Monthly Fund Report 31 ember 2017 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 Dubai, Guernsey, Ireland, Jersey, Isle of Man, Cyprus 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. Fund Managers Dave Jubb, David Millar & Richard Batty Henley-on-Thames, managed fund since ember 2013 Summary of fund objective 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. Please note there is no guarantee this gross performance target or volatility target will be achieved. For the full objectives and investment policy please consult the current prospectus. Key facts 1 Fund launch date 18 ember 2013 Legal Status Luxembourg SICAV with UCITS status Fund size EUR 6,854.05m Current NAV A Accumulation EUR 11.06 C Accumulation EUR 11.25 Market commentary Global equity markets ended the year near all-time highs as solid corporate earnings were backed up by what appeared to be a broad-based and robust acceleration in economic growth. In addition, optimism around President Trump s promised tax cuts continued to be absorbed by US equity markets as Congress approved the reform bill. The performance of equity markets in the UK and Europe was driven by commodityrelated sectors as commodities such as oil and copper enjoyed a strong month. Meanwhile, the US Federal Reserve hiked interest rates in a widely expected move and raised its economic outlook for 2018. In the UK, rates were left on hold despite higher inflation. Elsewhere, there was a bigger than expected interest rate cut in Russia where policy makers cited an OPEC deal to maintain oil production cuts as helping to keep inflation in check. Diminishing inflation expectations in Brazil led the central bank to cut rates while the opposite was true in Mexico where a new central bank governor marked the beginning of his tenure with a rate rise as inflationary pressures mounted. The month provided mixed returns for bond markets. In sterling and US dollar denominated bonds, the best performing areas were investment grade bonds and in the eurodenominated markets, high yield bonds performed better. Fund strategy During the month, no new ideas were added and no ideas were removed. However, a number of changes were made to existing ideas. This included the removal of the Hungarian exposure in the emerging market selective debt idea. This followed Hungarian yields hitting record lows after the central bank announced measures to depress long-term yields and encourage mortgage lending. The team felt returns were limited from here. In addition, the team removed the US leg of our swap spreads idea. Here, the spread between 30-year Treasuries and their swap equivalents had narrowed aggressively since the idea was initiated and as it neared our target, the team felt the new tax regime made the market less predictable. The UK leg remains. Finally, the option implementation of our Japanese equity idea was altered to provide greater upside exposure while limiting the downside for small market declines. Expected diversification from combining investment ideas Ideas expressed through Invesco investment strategies Other investment ideas Expected risk 16 Total independent risk2 15.23% 14 12 10 8 Expected fund risk 3 3.73% Expected diversification benefit 6 50% of global equity risk 4 4 2 0 Independent risk 2 Expected fund risk Source: Invesco as at 31 ember 2017.
31 ember 2017 Fund performance Performance was negative during the month. The main detractors were currency ideas including our Long EM Carry idea, which was hurt by falls in both the Mexican peso and the Brazilian real. At the same time, Brazilian equities had a strong month, which also detracted from the idea. More positive Canadian domestic data and an improving oil price increased the possibility of another Canadian interest rate hike in January, which weighed on our US dollar vs Canadian dollar idea. This was partially mitigated by our currency idea preferring the Russian ruble to the US dollar, which also benefited from the oil price rise. However, the rise in commodity prices also counted against our Commodity Short idea. Other positives included our global equities idea and our Swedish interest rates idea, where the difference between short-term and longer-term government debt narrowed and the euro weakened against the Swedish krona. The fund s annualised volatility at the end of ember was 3.39% (over the previous three years), which compared to 11.27% for global equities, as measured by the MSCI World index. Since launch performance Invesco Global Targeted (A accumulation - Eur shares) Invesco Global Targeted (C accumulation - Eur shares) 20 15 10 5 0-5 13 14 15 16 17 Cumulative performance % Since YTD 1 month 1 year 3 years inception 2015 2016 2017 Fund A Acc- Eur Shares -0.73-0.91-0.73 1.85 10.60 1.04 1.55-0.73 Fund C Acc- Eur Shares -0.23-0.87-0.23 3.24 12.50 1.40 2.05-0.23 The performance data shown relates to a past period. Past performance is not a guide to future returns. Fund performance figures are shown gross of income re-invested, net of ongoing charge and portfolio transaction costs to 31 ember 2017 unless otherwise stated. The figures do not reflect the entry charge payable by individual investors. All performance data on this monthly fund report is in the currency of the share classes. Source: 2017 Morningstar.
