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A Large-Value Fund That Wins by Losing Less

Successful execution of a prudent, quality-focused approach earns Invesco Diversified Dividend a Morningstar Analyst Rating of Silver.


Susan Wasserman: Invesco Diversified Dividend (LCEAX) is a stand-out strategy. Meggan Walsh has led this fund since the end of 2002, and she's joined by two co-portfolio managers and three analysts. Together, the team looks for stocks that will return capital to shareholders and generate strong free cash flow growth. 

The fund is noticeably overweight consumer-staples and consumer discretionary stocks relative to the Russell 1000 Value Index. This comes mainly at the expense of financials and energy stocks, which the fund underweights relative to the index. The team focuses on the balance-sheet strength of stocks and largely ignores quantitative factors in the evaluation process, which can cause it to lag in momentum-driven rallies. On the flip side, thanks to the team's quality bias, the fund tends to outperform the index and the category during market downturns.

Susan Wasserman does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.