Invesco Perpetual Select reports a mixed bag of results – Invesco Perpetual Select has published its full annual report for the year ending 31 May 2018.
But first, a bit more on the company:
The company’s investment objective is to provide shareholders with a choice of investment strategies and policies, each intended to generate attractive risk-adjusted returns.
The company’s share capital comprises four share classes, each of which has its own separate portfolio of assets and attributable liabilities:
UK Equity Shares (IVPU), Global Equity Income Shares (IVPG), Balanced Risk Allocation Shares (IVPB) and Managed Liquidity Shares (IVPM),
Performance
Invesco Perpetual Select UK Equity Shares (IVPU)
The NAV of the UK Equity Shares portfolio in total return terms rose by 1.1%. The FTSE All-Share index of UK equities returned 6.5% on the same basis. An underweight to outperforming mining and technology stocks detracted from performance.
Invesco Perpetual Select Global Equity Income Shares (IVPG)
The NAV of the Global Equity Income Shares in total return terms rose by 7.8%. The MSCI World index returned 8.2% on the same basis. The fund was underweight to outperforming technology stocks on valuation grounds and because they do not provide the income yield that the manager needs to deliver to shareholders.
Invesco Perpetual Select Balanced Risk Allocation Shares (IVPB)
The NAV of the Balanced Risk Allocation Shares in total return terms rose by 6.4%. The 3m LIBOR benchmark returned 5.4% on the same basis. Unlike IVPU and IVPG, exposure to commodities asset class was the largest positive contributor to performance followed by its equity sub-portfolio. The fund’s exposure to fixed income detracted from performance.
Invesco Perpetual Select Managed Liquidity Shares (IVPM)
The NAV of the Managed Liquidity Shares in total return terms rose by 0.3%, affected by the ongoing low interest environment.
Outlook; comments from the chairman, Patrick Gifford
“The quotation from Macbeth was appropriate for our last financial year*. There is a strong possibility that political events will have more actual impact during this year. A Brexit settlement will be reached, the US will have mid-term elections and serious discriminatory tariffs may be imposed. The problem is that one is merely guessing at the likely outcome of non-binary issues. However, it does still appear to be in both the UK and the EU’s interest to avoid the “No-deal” scenario. The US elections are most likely to see a swing away from the Republican party in line with mid-term tradition though whether control of Congress will change is unclear. One can only hope that the realisation will dawn on the US government that a trade war is at least as harmful to the US as to its trading partners.
Economically it still seems likely that there is reasonable momentum in the current acceleration of growth worldwide and that we should therefore expect further upward movements in short term interest rates. However, in the likely absence of a concerted investment effort to thwart climate change, the underlying deflationary trends should mean that rates and inflation remain relatively subdued compared to previous cycles. It is, however, very difficult to judge whether this expansion will end with a bang or a whimper or when either will happen. In the meantime our portfolio managers will continue to deploy a well-tested investment philosophy in which we have considerable confidence.
On the regulatory front it is worth noting that MiFID II threatens to be a case of “be careful what you wish for”. The changes that it is causing in the structure of the investment industry are far-reaching and their consequences for both the industry and securities markets may not be benign.”
*Quoted earlier in the chairman’s report about the global political situation over the year under review: “It is a tale told by an idiot, full of sound and fury, signifying nothing”. (Act 5, scene 5, Macbeth, William Shakespeare)
IVPU, IVPG, IVPB, IVPM : Invesco Perpetual Select reports a mixed bag of results