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Investment Trusts

Here today. Here tomorrow.

Having helped many thousands of investors, we’re confident that with the right management, stock market investments have the potential to offer strong, long-term rewards. Investing your money within an investment trust – a closed ended investment company listed on the London Stock Exchange - can be an effective way, over the long-term, to enjoy the growth potential of the stock market.

At Invesco Perpetual we manage a range of nine investment trusts. These vary from the relatively new to having over 125 years’ history, but at the heart of each one is the same commitment to investment excellence. Each of the trusts is diligently managed with long-term performance in mind, based on an active, high conviction approach to investing.

"I strongly believe the best way to invest in companies is to take a long-term approach and act as much as possible as an owner of a part of a company, rather than as a speculator in share prices"

- Ciaran Mallon,
  UK Equities Fund Manager

The Edinburgh Investment Trust plc

Managed by Mark Barnett, the Company invests primarily in UK securities with the long-term objective of achieving an increase of the Net Asset Value per share by more than the growth in the FTSE All-Share Index; and growth in dividends per share by more than the rate of UK inflation.

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Perpetual Income and Growth Investment Trust plc

Managed by Mark Barnett, the Company’s investment objective is to provide shareholders with capital growth and real growth in dividends over the medium to longer term from a portfolio of securities listed mainly in the UK equity and fixed interest markets.

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Invesco Income Growth Trust plc

Managed by Ciaran Mallon, the Company’s investment objective is to produce income and capital growth superior to that of the UK stock market and dividends paid quarterly that, over time, grow above the rate of inflation.

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Keystone Investment Trust plc

Managed by Mark Barnett, the investment objective is to provide shareholders with long-term growth of capital, mainly from UK investments.

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Invesco Perpetual UK Smaller Companies Investment Trust plc

Managed by Jonathan Brown, the Company’s investment objective is to achieve long-term total return for shareholders primarily by investment in a broad cross-section of small to medium-sized UK quoted companies.

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Invesco Asia Trust plc

Managed by Ian Hargreaves, the Company’s objective is to provide long-term capital growth by investing in a diversified portfolio of Asian and Australasian companies. The Company aims to achieve growth in its net asset value (NAV) in excess of the Benchmark Index, the MSCI AC Asia ex Japan index (total return, in sterling terms).

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Invesco Perpetual Enhanced Income Limited

Managed by Paul Causer, Paul Read and Rhys Davies, the Company’s principle objective is to provide shareholders with a high level of income whilst seeking to maximise total return through investing in a diversified portfolio of high yielding corporate and government bonds. The Company may also invest in equities and other instruments that the Manager considers appropriate.

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City Merchants High Yield Trust Limited

Managed by Paul Causer, Paul Read and Rhys Davies, the Company’s investment objective is to seek to obtain both high income and capital growth from investment, predominantly in high-yielding fixed-interest securities.

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Invesco Perpetual Select Trust plc

This is a multi-asset class investment trust with four share portfolios with a range of objectives suited to investors looking for a long-term investment with the flexibility to react to changing investment conditions. Shareholders are able to convert between the four share classes once per quarter allowing maximum flexibility to gain exposure to their preferred asset classes without triggering a disposal for Capital Gains Tax purposes.

Balanced Risk Share Portfolio

Global Equity Income Share Portfolio

Managed Liquidity Share Portfolio

UK Equity Share Portfolio

Important information

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.

When making an investment in an investment trust or investment company 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 or investment company 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.

Current tax levels and reliefs may change. Depending on individual circumstances, this may affect investment returns.

Where Invesco Perpetual has expressed views and opinions, these may change.

The investment trusts and investment companies may use borrowings to invest in the market. The use of borrowings may enhance total return when the value of the investment trusts’ and investment companies’ assets are 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 trusts and investment companies may be required to repay borrowings and this could adversely affect income and capital returns.

The Edinburgh Investment Trust plc, Invesco Asia Trust plc, Invesco Perpetual UK Smaller Companies Investment Trust plc, Keystone Investment Trust plc and Perpetual Income and Growth Investment Trust plc may invest in derivatives. This means that the net asset value of the investment trusts may, at times, be highly volatile. The use of derivative instruments involves certain risks (including market or communication breakdown, counterparty failure and credit risk) and there is no assurance that the objectives for the use of such instruments will be achieved.

Invesco Income Growth Trust plc may, subject to Board approval, invest in derivatives. This means that the net asset value of the investment trust may, at times, be highly volatile. The use of derivative instruments involves certain risks (including market or communication breakdown, counterparty failure and credit risk) and there is no assurance that the objectives for the use of such instruments will be achieved. At present the Directors have not sanctioned the use of any derivatives.

As the Invesco Asia Trust plc is an emerging markets investment trust, 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.

As the Invesco Perpetual UK Smaller Companies Investment Trust plc is a smaller companies investment trust, investors should be prepared to accept a higher degree of risk than for an investment trust with a broader investment mandate.

The City Merchants High Yield Trust Limited and Invesco Perpetual Enhanced Income Limited have a significant proportion of high-yielding bonds, which means that there is more risk to investors’ capital and income than from a Company investing in government or investment grade bonds. Income from the investment may fluctuate and is not guaranteed. The Companies may invest in derivatives. This means that the net asset value of the Companies may, at times, be highly volatile. The use of derivative instruments involves certain risks (including market or communication breakdown, counterparty failure and credit risk) and there is no assurance that the objectives for the use of such instruments will be achieved.

The Invesco Perpetual Select Trust plc 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.

The Invesco Perpetual Select Trust plc 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 Invesco Perpetual Select Trust plc 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 Invesco Perpetual Select Trust plc 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 Shares, 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.

For more information on our products, please refer to the relevant Alternative Investment Fund Managers Directive document (AIFMD) and the latest Annual or Half-Yearly Financial Reports, which include both the general and specific risks associated with investing in the investment trusts, before you make your decision. This information is available on our website www.invescoperpetual.co.uk or by using the contact details shown.

Further details of the Companies’ Investment Policies and Risks and Investment Limits can be found in the Report of the Directors contained within the Companies’ Annual Financial Reports.

If you are unsure if a product is suitable for you, you should seek advice from a financial adviser. For details of your nearest financial adviser, visit www.unbiased.co.uk