Invesco Global Targeted Returns Fund

Transcription

1 Invesco Global Targeted Returns Fund May 2014 This document is exclusively for use by Professional Clients and Financial Advisers in Continental Europe and Professional Clients in the UK and for Qualified Investors in Switzerland and is not for consumer use. Please do not redistribute.

2 Agenda Investment proposition and philosophy Investing in ideas Investment team Core team with broad multi-discipline support Investing in ideas Our three step process Approving, combining and implementing ideas Conclusion Why consider Invesco for Multi Asset Appendix 1

3 Invesco Global Targeted Returns Fund Investment proposition Investing in ideas The Invesco Multi Asset Team focuses on great investment ideas, identifies the best way to invest in them and then combines them into a risk-managed portfolio. 2 Portfolio: Typically, individual investment ideas across asset classes Target return: 3-month EURIBOR plus 5% on a rolling 3-year annualised basis* Target volatility: Less than half global equity 1 volatility over a rolling 3-year period* *Please note there is no guarantee this gross performance target or volatility target will be achieved. The only way to achieve true diversification is to break away from the focus on asset class contraints. David Millar, Head of Multi Asset, Invesco Perpetual 1 MSCI World. The data shown relates to a representative account of the Invesco Perpetual Global Targeted Returns Strategy. Each portfolio may differ due to specific investment restrictions and guidelines.

4 Invesco Global Targeted Returns Fund Investment philosophy Unconstrained approach: Two- to three-year horizon High conviction macro investment ideas Across asset types and geographies We believe we can achieve positive total returns over all market environments over a rolling 3-year period through an unconstrained approach to sourcing return ideas and through robust risk management David Millar Source: Invesco. 1 Diversification is an attempt to spread risk and performance across mutiple asset types and geographies. 3 Robust risk management: Risk-based analysis Genuine diversification 1 Continuous stress-testing

5 Invesco Perpetual* Multi Asset team Core investment team with broad multi discipline support David Millar, FIA Head of Multi Asset, Fund Manager 25 years of investment experience Background as an actuary and fixed interest fund manager Dave Jubb, FIA Fund Manager, Multi Asset 30 years of investment experience Background as an actuary and investment strategist Richard Batty, PhD Fund Manager, Multi Asset 19 years of investment experience Background in economics and investment strategy Source: Invesco as at 31 March *Invesco Perpetual is a business name of Invesco Asset Managment Limited. 4 Gwilym Satchell, PRM Risk Manager, Multi Asset 5 years of multi-asset investment experience Qualified risk manager Georgina Taylor Product Director, Multi Asset 13 years of investment experience Background in sell-side equity Saul Shaul Fund Analyst, Multi Asset 8 years of investment experience Background in front office IT Steve Hawes Trainee Analyst, Multi Asset 3 years of investment experience Background in investment performance, client services A team of macro specialists solely focused on the Invesco Perpetual Global Targeted Returns Strategy Front office Invesco Ltd. s economist Henley investment teams Other Invesco teams CIO oversight and operations Dealing Global team (incl. multi asset specialist, Simon Ferguson) Operations Invesco Global Operating Platform Marketing Support Multi asset product managers, Damian May & Michelle Shwarzman Governance Independent risk function Global performance measurement and Risk Compliance Internal audit Invesco Ltd.: On-the-ground presence in 20 countries, serving clients in more than 150 countries

6 Investing in ideas Our three step process 1 Research Thematic T Economic E Approving ideas Analytic A Managers M 2 Fund management 3 Implementation For illustrative purposes only. 5 Risk Scenarios Structure Liquidity Combining ideas Order Comply Execute Review Implementing ideas 4 Review and Oversight

7 Approving ideas A TEAM approach 1 Research For illustrative purposes only. 6 Initial justification for the idea why it should work in our central economic scenario Economic and corporate drivers that should make the idea work Valuation metrics industry standard and proprietary to assess each idea The views of Invesco asset class specialists when assessing potential ideas Inputs: Multi Asset team Invesco Chief Economist CIO challenge process Henleybased fund managers IVZ fund managers External research calls Thematic T Economic E Analytic A Managers M

