Invesco Perpetual Select Trust plc An investment trust for changing times

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1 Invesco Perpetual Select Trust plc An investment trust for changing times

2 Investment risks 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. When making an investment in an investment trust you are buying shares in a company that is listed on a stock exchange. The price of the shares will be determined by supply and demand. Consequently, the share price of an investment trust may be higher or lower than the underlying net asset value of the investments in its portfolio and there can be no certainty that there will be liquidity in the shares. The investment trust may use derivatives for the purpose of efficient portfolio management. There may not be a precise correlation between price movements in the underlying securities, currency or index, on the one hand, and price movements in the investments, which are the subject of the hedge, on the other. In addition, an active market may not exist for a particular derivative instrument at any particular time. The Invesco Perpetual Select Trust plc Global Equity Income portfolio may invest in emerging market securities. Investors should be prepared to accept a higher degree of risk than for an investment trust with a broader investment mandate, as difficulties in dealing, settlement and custody problems could arise. The Invesco Perpetual Select Trust plc Balanced Risk portfolio will make significant use of financial derivatives (complex instruments) which will result in large fluctuations in the value of the investment trust. Leverage created from borrowing on certain types of transactions including derivatives may impair the investment trust liquidity, cause it to liquidate positions at unfavourable times or otherwise cause the investment trust not to achieve its intended objective. Leverage occurs when the economic exposure created by the use of derivatives is greater than the amount invested resulting in the investment trust being exposed to a greater loss than the initial investment. The Invesco Perpetual Select Trust plc Balanced Risk portfolio will gain exposure to commodities which are generally considered to be high risk investments and may result in large fluctuations in the value of the investment trust. The Directors intend that each portfolio will effectively operate as if it were a stand-alone company. However, prospective investors should be aware that in the event that any of the portfolios have insufficient funds or assets to meet all of its liabilities, such a shortfall would become a liability of the other portfolios. In addition, should the investment trust incur material liabilities in the future, a significant fall in the value of the investment trust s assets as a whole may affect the investment trust s ability to pay dividends on a particular class of shares, even though there are distributable profits attributable to the relevant portfolio. The investment trust may use borrowings to invest in the market. The use of borrowings may enhance total return when the value of the investment trust s assets is rising, but it will have the opposite effect when asset values fall. The use of borrowings may increase the volatility of the share price and the net asset value per share. In certain circumstances, the investment trust may be required to repay borrowings and this could adversely affect income and capital returns. The investment trust expects to increase dividend payments on the Global Equity Income and UK Equity Shares by making use of its ability to distribute capital. To the extent the investment trust uses its ability to fund dividends using capital profit this will reduce capital growth.

3 About Invesco Perpetual Invesco Perpetual is one of the largest independent investment managers in the UK, currently managing 9.59bn of assets on behalf of private investors, institutional and investment professionals. The broad range of products includes ICVCs, investment trusts, ISAs, pension funds and other specialist investment solutions, but despite its size, Invesco Perpetual has not sacrificed the principles and philosophy upon which it was built. 9.59bn Of assets on behalf of private investors Having helped hundreds of thousands of investors, we re confident that, with the right management, stock market investments have the potential to offer strong long-term rewards. Source: Invesco Perpetual as at 30 September Invesco Perpetual Select Trust plc

4 An investment trust for changing times Invesco Perpetual Select Trust plc, which launched in November 2006, is a multi-asset class investment trust, unlike many other products currently available. It has four independently managed share portfolios UK Equity, Global Equity Income, Balanced Risk and Managed Liquidity offering a range of objectives and differing investment strategies. The investment trust s design therefore offers shareholders the opportunity to gain exposure to a wide array of asset classes and markets; from the home shores of the UK to wider global markets. In addition, the capital structure, which permits quarterly conversions between the four share portfolios, allows for shareholders to react to changing investment conditions, if desired. Choice: The investment trust provides a choice of four share portfolios, each offering a different objective and exposure to different asset classes or geographical regions, providing shareholders with the opportunity to achieve investment diversity. Flexibility: Quarterly conversions between the share portfolios allow flexibility for shareholders to gain access to their preferred asset classes. Under current legislation, the conversion of one class of shares to another is not considered to be a disposal for Capital Gains Tax purposes. Approach: Invesco Perpetual has a stable, well experienced investment team with a long term investment approach; which we believe is the best way to potentially deliver sustainable investment performance for our investors. Income: Dividends and dividend growth are key components of the investment strategies driving both the UK Equity and Global Equity Income Share Portfolios, which both pay a quarterly dividend, just before the conversion date 2. Conversions take place on February, May, August and November and are on a NAV to NAV basis. Notice from the shareholder to convert any class of shares on any conversion date will be required up to a maximum of 0 business days prior to the relevant conversion date. Forms for conversion are available from Conversion from one class of shares into another will be on the basis of a ratio derived from the prevailing underlying net asset value of each class of relevant shares, calculated shortly before the date of conversion. 2 When sufficient cash is available for distribution at the end of each quarter, the Managed Liquidity Share Portfolio will also pay a quarterly dividend. 02 Invesco Perpetual Select Trust plc

