Far Eastern. Invesco Far Eastern equity funds Investment update Six months to 30 September 2018

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1 Invesco Far Eastern equity funds Investment update Six months to 30 September 2018 Far Eastern This investment update covers the following funds: Invesco Asian Fund (UK) Invesco Asian Equity Income Fund (UK) Invesco Hong Kong & China Fund (UK) Invesco Japan Fund (UK) Invesco Japanese Smaller Companies Fund (UK) Invesco Pacific Fund (UK) Far Eastern market overview Asian equity markets were mixed over the six months to 30 September 2018 amid concerns surrounding trade tensions, China s economic growth and a stronger US dollar. In China, the authorities ongoing deleveraging efforts resulted in some weaker than expected economic data, which, combined with escalating trade tensions, saw its equity market and currency weaken. Furthermore, fears that the US Federal Reserve may increase interest rates more than anticipated contributed to the rise in the US dollar, which negatively impacted some markets, in particular Indonesia and the Philippines. However, Asian equity markets are now trading at valuation levels below their long term averages. In our view, the region is well supported by its present valuations, even accounting for small downward revisions in earnings and China is likely to look to offset any escalation in trade tensions with more supportive policies. Meanwhile, although there is uncertainty in the short term, Asian economies in general appear better placed than in the past to withstand the pressures from a stronger US dollar. Japan s equity market performance was positive in sterling terms supported by robust corporate earnings and continued economic growth. Over the period, the Japanese yen depreciated against the US dollar, providing support for the earnings of export related companies against a backdrop of continued global economic expansion and ultimately growth is a more important driver of Japanese earnings than short term fluctuations in the exchange rate. There are a number of reasons for remaining optimistic on the near-term outlook for Japan s economy and equity market. Despite contracting in the first quarter of 2018, the economy remains on a broad improvement trend and returned to growth in the second quarter. Inflation is positive and while wage growth has been modest so far, it has recently shown signs of gaining momentum. In terms of corporate profits, consensus expectations are that Japanese companies will follow last year s strong earnings with another year of higher profits. Looking further ahead, we find that the outlook is less clear. The introduction of protectionist trade policies by the US administration could be a risk for global trade, while the gradual reversal of central bank stimulus represents another area of uncertainty. Meanwhile, corporate governance in Japan continues to improve, with shareholders returns rising as more companies pay a higher proportion of their earnings out in dividends and continue to buy back their own shares.

2 Invesco Asian Fund (UK) Managed by William Lam stock selection across the technology and financial sectors. For example, Delta Electronics expected purchase of 40% of Delta Thailand pushed Delta s share price up as investors anticipate that this acquisition will be earnings accretive and provide access to additional net cash while the insurance company, Samsung Fire & Marine rose on the back of better than feared regulatory changes towards the end of the quarter. Also energy stocks such as CNOOC and Woodside Petroleum benefited from oil price strength. Conversely, JD.com fell on renewed concerns that its investment in logistics will be a near-term drag on profitability despite the likelihood that it should help accelerate growth in the medium term. We seek to invest in companies whose share prices are substantially below our estimate of fair value. The fund continues to have an overweight position in the IT sector, with significant exposure to highly cash generative Chinese internet companies because we believe that in some cases the market is too sceptical on their ability to maintain strong earnings growth. Recently, we added to some of our positions in this sector to capitalise on recent share price weakness such as JD.com, Naspers and Tencent. Asian Fund (UK) 2.64% Fund Invesco Asian Equity Income Fund (UK) Managed by Tim Dickson exposure to the energy and technology sectors. Significant contributors included CNOOC and Woodside