Invesco Pan European Focus Equity Fund

Transcription

1 Invesco Pan European Focus Equity Fund November 2013 This marketing document is exclusively for use by Professional Clients and Financial Advisers in Continental Europe and is not for consumer use. Data as at , unless otherwise stated. Please do not redistribute this document.

2 Contents Henley investment centre and Pan European equities Fund characteristics Investment team Investment philosophy and process Changes in portfolio since launch Additional characteristics of the fund Scenario analysis Breakdown of stocks owned and sold since inception Performance and current positioning 8 Appendix 2

3 Henley investment centre and Pan European equities

4 Henley investment centre Manages 83.7bn 1 Equities Fixed income 26% 35 fund managers/analysts 18 years avg experience 9 years avg with firm AUM 61.9bn 12 fund managers/analysts 15 years avg experience 9 years avg with firm AUM 21.8bn Multi Asset 74% 4 fund managers/analysts 20 years avg experience Team is new to firm Equities Fixed income Multi Asset 1 Including retail, offshore and institutional assets. Equities information includes Global, US, European, UK, Emerging Market, Asian and Japan equities teams. Source: Invesco Perpetual as at 30 June / Exchange rate

5 Fund characteristics

6 Invesco Pan European Focus Equity Fund Fund characteristics Fund inception 7 July 2011 Benchmark Investment strategy MSCI Europe We aim to construct a high conviction portfolio of the best regional ideas within a disciplined, scalable investment process. Unconstrained, valuation-led, bottom-up investment approach. We are style agnostic but try to avoid momentum strategies. Invesco Pan European Focus Equity Fund Cumulative returns, gross of fees in EUR (%) ,2 50,8 No. of holdings Current Fund size 13.5m Market cap Approximately 40 stocks From 100m to over 50bn on and off benchmark ,7 21,7 24,0 Average holding period Target investment horizon of 3 to 5 years. Information on stocks held and sold in fund provided on slide ,3 7,8 9,6 0 3 months 6 months 1 year Since inception Invesco Pan European Focus Equity Fund MSCI Europe Index Past performance is not a guide to future returns. Source: Invesco as at 31 October Fund performance figures are shown in euros on a mid-to-mid basis, inclusive of reinvested income and gross of the annual management charge and all other fund expenses. The figures do not reflect the entry charge paid by individual investors. Benchmark figures are total return, in euros. 6

7 Investment team

8 UK and European Equities Team in Henley 8 fund managers operate on Pan-European mandates 1 Fund managers Fund managers Fund managers Mark Barnett 2 Fund Manager 17 yrs with team Paul Lamacraft Trainee Fund Mgr 1 yr with team Richard Smith Fund Manager 11 yrs with team Adrian Bignell Fund Manager 10 yrs with team Stephen Lamacraft Fund Manager 6 yrs with team John Surplice Fund Manager 18 yrs with team Jonathan Brown Fund Manager 9 yrs with team Ciaran Mallon Fund Manager 9 yrs with team Jeff Taylor Fund Manager 16 yrs with team Stephanie Butcher Fund Manager 10 yrs with team Matthew Perowne Trainee Analyst 3 yrs with team Martin Walker Fund Manager 14 yrs with team Erik Esselink Fund Manager 6 yrs with team Saku Saha Fund Manager 4 yrs with team Neil Woodford 2 Fund Manager 25 yrs with team James Goldstone Trainee Fund Mgr 1 yr with team Source: Invesco Perpetual as at 30 September Individuals highlighted in grey manage Pan European mandates. 2 Neil Woodford will be leaving the company on 29 April Mark Barnett will succeed him as Head of UK Equities as of this date. 8

9 Invesco Pan European Focus Equity Fund team Europe UK Large Cap 1 Small Cap John Surplice Key funds Years at IP Years in industry Erik Esselink Key funds Invesco Pan European Equity Fund - Managed by John Surplice and Martin Walker UK domiciled Global Equity ICVC - Managed by IP Global Equity Group (GEG) Invesco Continental European Small Cap Equity Fund Invesco Global Smaller Companies Equity Fund Managed by IP Global Smaller Companies Group (GSC) and Nick Mustoe Martin Walker Key UK domiciled UK Growth ICVC funds UK domiciled UK Aggressive ICVC Years at IP Years in industry Invesco Pan European Equity Fund - Managed by Martin Walker John Surplice UK domiciled Global Equity ICVC - Managed by IP Global Equity Group (GEG) Jonathan Brown Key UK domiciled UK Smaller Companies funds Equity ICVC - Managed by Richard Smith and Jonathan Brown Invesco Pan European Small Cap Equity Fund - Managed by Adrian Bignell and Jonathan Brown UK domiciled Global Smaller Companies ICVC - Managed by IP Global Smaller Companies Group (GSC) Years at IP Years in industry 6 14 Years at IP Years in industry Source: Invesco Perpetual as at 30 September

