Fund Profile


Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Invesco Asia. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

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Invesco Asia Trust (IAT) aims to grow capital by investing in Asian equities with a valuation-sensitive approach. Manager Ian Hargreaves focusses on identifying businesses which are cheap relative to their future earnings growth potential, looking across the whole market for new ideas. IAT pays out 2% of NAV each half year as a dividend, based on the valuation at the end of that period. This is paid from income (and from capital where necessary), with the focus of the manager remaining on generating total returns.

IAT is typically more exposed to value stocks and sectors than its growth-focussed peers, although it also holds significant positions in technology, e-commerce and classic growth areas. The manager is focussed on looking for companies that are worth more than the market believes, including looking for opportunities in undervalued companies with superior growth prospects, meaning this is by no means a pure ‘value’ approach.

IAT has had an exceptional 12 months, building on a longer track record of outperformance, as discussed in the Performance section. While Ian’s shift into cyclicals on valuation grounds has been rewarded, key growth stocks continue to contribute as well.

Ian has the ability to use gearing actively to express a view on the market. With index-level valuations above their long-term historical averages, he has taken net gearing down to zero. However, as we discuss in the Portfolio section, he continues to find opportunities at the stock level in both the growth and value sectors.

IAT trades on a discount of 9.3%, compared to the AIC Asia Pacific Equity Income sector average of 6.3%, with its discount having recently widened out considerably.

Kepler View

In our view IAT could serve as an excellent core Asia exposure. Ian has a good track record of adding value through stock-picking in both growth and value sectors, and the portfolio is balanced across the region on a geographic and sector basis, so this looks like an attractive way to be positioned at this point in time. We saw growth outperform value for a number of years pre-pandemic, and then get another boost from the working-from-home phenomenon. We then saw a sharp rally in value after vaccines were proven to work. As ever, the market direction is unclear, but it seems unlikely that either growth or value will see as strong a trend in their favour as has recently been the case. Similarly, Ian’s prudent caution in taking the gearing down while maintaining punchy exposure to individual stocks seems to make sense given the current state of valuations.

For income investors, the trust offers a decent yield with the potential for growth if the NAV continues to rise. This yield is delivered without Ian having to sacrifice total return potential, as he remains focussed on picking companies that are worth more than the market believes, without having to compromise in order to boost the natural yield. In our view there is no good reason for the discount to be so wide relative to peers, and we note that at times it has been significantly narrower in recent months.

bull bear
Dividend policy offers attractive yield while maintaining total return focus
Dividend will not be predictable as it will depend on NAV
A track record of long-term outperformance under this manager
High degree of macro uncertainty means world and Asian markets could struggle post-pandemic
Balanced factor exposure should help limit volatility to market rotations
Current tilt towards cyclicals could detract if recovery disappoints
Continue to Portfolio

Fund History

09 Mar 2022 Fund Analysis
IAT could appeal to investors looking to diversify in a growth-heavy sector…
03 Feb 2022 Video update: Invesco Asia
Update from new co-manager Fiona Yang...
06 Oct 2021 Slides and Audio: Invesco Asia
Download the presentation and listen to the audio from our 'Now that's what I call a discount!' Autumn conference on 30 September...
23 Sep 2021 Now that's what I call a discount 2021!
For the second year running we examine trusts on discounts which, in our view, don't make sense...
25 Aug 2021 Is the UK’s debt a ticking time bomb?
Our analyst argues Rishi is right to worry about government debt and borrowing…
09 Aug 2021 Fund Analysis
IAT has enjoyed a strong period of outperformance, boosted by a diverse group of companies…
09 Mar 2021 Asian opportunities in challenging times
Ian Hargreaves, manager of Invesco Asia Trust plc, believes the strength of the Asian equity markets are on the up since their March 2020 lows...
21 Jan 2021 Fund Analysis
IAT has significantly outperformed in Ian Hargreaves’ first five years as sole manager…
24 Sep 2020 Fund Analysis
IAT’s new dividend policy will see it pay 4% of NAV as a dividend each year…
06 Aug 2020 Ian Hargreaves
Ian Hargreaves is co-head of the Asian & Emerging Markets Equity Team at Invesco in Henley on Thames and runs a number of pan-Asian portfolios including Invesco Asia Trust (IAT), Invesco Asian Equity Fund and the Invesco Global Emerging Markets Fund (UK)...
28 May 2020 Opportunities from the Covid-19 crisis
Ian Hargreaves of Invesco outlines key questions to be considered through this 'black swan' event...
29 Apr 2020 On solid ground
Our analysis of discounts highlights trusts which are likely to offer significantly less discount downside from the current level…
24 Mar 2020 First in, first out?
We ask whether the brave should be raising their allocation to Asia...
22 Jan 2020 Fund Analysis
IAT’s cheap portfolio is positioned for a strong 2020 in Asian markets…
06 Nov 2019 Poacher turned gamekeeper
Former fund manager - now investment trust chairman - Neil Rogan discusses how his own lessons from the job have helped him in his role...
21 Aug 2019 All change: a closer look at the AIC's revised sectors
We examine the AIC's revised sector classifications and discuss whether further improvements could be made...
03 Jul 2019 Push-me pull-you
Two contrasting influences are dominating the outlook for Asian markets - we analyse them and how Asia trusts are positioning their portfolios in response...
02 Jul 2019 Fund Analysis
Invesco Asia offers a diversified portfolio that has outperformed in a variety of market conditions...
17 Aug 2018 Why Asia's crosswinds will not blow it off course
Ian Hargreaves explains why heightened trade tensions and fading earnings momentum will not stop Asia's equities shining...
03 Jul 2018 Outlook for Asia: still positive?
Invesco's Ian Hargreaves gives his take on the trade war and more...
19 Apr 2018 When others are fearful...
We ask whether it is time to be greedy after the recent selloff in Asia equities...
19 Apr 2018 Fund Analysis
A broad ranging remit, which diversifies well the traditional exposures and biases of the typical fund....
30 Nov 2017 Race ready
Our analysis suggests conditions are right for emerging markets fund managers who can add real alpha to generate strong returns...
29 Nov 2017 Fund Analysis
A top-performing trust that invests across Asia and across the market cap spectrum via a value-orientated strategy
26 Jul 2017 Apt student
Invesco CIO Nick Mustoe tell us he started out with just a university grant as seed capital for his first portfolio...
24 May 2017 Fund Analysis
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