fund's median investment is in growth stocks of companies with large market capitalizations.
Total Returns as of 08/20/99
Year-to-date: 44.83 percent
One-year: 65.91 percent
Three-year annualized: 42.02 percent
Five-year annualized: 32.88 percent
Risk vs. domestic equity funds: Average
Morningstar rating: 5 stars
Maximum sales charge: 12b-1 only