Invesco Asian Equity Fund

Transcription

1 Invesco Asian Equity Fund A-AD shares July 2018 This marketing document is exclusively for use by Professional Clients and Financial Advisers in Continental Europe (as defined in the important information), Qualified Investors in Switzerland and Professional Clients in Cyprus, Dubai, Jersey, Guernsey, Isle of Man, Malta and the UK. This document may also be used by financial intermediaries in the United States as defined in the important information. This document is not for consumer use, please do not redistribute. EMEA4517/2018

2 Contents Invesco Asian Equity Fund Investment philosophy and process Portfolio performance and positioning 2

3 Invesco Asian Equity Fund

4 Invesco Asian Equity Fund Key fund features 1 Taps Asia s fundamental strengths The fund offers investors unconstrained exposure to Asia s fundamental strengths. The fund is well balanced and diversified across countries and sectors, with no inbuilt style bias 2 Strong experienced team 3 Unconstrained, valuation-led investment approach This stable and experienced investment team have been investing successfully in Asian equity markets for over 20 years. The team head and fund manager Stuart Parks is supported by a strong team, including Tim Dickson, Ian Hargreaves, William Lam, Charles Bond and Fiona Yang, who together have an average industry experience of 20 years. The team take an unconstrained, valuation-led investment approach that combines robust bottom-up, fundamental analysis with a unique top down approach specifically tailored for Asia which takes advantage of changes in liquidity conditions Source: Invesco as at 31 May

5 Henley-based Asian equities team Experience and stability Stuart Parks Ian Hargreaves Tim Dickson William Lam Charles Bond Fiona Yang John Pellegry Dana Draper Title: Head of Asian Equities Fund Manager Fund Manager Fund Manager Deputy Fund Manager Analyst Product Director FM Assistant Experience: - Industry -Invesco 33 years 24 years 24 years 24 years 25 years 10 years 17 years 12 years 7 years 6 years 6 year 1 year 22 years 15 years 18 years 18 years Asian Team assets under management: $20.5 billion Source: Invesco as at 31 March Figures may be rounded up. $ = US. 5

6 Stuart Parks Head of Asian Equities and Fund Manager Stuart Parks We are seeing genuine signs of economic reform across the region. While we do not expect progress to be smooth, these forces for change should be beneficial in the longer term while also bringing up interesting opportunities at the stock picking level, particularly given the reasonable valuation levels still on offer relative to global markets. Stuart Parks, Fund Manager 6

7 Invesco Asian Equity Fund Fund facts Fund name Fund objectives Invesco Asian Equity Fund The objective of this Fund is to achieve long-term capital growth by investing in securities of Asian companies 1 Launch date 3 August 2001 Original launch date 8 March Domicile Legal structure Base currency Unit type Reference index Ireland Mutual Fund Irish Unit Trust authorised as UCITS USD Accumulation and distribution MSCI AC Asia ex Japan Index-ND Share class Unit type Share class ccy Annual management fee Minimum investment ISIN code A AD USD 1.50% USD 1,500 IE There may be additional share classes 3 registered for sale in individual jurisdictions. 1 For the full objectives and investment policy please consult the current prospectus. 2 The original fund launch date shown herein is different from the fund launch date shown in the KIID, as it indicates the launch date of a previous fund that was merged into the fund shown and therefore the track record starts with this previous fund. On 27 June 2008 the Invesco Newly Industrial Countries Fund was merged into the Invesco Asian Equity Fund. 3 For information on fund and fund s shares registrations, please refer to the appropriate internet site or your local Invesco office. 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 fund prospectus for additional information. 7

8 Investment philosophy and process

9 Investment philosophy Active fund management: absolute return mind-set with benchmark awareness for risk control purposes Flexible investment approach combining top down and bottom up analysis. We seek to add value through good stock selection as well as to use our understanding of liquidity conditions to shape portfolio construction For illustrative purposes only. 9

10 Our investment approach Flexible approach combining top down and bottom up Top down (Liquidity analysis) We aim to tilt the portfolio towards areas of the market that are better placed to benefit from our liquidity outlook Portfolio stocks* Portfolio Construction tilts Defensive vs Growth Large vs Small Cap Market and Sector Position size Bottom up (Fundamental analysis) We aim to hold stocks that are trading at a significant discount to our estimate of fair value. *Applies to the Invesco Asia ex Japan Equity Strategy 10