8 Approving ideas Sourcing individual research ideas 1 Research Equities 7 Government Bonds Idea: Global equities We believe global equities will participate in a continued pick-up in trade and economic growth, and want access to dividends through selective stock exposure. We have implemented this view through two funds to benefit from the stock-picking skills of the fund managers. Idea: US bonds curve and duration We believe that the 30-year US bond will provide return as the yield curve flattens on any bond sell-off and gives protection from any risk market sell-off which will be reflected in US 10-year bond yields rising. Corporate Bonds Real Estate Source: Invesco Perpetual as at 31 March For illustrative purposes only. Collective Investment Schemes Idea: UK vs Swiss equities Cyclical stocks in the UK are good value relative to the expensive defensive stocks in Switzerland. The Swiss Franc is also strong which will be a drag on profitability for exporters in Switzerland. Idea: Brazilian Real vs Chilean Peso Brazil is struggling with slow growth but still high inflation which has prompted an increase in interest rates this year. In Chile growth is under pressure and inflation is lower than Brazil. These dynamics are likely to be reflected in a stronger Brazilian currency versus the Chilean currency based on diverging economics and positive carry. Volatility Instruments Inflation Products Currencies Commodities

9 Approving ideas Our central economic thesis 1 Research Source: Invesco Perpetual as of 24 April For illustrative purposes only. 8 Global monetary accommodation Continued low short interest rates but potential for rises (e.g.uk) further out Growth multiplier deficiencies remain across economies Tapering, regulatory tightening and lack of bank lending all reduce the impact Low, but positive, global economic growth Growth momentum is well below previous cycle levels; Downside risks in developed economies; policy and market adjustments in EM Concerns over sustainability in China and the impact on commodities Continued disinflation Deflation concerns in some developed markets, e.g. Europe Emerging market adjustments will be helped by disinflation Long-dated forward interest rates in some markets (e.g. US) reflect fair value Diminishing support for risk assets Cautious whether future earnings will grow enough to support equity valuations Economic justification for IG and HY credit valuations is difficult Diversified alpha as an additional source of value Market interference as a source of volatility Continued macro-prudential tightening changing the investment landscape Potential for policy disappointments, e.g. Japan Long-term impacts from the misallocation of capital

10 Approving ideas A slowly evolving portfolio 1 Research Q o o Currency - Norwegian Krone vs UK Pound Volatility - UK Rates vs Equity Interest Rates US Curve Steepener Interest Rates - UK vs Germany to UK vs France Equities protection added to UK and Global ideas Source: Invesco Perpetual as at 31 March For illustrative purposes only. 9

11 Combining ideas Our fund management process 2 Fund management A number of risk measures: independent risk, contribution to risk, total fund risk Test a range of possible, even if not probable, scenarios Risk Scenarios Use derivatives where appropriate for efficient and precise implementation Structure Physical portfolio breakdown Funds For illustrative purposes only. 10 c.60% Engage dealers in liquidity analysis c.40% Cash and derivatives Portfolio breakdown by risk Ideas expressed through funds Liquidity Ideas expressed through derivatives

12 Combining ideas Achieving diversification 2 Fund management Source: Invesco as at 2 May There is no guarantee this target will be achieved. For illustrative purposes only. This information relates to the portfolio based on market conditions as at 2 May 2014, portfolio characteristics are subject to change without notice. 11 A portfolio designed to target long-term, equity-like returns for less than half the risk of global equities 1 Volatility - UK Equity vs Rates Total independent risk 18.87% Independent risk Diversification benefit 50% of global equity risk Total marginal risk 4.37% Marginal risk Volatility - Chinese Equities Volatility - AUDJPY vs USDJPY Volatility - Asian Equities vs US Equities Interest Rates - US vs Europe Interest Rates - US Duration Interest Rates - UK vs France Interest Rates - Sweden vs Europe Interest Rates - European Curve Steepener Interest Rates - Australian Short Rates Equity - US Large Cap vs Small Cap Equity - UK vs Switzerland Equity - Sell Puts as Long US Equity Currency - US Dollar vs Japanese Yen Currency - US Dollar vs Canadian Dollar Currency - Norwegian Krone vs UK Pound Currency - Brazilian Real vs Chilean Peso Credit - European Financials Credit - European Curve Flattener Credit - High Yield Equity - UK Equity - Selective Asia Exposure Equity - Global Equity - European Divergence

