Fund Profile

Invesco Select: Global Equity Income 23 January 2024

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Invesco Select: Global Equity Income. 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.

Overview
IVPG’s proposed merger with IVPU will bring with it the inherent benefits of scale…
Overview

Invesco Select Global Equity Income (IVPG) has been managed by Stephen Anness since January 2020. Stephen has transformed the Portfolio to provide investors with a balanced, all-weather strategy to minimise exposure to stylistic biases or specific factor risks, with the aim of delivering a growing level of income alongside long-term capital appreciation.

In December 2023, the board announced the proposed merger of assets within the Invesco Select Trust. The proposals are for IVPG to absorb the Invesco UK Equity (IVPU) share class and the smaller share classes. In addition, the board intends to amend the dividend policy in order to pay at least 1% of cum-income net asset value, paid quarterly, utilising the revenue and capital reserves when appropriate (see Dividend). This will lead to a substantial increase in the yield IVPG offers whilst allowing Stephen to continue to run the portfolio to the same strategy which has delivered strong Performance in recent years. Since he took over in 2019, IVPG has generated a NAV total return of 54.4% compared to the 37.2% and 49.1% generated by the global equity income sector and the MSCI World Index.

Additionally, the board intends to tighten the discount control policy, which will seek to keep the discount at less than 10%, in normal market conditions. The board believes the consolidation should have a beneficial impact on liquidity and a narrowing of the Discount, which is currently 9.6%. Net assets will increase, allowing IVPG to spread fixed costs over an enlarged assets base which will reduce Charges.

Kepler View

This is a significant package of proposals which brings with it several advantages. Chiefly, we believe the new dividend policy will be attractive to income-seeking investors by boosting the yield whilst allowing Stephen to continue to follow the investment strategy that has delivered such attractive total returns.

Importantly, the investment strategy will remain the same, and we think Stephen has demonstrated the value of his balanced strategy over the long term, delivering impressive performance. The current economic environment remains uncertain, and we believe his well-balanced, benchmark-agnostic approach and focus on fundamentals could continue to do well. Performance has been helped at different times by a well-timed reduction in gearing and an increased allocation to lower-leveraged companies with greater predictability of cash flows. It was also helped in 2023 by Stephen identifying a range of attractively valued opportunities further down the market cap spectrum which had been overlooked by the market—particularly those exposed to AI. With interest rates expected to fall by the end of the year, a softer landing continuing to be priced and investor sentiment improving, these mispriced companies and IVPG may be well placed to benefit, in our view.

We believe the proposed introduction of a tighter discount control policy and the increased simplicity of the investment proposition may provide a catalyst for the discount to narrow.

Bull

  • Discount significantly wider than long-term average
  • Very strong and consistent performance
  • Offers genuine diversification opportunity versus alternative global strategies

Bear

  • OCF currently higher than sector average, although completion of merger will reduce costs
  • May lag in strong style-driven market environments
  • Low current yield compared to alternative income strategies
Continue to Portfolio
2024 Kepler Growth Rated Fund

This trust has been awarded a rating by Kepler Trust Intelligence for growth... Find out more

Fund History

23 Jan 2024 Fund Analysis
IVPG’s proposed merger with IVPU will bring with it the inherent benefits of scale…
17 Jan 2024 Top of the Pops
We reveal the winners of our investment trust ratings for 2024…
10 Jan 2024 Definitely maybe
Fund flows and discounts may shed some light on a once-in-a-generation opportunity…
30 Jun 2023 Stock spotlight: Broadcom - investing for a chatbot world
AI chatbots allow us to interact with technology in smarter ways but there is a price – the billions that will be invested in the software and the hardware needed. AI will demand ever-greater processing power. One company involved in the AI revolution is California-headquartered Broadcom. Head of Global Equities, Stephen Anness, shares his thoughts in this short read...
11 May 2023 Tipping point
Battered growth strategies have staged a comeback recently, but what happens now?
05 May 2023 Fund Analysis
IVPG’s historically-wide discount may present an opportune entry point, given the managers’ strong performance track record…
19 Aug 2022 Fund Analysis
IVPG’s relative performance has been improving, making the discount widening to c. 12% seem anomalous...
22 Mar 2022 Fund Analysis
IVPG’s current discount potentially offers a good opportunity to access a differentiated trust…
17 Nov 2021 Fund Analysis
A new team means IVPG has a more balanced portfolio, but the same focus on dividend growth…
16 Jun 2021 A better class of travel*
Sharing many features of a traditional family office, investment trusts offer a sophisticated, cost effective solution for managing family wealth...
11 Mar 2021 Flash update: Invesco Select & Invesco Income Growth
With a merger of Invesco Select UK Equity shares and Invesco Income Growth, we learn that the management team is also merging….
04 Dec 2020 Biden victory and vaccine hopes spur rotation into value stocks
Stephen Anness digests the latest headlines from around the world and what this could mean looking ahead for Invesco Perpetual Select Trust plc: Global Equity Income...
03 Apr 2019 Nice guys finish first
We review the rise of ESG, its impact on investment trusts, and the various ways ESG has evolved in the trust world...
18 Feb 2019 Fund Analysis
Comprised of just over 50 stocks, IVPG looks to grow income and capital through holding high quality companies...
03 Oct 2018 We can be heroes
Our analysis has uncovered the trusts which have generated a solid income through thick and thin - without compromising other aspects of performance...
01 Oct 2018 Fund Analysis
IP Select Global Equity Income aims to offer investors a growing level of income, and capital appreciation over the long term.This is achieved through a concentrated portfolio of global equities...
23 Aug 2018 Has the time come for global equity income?
Although Global Equity Income-orientated strategies have been underperforming the wider market, Invesco Perpetual's John Botham explains that rising interest rates have historically been catalysts for a change in market leadership...
13 Jun 2018 Fund Analysis
A solid track record, a yield of 3.2%, and year on year dividend growth since launch...
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...
10 Jun 2015 Fund Analysis
10 Jun 2015 Liquidity: Punching above their weight
Five small yet highly liquid trusts which should be on your radar
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