11 Top down analysis Country/sector liquidity analysis Top down Top down analysis focuses on two key aspects: Overall Asian liquidity environment determines the tilts of the portfolio Trends at the country and sector level and how they shape the outlook for corporate earnings growth. In combination with valuation analysis, these findings will determine the country and sector allocation of the portfolio Qualitative assessment of expected returns from the asset class on the basis of growth outlook, yield and view on multiple expansion/contraction For illustrative purposes only. 11

12 Liquidity trend analysis Top down Liquidity conditions are the key determinant in shaping the environment for equities Liquidity is best gauged by changes to balance of payments conditions Findings of liquidity trend analysis determine the portfolio bias to growth or value stocks, large vs. small caps A projected deterioration of liquidity conditions will emphasise need for capital preservation Asian Domestic Excess Liquidity (%YoY, left scale) MSCI AC Asia ex-jp US$ Index 12m % chg (right scale) Source: CEIC and Citi Investment Research as at 28 February Excess liquidity = Supply of money growth less nominal GDP growth. 12

13 Bottom up analysis Bottom up Inputs into idea generation Top down analysis helps define subset of investible stocks at any point in the cycle Company research aims to: Gain an intimate understanding of the company Establish where consensus may be wrong Forecast the 3 to 5 year outlook Primary research: Company visits in Asia (3-4 trips p.a. per fund manager) Company meetings in Henley/London Team coverage: approx. 700 company meetings per annum External analysis Broker research, models & analyst meetings Help to establish market consensus For illustrative purposes only. 13

14 Bottom up analysis Bottom up Stock selection decisions Focus on Management quality and corporate governance Financials (balance sheet health, profitability, cash flow dynamics) Key drivers of future earnings growth Competitive advantages Valuation and fair value to model our own expectations Target stocks which trade at a significant discount to our estimate of fair value For illustrative purposes only. 14

15 Company shortlist Our company shortlist includes holdings + approx. 30 candidates These are ranked by our estimated total annual return for the next 3 years Company Price EPS P/E EPS EPS P/E Price Total return 3-y CAGR* in 3 years in 3 years in 3 years 3-y CAGR* Latest Latest Latest Estimate Implied Estimate Implied Output Stock A 102,500 33, x -3% 30,438 6x 182, % Stock B x 14% x % Stock C x 31% x % Stock Y x 10% x % Stock Z x -3% x % For illustrative purposes only. This table is an illustration and simplification of our proprietary stock comparison tool with earnings-per-share estimates and an earnings-based valuation ratio (P/E) as inputs. A more complete version of the stock comparison table, particularly for financial companies, would include return-onequity estimates and asset-based valuation ratios such as the price-to-book ratio as inputs. *CAGR: cumulative annual growth rate. Dividends are included in the total CAGR estimate but not apparent in the above table. 15

16 Portfolio construction If the expected annual return of a stock looks attractive compared with the return outlook for the asset class, include in portfolio Typically when a stock enters the portfolio it has an expected annual return of over 10% 1 The size of the position in the portfolio is determined by: The size of the expected return Our level of conviction in the expected return The effect of the position on sector and country weights Liquidity Risk control Bottom up: usually no more than 5% in a single holding, stocks in the portfolio Top down: maximum double or half-weighted vs the benchmark in core markets or sectors, maximum 10% cash Applies to Invesco Asian Equity Strategy. 1 There is no guarantee this target will be achieved. Risk control is a mixture of internal, external and prospectus guidelines. For the complete information on the fund, please refer to the current KIID s and prospectus. 16

17 Portfolio construction and risk management Security selection Candidate stocks Portfolio manager Portfolio composition Stock/Security weighting (attitude to benchmarks) Portfolio Risk monitoring structures Risk monitoring systems Investment Oversight team CIO challenge Internal audit & compliance Independent risk function VaR analysis, attribution, style analysis, valuation analysis Third parties Risk analytics For illustrative purposes only. 17

18 Risk Management: CIO challenge Attended by Fund Managers and Invesco Perpetual CIO facilitated by Invesco Perpetual Investment Oversight team. Items covered at these meetings include: Macro-economic views Assessment of the conviction behind active positions taken Rationale for portfolio changes (active positions, market cap, risk profile, style etc) Performance review and attribution Success or otherwise of trading activity Liquidity and capacity issues Team interaction and research capabilities Portfolio risk and style analysis Stock decisions and conviction External impacts flows, market risk etc Forward look at likely behaviour of the portfolio in anticipated market conditions This list in not exhaustive and subject matter can vary depending on market conditions, status of the strategies and the findings of the Investment Oversight team in their ongoing oversight function. 18