13 Combining ideas Stress testing and economic scenario analysis 2 Fund management 1. Regulatory stress testing of the portfolio using StatPro based on periods of historic market stress, e.g. Lehmans, European debt crisis 2. Analysis by the Multi Asset team of possible scenarios going forward Scenario Characteristics Japan deflation Nikkei at 9000 and Japanese Yen at 75 to the US Dollar Nationalism Spanish spreads 5% over bunds, Asian equities down 20% EM outflows Emerging markets FX index down 20%, US 5-Yr Treasuries yields up 150bps Regional War Crude rises to $150, European equities fall 25% Cash is King S&P falls to 1000, yield on US 10-yr Treasuries rises to 5% Melt Up European equities up 30%, Commodities CRB index up 20% Debt Deflation S&P falls to 1000, yield on US 10-year Treasuries falls to 1% Simulation count 1 Blue line indicates probability-weighted best estimate, red line indicates worst case using lower quartile outcomes. For illustrative purposes only. Portfolio characteristics are subject to change without notice. 12 Distribution of potential investment strategy returns for a given scenario

14 Combining ideas Our risk management process 2 Fund management CIO Oversight Managed by Richard Underwood, Head of Investment Oversight Based in Henley on the investment floor Independently analyse fund information Interact with the multi asset fund managers on a day to day basis on the fund Questions range from the risk of the fund to how many ideas we have in the fund at any one time GPMR = Global Performance Measurement and Risk. For illustrative purposes only. 13 Independent Risk Function (IRF) Primary role is to report to the regulators Use a separate risk system StatPro Run historic stress tests on the fund to highlight risks The Multi Asset team meets with the IRF monthly to discuss stress test results and to reconcile risk models

15 Implementing ideas Invesco Global Trading Desk 3 Implementation The Global Trading Desk includes 46 trading professionals on 9 desks in 7 countries UK & Europe London/ Henley (10) Order Source: Invesco as at 31 December Numbers are subject to rounding. 14 Americas Houston (6) Atlanta (14) Toronto (2) Invesco: trading volumes, US$746.9bn (2013) 5% 9% 16% 70% Asia Pacific Hong Kong (6) Tokyo (5) Taipei (2) Melbourne (1) Alternatives & FX bn Cash equities - Americas 119.7bn Cash equities - Asia (incl. Japan) 41.70bn Cash equities - EMEA 64.10bn Comply Execute Review

16 Review and oversight A structured approach Weekly Monthly Multi Asset fund management meeting Multi Asset team, dealing team To review risk positions, implementation of investment ideas and fund performance Multi Asset macro meeting Multi Asset team To define the central economic thesis Multi Asset ideas meeting ( TEAM ) Multi Asset team to assess new investment ideas and revisit existing ideas on a rolling quarterly basis External research calls Multi Asset team, other investment team representatives, external strategists To filter the research available from investment bank and other external strategists Investment team meeting Nick Mustoe, CIO & investment teams John Greenwood s economic outlook Monthly economic update Independent risk function To discuss stress tests and compare risk models Quarterly Annual For illustrative purposes only. 15 Multi Asset investment oversight meeting CIO, Head of Investment Oversight, Heads of Desks, Multi Asset fund managers To review additions/deletions/changes to investment ideas CIO challenge Multi Asset fund managers; Nick Mustoe, CIO; Head of Investment Oversight To review investment ideas and portfolio risk Multi Asset governance meeting Independent risk and compliance review 4 Review and Oversight

17 Conclusion Why consider Invesco for Multi Asset? We believe changing market dynamics require access to an unconstrained research agenda in order to generate positive returns long term. The Invesco Global Targeted Returns Fund seeks to offer a target return for investors through genuine diversification from a single integrated product using a portfolio of investment ideas. The fund will be run by a dedicated team of macro specialists who have a fundamental long term investment horizon, consistent with the philosophy across the Henley-based investment centre. The fund has access to diversified alpha sources across Invesco Perpetual and Invesco product range. The team is embedded in a truly global investment management organisation underpinned by a global infrastructure across distribution, dealing, oversight and global 3rd party relationships. 16

18 Risk warnings The value of investments, and income from them, can go down as well as up and you may not get back the full amount you invested. The fund will invest in derivatives (complex instruments) which will be significantly leveraged resulting in large fluctuations in the value of the fund. The fund may hold debt instruments which are of lower credit quality and may result in large fluctuations of the value of the fund. The fund may be exposed to counterparty risk should an entity with which the fund does business become insolvent resulting in financial loss. This counterparty risk is reduced by the Manager, through the use of collateral management. For more information, please read the prospectus. 17

