Invesco Canada blog

Insights, commentary and investing expertise

Rob Mikalachki | May 30, 2013

Morningstar interview: Why I believe in a concentrated portfolio

I am a big believer in a concentrated portfolio. I think it leads to higher quality decision-making and ultimately, better companies in the portfolio. I spoke with Morningstar Canada recently and emphasized this during a wide-ranging interview about Trimark U.S. Small Companies Class.  

Many of the topics brought up in the Morningstar article are questions we often receive from advisors and investors, so I thought I’d link to the article here on our blog.

You can read the full article for more of my thoughts on Trimark U.S. Small Companies Class, performance, how we source ideas and more.

If any questions come up while you’re reading, please feel free to ask them in the comment area below.

Thanks for reading.

Note: The companies mentioned in the article above were selected for illustrative purposes only and are not intended to convey specific investment advice.

Get more information on Trimark U.S. Small Companies Class.
Learn more about the Trimark Investments team.

Trimark U.S. Small Companies Class, Series A provided the following performance returns as at April 30, 2013: 1-year, 17.51%; 3-year, 13.65%; 5-year, 11.96%; 10-year, 8.37%.

Trimark U.S Small Companies Class, Series A (U.S Small/ Mid Cap Equity category): overall 4 stars; 3-year, 4 stars (79 funds); 5-year, 5 stars (67 funds); 10-year 4 stars (39 funds).

As at March 31, 2013.

The Morningstar Risk-Adjusted RatingTM, commonly referred to as the Star Rating, relates the risk-adjusted performance of a fund to that of its category peers. Morningstar Research Inc., an independent research firm, calculates ratings only for categories that contain at least five funds with sufficient history. To determine a fund’s rating, the fund is typically ranked by its three-, five- and 10-year returns measured against 91-day Treasury bill and peer group returns. If a fund scores in the top 10% of its fund category, it receives five stars (High); if it falls in the next 22.5%, it receives four stars (Above Average); a place in the middle 35% earns a fund three stars (Neutral or Average); those in the next 22.5% receive two stars (Below Average); and the lowest 10% get one star (Low). Morningstar also accounts for instances where a fund is sold in multiple versions (corporate class, trust, F-class, etc.). In order to prevent one fund from unfairly taking up many places in a portion of the ratings scale, Morningstar treats multiple versions of a fund as “fractional funds”. The multiple versions of a fund are all rated, but they collectively count as one and so leave more room for other deserving funds. The overall Star Rating for a fund is a weighted combination of its three-, five- and 10-year ratings. Morningstar Risk-Adjusted Ratings are subject to change monthly. For greater detail on the calculation of the Morningstar Star Ratings, you may visit Morningstar’s website (www.morningstar.ca).

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