19 Portfolio performance and positioning

20 Invesco Asian Equity Fund Indexed performance Indexed performance /13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 Fund MSCI AC Asia ex Japan Index ND The performance data shown relates to a past period. Past performance is not a guide to future returns. 1 (Source: 2017 Morningstar as at 30 June 2018) Fund returns are inclusive of gross income re-invested and net of the ongoing charge and portfolio transaction costs, cumulative in fund currency. The figures do not reflect the entry charge payable by individual investors. The performance data shown does not take account of the commissions and costs incurred on the issue and redemption of units. 20

21 Invesco Asian Equity Fund Net cumulative and calendar year performance Cumulative performance 1 in % YTD 1 month 1 year 3 years 5 years Fund Index Quartile ranking Absolute ranking 96/152 48/155 85/151 27/138 28/111 Mstar GIF OS Sector: Asia ex Japan Equity Calendar year performance 1 in % Fund Index IE Rolling 12 month performance to end of 1 in % Jun 2014 Jun 2015 Jun 2016 Jun 2017 Jun 2018 Fund Index The performance data shown relates to a past period. Past performance is not a guide to future returns. 1 (Source: 2017 Morningstar as at 30 June 2018) Fund returns are inclusive of gross income re-invested and net of the ongoing charge and portfolio transaction costs, cumulative in fund currency. The figures do not reflect the entry charge payable by individual investors. The performance data shown does not take account of the commissions and costs incurred on the issue and redemption of units. Share class: A-AD. Share class currency: USD. 2 MSCI AC Asia ex Japan Index-ND. 21

22 Invesco Asian Equity Fund Issuers and active weights Issuers and active weights 1 (total holdings: 56) Top 10 Issuers % Samsung Electronics Co Ltd 9.0 AIA Group Ltd 5.9 Tencent Holdings Ltd 4.7 Taiwan Semiconductor Manufacturing Co Ltd Industrial & Commercial Bank of China Ltd Housing Development Finance Corp Ltd CNOOC Ltd 3.1 NetEase Inc 2.9 Korea Electric Power Corp 2.7 China Life Insurance Co 2.6 Top 10 positive + Samsung Electronics Co Ltd 3.9 AIA Group Ltd 3.6 Housing Development Finance Corp Ltd Industrial & Commercial Bank of China Ltd Korea Electric Power Corp 2.5 China Life Insurance Co Ltd/Taiwan 2.5 NetEase Inc 2.5 CNOOC Ltd job Inc 2.1 POSCO 2.0 Top 10 negative Alibaba Group Holding Ltd 2.4 China Construction Bank Corp 1.9 Tencent Holdings Ltd 1.3 Ping An Insurance Group Co of China Ltd 1.0 SK Hynix Inc 1.0 Reliance Industries Ltd 0.9 Hong Kong Exchanges & Clearing Ltd Oversea-Chinese Banking Corp Ltd Tata Consultancy Services Ltd 0.5 Sun Hung Kai Properties Ltd Source: Invesco as at 30 June Portfolio weightings can change any time and without warning. There is no guarantee that Invesco will hold these securities within its funds in the future. 22

23 Invesco Asian Equity Fund Geographical weightings Geographical weightings 1 in % Fund Index 2 China South Korea India Taiwan Hong Kong Singapore Thailand Philippines Others Cash Geographical weightings of the fund in % 1 China South Korea India Taiwan Hong Kong Singapore Thailand Philippines Others Cash 1 Source: Invesco as at 30 June Portfolio weightings can change any time and without warning. 2 MSCI AC Asia ex Japan Index-ND. 23

24 Invesco Asian Equity Fund Geographical weightings Sector weightings 1 Sector weightings of the fund in % 1 in % Fund Index 2 Information Technology Financials Industrials Consumer Discretionary Materials Utilities Real Estate Energy Others Cash Information Technology Financials Industrials Consumer Discretionary Materials Utilities Real Estate Energy Others Cash 1 Source: Invesco as at 30 June Portfolio weightings can change any time and without warning. 2 MSCI AC Asia ex Japan Index-ND. 24

25 Invesco Asian Equity Fund Financial characteristics 1 USD bn Average weighted market capitalisation 99.2 Median market capitalisation year characteristics 2 Alpha 1.2 Beta 1.0 Correlation 1.0 Information Ratio 0.3 Sharpe Ratio 0.5 Tracking Error 4.1 Volatility in % Source: Invesco as at 30 June Source: Morningstar as at 30 June Portfolio weightings can change any time and without warning. 25

