Invesco Wholesale Global Targeted Returns Fund Class A Monthly Report

Transcription

1 Invesco Wholesale Global Targeted Returns Fund Class A Monthly Report 31 March 2018 FUND MANAGER OF THE YEAR 2017 WINNER Alternative Investments Fund performance analysis (periods to 31 March 2018) s Net performance Periods Fund % Benchmark % Value added % 1 month months months year years p.a years p.a Calendar year to date Financial year to date Since inception p.a David Millar Head of Multi Asset and Gwylim Satchell Dave Jubb Richard Batty Fund ratings 1 2 The Fund returns are shown after ongoing fees and assumes reinvestment of income. Past returns are not a reliable indicator of future returns. Future returns may be affected by a range of factors including economic and market influences. Underlying Luxembourg Strategy performance analysis in EUR (periods to 31 March 2018) In the table below we show the performance history (gross of fees) of the underlying Invesco Global Targeted Returns Strategy. Gross performance Periods Strategy % Benchmark % Value added % 1 month months months year years p.a years p.a Calendar year to date Financial year to date Since inception p.a Returns can go up and down. Past returns are not a reliable indicator of future returns. Future returns may be affected by a range of factors including economic and market influences. Cumulative performance of the GTR Strategy since inception 3 in EUR Invesco Global Targeted Returns (gross) Fund Objective (EURIBOR 3M + 5% p.a.) (gross) Fund Benchmark (EURIBOR 3M) Invesco Wholesale Global Targeted Returns Fund - Class A Monthly report

2 Fund facts at a glance Asset class Liquid alternatives, multi asset. Management style A fundamental, unconstrained, high conviction approach focused on leveraging a diversified, value-adding set of investment ideas into a single risk-managed portfolio. Objective 4 To achieve a positive total return in all market conditions, targeting a gross return of cash +5% p.a. with less than half the volatility of global equities over rolling three-year periods. Benchmark Bloomberg AusBond Bank Bill Index 5 (Australian pooled Fund) Euribor 3M (underlying Luxembourg strategy) Investment team location Henley-on-Thames, UK Investor time horizon 3-5 years Distribution frequency Annually - as at 30 June Inception date 28/2/15 Minimum investment A$20,000 MER/ICR 0.95% Buy/Sell Spread 0.3/0.3 Fund analysis (as at 31 March 2018) The diagram below illustrates how portfolio risk is reduced by combining a diversified array of individual investment ideas within a single, risk managed portfolio Total independent risk Independent risk Diversification benefit 5 of global equity risk 3 Total portfolio risk 4.48% 1 Portfolio risk Volatility - Asian Equities vs US Equities Interest Rates - Yield Compression Interest Rates - Selective EM Debt Interest Rates - Italy vs Europe Interest Rates - Global Yield Curves Interest Rates - Australia Inflation - US vs UK Inflation - Short Europe Equity - Japan Equity - Dispersion Currency - US Dollar vs Taiwan Dollar Currency - US Dollar vs Euro Currency - US Dollar vs Canadian Dollar Currency - Swedish Krona vs Euro Currency - Russian Ruble vs US Dollar Currency - Long EM Carry Currency - Japanese Yen vs Swiss Franc Currency - Japanese Yen vs Korean Won Currency - Indian Rupee vs Chinese Renminbi Currency - Chile and Mexico vs Australia and NZ Commodity - Commodity Short Commodity - Commodity Carry Credit - US High Yield Credit - Selective Credit Equity - UK Equity - Selective Asia Exposure Equity - Global Equity - European Divergence Source: Invesco as at 31 March For illustrative purposes only. 1. Portfolio risk the expected volatility of the fund as measured by the standard deviation of the current portfolio of ideas over the last three and a half years. 2. Independent risk the expected volatility of an individual idea as measured by its standard deviation over the last three and a half years. 3. Global equity risk - the expected volatility of the MSCI World Local index as measured by its standard deviation over the last three and a half years, 11.6 as at 31 March Portfolio statistics (31 March 2018) Contribution to total independent risk by asset (%) Contribution to total independent risk by country (%) APIR code GTU0109AU Volatility Inflation 8% Asia 2% Equity 26% Australia Canada 2% Cayman Islands 2% Awards Commodity 6% Other 2 Chile China Europe FUND MANAGER OF THE YEAR 2017 WINNER Alternative Investments France 9% 3 The underlying, Luxembourgbased Global Targeted Returns Strategy composite commenced on 31 December Invesco does not guarantee that the Fund will achieve its objective. 5 This is a target return Fund managed on a benchmarkunaware basis. The Bloomberg AusBond Bank Bill Index is used as a reference rate for performance purposes only. Currency 35% Assets under management Credit 5% Interest Rates 16% United States United Kingdom Sweden Singapore Hong Kong India A$m Fund AUM: 1, Strategy AUM: 39, Switzerland Russia Norway 1% Japan 5% Ireland Germany 6% 2 Invesco Wholesale Global Targeted Returns Fund - Class A Monthly report