10 Invesco Pan European Focus Equity Fund team Performance of funds of regional fund managers Large Cap Small Cap Europe Fund performance (%) 1yr 3 yrs 5 yrs Invesco Pan European Equity Fund M Star GIF OS Europe Large-Cap Blend Equity Quartile Fund performance (%) 1yr 3 yrs 5 yrs Invesco Continental European Small Cap Equity Fund GIF OS Europe ex-uk Small-Mid Cap Equity Quartile Large Cap UK Fund performance (%) 1yr 3 yrs 5 yrs UK domiciled UK Growth ICVC IMA UK All Companies Quartile Small Cap Fund performance (%) 1yr 3 yrs 5 yrs UK domiciled UK Small Companies Equity ICVC IMA UK Smaller Companies Quartile Past performance is not a guide to future returns. Source: UK domiciled ICVC s: Lipper as at 31 October Fund and sector performance figures are shown in sterling on a mid-to-mid basis, inclusive of net reinvested income and net of the annual management charge and all other fund expenses for the Accumulation share class. The figures do not reflect the entry charge paid by individual investors. Source: Luxembourg and Dublin domiciled Funds: Morningstar 2013 as at 31 October Fund and sector performance figures are shown in euros (Invesco Pan European Equity Fund) and USD (Invesco Continental European Small Cap Equity Fund) on a mid-to-mid basis, inclusive of gross reinvested income and net of the annual management charge and all other fund expenses for the A share class. The figures do not reflect the entry charge paid by individual investors. 1 Jonathan Brown was named as joint fund manager of this fund as at 25 February

11 Investment philosophy and process

12 Investment philosophy We believe markets are inefficient and provide opportunities to buy stocks below their intrinsic value Valuation is the key determinant of future returns We are style agnostic but try to avoid momentum strategies Valuation-driven stock picking in a macro and market context 12

13 Investment process Overview Fundamental research and idea generation Challenge process Portfolio construction & risk management Individual fund managers are responsible for proposing the best ideas from their regional portfolios, drawing on: - their specialist knowledge of that asset class - in-depth understanding and analysis of each company Each idea, supported by extensive research and analysis carried out by the regional fund manager, will be carefully assessed by the group, drawing on their considerable individual and collective experience of equity markets. Other considerations such as the macro context and the impact of the individual idea on the shape of the portfolio will also be assessed. The portfolio construction process targets the best mix of stock specific opportunities at any particular time. Position sizes are based on upside potential and risk/reward assessment. We build a high conviction, valuation-led portfolio of the best ideas across Europe. Typically stocks. Individual stock risk analysis is supplemented by the use of various quantitative and qualitative tools at the portfolio level Valuation-driven stock picking in a macro and market context For illustrative purposes only. 13

14 Investment process Idea generation Ideas are sourced from the regional fund managers A flexible approach to the type of stock ideas to be considered eg bottom up, top down and opportunistic Extensive knowledge of local markets and companies is key to identifying attractive regional opportunities The regional fund managers propose the best ideas from their regional portfolios, drawing on their in-depth understanding of those companies Valuation-driven stock picking in a macro and market context 14

15 Investment process Fundamental research undertaken by regional experts Bottom up analysis Valuation analysis Multiples Return analysis Special Situations Operational analysis What drives this company s results? Management track record Financial analysis Understanding historic trends and forecasts Capital allocation analysis Meeting management Meeting sell side analysts Top down analysis Macro analysis Understanding where we are in the economic cycle and inflection points Understanding market perceptions Meeting sell side economists and strategists Henley fund managers specialising in other regions and asset classes Valuation considerations Several valuation scenarios are considered and an assessment of likelihood Compare with market value and consensus expectations The establishment of a fair value target based on relevant valuation methodology Valuation-driven stock picking in a macro and market context 15

