On 4 October 06 James Goldstone became Portfolio Manager of the UK Equity Share Portfolio. Key information Investment trust size Switching dates 65.9m February, May, August and November UK Equity Share Portfolio James Goldstone, Portfolio Manager Managed Liquidity Share Portfolio Stuart Edwards, Portfolio Manager Key investment trust features Discount control policy The Board will authorise the issue or buy back of shares of all four share portfolios with a view to maintaining the mid-market prices at close to their respective net asset values. Quarterly switching facility Shares may be converted into any other share portfolio on a quarterly basis each year without incurring any liability for capital gains tax. Global Equity Income Share Portfolio Nick Mustoe, Portfolio Manager (lead) and Invesco Perpetual Global Equity Income Group Balanced Risk Share Portfolio Scott Wolle, Portfolio Manager Dividend Policy The Board has committed to an annual dividend for 07 of 6.5p for the UK Equity Share Portfolio and 6p for the Global Equity Income Share Portfolio. A small element of each dividend may be paid from capital but, crucially, the total return characteristics of both portfolios are not expected to alter as a result of this commitment. Gearing facility The Company has a 5 million 364 day multi-currency credit facility with the Bank of New York Mellon. A choice of four share portfolios With four share portfolios the investment trust offers investors a choice of investment objectives and policies, with each share portfolio seeking to generate attractive riskadjusted returns. UK Equity High conviction, unconstrained portfolio managed by James Goldstone. Global Equity Income Managed by Invesco Perpetual s Chief Investment Officer, Nick Mustoe and the Global Equity Income Group, who have an unconstrained, long-term, valuation driven investment approach. Balanced Risk Aims to provide shareholders with an attractive total return in differing economic and inflationary environments, and with low correlation to equity and bond market indices by gaining exposure to three asset classes: debt securities, equities and commodities. Managed Liquidity Aims to produce an appropriate level of income return combined with a high degree of security. A multi asset class investment trust launched in 006 with four share portfolios: UK Equity, Global Equity Income, Balanced Risk and Managed Liquidity. The investment trust offers shareholders access to a wide array of markets, from the home shores of the UK to the wider global markets. In addition, the investment trust's innovative capital structure permits quarterly conversions between the four share portfolios without triggering a disposal for capital gains tax purposes. Investors can hold one or more of the share portfolios, in any combination. Quarterly switching Shares will be convertible at the option of the holder into any other share portfolio every quarter, on or around February, May, August and November. Notice from the shareholder to convert any class of share portfolio on any conversion date will be required up to a maximum of 0 business days prior to the relevant conversion date. Forms for conversion are available from www.invescoperpetual.co.uk/ipst. Conversion from one share portfolio into another will be on the basis of a ratio derived from the prevailing underlying net asset value of each relevant share, calculated shortly before the date of conversion. Conversion of one share portfolio into another will not be treated as a disposal for the purposes of UK capital gains tax. Discount control policy On 3 January 03 adopted a discount control policy and will offer or, as the case may be, purchase shares in any of the Company s share portfolios with a view to maintaining the mid-market price at which the relevant share portfolio trades on the London Stock Exchange at close to net asset value. This policy seeks to ensure there will always be adequate liquidity to enable shareholders to buy or sell as required. Further details of the Company s Investment Policy and Risk and Investment Limits can be found in the Report of the Directors contained within the Company s Annual Financial Report. Financial calendar Year End Annual Financial Report published Half-Yearly Financial Report published Annual General Meeting Dividend payment dates UK Equity, Global Equity Income, Balanced Risk, Managed Liquidity 3 May August January September July, October, January and April There is no guarantee dividend targets will be met. Balanced Risk Share Portfolio is a total return strategy and no dividends are expected.
