Invesco Perpetual Global Targeted Returns Fund
February 2017 (Content as at 31 January 2017)
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% per annum above UK 3 month LIBOR (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 target and an investor may not get back the full amount invested.
The populist tone in the US and the UK continued to stoke optimism in local equity markets with the FTSE 100 and the Dow Jones Industrial indices reaching record high levels during the month. The most evident trend in global equity markets was the preference of investors for the more growth sensitive areas of the market. In particular, stocks in materials, especially mining and industrial sectors, fared well as commodity prices continued to improve off the back of some encouraging economic data. One exception was the oil sector, which was held back by concerns over rising oil output and some lacklustre earning. Defensive sectors such as consumer staples continued to lag. Equity markets in Europe and Japan were relatively flat, as both the euro and the yen rallied against the US dollar, with the new US president taking advantage of his new found prominence to attack the weakness of both the yen and the euro and outline radical changes to US trade policy. The global sell-off in bond markets resumed in January, the increase in yields seemed to reflect improved economic data, particularly in the Eurozone, and signs of a possible pick-up in inflation. This led to market concerns about what impact this may have on central bank policies. US bond yields stayed relatively flat.
During the month, we added two new ideas to the fund. We introduced a long sterling view against the US dollar. The UK pound has fallen significantly over the last 12 months as the Brexit referendum and its result have weakened the currency. At the same time, the US dollar has risen, boosted by optimism around the policies of the new president. While we do not foresee a significant recovery of sterling, we are able to implement an options strategy that will enhance returns if the pound does not fall much further from here. We also added an equities idea pairing a positive view on French equities versus both German and Italian equities. Given the strong performance in German equities over the last year, ongoing concerns around the financial sector in Italy and the prospect of business-friendly political changes in France later this year, we believe it could be time for a reversal in fortunes across Europe. This is particularly true of France and Germany, which have similar exposure to global growth. We also moved our European credit curve flattener idea into our Selective Credit idea. While we still expect the cost of protecting against credit default in 10-year’s time to fall relative to five-year’s time, the projected returns are no longer sufficient to justify a standalone idea in the portfolio.
|Launch date||09 September 2013|
|Sector||IA Targeted Absolute Return NR|
|Available in an ISA?||Yes|
|Team:||Invesco Perpetual - Multi Asset|
|Team:||Invesco Perpetual - Multi Asset|
|Title:||Head of Multi Asset|
|Team:||Invesco Perpetual - Multi Asset|
|Accounting period ends||
|Accumulation (No Trail)||B8CHD05||GB00B8CHD050|
|Minimum lump sum||£500|
|Minimum monthly amount||£20|
|Minimum additional lump sum||£100|
One-off charges taken before you invest
The entry charge for the fund is up to 5%. This is the maximum that might be taken out of your money before it is invested. For example, if you invest £1,000, an entry charge of 5% means £950 of your money will be used to buy shares in the fund.
The entry charge covers the costs of setting up your investment.
If you invest through a third party (such as a financial adviser), but do not receive financial advice on your investment, this charge may include payments to that third party. For more details see "What share classes are available for your ICVC funds?".
There is no exit charge for the fund.
Charges taken from the fund over a year
The ongoing charge figure is based on a fixed, all-inclusive fee and excludes portfolio transaction costs. The ongoing charge for each share class can be found in the relevant Key Investor Information Document available under 'Literature'. Investors will be provided with advance notice if any increases to this figure occur.
The ongoing charge covers all aspects of operating the fund during the year, including fees paid for investment management, administration and the independent oversight functions.
If you invest through a third party (such as a financial adviser), but do not receive financial advice on your investment, this charge may include payments to that third party. Once invested, your contract note or acknowledgement letter will show the amount of any payment in cash terms. For more details see "What share classes are available for your ICVC funds?".
Charges taken from the fund under specific conditions
No performance fee is charged.
Portfolio transaction costs
The fund was launched on 9th September 2013. On average, since launch, the fund incurred broker commissions of 0.08% and transfer taxes of 0.11%, as a necessary part of buying and selling the fund’s underlying investments in order to achieve the investment objective. A proportion of these costs are recovered directly from investors joining and leaving the fund.
When the fund buys or sells shares, broker commissions and transfer taxes are paid by the fund on each transaction. In addition, there is a dealing spread between the buying and selling prices of the underlying investments. Unlike shares, other types of investments (such as bonds, money market instruments and derivatives) have no separately identifiable transaction costs; these costs form part of the dealing spread. Dealing spreads vary considerably depending on the transaction value and market sentiment. The estimated average dealing spread for the fund is 0.71% of the transaction value.
Comparing portfolio transaction costs for a range of funds may give a false impression of the relative costs of investing in them, for the following reasons:
- Transaction costs do not necessarily reduce returns. The net impact of dealing is the combination of the effectiveness of the manager's investment decisions in improving returns and the associate costs of investment
- Historic transaction costs are not an effective indicator of the future impact on performance
- Transaction costs for buying and selling investments due to other investors joining or leaving the fund may be recovered from those investors. For further information see Pricing policy note below
- Transaction costs vary from country to country
- Transaction costs vary depending on the types of investment in which a fund invests
- As the manager's investment decisions are not predictable, transaction costs are also not predictable
Pricing policy note
We operate a single pricing methodology for this fund and reserve the right to adjust the fund's price to protect your investment from the costs of buying and selling investments that result from other investors joining or leaving the fund. The amount of any such adjustment is calculated by reference to the estimated costs of dealing in the underlying investments.
Typical adjustments to the fund’s price are to increase it by 0.41% for net inflows and decrease it by 0.33% for new outflows.
We usually adjust the price to the maximum extent possible when the value of net contributions or withdrawals is significant, which helps to protect your investment from the costs of the resultant transactions.
1The fund's financial year end is 31 December 2015. Figures in these sections are as at 31 December 2015.
Product & fund 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. Past performance is not a guide to future returns.
The fund makes significant use of financial derivatives (complex instruments) which will result in the fund being leveraged and may result in large fluctuations in the value of the fund. Leverage on certain types of transactions including derivatives may impair the fund’s liquidity, cause it to liquidate positions at unfavourable times or otherwise cause the fund 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 fund being exposed to a greater loss than the initial investment. 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 securities that the fund invests in may not always make interest and other payments nor is the solvency of the issuers guaranteed. Market conditions, such as a decrease in market liquidity for the securities in which the fund invests, may mean that the fund may not be able to sell those securities at their true value. These risks increase where the fund invests in high yield or lower credit quality bonds and where we use derivatives.
Yield and performance figures are based on the z (accumulation) share class.
All fund portfolio figures are as at date shown (source: Invesco Perpetual).
Performance figures are shown in sterling, inclusive of reinvested income and net of the ongoing charge and portfolio transaction costs to date shown. The figures do not reflect the entry charge paid by individual investors (source: Lipper).
The Historic Yield reflects distributions declared over the past twelve months as a percentage of the mid-market price of the fund, as at the date shown. It does not include any entry charge and investors may be subject to tax on their distributions.
Where Invesco Perpetual has expressed views and opinions, these may change. Where securities are mentioned they do not necessarily represent a specific portfolio holding and do not constitute a recommendation to purchase, hold or sell.
For the most up to date information on our funds, please refer to the relevant fund and share class-specific Key Investor Information Documents, the Supplementary Information Document, the Annual or Interim Short Reports and the Prospectus, which are available using the contact details shown.