16 Investment process Challenge process Presentation of proposed idea to the group with supporting research material, highlighting the investment case. Active discussion of the proposed idea by the investment team: - Understanding of current valuation and scale of opportunity - Assessment of key scenarios - Assessment of key drivers - Assessment of key risks - Assessment of macro context Open nature of discussions encourages each fund manager to provide additional insight: Portfolio of the best mix of high conviction ideas within a disciplined investment process. - Knowledge of that particular industry in their own region - Knowledge of similar companies, be it competitors or suppliers, based in their own region - Knowledge of top down factors in their own region - Discuss alternative ideas from their own region if appropriate The appropriateness of any proposed idea in context of the shape of the portfolio Valuation-driven stock picking in a macro and market context 16

17 Investment process Portfolio construction The portfolio construction process targets the best mix of stock specific opportunities at any particular time. Stock weightings reflect: - The expected return profile subject to our assessment of risk - Risk/reward in context of existing holdings Tracking error is a residual factor Portfolio of the best mix of high conviction ideas within a disciplined investment process. Holdings are sold if: - They become fully valued - There is a change in the investment thesis for that stock - There exists a more attractive opportunity elsewhere Valuation-driven stock picking in a macro and market context 17

18 Investment process Risk management Investment risk Portfolio holdings are continuously monitored by both the regional specialist, who is responsible for the original idea, as well as by the wider team. By constantly analysing stock fundamentals and valuation, each team member is well placed to understand the risks associated with any particular stock. Portfolio risk Individual stock analysis is supplemented by the use of various quantitative and qualitative tools at portfolio level. Investment Oversight and Independent Risk Function monitor risk of portfolio. CIO challenge Combining investment and portfolio risk monitoring. 18

19 Invesco Pan European Focus Equity Fund Strategy summary A disciplined valuation driven approach to investing, and a strong risk culture High conviction Investment universe: Benchmark and off-benchmark opportunities Idea generation employs regional expertise Fundamental analysis with a strong emphasis on valuation Detailed and independent risk assessment 19

20 Changes in portfolio since launch

21 Invesco Pan European Focus Equity Fund Active sector weights Time series of largest active sector weights (based on largest active positions as at 30 June 2013) % 1, juil. 11 oct. 11 janv. 12 avr. 12 juil. 12 oct. 12 janv. 13 avr. 13 juil. 13 oct. 13 Industrials Financials Consumer Staples Telecommunications Source: Invesco Perpetual as at 30 October Sectors selected on the two largest active overweight and underweight positions as at 30 June On a month end basis. For illustrative purposes only. 21

22 Invesco Pan European Focus Equity Fund Active country weights Specific active country weights (selected on the basis of major changes since July ) % 1, juil. 11 oct. 11 janv. 12 avr. 12 juil. 12 oct. 12 janv. 13 avr. 13 juil. 13 oct. 13 Spain Finland United Kingdom Switzerland Source: Invesco Perpetual as at 30 October Countries selected according to two largest active increases and two largest active decreases since 7 July On a month end basis. For illustrative purposes only. 22

23 Invesco Pan European Focus Equity Fund Portfolio breakdown by market capitalisation bands Portfolio breakdown by market capitalisation bands (%) juil. 11 oct. 11 janv. 12 avr. 12 juil. 12 oct. 12 janv. 13 avr. 13 juil. 13 oct. 13 EUR 10bn and above EUR 5bn to 10bn EUR 1 to 5bn EUR 0 to 1bn Cash Source: Invesco Perpetual as at 30 October On a month end basis. For illustrative purposes only. 23

24 Invesco Pan European Focus Equity Fund Active share ratio Active share ratio % 1 90,0 89,5 89,0 88,5 88,0 87,5 87,0 86,5 86,0 85,5 85,0 juil. 11 sept. 11 nov. 11 janv. 12 mars 12 mai 12 juil. 12 sept. 12 nov. 12 janv. 13 mars 13 mai 13 juil. 13 sept. 13 Portfolio of stocks encourages high active share ratio Source: Invesco Perpetual as at 31 October Active share is that part of the fund which differs from the benchmark and is calculated as (1 minus the coverage ratio.) Coverage is defined as that part of the fund which exactly replicates the benchmark. 24