19 Appendix

20 Invesco Global Targeted Returns Fund Portfolio physical investment Funds The Multi Asset team has direct access to the fund management capabilities of its Henley-based colleagues and of the broader Invesco group. The Invesco Global Targeted Returns Fund will generally hold between 50-70% of its assets in funds from within the Invesco Perpetual and Invesco range. Cash Ideas currently expressed through funds include: Equities European Divergence Credit High Yield Equities Global Equities UK Equities Selective Asia Cash 1 The cash holdings are used as collateral against derivative positions which are used to implement fund ideas and manage risk. Cash will be managed by Invesco Global Liquidity, please refer to slide 24 for more information Managed by Invesco Fixed income Counterparty exposures limited Global Credit Research team 1 Cash is expected to be 30-50% of the portfolio, but may be as high as 75%. For illustrative purposes only. This information relates to the portfolio based on market conditions as at 31 March 2014, subject to change. 19 For illustrative purposes only. Funds

21 APT output Assessing each individual trade and its contribution to the risk of the portfolio Idea Independent Risk Marginal Equity Position risk impact risk correlation Size Long Short Credit - European Curve Flattener % 23.1% 23.1% Credit - European Financials % 18.9% 3.6% Credit - High Yield % 12.2% 6.0% Currency - Brazilian Real vs Chilean Peso % 7.6% 7.6% Currency - Norwegian Krone vs UK Pound % 7.6% 7.6% Currency - US Dollar vs Canadian Dollar % 10.0% 10.0% Currency - US Dollar vs Japanese Yen % 0.2% 0.0% Equity - European Divergence % 17.0% 16.2% Equity - Global % 12.2% 6.0% Equity - Selective Asia Exposure % 12.0% 4.0% Equity - Sell Puts as Long US Equity % 2.6% 0.0% Equity - UK % 12.3% 6.1% Equity - UK vs Switzerland % 8.8% 9.1% Equity - US Large Cap vs Small Cap % 8.0% 7.8% Interest Rates - Australian Short Rates % 40.0% 0.0% Interest Rates - European Curve Steepener % 30.1% 12.0% Interest Rates - Sweden vs Europe % 19.9% 20.0% Interest Rates - UK vs France % 31.0% 31.2% Interest Rates - US Duration % 14.1% 14.4% Interest Rates - US vs Europe % 15.0% 15.0% Volatility - Asian Equities vs US Equities % 16.2% 16.2% Volatility - AUDJPY vs USDJPY % 15.4% 15.5% Volatility - Chinese Equities % 17.0% 0.0% Volatility - UK Equity vs Rates % 3.8% 2.2% Cash & Residual FX* % 36.4% 0.0% Source: Invesco Perpetual as at 2 May Sum of representative idea sizes: 348.2%. Definitions: Independent risk: The risk of the idea in isolation. Risk impact: The change in the portfolio s risk as a result of adding the idea to the portfolio. Marginal risk: The attribution of the overall portfolio volatility to each idea. For illustrative purposes only. This information relates to the portfolio based on market conditions as at 2 May 2014, subject to change. *Residual FX refers to the risk arising from unhedged currency exposure rather than an individual investment idea. 1 Global equity represented by MSCI World Index. 20 % of global equity 1 Portfolio volatility % Fund value 102,822,549 Sum of independent risk % 99% 1-month VaR 1,386,679 Equity beta -0.04

22 APT output Risk contribution Credit - European Curve Flattener Credit - High Yield Currency - Norwegian Krone vs UK Pound Currency - US Dollar vs Japanese Yen Equity - Global Equity - Sell Puts as Long US Equity Equity - UK vs Switzerland Interest Rates - Australian Short Rates Interest Rates - Sweden vs Europe Interest Rates - US Duration Volatility - Asian Equities vs US Equities Volatility - Chinese Equities Credit - European Financials Currency - Brazilian Real vs Chilean Peso Currency - US Dollar vs Canadian Dollar Equity - European Divergence Equity - Selective Asia Exposure Equity - UK Equity - US Large Cap vs Small Cap Interest Rates - European Curve Steepener Interest Rates - UK vs France Interest Rates - US vs Europe Volatility - AUDJPY vs USDJPY Volatility - UK Equity vs Rates Source: Invesco Perpetual as at 2 May For illustrative purposes only. This information relates to the portfolio based on market conditions as at 2 May 2014, subject to change. 21 RiskOn PartialRiskOn Neutral PartialRiskOff RiskOff Credit Currency Equity Interest Rates Volatility Asia Australia Canada Europe France Global Japan LatAm Norway Sweden Switzerland UK US