Petroleum thanks to oil price strength, while AIA Group added value as its new business continued to grow significantly, thanks in part to its strong competitive positioning versus regional and Chinese peers. Elsewhere, China Blue Chemical, a producer of methanol and urea, benefited from expectations that a recovery in industry pricing could support a continued earnings recovery for the company in Conversely, KB Financial detracted given regulatory tightening on lending rates and some macroeconomic headwinds for the Korean bank, while Indonesian telecoms company Indosat suffered from a slowdown in revenue growth. We seek to invest in companies whose share prices are substantially below our estimate of fair value and, in our view, have an ability to grow or maintain their dividend payments. A number of our holdings in the technology sector match this description particularly the fund s positions in dominant Taiwanese and South Korean companies. Finally, the real estate sector remains well represented with holdings in Australian real estate investment trusts (REITS). Asian Equity Income Fund (UK) 5.58% Fund Launch date: Current fund value: 2,407.83m Historic yield: 0.57% Launch date: Current fund value: 42.11m Historic yield: 3.47% Information Technology Financials Consumer Discretionary Energy 9.39 Industrials 5.90 Materials 5.11 Telecommunication Services 3.63 Consumer Staples 3.25 Utilities 2.03 Real Estate 1.41 Cash 1.77 Financials Information Technology Telecommunication Services 9.63 Real Estate 8.60 Industrials 8.42 Energy 8.30 Consumer Discretionary 5.47 Materials 4.34 Utilities 4.04 Consumer Staples 2.52 Cash 1.52 South Korea China Taiwan Australia Hong Kong India 7.25 Singapore 2.83 South Africa 2.83 Japan 2.50 Thailand 2.39 Indonesia 0.65 Other countries 1.16 Cash 1.77 China Australia Hong Kong Taiwan South Korea Singapore 8.68 India 7.14 Indonesia 3.74 Thailand 3.34 Philippines 0.82 Malaysia 0.76 Cash 1.52 % Top 10 issuers % Top 10 issuers Samsung Electronics 5.64 Taiwan Semiconductor 3.75 Manufacturing Baidu Inc 3.46 Woodside Petroleum Ltd 3.41 CK Hutchison Holdings Ltd 3.09 JD.com Inc 2.98 Samsung Fire & Marine 2.94 Insurance CNOOC Ltd 2.90 United Overseas Bank Ltd 2.83 Naspers Ltd 2.83 Total Total number of holdings: 58 Taiwan Semiconductor 5.32 Manufacturing Samsung Electronics 3.85 AIA Group Ltd 3.81 China Mobile Ltd 3.54 Bangkok Bank PCL 3.34 United Overseas Bank Ltd 3.07 CNOOC Ltd 3.00 CK Hutchison Holdings Ltd 2.83 Viva Energy REIT 2.77 Industrial & Commercial 2.73 Bank of China Ltd Total Total number of holdings: 51

3 Invesco Hong Kong & China Fund (UK) Managed by Mike Shiao (lead) and Lorraine Kuo Fund review and strategy The strong performance of the fund was largely attributable to stock selection, particularly in the healthcare and materials sectors. Although the healthcare sector underperformed the broader market, selected holdings delivered strong returns given solid fundamentals. One of the strongest contributors was a Chinese medical products manufacturer on expectations that permission to convert its domestically listed or unlisted shares into Hong Kong-listed H-shares would help improve management incentives and corporate governance. Within the materials sector, a cement manufacturer was the biggest contributor as resilient cement prices have benefited earnings this year, thanks to continued supply side reform in China. Conversely, sector allocation, a by-product of our bottomup stock selection, detracted from relative performance. As an active bottom-up investor, we continue to seek companies with sustainable industry leadership and competitive advantages using a purely bottom-up investment process. This approach has led to a decent level of exposure in Chinese consumer-related sectors, including the consumer discretionary, consumer staples and internet services. In our view, the growth drivers for these sectors are diverse and not strongly correlated. Although the fund does not actively pursue a concentrated portfolio, it may have a concentrated number of holdings on occasions. Accordingly, the fund may carry a higher degree of risk than a fund which invests in a broader range of companies or takes smaller positions in a relatively large number of holdings. Hong Kong & China Fund (UK) 6.39% Fund Invesco Japan Fund (UK) Managed by Paul Chesson (lead) and Tony Roberts exposure to the energy sector. For example, Inpex made strong gains thanks to the higher oil price and expectations that production at its Ichthys LNG project will