Invesco Pinnacle Hybrid Plus Multi-Manager Target Risk Series

Invesco Pinnacle Hybrid Plus Multi-Manager target-risk series’ lacks a well-defined process and the team suffers from continued instability. It retains its Morningstar Analyst Rating at Neutral.

 

This series of separate accounts is representative of model portfolios management made available to financial advisors, who retain discretion over asset allocation and underlying fund selection.

 

A trio of managers run this series: Jeffrey Bennett, Jacob Borbidge, and Duy Nguyen. Bennett has managed this series since October 2018, when it was incepted. Nguyen and Borbidge were recently added in April 2020 as the Invesco Solutions team finalized its integration following the Oppenheimer acquisition. They run numerous mandates together but have not been working together for long.

 

The series includes five portfolios that range from 20% to 100% equity exposure in increments of 20 percentage points. Management has the flexibility to include both active and passive strategies in the underlying lineup. They recently broadened the scope of the series to allow the inclusion of third-party funds. The team made use of the new freedom by adding Gold-rated Vanguard Total Stock Market ETF and Gold-rated Vanguard Total International Stock ETF to the lineup in March 2020.

 

Management lacks a well-defined fund selection process that would give us confidence in their ability to make the most of its expanded opportunity set. In the past, the team has included small proprietary funds with short-track records such as Invesco Russell 1000 Value ETF, which comprised 14% of the most aggressive portfolio. The ETF liquidated in February 2020, less than three years from its inception. The team continues to include funds with similar small asset bases like Invesco PureBeta US Aggregate Bond ETF, which is the largest fixed-income allocation across the portfolios and has less than $21 million in assets. It was added to the lineup in March 2020, prior to having a three-year track record. Better guardrails around what the managers allow into the portfolios would give us more confidence in the process.

 

 (Source: Morningstar)

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