23 Invesco Global Targeted Returns Fund Fund facts Fund name Fund objectives Invesco Global Targeted Returns Fund The Fund aims to achieve a positive total return in all market conditions over a rolling 3 year period. The Fund targets a gross return of 5% p.a. above 3 month EURIBOR (or an equivalent reference rate) and aims to achieve this with less than half the volatility of global equities, over the same rolling 3 year period. There is no guarantee that the Fund will achieve a positive return or its volatility target. Launch date 18 December 2013 Domicile Legal structure Base currency Unit type Reference index Luxembourg Sub-fund of Invesco Funds, SICAV with UCITS status EUR Accumulation and distribution EURIBOR 3 month Share class Unit type Share class ccy Annual mgmt. fee *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. 22 Minimum investment ISIN codes A Acc EUR 1.40% USD 1,500 LU There may be additional share classes* registered for sale in individual jurisdictions. The A share class is not available in the UK.

24 CIO Challenge The CIO Challenge covers the following areas of focus Performance Assets, Flows & Liquidity Attribution/Contribution Risk Financial Attributes Active Positioning Transaction Analysis Stock Analysis For illustrative purposes only. 23 Performance against relevant peer groups and indices on a discreet and cumulative basis. Performance dispersion. Systems: Lipper, Morningstar, Statpro Composites. Information relating to assets managed, subscriptions, redemptions, net flow, liquidity of underlying portfolio to trade to cash. Attribution showing the relative contribution to performance. For equity this could be measured at Country, Industry, Sector and stock level. For Fixed Income portfolios this could be measured to show contribution by credit rating, duration, issuer and issue. Risk reward charts and total fund level. Risk reports showing tracking error, beta, highest marginal contribution to risk by stock etc. Analysis showing the style tilts of the portfolio to value, growth, momentum, yield etc. Information relating to active positions by Country, Industry, Sector, Stock for equities. For Fixed Income active positions by credit, duration, industry and issuer. Portfolio activity over the period under review including charts of purchase/sale activity relative to stock price movements. Individual stock analysis often using broker research to challenge the decisions made by a Fund Manger at a very granular level.

25 Cash management Short Term Investments Company (STIC) Invesco Global Liquidity has US$85.4 billion in assets worldwide There are 19* investment professionals dedicated to the short-term space The team has an average 18 years* of industry experience, and over a decade working as a team at Invesco The cash allocation pool will be invested in the STIC Global money market fund and in other highly rated short-term debt instruments The Global Liquidity team aims to achieve: Preservation of principal Liquidity Yield Credit risk is mitigated through AAA credit rating, holding highest quality securities, diversifying across up to 40 different issuers, independent credit approval and monitoring process. Market risk is mitigated through constant net asset value, portfolio stress testing, weighted average maturity of around 35 days. Liquidity risk is mitigated through default liquidity position of 30% in portfolio. Source: Invesco as at 31 December * As at 31 January The fund managers continuously assess the impact of economic and market events on liquidity. Immediate liquidity: fund is open daily and has same day settlement. There are no restrictions on frequency of dealing, size of transaction or on retained balances. Portfolios are priced competitively, allowing for more selective portfolio construction while seeking to deliver competitive yield. The fund yield is comparable to the overnight interbank market rate. Yields are smoothed against the reference index which in the case of Sterling Liquidity is the SONIA rate. Daily yield is calculated with income accrued each day.