26 Risk Warnings 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. As a large portion of the fund is invested in less developed countries, you should be prepared to accept significantly large fluctuations in the value of the fund. 26

27 Important Information This marketing document is exclusively for use by Professional Clients and Financial Advisers in Continental Europe (as defined below), Qualified Investors in Switzerland and Professional Clients in Cyprus, Dubai, Jersey, Guernsey, Isle of Man, Malta and the UK. This document may also be used by financial intermediaries in the United States as defined below. By accepting this document, you consent to communicate with us in English, unless you inform us otherwise. This document is not for consumer use, please do not redistribute. Data as at , unless otherwise stated. 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, they are subject to change without notice and are not to be construed as investment advice. 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 in English using the contact details shown. This marketing document is not an invitation to subscribe for shares in the fund and is by way of information only, it should not be considered financial advice. This does not constitute an offer or solicitation by anyone in any jurisdiction in which such an offer is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. 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 where applicable. 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. Fee structure and minimum investment levels may vary dependent on share class chosen. 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 ( annual distribution - USD) exclusively. This fund is domiciled in Ireland. For the distribution of this document, Continental Europe is defined as Austria, Belgium, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Spain and Sweden. Germany, Austria and Switzerland: This document is issued in Germany by Invesco Asset Management Deutschland GmbH. This document is issued in Austria by Invesco Asset Management Österreich Zweigniederlassung der Invesco Asset Management Deutschland 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 Zweigniederlassung der Invesco Asset Management Deutschland GmbH, Rotenturmstrasse 16-18, A-1010 Wien, and Invesco Asset Management (Schweiz) AG, Talacker 34, CH-8001 Zurich, 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 Zürich. Belgium, Finland, France, Greece, Italy, Luxembourg, Netherlands, Norway, Spain, Sweden: This document is issued by Invesco Asset ManagementS.A., rue de Londres, Paris, France. Cyprus: Issued by Invesco Asset Management S.A. 18, rue de Londres, F Paris. Authorised and regulated by the Autorité des marchés financiers in France. Any scheme provided by the Cyprus regulatory system, for the protection of retail clients, does not apply to offshore investments. Compensation under any such scheme will not be available.the Invesco Asian Equity Fund is subject to the provisions of the European Directive 2009/65/EC. Dubai: Issued by Invesco Asset Management Limited, Po Box , DIFC Precinct Building No 4, Level 3, Office 305, Dubai, United Arab Emirates. Regulated by the Dubai Financial Services Authority. Jersey and Guernsey: Issued by Invesco International Limited, 2nd Floor, Orviss House, 17a Queen Street, St Helier, Jersey, JE2 4WD. Regulated by the Jersey Financial Services Commission. Isle of Man: Issued by Invesco Global Asset Management DAC, Central Quay, Riverside IV, Sir John Rogerson s Quay, Dublin 2, Ireland. Regulated in Ireland by the Central Bank of Ireland. The Invesco Asian Equity Fund is an unregulated scheme that cannot be promoted to retail clients in the Isle of Man. The participants in the scheme will not be protected by any statutory compensation scheme. Malta: Issued by Invesco Asset Management S.A. 18, rue de Londres, F Paris. Authorised and regulated by the Autorité des marchés financiers in France. Investments should be based on the full details of the Prospectuses. The Prospectuses, the fund and share class-specific Key Investor Information Documents and further information are available from Invesco Asset Management S.A. UK: Issued by Invesco Fund Managers Limited, Perpetual Park, Perpetual Park Drive, Henleyon-Thames, Oxfordshire RG9 1HH, UK. Authorised and regulated by the Financial Conduct Authority. For the purposes of UK law, the fund is a recognised scheme under section 264 of the Financial Services & Markets Act The protections provided by the UK regulatory system, for the protection of Retail Clients, do not apply to offshore investments. Additional information for financial intermediaries in the United States: This document is intended for distribution to US financial intermediaries for informational purposes and in relation to their activities with offshore clients only. The Funds are not registered under any US securities law, and may not be offered or sold directly or indirectly in the US, its territories or possessions, nor to any US persons, citizens or residents. The Fund must not be marketed on US soil. This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial professional before making any investment decisions. Issued in the US by Invesco Distributors, Inc., 11 Greenway Plaza, Suite 1000, Houston, Texas 77046, USA. Invesco Distributors, Inc. is the appointed US sub-distributor of the Invesco Funds SICAV and Invesco Fund Series 1-6. All entities are indirect, wholly owned subsidiaries of Invesco Ltd. 27