It’s quite rare for one person to manage a large-cap mutual fund for a consecutive span of 25 years, but that’s just what Kevin C. Holt, CFA, chief investment officer, U.S. Value Equities at Invesco, is celebrating this summer.
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Holt and Devin Armstrong, who have been co-lead portfolio managers for the Invesco Comstock Fund since 2007, apply a unique contrarian approach and classic value investing techniques.
Holt joins the 401(k) Specialist Pod(k)ast to share more about the approach, what he looks for in a value stock, and why 401(k) participants need a well-diversified portfolio to reach their retirement saving goals.
Key Insights
- Invesco Comstock Fund:
Kevin C. Holt has managed the Invesco Comstock Fund for 25 years, with a contrarian approach and classic value investing techniques. - Contrarian Value Investing Strategy:
Holt emphasizes a contrarian strategy that combines valuation metrics with behavioral psychology. He focuses on sectors where pessimism is high and valuations are low, like healthcare and consumer staples, adapting the strategy to changing market conditions. - Importance of Diversification in 401(k) Plans:
Holt advocates for well-diversified portfolios within 401(k) plans, stressing that diversification across growth and value stocks is crucial due to the unpredictable nature of market cycles and the historical performance during different inflationary periods.
Not a Deposit | Not FDIC Insured | Not Guaranteed by the Bank | May Lose Value | Not Insured by any Federal Government Agency
All data provided by Invesco unless otherwise noted.
The opinions expressed are those of the author as of July 22, 2024. These comments should not be construed as recommendations, but as an illustration of broader themes. Forward-looking statements are not guarantees of future results. They involve risks, uncertainties and assumptions; there can be no assurance that actual results will not differ materially from expectations.
Diversification does not guarantee a profit or eliminate the risk of loss.
This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial professional before making any investment decisions.
P/B (Price-to-Book): it compares the price of the stock with its book value (total assets minus total liabilities). It is commonly used for banks. P/S (Price-to-Sales): it compares the price of the stock with its sales (renevues) from the last twelve months. It is commonly used for companies that have losses. Price-to-earnings (P/E) ratio measures a company’s share price relative to its earnings per share (EPS).
Enterprise value-to-sales (EV/Sales) is a financial ratio that compares a company’s total value to its total sales revenue.
“The Art of the Answer” is an Invesco Global Consulting program and is for illustrative, informational and educational purposes only. We make no guarantee that participation in any programs or utilization of their content will result in increased business for any financial professional.
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An inverted yield curve is when the interest rate on short-term debt instruments, like bonds, is higher than the interest rate on long-term debt instruments. Free cash flow yield (FCFY) is a financial ratio that measures a company’s financial health by comparing its free cash flow (FCF) to its market value. ROI is return on investment.
Wells Fargo makes up 3.27% of the holdings in the Invesco Comstock Fund. Bank of America makes up 2.89% of the holdings in the Invesco Comstock Fund. Meta Platforms makes up 2.40% of the holdings in the Invesco Comstock Fund. As of June 30, 2024. Holdings are subject to change and are not buy/sell recommendations.
The health care industry is subject to risks relating to government regulation, obsolescence caused by scientific advances and technological innovations.
The Fund is subject to certain other risks. Please see the current prospectus for more information regarding the risks associated with an investment in the Fund.
A value style of investing is subject to the risk that the valuations never improve or that the returns will trail other styles of investing or the overall stock markets.
The Fund’s value may be affected by changes in the stock markets. Stock markets may experience significant short-term volatility and may fall or rise sharply at times. Adverse events in any part of the equity or fixed income markets may have unexpected negative effects on other market segments. Different stock markets may behave differently from each other and U.S. stock markets may move in the opposite direction from one or more foreign stock markets.
Stocks of small and mid-sized companies tend to be more vulnerable to adverse developments, may be more volatile, and may be illiquid or restricted as to resale.
Investments in financial institutions may be subject to certain risks, including the risk of regulatory actions, changes in interest rates and concentration of loan portfolios in an industry or sector.
Growth stocks tend to be more sensitive to changes in their earnings and can be more volatile.
The investment techniques and risk analysis used by the portfolio managers may not produce the desired results.
The Russell 1000® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000® Growth Index is an unmanaged index considered representative of large-cap growth stocks. The Russell 1000 Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.
The change in technology and services, percent of S&P 500 market cap by sector. Haver Analytics/S&P Analyst Handbook FactSet, BofA US Equity & Quant Strategy. (Asset light / Innovation = Tech Comm. Services ex-Telecom & Health Care, Consumer -Staples/ Discretionary, Manufacturing/Asset Intensive/Capex – Industrials, Materials, Energy, Utilities, Telecom). As of February 2024.
Past performance does not guarantee future results. An investment cannot be made into an index.
Before investing, investors should carefully read the prospectus and carefully consider the investment objectives, risks, charges and expenses. For this and more complete information about the fund(s), investors should ask their financial professionals for a prospectus or visit invesco.com/fundprospectus
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Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