26 Operating platform Process & Controls: Company Boards; CIO Challenge Process; Daily, Monthly & Quarterly Risk Reviews (RPLS); IP Management Group; Quarterly Broker Review; Internal Audits; Compliance Monitoring; Dealing Commission Committee; TCF Training & Scorecards; Derivatives Committee; New Instruments Committee; Departmental Procedures; Breach Reporting; Counterparty Risk Committee OVERSIGHT Portfolio Valuation / Modelling Tool Fund Manual / POM / IPG Derivative Forms Bank Loan Checklists Data automation FM Daily /Weekly sign off Derivative Matrix Overdraft monitoring Notification of strategy/idea Pre Trade risk analysis Source: Invesco Perpetual as at 14 February For illustrative purposes only. 25 CRD Access Segregation Trade entry controls IM Procedures Pre Trade Alerts Breach Recording Pre Trade Blocks Stock Availability checks Compliance Approvals IVZ Restricted list CRD FMC ITR CRD P2 FMC Apollo BWISE CRD FMC Bloomberg SWIFT ITERO CTM TRADE EXECUTION Daily Post Trade checks P2 CRD against Regulatory and CRD TRAC Investment Restrictions Apollo Miles Software Daily IRF Checks to APT BWISE RPLS/Derivatives Matrix Bloomberg StatPro Breach Reporting to FMC Counterparty Risk DB Management & Board MatLab RCBanken Datastream IM Procedures Process & Controls Systems Workflow Steps Workflow Steps Systems Process & Controls IT Applications: Peoplesoft; Plateau; Success Factors; SharePoint; Complinet Broker Approval & Set Up Process Trade by Trade Broker Assessment Broker Contracts / MiFID / ISDA Price spot checking Transaction Cost Analysis Matching & Confirmation process Execution by G.T Function IM Procedures RESOURCING FM Sign Off of unquoted / illiquid securities Quarterly Pricing Committee Fair Value policy Fund Manager weekly & Monthly Review and Sign Off GlobeOP v BNYM Pricing Validation BNYM CADIS FMC GlobeOp Daily Reconciliations of Cash & Stock to Custodian / Bank Weekly Market Reconciliation IP / BNYM Oversight of Swing Pricing Fund Manager Reviews and Sign off FMC BNYM/InvestOne Apollo Process & Controls: Annual Appraisals & Development Plans; Recruitment Process; Continual Professional Development; Regulatory Training; Resource & Succession Planning; Remuneration Policy; Conduct / Ethics Policies; Segregation of Duties

27 Independent Risk Function (IRF) Monitoring Daily Strategy notifications The Multi Asset team includes the IRF in its notification s to enable the IRF to effectively identify and analyse complex, multi-legged derivative transactions after they are executed Derivatives oversight APT risk report Risk profile & limit system Monthly Investment risk meetings Quarterly Fund manager reviews For illustrative purposes only. 26 The IRF conduct monitoring of executed derivative transactions on an ongoing basis and to provide regular reporting/escalation to the Derivatives Committee The IRF have access to APT and run a daily report for market risk analysis purposes so as to identify any emerging risks early on The IRF, on a daily basis, monitor the risk limits for market risk, liquidity risk, the sum of the notionals of all derivatives used and counterparty risk The Multi Asset team, the Investment Oversight team and the IRF meet at least monthly The IRF meet with fund managers on a quarterly basis to discuss the key risks of their portfolios Independent risk function

28 Market Risk Risk Profile & Limit System (RPLS) The RPLS includes internal risk limits developed by the Independent Risk Function in consultation with the fund manager taking into account the fund s investment objectives/strategy and risk profile. Green Yellow Amber Red Absolute VaR < Strategy Relative Volatility (upper bound) < N/A Strategy Relative Volatility (lower bound) > N/A For illustrative purposes only. 27 Fund Relative Volatility < N/A In addition to Absolute VaR, the RPLS includes three further risk metrics computed by APT: a) each derivative strategy s (standalone, undiversified) Relative Volatility vs. the MSCI World Index (GBP) upper bound; b) each derivative strategy s (standalone, undiversified) Relative Volatility vs. the MSCI World Index (GBP) lower bound; and c) the portfolio s (total, diversified) Relative Volatility vs. the MSCI World Index (GBP).

29 Liquidity Risk Monitored by GPMR using RC Banken system Based on outflows (historical data or scenarios) and holdings Largest 1/5/10 days outflows at a 90 to 99.9% confidence level (using Generalized Extreme Value Distribution) For each security, a bid-ask spread from a variety of sources: In Normal Market Conditions In Fire Sale Market Conditions Outputs of the model: portfolio breakdown by liquidity level, liquidity ratios, losses given the net outflows For illustrative purposes only. 28