31 ember 2017 Breakdown by idea Independent risk 2 (%) Marginal risk 5 (%) Position size 6 (%) Commodity - Carry 0.21 0.02 14.3 Commodity - Short 0.57-0.04 2.5 Credit - Selective Credit 0.45 0.13 9.0 Credit - US High Yield 0.36 0.14 13.1 Currency - Chile and Mexico vs Australia 0.70 0.20 18.6 and New Zealand Currency - Indian Rupee vs Chinese Renminbi 0.39 0.14 15.8 Currency - Japanese Yen vs Korean Won 0.59-0.06 3.3 Currency - Japanese Yen vs Swiss Franc 0.75 0.17 6.2 Currency - Long EM Carry 0.61 0.08 5.9 Currency - Russian Ruble vs US Dollar 0.55 0.14 2.6 Currency - US Dollar vs Canadian Dollar 0.44 0.04 10.6 Currency - US Dollar vs Euro 0.33 0.10 4.4 Equity - Dispersion 0.22 0.02 5.9 Equity - European Divergence 0.97 0.45 2.3 Equity - Global 0.68 0.22 6.9 Equity - Japan 0.61 0.16 3.1 Equity - Selective Asia Exposure 1.05 0.54 9.7 Equity - UK 0.80 0.37 2.9 Equity - US Large Cap vs Small Cap 0.54 0.05 8.6 Inflation - Short Real Yields and Inflation 0.67-0.12 59.5 Inflation - US vs UK 0.82 0.21 23.1 Interest Rates - Australia vs US 0.59 0.12 15.9 Interest Rates - Selective EM Debt 0.49 0.27 4.7 Interest Rates - Swap Spreads 0.17 0.03 14.2 Interest Rates - Sweden 0.68 0.30 23.5 Interest Rates - Yield Compression 0.39 0.09 10.7 Volatility - Asian Equities vs US Equities 0.52-0.04 14.5 Cash & Residual FX 7 0.11 0.01 36.4 Total 15.23 3.73 348.2 As at 31 ember 2017, there were 27 ideas in the portfolio. Independent risk 2 breakdown by asset type % Equity 31.92 Currency 29.27 Interest Rates 15.20 Inflation 9.77 Credit 5.33 Commodity 5.12 Volatility 3.39 % of total independent risk 100.00 Independent risk 2 breakdown by region % France 9.68 Switzerland 3.75 Europe 7.73 Chile 3.66 United Kingdom 7.44 Japan 3.64 Hong Kong 5.82 China Offshore 3.52 Germany 5.77 Sweden 3.51 United States 5.74 Russia 3.01 Australia 5.33 Taiwan 2.78 India 4.33 Brazil 2.23 Mexico 3.90 Other countries 18.16 % of total independent risk 100.00
31 ember 2017 Performance contribution by idea Q4 2017 8,9 Basis points Commodity - Carry -2 Commodity - Short -15 Credit - Selective Credit -1 Credit - US High Yield -7 Currency - Chile and Mexico vs Australia and New Zealand 26 Currency - Indian Rupee vs Chinese Renminbi 6 Currency - Japanese Yen vs Swiss Franc -8 Currency - Japanese Yen vs Korean Won -57 Currency - Long EM Carry -17 Currency - Russian Ruble vs US Dollar 4 Currency - US Dollar vs Canadian Dollar -2 Currency - US Dollar vs Euro -11 Equity - Dispersion -1 Equity - European Divergence -9 Equity - Global -7 Equity - Japan 25 Equity - Selective Asia Exposure 53 Equity - UK -12 Equity - US Large Cap vs Small Cap 25 Inflation - Short Real Yields and Inflation -35 Inflation - US vs UK 10 Interest Rates - Australia vs US 35 Interest Rates - Selective EM Debt -1 Interest Rates - Swap Spreads 12 Interest Rates - Sweden -13 Interest Rates - Yield Compression -16 Volatility - Asian Equities vs US Equities 3 Cash & Residual FX 7-3 Total quarterly contribution -17 The above ideas contributed to performance during Q4 2017. 1 All fund portfolio figures within this leaflet are as at 31 ember 2017 (Source: Invesco). 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 Expected fund 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. 4 Global equity risk is the expected volatility of the MSCI World index as measured by its standard deviation over the last three and a half years, 11.61%, on 31 ember 2017. 5 Marginal risk: the attribution of the overall portfolio volatility to each idea. 6 Position size - this is the economic leverage of the idea. 7 Residual FX refers to risk arising from unhedged currency exposure rather than an individual investment idea. 8 Performance contribution figures reflect each idea s contribution to the overall performance of the fund s portfolio of ideas. These figures are calculated before taking into account the accrued income of the fund, the ongoing charge and the portfolio transaction costs. Therefore the total performance contribution figures differ from the net fund performance figures shown on the page 2. (Source: POINT Portfolio Returns, Barclays POINT) 9 Performance contribution may be affected by rounding.
