"You should know what
knows," boasts the Denver fund shop's ads. Well, here's your chance.
Everybody would like to know what stocks are tops with managers at big fund shops. For fund investors, it's a look at where their money is invested. And for stock investors, it's a glimpse at what stocks have won fund managers' hearts. That might be particularly useful since the market has hit some choppy water over the last few months.
But it's usually tough to figure out what managers like, since fund holdings are shared infrequently. That said, regulators require that every big fund company report their firmwide holdings quarterly. Those Sept. 30 reports are rolling in now -- fund companies don't do anything quickly -- so let's take a look at Invesco's faves. The shop, sometimes compared with cross-town rival
, is one of the top-five selling fund families this year and its stock and bond fund assets have about doubled over the 12 months to top $50 billion.
Here are the firm's top 25 holdings, according to
, a Web site that tracks institutional stock ownership. Each stock's weighting within the firm's portfolio is compared with its weighting in the
Maybe the best way to tell to what degree Invesco's managers like a stock is the comparison with its weighting in the S&P 500. Since the index is a yardstick for the general market and a firm's total portfolio, a weighting above or below the index's weighting can identify a generally optimistic or somewhat pessimistic opinion of a stock's prospects, respectively.
Of course, this doesn't mean that all of the firm's managers are investing in lockstep, and Invesco's stock-pickers' portfolios have been in flux since the end of September. Still, this might be the closest to a quick survey of the hot shop's stock-pickers. The upshot: Hopes appear to be highest for financial stocks -- one of this year's leading sectors.
The only financial stock on the list that didn't get an outsize weighting from Invesco managers was insurer
American International Group
, up 39.6% on the year. Financial stocks like
Morgan Stanley Dean Witter
Bank of America
aren't even among the S&P's top 25 stocks.
They leap-frogged the likes of
on Invesco's short list. The merging
, also in the S&P 500's top 25, aren't among Invesco's favorites either.
Among their financial stock favorites, Invesco managers added to their positions in Citigroup, Fannie Mae, FleetBoston Financial and Wells Fargo during the third quarter, according to bigdough.com.
Health care titans
Johnson & Johnson
play a bigger role in Invesco's firmwide portfolio than they do in the S&P 500. Though health care stocks are shooting the lights out this year, this doesn't necessarily indicate a bet on the whole sector. Keep in mind that drug shops
have a smaller weighting in Invesco's top 25 than in the S&P 500.
On the whole, Invesco managers reduced their stake in each of these health care stocks, except for Pfizer, during the third quarter.
Interestingly, battered phone stocks
, down 57.5% for the year, and
, off 69.6%, both got a slightly bigger weighting here than in the S&P 500. At the same time,
got smaller weightings in the Invesco portfolio than in the S&P 500.
Of these four phone stocks, Invesco managers raised the firm's exposure to AT&T and SBC Communications in the third quarter.
Implicit in all this is the generally underweight position in technology stocks. While there are seven tech stocks on the list, together they make up less of Invesco's firmwide portfolio than they do of the S&P 500. That said, Invesco managers were net buyers of
in the third quarter.
There we have it, a look at where one fund shop is putting its investors' money.