Fund Profile

Invesco Select: Global Equity Income 18 February 2019

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

IP 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, through a concentrated but diversified portfolio of global equities.

IVPG's portfolio is relatively concentrated, comprising of approximately 52 stocks. The team, led by Nick Mustoe, look to invest in high-quality companies at attractive valuations, offering appealing yields, sustainable income and capital upside.

Over the long term, the trust has met its aim of achieving strong total returns and the emphasis on dividend growth, rather than investing for the highest achievable yield, has meant that the trust has outperformed peers. Since the team took over the portfolio in late 2012, the trust has outperformed many of its investment trust and open-ended peers by a country mile, delivering 34% and 24.1% greater returns than the Morningstar IT Global Equity Income sector and the IA Global Equity Income sector respectively.

The portfolio currently yields 3.7%, and at a portfolio level the managers expect growth in earnings and dividends at around 6-7%. Shareholders have seen substantial year-on-year increases in income payments, with full-year dividends growing at a rate of 14.5% p.a. over the past five years.

So far in FY19, three interim dividends have been announced. The latest, in December, equated to 1.5p and the Directors announced that they have a target of at least maintaining the previous year’s dividend (6.7p). The Company also employs a dividend policy which looks to smooth pay-outs through returns of capital, whilst actively controlling the discount. Historically this has prevented the trust’s shares from slipping to a significant discount to NAV and currently the discount is -2%.

Kepler View

There are many things to like about IVPG. Comprised of just over 50 stocks, the relatively concentrated portfolio is built up of numerous high-quality companies, which either offer attractive yields or dependable income growth and capital upside. Although the current yield of 3.7% is below the average in the Global Equity Income sector, the dramatic outperformance in NAV terms the trust has delivered in comparison to the open and closed-ended peer groups (since Nick and the team took over) more than makes up for it. Alongside the strong returns, the manager has been able to grow the full year dividends at close to 15% per annum, over double the weighted average in the global equity income sector.

BULL
BEAR
Well resourced, team approach to global investment
Lower initial yield
Strong dividend growth
Relatively small size could make it hard for institutions to own the trust
Zero tolerance approach to discount means the trust is much more liquid than its size would suggest



Continue to Portfolio

Fund History

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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