James Goldstone The investment objective of the UK Equity Share Portfolio is to provide shareholders with an attractive real long-term total return by investing primarily in quoted UK equities. IVPU.L 80.m 8.8p 83.p Discount 0.% Total Dividend 6.5p Dividend Yield 3.4% Gearing 3 3.4% Ongoing charge (incl AMF) 0.85% Annual Management Fee (AMF) 0.55% Performance fee.5% of any outperformance of the FTSE All-Share index in excess of % per annum. The amount that can be paid in any year is capped at 0.55% of net assets. Performance above the cap is carried forward to subsequent periods or offset against future underperformance. No performance fee can be earned until any past underperformance is offset and payment of performance fees is subject to a high water mark. 00% of the performance fee will be charged to capital. Please refer to the annual financial report for a fuller explanation. 38,009,455 Total dividend is made up of the previous financial year s dividends declared by the Company and specific Board guidance as to the level of dividends in the current year. Dividend yield is the total dividend divided by the current share price (excluding any special dividends paid). The investment trust may increase dividend payments from this portfolio by making use of its ability to distribute capital. To the extent the investment trust uses its ability to fund dividends using capital profit this will reduce capital growth. 3 Gearing reflects the amount of net borrowings invested, i.e. borrowings less cash. It is based on net borrowings as a percentage of shareholders funds. The Board has prescribed limits on the amount of gearing that may be used to raise equity exposure to a maximum of 5% of net assets where it is appropriate. UK Equity Share Portfolio www.invescoperpetual.co.uk/selectuk The UK equity market closed the month marginally higher after a quieter month on the macroeconomic front. Economic readouts continued to provide mixed signals of growth in the UK economy, with GDP growth slowing from its 06 rate. On the corporate news front, Rentokil delivered against its first half 07 financial targets, supported by strong performance in its pest control and hygiene business segments. Legal & General rose strongly following upgrades to forecasts from analysts, who anticipate further improvement in the solvency position and earnings growth. Acacia Mining announced it had agreed to pay extra royalties tax on the exports of gold and other minerals to minimise further disruptions through a legal dispute with the Tanzanian government over new laws on mining projects. The portfolio manager favours companies with strong balance sheets, high barriers to entry and the ability to expand market share, believing that these traits help underpin long-term capital and income growth. The manager deploys an investment approach anchored around valuation, aiming to achieve total return via both capital and sustainable dividend growth. Top 0 holdings Barclays 4.7 BP 3.9 British American Tobacco 3.4 Aviva 3. Lloyds Bank 3. Shire 3.0 Legal & General 3.0 RELX.7 Next.5 Royal Dutch Shell - B shares.3 Total 3.7 Portfolio breakdown Industry breakdown Financials 35.8 Consumer Services 6.3 Industrials 4. Consumer Goods. Health Care 8.4 Oil & Gas 6. Telecommunications.7 Basic Materials.9 Technology.3 Utilities.0 Total 00.0 FTSE 00 50.6 FTSE Small Cap Fledgling AIM ex Inv Companies.9 FTSE 50 ex Inv Companies 3. International Equities 4.4 Total 00.0 Ordinary share price, NAV and index cumulative performance 6 months Year 3 Years 5 Years 6.7 3.4 33.7 3.4 Net Asset Value 7..9 35.5 07.0 FTSE All-Share Index 7. 4.9 5.7 65.0 Standardised rolling -month performance 30.06. 30.06.7 Ordinary 50..0 0.7. 0.7 Net Asset Value 3.7 0. 0. 5.5 6.5 FTSE All-Share Index 7.9 3..6. 8. reinvested. The NAV used includes current period revenue and values debt at fair. The FTSE All-Share Index performance is shown as total return. All performance figures are in sterling as at 3 July 07 except where otherwise
