Invesco Perpetual Emerging European Fund
July 2017 (Content as at 30 June 2017)
The Invesco Perpetual Emerging European Fund aims to achieve long-term capital growth from investment primarily in shares of companies in Emerging European Countries, and also in Russia. In pursuing this objective, the fund managers may include investments that they consider appropriate which include transferable securities, money market instruments, warrants, collective investment schemes, deposits and other permitted investments and transactions as detailed in Appendix 2 of the most recent Prospectus.
The fund is positioned to benefit from long-term growth opportunities in a region that we believe is undervalued by the market. We seek to hold stakes in companies that we believe are well-run and have a market position that should allow them to deliver a high level of return on invested capital. The fund’s diversified approach is reflected in sector positioning, which is spread across a broad range. Our largest country holding is in Russia, though the fund also seeks to enhance its risk-reward profile by investing in off-index countries such as Turkey.
Equity performance in emerging Europe was mixed with weakness in Russia being offset by strength in Greece and Hungary. Sentiment towards Russia was dented by lower energy prices – natural gas fell by 8.4% and Brent crude dropped by 3.1% in May. However, news on the Russian economy was more robust with GDP for Q1 2017 rising by 0.5% year-on-year. In keeping with its downward trend, Russia’s annual inflation rate edged down to 4.1% in April, increasing the chances of further interest rate cuts in the months ahead. Equity performance elsewhere in the region was more positive with Greece leading the way with healthy returns for the second consecutive month. Sentiment towards Greece was enhanced by positive progress on bailout talks with creditors. Turkey’s equity market continued its uptrend given steady improvement in earnings growth expectations for 2017. In central Europe, economic data from Poland and Hungary was generally robust with retails sales increasing at a healthy rate in both countries.
|Launch date||12 December 2007|
|Sector||IA Specialist Sector|
|Available in an ISA?||Yes|
|Team:||Invesco Perpetual - Emerging Market Equities|
|Accounting period ends||
|Accumulation (No Trail)||B28J0Z7||GB00B28J0Z75|
|Income (No Trail)||B28J109||GB00B28J1092|
|Minimum lump sum||£500|
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 costs1
On average, over the last three financial years, the fund incurred broker commissions of 0.18% and transfer taxes of 0.01%, 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 is 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 0.24% 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 note1
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, including any dealing spreads, broker commissions and transfer taxes.
Typical adjustments to the fund's price are to increase it by 0.24% for net inflows or decrease it by 0.35% for net 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 July 2016. Figures in these sections are as at 31 July 2016.
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.
Although the fund does not actively pursue a concentrated portfolio, it may have a concentrated number of holdings on occasions. Accordingly, the fund may carry a higher degree of risk than a fund which invests in a broader range of companies or takes smaller positions in a relatively large number of holdings.
The fund invests in emerging and developing markets, where there is potential for a decrease in market liquidity, which may mean that it is not easy to buy or sell securities. There may also be difficulties in dealing and settlement, and custody problems could arise.
The fund will invest directly in Russia, which can involve significant risks to capital.
The fund may use derivatives (complex instruments) in an attempt to reduce the overall risk of its investments, reduce the costs of investing and/or generate additional capital or income, although this may not be achieved. The use of such complex instruments may result in greater fluctuations of the value of the fund. The Manager, however, will ensure that the use of derivatives within the fund does not materially alter the overall risk profile of the fund.
Yield and performance figures are based on the z (accumulation) share class. As this was launched on 12 November 2012, for the periods prior to this launch date, performance figures are based on the accumulation share class, without any adjustment for fees. Performance figures for all share classes can be found in the relevant Key Investor Information Document.
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. Benchmark performance is calculated on an equivalent basis (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. This marketing material 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.
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.