25 Invesco Pan European Focus Equity Fund Changes in sector weightings at specific points MSCI Europe net return (Indexed, EUR) 1 117,5 112,5 107,5 102,5 97,5 Key changes in fund positioning between 31 May and 28 June : Increased our consumer discretionary holdings by 2.2% Increased our healthcare holdings by 1.5% Key changes in fund positioning between 31 May and 31 August : Increased our financials holdings by 6.1% Reduced our healthcare holdings by 2.8% Reduced our consumer staples holdings by 1.9% 92,5 87,5 82,5 juil. 11 sept. 11 nov. 11 janv. 12 mars 12 mai 12 juil. 12 sept. 12 nov. 12 janv. 13 mars 13 mai 13 Key changes in fund positioning between 30 September and 31 October : Increased our financials holdings by 1.5% Reduced our healthcare holdings by 2.1% Increased our industrials holdings by 1.6% Source: Lipper as at 30 June Changes in fund holdings is Invesco Perpetual data. 25

26 Additional characteristics of the fund - Scenario analysis - Holding periods

27 Invesco Pan European Focus Equity Fund Scenario liquidity analysis: days to trade to cash and benchmark on theoretical 300m fund size The estimated no of days to trade the portfolio to cash/benchmark assuming a theoretical fund size of 300m (based on the current portfolio as at 30 April 2013) Positions eliminated (%) Trade to cash (number of days) Trade to benchmark (number of days) Source: Invesco Perpetual as at 30 April Liquidity shows the amount of the portfolio, as a % of its initial value, that can be liquidated to cash (dark blue line) or traded to the benchmark (light blue line) within the time indicated. The chart above uses scenario analysis, assuming a theoretical fund size of 300m (based on the actual portfolio as at 30 April 2013 which was 3.2m), to estimate the theoretical number of days it would take to trade to cash/benchmark. This is based on the assumption of a 300m portfolio size and the ability to trade up to 20% of each share s daily volume. 27

28 Invesco Pan European Focus Equity Fund Breakdown of stocks held and sold since inception A breakdown of the number of stocks held and sold since 7 July Stocks still owned since inception Stocks bought after inception and still held Stocks bought after inception and since sold Stocks owned at inception and since sold Source: Invesco Perpetual as at 30 October In total 63 stocks have been part of the fund since 7 July Calculations exclude cash within the fund and each company is only counted once thereby ignoring any other related equity/debt linked instruments e.g. bonus/scrip issues. 28

29 Portfolio performance and current positioning

30 Invesco Pan European Focus Equity Fund Net performance (%) A share class Calendar year returns YTD Invesco Pan European Focus Equity Fund M Star GIF OS Europe Large-Cap Value Equity Out/underperformance Cumulative returns 1 month 3 months 6 months 1 year Since Launch 1 Invesco Pan European Focus Equity Fund M Star GIF OS Europe Large-Cap Value Equity Out/underperformance Past performance is not a guide to future returns. Source: Morningstar 2013 as at 31 October Fund and sector performance figures are shown in euros on a mid-to-mid basis, inclusive of gross reinvested income and net of the annual management charge and all other fund expenses for the A share class. The figures do not reflect the entry charge paid by individual investors. 1 Fund launched 7 July

31 Invesco Pan European Focus Equity Fund Top 10 holdings Stock Sector % in fund Novartis Health Care 4.8 Roche Health Care 3.7 BP Energy 3.3 BBVA Financials 3.2 UBS Financials 3.0 BT Telecoms 3.0 UPM-Kymmene Materials 2.9 Rio Tinto Materials 2.9 CAP Gemini Information Technology 2.9 GKN Consumer Discretionary 2.9 Source: Invesco Perpetual as at 31 October

32 Invesco Pan European Focus Equity Fund Active sector weightings (%) 1 Industrials Financials Consumer Discretionary Health Care Information Technology Energy Utilities Materials Telecommunication Services Consumer Staples Source: Invesco Perpetual as at 31 October Relative to MSCI Europe. 32

33 Invesco Pan European Focus Equity Fund Active country weightings (%) 1 Netherlands Spain United Kingdom Finland Greece Portugal Austria Ireland Italy France Norway Denmark Belgium Switzerland Sweden Germany Source: Invesco Perpetual as at 31 October Relative to MSCI Europe. 33