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 Dubai, Guernsey, Ireland, Jersey, Isle of Man, Cyprus and the UK. This document may also be used by financial intermediaries in the United States as defined below. This document is not for consumer use, please do not redistribute. Data as at 31.12.2017, 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. Past performance is not a guide to future returns. Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. 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. The fund uses derivatives (complex instruments) for investment purposes, which may result in the fund being significantly leveraged and may result 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. Debt instruments are exposed to credit risk which is the ability of the borrower to repay the interest and capital on the redemption date. The fund may invest in distressed securities which carry a significant risk of capital loss. 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. 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. 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. As with all investments, there are associated risks. This document is by way of information only. It does not constitute financial advice. 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. Fee structure and minimum investment levels may vary dependent on share class chosen. Please note all share class specific information provided in this document relates to the A and C accumulation - EUR share classes. This fund is domiciled in Luxembourg. By accepting this document, you consent to communicate with us in English, unless you inform us otherwise. For the distribution of this document, Continental Europe is defined as Austria, Finland, France, Germany, Greece, Italy, Liechtenstein, Luxembourg, The Netherlands, Spain, Sweden and Switzerland. Italy: The fund s C accumulation EUR share class is currently registered in Italy for professional investors only and not for public distribution. The marketing of the fund to Retail clients is therefore currently forbidden. Germany, Austria, Switzerland and Liechtenstein: 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 & semiannual reports, articles and trustee deed) are available free of charge at our website and in hard copy and local language from the issuers: Invesco Asset Management Deutschland GmbH, An der Welle 5, D-60322 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 and Liechtenstein. In Liechtenstein the KIID and Prospectus are available in German and English language on www.fundinfo.com, respectively. Paying agent for the fund distributed in Switzerland: BNP PARIBAS SECURITIES SERVICES, Paris, succursale de Zurich, Selnaustrasse 16, CH-8002 Zürich. Paying agent in Liechtenstein: LGT Bank AG, Herrengasse 12, 9490 Vaduz. www.invescoeurope.com Dubai: Issued by Invesco Asset Management Limited, Po Box 506599, DIFC Precinct Building No 4, Level 3, Office 305, Dubai, United Arab Emirates. Regulated by the Dubai Financial Services Authority. Ireland: 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. 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. In Guernsey, the fund can only be promoted to Professional Clients. 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. Cyprus: 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. 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 Global Targeted is subject to the provisions of the European Directive 2009/65/EC. UK: Issued by Invesco Global Investment Funds Limited. Perpetual Park, Perpetual Park Drive, Henley-on-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 2000. 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 or Invesco Fund Series 1-6. All entities are indirect, wholly owned subsidiaries of Invesco Ltd. 63388-11/PDF/180118