Nick Mustoe, Chief Investment Officer (lead) and Invesco Perpetual Global Equity Income Group The investment objective of the Global Equity Income Share Portfolio is to provide an attractive and growing level of income return and capital appreciation over the long term, predominantly through investment in a diversified portfolio of equities worldwide. IVPG.L 70.9m 98.5p 00.6p Discount.% Total Dividend 6p Dividend Yield 3.0% Gearing 3 7.9% Ongoing charge (incl AMF) 0.84% Annual Management Fee (AMF) 0.55% Performance fee.5% of any outperformance of the MSCI World index in excess of % per annum. The amount that can be paid in any year is capped at 0.55% of net assets. Performance above the cap is carried forward to subsequent periods or offset against future underperformance. No performance fee can be earned until any past underperformance is offset and payment of performance fees is subject to a high water mark. 00% of the performance fee will be charged to capital. Please refer to the annual financial report for a fuller explanation. 3,747,93 Total dividend is made up of the previous financial year s dividends declared by the Company and specific Board guidance as to the level of dividends in the current year. Dividend yield is the total dividend divided by the current share price (excluding any special dividends paid). The investment trust may increase dividend payments from this portfolio by making use of its ability to distribute capital. To the extent the investment trust uses its ability to fund dividends using capital profit this will reduce capital growth. 3 Gearing reflects the amount of net borrowings invested, i.e. borrowings less cash. It is based on net borrowings as a percentage of shareholders funds. The Board has prescribed limits on the amount of gearing that may be used to raise equity exposure to a maximum of 0% of net assets where it is appropriate. Global Equity Income Share Portfolio www.invescoperpetual.co.uk/selectglobal Global equity markets reached all-time highs in July after more than $0 trillion was added to their value in the first half of the year (source: Bloomberg, as at 7 July 07). Investor appetite for risk remained robust with tolerance across many different asset classes at a three-year high, based on measures of volatility, and in line with levels seen before the 008 global financial crisis (source: Citigroup/Bloomberg, as at 7 July 07). Economic data largely supported the global growth story over the month. The rate of US growth picked up steam in the second quarter, growing at an annualised rate of.6%. The US Federal Reserve (Fed) said that near-term risks to the economic outlook appeared balanced. The investment trust s strategy for the global equity share portfolio is to look for attractively valued, high quality companies, with strong franchises and balance sheets that offer growing and sustainable dividends. Overall, there was limited portfolio activity in July. Top 0 holdings JPMorgan Chase United States 3.4 Caixabank Spain 3.0 Novartis Switzerland 3.0 Microsoft United States 3.0 ING Netherlands.9 Chevron United States.8 Orange France.6 Taiwan Semiconductor Manufacturing Taiwan.4 Intesa Sanpaolo Italy.4 Airbus France.3 Total 7.8 Geographic breakdown Europe 38.9 Pacific Rim - ex Japan 8.7 Americas 34.0 Japan.9 United Kingdom 6.5 Total 00.0 Ordinary share price, NAV and index cumulative performance 6 months Year 3 Years 5 Years 4.8 9.7 49.7 33.3 Net Asset Value 8.9 0.8 53.5 06.3 MSCI World Index ( ) Total Return 5.9 7.6 58.0.9 Standardised rolling -month performance 30.06. 30.06.7 Ordinary 40.. 0..7 30.6 Net Asset Value 6.4 9.7 9.7 9.9 3.8 MSCI World Index ( ) Total Return 3.3 0.6 0.9 5..3 reinvested. The NAV used includes current period revenue and values debt at fair. The MSCI World Index ( ) Total Return performance shown is total return (net of withholding tax). All performance figures are in sterling as at 3 July 07 except where otherwise
Scott Wolle The investment objective of the Balanced Risk Share Portfolio is to provide shareholders with an attractive total return in differing economic and inflationary environments, and with low correlation to equity and bond market indices by gaining exposure to three asset classes: debt securities, equities and commodities. Discount Total Dividend IVPB.L 9.4m 3.9p 34.p NaN% 0p Dividend Yield 0.0% Exposure 39.% Ongoing charge (incl AMF).5% Annual Management Fee (AMF) 0.75% 7,043,885 Balanced Risk Share Portfolio www.invescoperpetual.co.uk/selectbr Asset classes perceived to be more "risky" (such as equities) set a positive tone in July, while those perceived to be "safe havens" (such as government bonds) saw mixed returns. Developed equity markets saw attractive gains, with Hong Kong in particular achieving stellar results. The equity market in Hong Kong tends to trade in tandem with that of China, where improvements in industrial output and retail sales helped boost returns. In the US, equity markets also rose on favourable earnings data and continued momentum, while a rebound was seen in both Europe and the UK. The