34 Appendix

35 Invesco Pan European Focus Equity Fund Biographies of regional fund managers John Surplice: European Equities fund manager John began his career in 1992, joining Price Waterhouse, where he qualified as a chartered accountant before joining our company in John holds an MA (Honours) in Economics from Edinburgh University. Martin Walker: UK Equities fund manager Martin began his investment career in 1997 at BWD Rensburg before joining Invesco Perpetual in Martin holds a BA in Financial Economics from Liverpool University and has also attained the Securities Institute Diploma. Erik Esselink: European Small Cap Equities fund manager Erik joined Invesco Perpetual in 2007 as a fund manager after 10 years working as a sales specialist at Barings and Morgan Stanley. He studied Commercial Economics at the Rotterdam School of Economics. Jonathan Brown: UK Small Cap Equities fund manager After three years as a trainee fund manager at Invesco Perpetual Jonathan became a fund manager in his own right in Jonathan holds a BSc in Bio-Chemistry from UMIST. Source: Invesco Perpetual as at 31 August

36 Important information This marketing document is exclusively for use by Professional Clients and Financial Advisers in Continental Europe and is not for consumer use. Data as at , unless otherwise stated. Please do not redistribute this document. 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. Past performance is not a guide to future returns. Where Invesco has expressed views and opinions, these may change. The fund invests in a limited number of holdings and is less diversified, and therefore this may result in large fluctuations of the value of the fund. For more information on our funds, please refer to the most up to date relevant fund and share class-specific Key Investor Information Documents, the latest Annual or Interim Reports and the latest Prospectus, and constituent documents. This information is available using the contact details of the issuer and is without charge. Further information on our products is available using the contact details shown. Whilst great care has been taken to ensure that the information contained herein is accurate, no responsibility can be accepted for any errors, mistakes or omissions or for any action taken in reliance thereon. This document is not an invitation to subscribe for shares in the fund and is by way of information only. This document is not an invitation to subscribe for shares in the fund and is by way of information only. The performance data shown does not take account of the commissions and costs incurred on the issue and redemption of units. Any reference to a ranking, a rating or an award provides no guarantee for future performance results and is not constant over time. Persons interested in acquiring the fund should inform themselves as to (i) the legal requirements in the countries of their nationality, residence, ordinary residence or domicile; (ii) any foreign exchange controls and (iii) any relevant tax consequences. As with all investments, there are associated risks. This document is by way of information only. Asset management services are provided by Invesco in accordance with appropriate local legislation and regulations. The fund is available only in jurisdictions where its promotion and sale is permitted. Not all share classes of this fund may be available for public sale in all jurisdictions and not all share classes are the same nor do they necessarily suit every investor. There may be differences in fee structures, in minimum investment amounts, etc. Please check the most recent version of the fund prospectus in relation to the criteria for the individual share classes and contact your local Invesco office for full details of the fund registration status in your jurisdiction. Please be advised that the information provided in this document is referring to Class A (accumulation - EUR) exclusively. Denmark and Greece: The fund is not registered for public distribution in these jurisdictions. This document is provided only at the request of a Professional Client or qualified investor and is intended for the sole use of this person. Portugal: The fund's shares are not all currently registered for sale. As a consequence, the unregistered shares may not be offered or distributed by way of public advertisement or public offer in this/these jurisdiction(s). The unregistered shares may only be offered and the legal offering documents (KIID, prospectus, annual reports) and marketing materials of the fund may only be distributed in this/these jurisdiction(s) without public solicitation and in compliance with the private placement rules set forth in the laws, rules and regulations of the jurisdiction concerned. Germany, Austria and Switzerland: This document is issued in Germany by Invesco Asset Management Deutschland GmbH regulated by Bundesanstalt für Finanzdienstleistungsaufsicht. This document is issued in Austria by Invesco Asset Management Österreich GmbH and in Switzerland by Invesco Asset Management (Schweiz) AG. Subscriptions of shares are only accepted on the basis of the most up to date legal offering documents. The legal offering documents (fund & share class specific Key Investor Information Document, prospectus, annual & semi-annual reports, articles and trustee deed) are available free of charge at our website and in hardcopy and local language from the issuers: Invesco Asset Management Deutschland GmbH, An der Welle 5, D Frankfurt am Main, Invesco Asset Management Österreich GmbH, Rotenturmstrasse 16-18, A-1010 Vienna, and Invesco Asset Management (Schweiz) AG, Stockerstrasse 14, CH-8002 Zürich, who acts as a representative for the funds distributed in Switzerland. Paying agent for the fund distributed in Switzerland: BNP PARIBAS SECURITIES SERVICES, Paris, succursale de Zurich, Selnaustrasse 16, CH-8002 Zurich. 36