30 Collateral Management Reducing counterparty risk 1. Introduction 2. Collateral requirements 3. Collateral coverage 4. Stress testing 5. Re-investment of collateral For illustrative purposes only. 29 Invesco has a collateral policy to reduce counterparty risk on OTC derivatives transactions Invesco requires collateral for the following types of transactions: stock lending, reverse repurchase transactions, and OTC derivative transactions In practice, Invesco will generally only accept cash as collateral on OTC derivative transactions OTC derivative transactions won t trigger automatic collateral payments and will be based on appropriate materiality levels, therefore no initial margin exchanged Daily check on concentration and spread rules by portfolio ops; additional reporting provided to compliance and IRF In relation to OTC derivatives we operate a minimum transfer amount under the Credit Support Annex (CSA) where applicable: The fund will obtain or pay collateral where the netted unrealised gain or loss is greater than 250,000 in the base currency of the fund For smaller funds, where 250,000 is significantly more than 0.5% of the NAV, a smaller amount can be agreed and specified in the CSA Where the fund is in receipt of collateral or where collateral is re-invested for more than 20% of NAV then additional checks will need to be completed to ensure compliance with ESMA guidelines Stress tests on the liquidity of the collateral to be implemented if collateral exceeds 30% of the fund s NAV Liquidity stress tests are performed in line with portfolio liquidity stress tests by GPMR Cash collateral received as a result of transactions in OTC derivatives contracts will be held at the custodian of the fund Any cash collateral re-invested is done so in line with the ESMA guidelines

31 Invesco Perpetual Henley investment centre Chief Investment Officer Nick Mustoe UK Equities Mark Barnett European Equities Jeff Taylor Global Equities GEG/GIG/ GSCG 1 Emerging Equities Dean Newman US Equities Simon Laing Asian Equities Stuart Parks Japanese Equities Paul Chesson Fixed Interest Paul Causer Paul Read Multi Asset David Millar Investment Management Operations Source: Invesco Perpetual as at 1 May Global Equity Group/Global Income Group/Global Smaller Companies Group. 2 Fund managers and analysts only. 30 Stuart Howard Equity Dealing David Miller Investment Oversight Richard Underwood Investment Marketing Martyn Evans 53 investment professionals with 16 years average industry experience and 8 years average company tenure 2

32 Team biographies 31 David Millar: FIA, Head of Multi Asset and Fund Manager Based in Henley-on-Thames, David joined Invesco Perpetual in January 2013 and heads the Multi Asset team. After commencing his investment career with Scottish Widows in 1989, where he qualified as an actuary, David joined the Fixed Interest team at Scottish Widows Investment Partnership in 1996, becoming Head of Bond Strategy and chair of their Bond Policy Group. In 2008, he joined Standard Life Investments as Investment Director in their Multi-asset investing team. He was one of the portfolio managers within their Global Absolute Return Strategies capability and was chair of their Bond Investment Group. David holds a BSc (Hons) in Mathematical Statistics from the University of Cape Town and is a Fellow of the Institute and Faculty of Actuaries. Richard Batty: PhD, Fund Manager Based in Henley-on-Thames, Richard joined Invesco Perpetual in March 2013, and serves as a fund manager for the Multi Asset team. Previously, he had worked at Standard Life Investments since 2003 where he was the Global Investment Strategist in their Strategy team which is now part of Standard Life s Multi-asset Investing team, gaining additional responsibilities for Global Tactical Asset Allocation in Prior to joining Standard Life Investments, he began his investment career at James Capel/HSBC as an equity strategist in During this part of his career, Richard became a highly-rated, senior member of its industry renowned Economics and Strategy group. In 1994, he was awarded a PhD in Financial Economics from Brunel University, where he was a part-time research assistant and taught both graduate and undergraduate students. Dave Jubb: FIA, Fund Manager Based in Henley-on-Thames, Dave joined the company in March 2013, and serves as a Fund Manager for the Multi Asset team. Prior to this, he worked at Standard Life Investments where he was an Investment Director, Multi Asset Investing, and was one of the fund managers of the firm s Global Absolute Return Strategies capability. Dave joined Standard Life Group in 1982 as a computer programmer and after a period in the Actuarial Department of Standard Life Canada, he joined Standard Life Investments where he held positions as a fixed income fund manager and strategist before joining their Multi-asset Investment team in Dave graduated from St Andrews University in 1982 with a BSc (Hons) in Mathematics and is a Fellow of the Institute and Faculty of Actuaries. Source: Invesco Perpetual as at 28 February 2014.