latter was largely due to the European Central Bank softening its rhetoric around the removal of the accommodative monetary policy of recent years. Government bonds saw yields climb as perceived safe haven assets were less in demand. Commodity prices rebounded from recent weakness as all four commodity categories enjoyed positive returns. The portfolio produced a positive return over the month. Exposure to commodities contributed most to performance as commodity prices experienced a rebound. Exposure to the equity markets also contributed positively, as all six markets the portfolio offers exposure to generated positive returns. The main detractor for the month was exposure to government bonds, which saw rising yields particularly in Canada, where the central bank increased interest rates for the first time since 00, citing improved business conditions and noting that recent weakness in inflation readings was temporary in their view. Portfolio exposure Bond- UK 6.0 Equity- Europe 7.5 Bond- Canada 5.9 Equity- US Large Cap 5.9 Bond- Australia.4 Equity- US Small Cap 5.7 Bond- Germany 0.8 Agriculture.5 Bond- US 7.4 Energy 7.4 Equity- Hong Kong 8.4 Precious metals 6.8 Equity- Japan 8. Industrial metals 6.5 Equity- UK 7.7 Total 39. Risk exposure Risk % Contribution % Fixed Income.6 7.3 Equities 4. 44.4 Commodities 3.5 38.3 Total 00.0 Ordinary share price and NAV cumulative performance 6 months Year 3 Years 5 Years.. 3. 4.8 Net Asset Value.3 3..6 5. Exposure reflects the ratio of nominal asset exposure to NAV. 00% exposure means that the portfolio has no gearing. The Board has prescribed investment limits where the portfolio s investment in derivatives may create significant leverage exposure to certain equity and fixed income markets. Leverage occurs when the investments in derivatives create greater economic exposure than the amount invested. The aggregate notional/contract value of such long financial derivative instruments is not expected to exceed 50% of the assets in the portfolio. Standardised rolling -month performance 30.06. 30.06.7 Ordinary 7.7 7.9.9.3 8.4 Net Asset Value.9. 0. 6.6 3. reinvested. The NAV used includes current period revenue and values debt at fair. All performance figures are in sterling as at 3 July 07 except where otherwise
Stuart Edwards The investment objective of the Managed Liquidity Share Portfolio is to produce an appropriate level of income return combined with a high degree of security. IVPM.L 5.4m 0.3p 03.p Discount.8% Total Dividend 0p Dividend Yield 0.0% Ongoing charge (incl AMF) 0.5% Annual Management Fee (AMF) 0.% 5,95,65 Managed Liquidity Share Portfolio www.invescoperpetual.co.uk/selectml Data released during July showed UK consumer inflation to have unexpectedly slowed. The Annual Consumer Price Index (CPI) of inflation for June was.6% against a figure of.9% in May. The fall is in line with a general weakening of global inflation. In large part the fall was due to earlier weakness in crude oil prices. After the hints in late June that central banks might start to reduce the level of economic stimulus this downturn in inflation has provided some breathing space. Market expectations about the timing of the next hike in UK bank rate were pushed out to later in 08. The -year Gilt yield, which is heavily influenced by interest rate expectations, fell from 0.36% at end of June to 0.7% at the end of July. Three month LIBOR (the rate at which the largest banks lend to one another) fell basis points to 0.9%. The portfolio has positions in a number of government, quasi-government and corporate bonds. In order to limit the exposure to interest rate risk and credit risk (the likelihood of an issuer defaulting), these bonds are both short dated and of high quality. The portfolio also has an allocation to floating rate notes. The interest rates on these bonds reset at regular intervals. Top 0 holdings Invesco Perpetual Money Fund 89.9 Short-Term Investment Company (Global Series) 0. Total 00.0 Ordinary share price and NAV cumulative performance 6 months Year 3 Years 5 Years 0.6 0. 0. 3.3 Net Asset Value 0.0 0.0-0. 0.4 Standardised rolling -month performance 30.06. 30.06.7 Ordinary.8-0. 0.6-0.7 0. Net Asset Value 0.5 0. -0. 0.0 0.0 reinvested. The NAV used includes current period revenue and values debt at fair. All performance figures are in sterling as at 3 July 07 except where otherwise Total dividend is made up of the previous financial year s dividends declared by the Company. Dividend yield is the total dividend divided by the current share price.