3 Monthly commentary Market review Broadly-speaking, equity markets fell as attentions were turned to the potential impact of US President Trump s desire to impose trade tariffs on competitors, initially focussing on foreign steel and aluminium. While the initial tariffs were tempered to exclude friendly nations, the tone had been set. Hardest hit were the more cyclical sectors, which tend to benefit from global trade. Among these was technology, which was buffeted by Facebook data privacy concerns and related regulatory crackdown and Amazon-related tweets from Trump. Buried among this was another interest rate hike from the US Federal Reserve, which was accompanied by a more positive outlook for the US economy. It also appears increasingly likely that the Bank of England will raise rates again at its May meeting. The UK government announced a Brexit victory of sorts giving some detail on a transition period, which effectively extended EU membership to December Government bonds outperformed corporate bonds, as equity market volatility increased demand for the perceived stability of government bond markets. Contributors to performance Performance was marginally negative during March. The weakness of the Swedish krona weighed on the fund as the traditionally open economy was seen as a potential victim of any trade war escalation. In addition, a number of our equity ideas (notably in Japan, the UK and Europe) followed markets lower. Our selective credit idea was also a negative as corporate bonds were out of favour during the month. On the upside, our selective emerging markets debt idea benefited from falling interest rates in Poland and Mexico. The Polish economy has been performing strongly, but this has not yet been translated into an increase in inflation, allowing the central bank to maintain record low interest rates. Lower inflation in the UK also benefited the fund as the difference between long-term and short-term inflation widened in the UK and the difference between future expectations for US and UK inflation narrowed. A number of our currency ideas also boosted performance, most significantly our preference for the Japanese yen against the Swiss franc, which was positive as the Swiss central bank reported lower demand for the safe haven currency due to the strength of the Eurozone economy. Summary of investment ideas During the month, we closed the US leg of our Australia vs US interest rates idea following strong performance and renamed the idea Interest Rates - Australia. This is now a short view on Australian rates, where we believe the economy will have to contend with further moderation in inflation and consumer strength, as well as the knock on effects of potentially lacklustre Chinese growth. We introduced a short position in the Taiwanese dollar vs the US dollar. The Taiwanese currency appears to us to have benefited from the cyclical increase in global trade, but could struggle from here relative to the US dollar. Inflation in Taiwan remains low and China is moving from being an importer of Taiwanese goods to being a competitor. At the same time, US interest rates look set to rise, which would increase the carry available from the idea. We added another interest rate idea where we expect Italian rates to fall relative to European rates. Here, we believe Italian debt dynamics have turned a corner and that further upgrades to government debt are possible, which could in turn lead to increased investor interest. 3 Invesco Wholesale Global Targeted Returns Fund - Class A Monthly report

4 Fund rating disclaimers 1 The Zenith Investment Partners ( Zenith ) Australian Financial Services License No rating (assigned December 2017) referred to in this document is limited to General Advice (s766b Corporations Act 2001) for Wholesale clients only. This advice has been prepared without takin into account the objectives, financial situation or needs of any individual and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at zenithpartners.com.au/regulatoryguidelines. 2 The Lonsec Rating (assigned June 2017) presented in this document is published by Lonsec Research Pty Ltd ABN AFSL The Rating is limited to General Advice (as defined in the Corporations Act 2001 (Cth)) and based solely on consideration of the investment merits of the financial product(s). Past performance information is for illustrative purposes only and is not indicative of future performance. It is not a recommendation to purchase, sell or hold Invesco Australia Ltd. product(s), and you should seek independent financial advice before investing in this product(s). The Rating is subject to change without notice and Lonsec assumes no obligation to update the relevant document(s) following publication. Lonsec receives a fee from the Fund Manager for researching the product(s) using comprehensive and objective criteria. For further information regarding Lonsec s Ratings methodology, please refer to our website at: The Professional Planner Zenith Fund Awards are determined using proprietary methodologies. Fund Awards were issued October 6, 2017 and are solely statements of opinion and do not represent recommendations to purchase, hold or sell any securities or make any other investment decisions. Fund Awards are current for 12 months from the date awarded and are subject to change at any time. Fund Awards for previous years are referenced for historical purposes only. The use of the Fund Awards logo and artwork is limited to organisations which consent to these Terms of Use. Use of the logo implies this consent has been given. Any requests for variation of these terms of use must be made to: Conexus Financial, Level 3, 1 Bligh Street, SYDNEY NSW Conexus Financial may terminate the licence to use the Professional Planner Zenith Fund Awards logo at any time upon written notice. 4 Invesco Wholesale Global Targeted Returns Fund - Class A Monthly report

5 Contact Phone: Website: Important Information This document has been prepared by Invesco Australia Ltd (Invesco) ABN , Australian Financial Services Licence number , who can be contacted on freecall , by to or by writing to GPO Box 231, Melbourne, Victoria, You can also visit our website at This document contains general information only and does not take into account your individual objectives, taxation position, financial situation or needs. You should assess whether the information is appropriate for you and consider obtaining independent taxation, legal, financial or other professional advice before making an investment decision. A Product Disclosure Statement (PDS) for any Invesco fund referred to in this document is available from Invesco. You should read the PDS and consider whether a fund is appropriate for you before making a decision to invest. Invesco is authorised under its licence to provide financial product advice, deal in financial products and operate registered managed investment schemes. If you invest in an Invesco Fund, Invesco may receive fees in relation to that investment. Details are in the PDS. Invesco s employees and directors do not receive commissions but are remunerated on a salary basis. Neither Invesco nor any related corporation has any relationship with other product issuers that could influence us in providing the information contained in this document. Investments in the Invesco funds are subject to investment risks including possible delays in repayment and loss of income and principal invested. Neither Invesco nor any other member of the Invesco Ltd Group guarantee the return of capital, distribution of income, or the performance of any of the Funds. Any investments in the Funds do not represent deposits in, or other liabilities of, any other member of the Invesco Ltd Group. Invesco has taken all due care in the preparation of this document. To the maximum extent permitted by law, Invesco, its related bodies corporate, directors or employees are not liable and take no responsibility for the accuracy or completeness of this document and disclaim all liability for any loss or damage of any kind (whether foreseeable or not) that may arise from any person acting on any statements contained in this document. This document has been prepared only for those persons to whom Invesco has provided it. It should not be relied upon by anyone else. Copyright of this document is owned by Invesco. You may only reproduce, circulate and use this document (or any part of it) with the consent of Invesco. Invesco Wholesale Global Targeted Returns Fund Class A Monthly Report (R) MAR18