The Invesco EQV International Equity Fund's Class A shares delivered a strong performance, outperforming the MSCI ACWI ex USA Index. This success was predominantly fueled by astute stock picking within the consumer discretionary sector. In the present market landscape, the fund identifies compelling opportunities, steadfastly adhering to its established, long-term, bottom-up EQV investment process, which is designed to pinpoint growth-oriented companies possessing both high quality and attractive valuations.
The EQV framework, which evaluates Earnings, Quality, and Valuation, served as the cornerstone for strategic portfolio adjustments. Notable additions included ICICI Bank, SK Hynix, and BHP, all selected for their robust fundamentals and appealing market prices. Conversely, holdings such as LVMH and CRH were divested, as their EQV characteristics or valuations became less compelling, indicating a proactive management approach to maintain portfolio strength.
Looking ahead, the fund strategically positions itself to capitalize on emerging trends in artificial intelligence and digital infrastructure. This forward-looking stance is reflected in its overweight allocations to Taiwan and carefully selected segments within the financials, industrials, and materials sectors. Simultaneously, the fund maintains underweights in regions like Canada and specific industrial subsectors, demonstrating a balanced and adaptive strategy to navigate global market dynamics.
A detailed review of the second quarter of 2026 highlights the key factors contributing to the fund's relative outperformance. Superior stock selection in consumer discretionary, materials, and healthcare sectors played a significant role. Geographically, investments in Japan, Canada, the Netherlands, and Taiwan were particularly beneficial. However, some drag on performance was observed due to stock choices in the UK and South Korea, as well as an overweight position in Indonesia, underscoring the nuanced challenges of international equity investing.
The fund's outperformance against its benchmark was driven by excellent stock selection, particularly in the consumer discretionary sector. This performance underscores the effectiveness of its long-term, bottom-up investment philosophy, which systematically seeks out high-quality growth companies at appealing valuations, demonstrating resilience and adaptability in a dynamic global market environment.
