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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Invesco Discovery Fund outperformed significantly in Q2 2026 with a 30.63% return, driven by concentrated semiconductor and AI infrastructure holdings. Top contributors TTM Technologies, Sterling Infrastructure, and MACOM benefited from cyclical recovery and AI-driven demand."
Invesco Discovery Fund delivered strong outperformance in Q2 2026, returning 30.63% versus 25.71% for the Russell 2000 Growth Index, driven primarily by stock selection in information technology and industrials. The fund maintains concentrated exposure to semiconductor companies and AI infrastructure beneficiaries, with top holdings including BrightSpring Health Services, MKS Inc, and TTM Technologies. Key contributors included TTM Technologies, Sterling Infrastructure, and MACOM, all benefiting from cyclical recovery and structural AI-driven demand in high-performance computing and data center development. Management added three new industrial positions (LittelFuse, Legence, AZZ) to capture opportunities in industrial renewal and AI infrastructure growth, while selling positions that grew beyond the small-cap mandate. The team maintains a constructive outlook supported by resilient economic growth, strong corporate profits, reduced regulatory burdens, and easing geopolitical tensions. They are encouraged by broadening market participation to small-caps and expect continued opportunities from AI innovation, industrial renewal, record buybacks, expanding M&A activity, and an anticipated wave of IPOs in 2026. The portfolio remains overweight industrials and IT with 99 holdings focused on premier growth compounders.
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