significantly enhance its earnings, cashflow and dividends in the medium term. Also with the energy sector, Cosmo Energy s share price benefited from higher refining margins translating into stronger earnings. Elsewhere, Hitachi Metals added value on growing confidence that its specialty steel business is being turned around. Conversely, holdings in auto manufacturers detracted despite generally solid earnings, with uncertainty related to ongoing trade talks between the US and Japan. The biggest detractor was Tsubaki Nakashima, which reported slightly weaker than expected 1H earnings results, although full year guidance remained unchanged. We continue to position the fund toward more economically sensitive areas of the market where we are able to find the most attractive valuations, which stand in marked contrast to more growth oriented areas of the market where we believe valuations in some cases look stretched. The fund is also exposed to banks and real estate, which we believe will deliver stable earnings and are currently modestly valued by the market. Fund risk Although the fund does not actively pursue a concentrated portfolio, it may have a concentrated number of holdings on occasions. Accordingly, the fund may carry a higher degree of risk than a fund which invests in a broader range of companies or takes smaller positions in a relatively large number of holdings. Japan Fund (UK) 7.89% Fund Launch date: Current fund value: m Historic yield: 0.26% Launch date: Current fund value: m Historic yield: 0.45% Information Technology Consumer Discretionary Industrials Consumer Staples 9.97 Health Care 9.44 Materials 9.38 Telecommunication Services 7.99 Utilities 3.11 Financials 2.88 Cash 0.14 Manufacturing Finance & Insurance Real Estate 8.92 Transport & 6.69 Communications Mining 6.07 Services 4.53 Electric Power & Gas 3.70 Commerce 2.14 Construction 1.95 Cash 1.44 China Hong Kong Taiwan 9.82 % Top 10 holdings Alibaba 9.59 China Mobile 6.41 Tencent 4.58 Asia Cement China 4.21 Shandong Weigao 3.84 Sinopharm 3.51 Cayman Islands 2.92 Cash 0.14 CK Hutchison 3.48 Hengan 3.46 Minth 3.31 Sun Art Retail 3.05 Total Total number of holdings: 51 Japan Singapore 0.45 % Top 10 holdings Sumitomo Mitsui Financial 6.25 Mitsubishi UFJ Financial 6.21 Honda Motor 6.16 INPEX 6.07 Sumitomo Mitsui 5.25 Toyota Motor 4.95 Cash 1.44 Minebea 4.55 Mitsubishi Estate 4.50 Hitachi Metals 4.25 Japan Post 3.97 Total Total number of holdings: 38

4 Invesco Japanese Smaller Companies Fund (UK) Managed by Osamu Tokuno Fund review and strategy The fund s bottom-up stock selection suffered from profit-taking during the period across a number of our holdings such as: Peptidream (a bio-venture focused on finding new drugs) which uses bespoke technology; Nestage (a used-car dealer) which is gaining market share in the very fragmented market in Japan; and Macromill (an online marketing research & digital marketing company with a global footprint) which has an attractive growth outlook, in our view. On the positive front, shares of D.A. Consortium (an internet advertisement company) rallied as it received a takeover bid. Looking ahead, we continue to monitor lingering global trade tensions, central banks activity and slightly slower growth in the Japanese economy. Meanwhile, our bottom-up approach to stock picking remains unchanged, with a focus on smaller companies which we expect will achieve high earnings growth over the next few years. Fund risk Smaller company funds are higher risk than funds that can invest in larger company sizes. Market conditions, such as a decrease in market liquidity, may mean that it is not easy to buy or sell securities. Japanese Smaller Companies Fund (UK) 2.31% Fund Invesco Pacific Fund (UK) Managed by Tony Roberts, William Lam and Charles Bond exposure to the energy sector, with the higher oil price helping holdings such as CNOOC and Woodside Petroleum make strong gains. Inpex also benefited from expectations that production at its Ichthys LNG project will significantly enhance its earnings, cashflow and dividends in the medium term. Conversely, JD.com fell on renewed concerns that its investment in logistics will be a near-term drag on profitability despite the likelihood that it should help accelerate growth in the medium term. We seek to invest in companies whose share prices are substantially below our estimate of fair value. In particular, we remain attracted to heavily cash-backed businesses with strong cash flow and as a result have a significant exposure