The value of investments and any income will fluctuate (this may partly be as a result of exchange rate fluctuations) and investors may not get back the full amount invested. When making an investment in an investment trust you are buying shares in a company that is listed on a stock exchange. The price of the shares will be determined by supply and demand. Consequently, the share price of an investment trust may be higher or lower than the underlying net asset value of the investments in its portfolio and there can be no certainty that there will be liquidity in the shares. The investment trust may use derivatives for the purpose of efficient portfolio management. There may not be a precise correlation between price movements in the underlying securities, currency or index, on the one hand, and price movements in the investments, which are the subject of the hedge, on the other. In addition, an active market may not exist for a particular derivative instrument at any particular time. Further information Client Services Telephone 0800 085 8677 Facsimile 049 46000 Email enquiry@invescoperpetual.co.uk Telephone calls may be recorded. www.invescoperpetual.co.uk/ipst Issued by Invesco Fund Managers Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 HH, UK Authorised and regulated by the Financial Conduct Authority The Global Equity Income portfolio may invest in emerging market securities. Investors should be prepared to accept a higher degree of risk than for an investment trust with a broader investment mandate, as difficulties in dealing, settlement and custody problems could arise. The Balanced Risk portfolio will make significant use of financial derivatives (complex instruments) which will result in large fluctuations in the value of the investment trust. Leverage created from borrowing on certain types of transactions including derivatives may impair the investment trust liquidity, cause it to liquidate positions at unfavourable times or otherwise cause the investment trust not to achieve its intended objective. Leverage occurs when the economic exposure created by the use of derivatives is greater than the amount invested resulting in the investment trust being exposed to a greater loss than the initial investment. The Balanced Risk portfolio will gain exposure to commodities which are generally considered to be high risk investments and may result in large fluctuations in the value of the investment trust. The Directors intend that each portfolio will effectively operate as if it were a stand-alone company. However, prospective investors should be aware that in the event that any of the portfolios have insufficient funds or assets to meet all of its liabilities, such a shortfall would become a liability of the other portfolios. In addition, should the investment trust incur material liabilities in the future, a significant fall in the value of the investment trust s assets as a whole may affect the investment trust s ability to pay dividends on a particular class of share portfolio, even though there are distributable profits attributable to the relevant portfolio. The investment trust may use borrowings to invest in the market. The use of borrowings may enhance total return when the value of the investment trust s assets is rising, but it will have the opposite effect when asset values fall. The use of borrowings may increase the volatility of the share price and the net asset value per share. In certain circumstances, the investment trust may be required to repay borrowings and this could adversely affect income and capital returns. The investment trust expects to increase dividend payments on the Global Equity Income and UK Equity shares by making use of its ability to distribute capital. To the extent the investment trust uses its ability to fund dividends using capital profit this will reduce capital growth. Important information 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 and are subject to change without notice. For more information, please refer to the relevant Alternative Investment Fund Managers Directive document (AIFMD) and the latest Annual or Half-Yearly Financial Reports. This information is available using the contact details shown.