5 Investment trust portfolios James Goldstone UK Equities Portfolio Manager Invesco Perpetual Nick Mustoe Chief Investment Officer Invesco Perpetual UK Equity Share Portfolio Investment objective To provide shareholders with an attractive real long-term total return by investing primarily in quoted UK equities. Global Equity Income Share Portfolio Investment objective To provide an attractive and growing level of income return and capital appreciation over the long term, predominantly through investment in a diversified portfolio of equities worldwide. Portfolio management Managed by James Goldstone, his high conviction approach seeks to maximise exposure to the UK sectors and securities he considers to be most attractive. He favours companies with strong balance sheets, high barriers to entry and the ability to expand market share, traits which he believes provide scope for long-term capital and income growth. James deploys an investment approach anchored around valuation, aiming to achieve total return via both capital and sustainable dividend growth. He identifies significant value in dividends both due to the effects of long-term compounding and with regard to the discipline it forces on company management and seeks companies which offer visibility of revenues, profits and cash flows. Portfolio management Managed by Nick Mustoe and the Global Equity Income Group, the team look for companies worldwide which can sustain a growing level of income return and have the potential to provide capital appreciation, through an increase in their share price, over the long term. This means investing in companies that they believe are high quality, with attractive franchises, balance sheets with conservative levels of debt and the ability to offer growing and sustainable dividends. Nick has over 32 years industry experience, six of which have been at Invesco Perpetual. Click here to visit this share portfolio web page James has 5 years industry experience, 4 of which have been at Invesco Perpetual. Click here to visit this share portfolio web page Source: Invesco Perpetual as at 30 September Invesco Perpetual Select Trust plc

6 Investment trust portfolios Scott Wolle Chief Investment Officer Invesco Global Asset Allocation team Stuart Edwards Fixed Interest Portfolio Manager Invesco Perpetual Balanced Risk Share Portfolio Investment objective To provide shareholders with an attractive total return in differing economic and inflationary environments, and with low correlation to equity and bond market indices by gaining exposure to three asset classes: debt securities, equities and commodities. Managed Liquidity Share Portfolio Investment objective To produce an appropriate level of income return combined with a high degree of security. Portfolio management Managed by Scott Wolle and the Invesco Global Asset Allocation team based in Invesco s Atlanta office, the team s approach to portfolio construction is to balance the risk contribution from each of three asset classes equities, bonds and commodities so that each contributes an equal proportion to the total risk of the portfolio. Through active positioning, the team then make additional tactical adjustments to the asset allocation, seeking to take advantage of the prevailing economic conditions. Investment in the asset classes are principally obtained through highly liquid derivatives, which allow for a higher and longer exposure to be achieved, with cash and cash equivalents being held as collateral. Portfolio management Stuart Edwards, is an experienced manager of cash, government bond and aggregate bond portfolios, and a specialist in the analysis of macroeconomic data and trends. The portfolio invests in a range of Sterlingbased or related money market fund assets (which may include transferable securities, money market instruments, warrants, collective investment schemes and deposits), either directly or indirectly through money market funds, including funds managed by Invesco Perpetual or its associated companies. Stuart has 9 years industry experience, 3 of which have been at Invesco Perpetual. Click here to visit this share portfolio web page Scott has 25 years industry experience, 7 of which have been at Invesco. Click here to visit this share portfolio web page Source: Invesco/Invesco Perpetual as at 30 September Invesco Perpetual Select Trust plc

7 Fast facts UK Equity Global Equity Balanced Managed Shares Income Shares Risk Shares Liquidity Shares Fund manager James Goldstone Nick Mustoe and the Scott Wolle and the Stuart Edwards Invesco Perpetual Invesco Global Asset Global Equity Allocation team Income Group Association of Investment UK All Companies Global Equity Income Flexible Investment Sector Specialist: Companies (AIC) sector Liquidity Funds Annual Management Charge (AMC) 0.65% 0.65% 0.75% 0.2% Ongoing charge (incl AMC) 0.96% 0.96%.6% 0.25% Performance fee 2.5% 2.5% No performance fee No performance fee Ticker IVPU.L IVPG.L IVPB.L IVPM.L Benchmark index FTSE All Share index MSCI World index None None Source: Invesco Perpetual as at 30 September 206. Performance fees apply to any outperformance of the relevant benchmark index subject to a minimum outperformance of % per annum. The amount that can be earned in any one year is limited to 0.65% of the net assets. Any underperformance of the benchmark index, or performance above the cap, is carried forward to subsequent periods. 06 Invesco Perpetual Select Trust plc

8 Contact us For further information regarding Invesco Perpetual Select Trust plc: Telephone Telephone calls may be recorded. Important Information Where Invesco Perpetual has expressed its views and opinions, these may change. For more information on our products, please refer to the relevant share portfolio-specific Alternative Investment Fund Managers Directive investor information document (AIFMD), and the latest Annual or Half-Yearly Financial Reports. This information is available using the contact details shown. Further details of the Company s Investment Policy and Risk and Investment Limits can be found in the Report of the Directors contained within the Company s Annual Financial Report. Issued on behalf of the board of Invesco Perpetual Select Trust plc by Invesco Fund Managers Limited. Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 HH, UK. Authorised and regulated by the Financial Conduct Authority UK529/68/PDF/226