33 Team biographies (continued) Gwilym Satchell: PRM TM Risk Manager Based in Henley-on-Thames, Gwilym joined the company in March Prior to this, he commenced his career in 2008 at Standard Life Investments, where he was involved in Multi-asset Investing risk management, in particular the development of scenario analysis techniques. In addition, he was responsible for managing a range of liability-driven investment (LDI) funds. Gwilym holds the PRM designation which is an independent validation of skills and commitment to the highest standard of professionalism, integrity, and best practices within the risk management profession. He graduated from Warwick University in 2005 with a degree in Computer Science, and gained a Masters degree at the University of Edinburgh Business School in Source: Invesco Perpetual as at 28 February Georgina Taylor: Product Director Based in Henley-on-Thames, Georgina joined our company in June 2013 and is the Product Director for the Multi Asset team. Georgina commenced her career with HSBC in 2001 as an Equity Strategist. She went on to join the Equity Strategy team at Goldman Sachs in 2004 where she wrote global equity and asset allocation research. Georgina gained asset management experience at Legal & General Investment Management, contributing to the overall asset allocation outlook for the firm and multi asset funds. Before joining Invesco Perpetual Georgina was head of Equity Strategy, EMEA, at State Street Global Markets, producing and presenting on asset allocation and equity research. Georgina holds a BSc (Hons) in Economics from the University of Bath. Simon Ferguson: CFA, Senior Dealer, Alternatives and Foreign Exchange Simon Ferguson joined Invesco in 2013 as a senior trader on the Alternatives and FX Trading desk, covering global derivative markets. Simon was previously a co-portfolio manager at Cayuga Capital, starting in July 2010 and implementing investment views through derivative instruments across the equity, fixed income, credit, FX and commodity markets. From 2002, he worked for Hermes Investment Management, running the Tactical Asset Allocation Overlay for the British Telecom pension scheme. Prior to that, Simon worked for a number of sell-side firms from 1993, including Goldman Sachs, Schroders and Julius Baer (Paris). Simon graduated from the University of Wales, Bangor, with a first-class degree in Economics. Simon also holds the Chartered Financial Analyst designation and has recently passed the Chartered Institute for Securities & Investment Level 4 Derivatives (IAD) exam.

34 Team biographies (continued) Saul Shaul: Fund Analyst Based in Henley-on Thames, Saul joined the company in May 2012 as an IT contractor working in front office IT and was later assigned to the implementation project working on the technical build of Invesco Perpetual s Multi Asset investment platform. In January 2014 Saul joined the Multi Asset team as a fund analyst. Saul commenced his career in front office IT in 2006 and has worked as an IT contractor on several projects involving Fund Management and Trading systems. He graduated from The University of Portsmouth in 1998 with a degree in International Finance and Trade. Source: Invesco Perpetual as at 28 February Steven Hawes: Trainee Analyst Based in Henley-on-Thames, Steve joined the company in July 2010, and since January 2014 has served as a Trainee Analyst within the Multi Asset team. Steve joined Invesco Perpetual as a Client Services Executive, specialising in investment performance. He graduated from the Sheffield Hallam University in 2010 with a BA (Hons) in Business and Financial Services and passed the Investment Management Certificate (IMC) in January 2013.

35 Important information (1) This document is exclusively for use by Professional Clients and Financial Advisers in Continental Europe, and Professional Clients in the UK and for Qualified Investors in Switzerland and is not for consumer use. Data as at , unless otherwise stated. Please do not redistribute this document. Where securities are mentioned in this document they do not necessarily represent a specific portfolio holding and do not constitute a recommendation to purchase or sell. This document should not be construed as investment advice. 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. Where Invesco has expressed views and opinions, these may change. The information provided on the investments and investment strategy (including current investment themes, the research and investment process, and portfolio characteristics, weightings, and allocation) represents the views of the portfolio manager at the time this material was completed, and is subject to change without notice. Past performance is not a guide to future returns. The fund will invest in derivatives (complex instruments) which will be significantly leveraged resulting in large fluctuations in the value of the fund. The fund may hold debt instruments which are of lower credit quality and may result in large fluctuations of the value of the fund. The fund may be exposed to counterparty risk should an entity with which the fund does business become insolvent resulting in financial loss. This counterparty risk is reduced by the Manager, through the use of collateral management. The distribution and the offering of the fund in certain jurisdictions may be restricted by law. Persons into whose possession this document may come are required to inform themselves about and to comply with any relevant restrictions. 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. The 34 fund is available only in jurisdictions where its promotion and sale is permitted. 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. 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 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. 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.

36 Important information (2) 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 Wien, 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 Zürich. Issued in the UK by Invesco Global Investment Funds Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxon, RG9 1HH, UK. Authorised and regulated by the Financial Conduct Authority. 35