to dominant Taiwanese and South Korean technology companies. We also have a number of notable positions in other sectors in South Korea, as we believe the equity market overall should benefit from companies adopting more shareholder friendly policies. In Japan, we continued to shift the fund towards those areas of the market more sensitive to global growth where we are able to find the most attractive valuations. Pacific Fund (UK) 5.18% Fund Launch date: Current fund value: 83.49m Historic yield: 0.00% Launch date: Current fund value: m Historic yield: 0.38% Manufacturing Services Commerce 9.68 Transport & 9.25 Communications % Top 10 holdings Peptidream 6.49 Macromill Inc(New) Npv 4.00 Meiko Electronics 3.92 Penta Ocean Construction 3.90 Mtg Npv 3.55 Topcon 3.54 Construction 5.53 Finance & Insurance 3.28 Cash 3.26 Japan Cash 3.26 Kh Neochem Npv 3.38 Fullcast 3.34 Aruhi Corporation Npv 3.28 Nextage Npv 3.26 Total Total number of holdings: 46 Financials Information Technology Consumer Discretionary Industrials Energy 7.76 Materials 7.56 Japan China South Korea Taiwan 7.47 Australia 6.77 Hong Kong 6.32 India 4.33 Singapore 1.73 % Top 10 issuers Samsung Electronics 3.04 Inpex Corp 2.35 Toyota Motor Corp 2.19 Taiwan Semiconductor 2.16 Manufacturing Murata Manufacturing 2.13 Consumer Staples 4.70 Real Estate 4.10 Telecommunication Services 2.75 Utilities 1.13 Cash 3.51 Thailand 1.47 South Africa 1.33 Indonesia 0.60 Philippines 0.49 Malaysia 0.25 United Kingdom 0.01 Cash 3.51 East Japan Railway Co 2.12 Honda Motor 2.12 Mitsubishi UFJ Financial 2.09 Group Inc MINEBEA MITSUMI Inc 2.02 Infosys Ltd 1.97 Total Total number of holdings: 91

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6 Performance profile 1 year 3 years ACR 5 years ACR Invesco Asian Fund (UK) Invesco Asian Equity Income Fund (UK) Invesco Hong Kong & China Fund (UK) Invesco Japan Fund (UK) Invesco Japanese Smaller Companies Fund (UK) Invesco Pacific Fund (UK) Performance profile 7 years ACR 10 years ACR Invesco Asian Fund (UK) Invesco Asian Equity Income Fund (UK) Invesco Hong Kong & China Fund (UK) Invesco Japan Fund (UK) Invesco Japanese Smaller Companies Fund (UK) Invesco Pacific Fund (UK) ACR = Annual Compound Return. Important information All fund performance figures are shown in sterling, inclusive of reinvested income and net of the ongoing charge and portfolio transaction costs to 30 September The figures do not reflect the entry charge paid by individual investors. Source: Lipper. Fund portfolio information is as at 30 September 2018 (source: Invesco). The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. The historic yield reflects distributions declared over the past twelve months as a percentage of the mid-market price of the fund, as at 30 September It does not include any entry charge and investors may be subject to tax on their distributions. The ongoing charge is charged to capital on the Invesco Asian Equity Income Fund (UK). This has the effect of increasing the distribution(s) for the year by the amount of the ongoing charge and constraining the fund s capital performance to an equivalent extent. Derivatives risk The funds may use derivatives (complex instruments) in an attempt to reduce the overall risk of their investments, reduce the costs of investing and/or generate additional capital or income, although this may not be achieved. The use of such complex instruments may result in greater fluctuations of the value of the funds. The Manager, however, will ensure that the use of derivatives within each fund does not materially alter the overall risk profile of the fund. This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/ investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities. Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. For the most up to date information on our funds, please refer to the relevant fund and share class-specific Key Investor Information Documents, the Supplementary Information Document, the ICVC ISA Terms and Conditions, the Annual or Interim Reports and the Prospectus, which are available using the contact details shown. Invesco s ISAs are managed by Invesco Fund Managers Limited. Telephone calls may be recorded. Contact us Client services Telephone Facsimile enquiry@invesco.com Administration centre address: Invesco Administration Centre PO Box Chelmsford CM99 2DL Invesco Fund Managers Limited Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK Authorised and regulated by the Financial Conduct Authority 64029/PDF/1018 EMEA8050