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Fund Profile

Invesco Select: Global Equity Income 17 November 2021

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
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Overview

Invesco Select Global Equity Income Share Portfolio (IVPG) aims to achieve a growing level of income return each year, with capital appreciation over the long term. Invesco’s Global Equity team, led by Stephen Anness, took responsibility on 1 January 2020, with a view at the time that reorientating the portfolio would be an evolution rather than a revolution. This was unfortunate timing, and IVPG was as a result too exposed to cyclical names in the crash. This affected short-term performance, but as we discuss in the Performance section, relative performance has improved considerably since November 2020.

The new management team are less focussed on ‘value’ opportunities than the previous team, preferring to lend a higher weight to the quality of a prospective business as a determinant of long-term returns. As we illustrate under Portfolio, this has resulted in the trust’s underweight to US equities being reduced, but it also shows through in the recent outperformance partly driven by mega-cap technology names like Microsoft and Facebook. In our view this demonstrates a more pragmatic investment process than was historically the case, and one likely to be less influenced by a single investment factor such as value, thus resulting in a more balanced portfolio over time.

Underpinning the process is a desire to invest in companies that are growing their dividends faster than the wider market. In the Dividend section, we illustrate that IVPG has a track record of delivering progressive dividends year on year, with the board having demonstrated its willingness to support this through capital payments.

Kepler View

With a new team behind Invesco Select’s Global Equity Income share class, the prospects for shareholders are bright, in our view. The team received the baton from the previous Invesco team at an inopportune moment, but there is good evidence that the team and process have both come out the other side stronger. For example, the portfolio is now more balanced between growth, value and core (as defined by Morningstar), which has helped the trust’s relative performance over 2021. Most recently this was seen over the past couple of months where the trust benefitted from its growth holdings, but also from more cyclical names such as JPMorgan and Lundin Energy.

This perhaps exemplifies why IVPG offers a differentiated global equity income exposure. The team clearly follow the ‘typical’ Invesco process by taking a long-term view, but their approach to income growth rather than just a high running yield should ensure that both the income and capital sides of the equation are satisfactory for investors.

Alongside the attractiveness of the strategy, IVPG’s shareholders benefit from the added flexibility afforded by the investment trust structure, which allows dividends to be supported by capital payments. This has seen the progressive dividend record continue, despite the perilous effects of the pandemic on the corporate dividends . With the board focussed on minimising discount volatility, it might be said that investors get all the benefits of the trust structure with fewer of the typical discount risks.

bull bear
Stephen Anness has a good long-term track record of outperforming his benchmark for the open-ended funds he has run in the past
Lower initial yield than that of peer group
Balanced approach, with a focus on dividend growth, offers differentiated exposure
New team have a short track record as managers of an investment trust
Zero-tolerance approach to discount means the trust is much more liquid than its size would suggest
Gearing can exacerbate the downside
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
View all

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