IP Select’s Global Equity Income Share Portfolio (IVPG) is run by a group of regional-specialist managers from the Henley-on-Thames offices of Invesco Perpetual. They aim 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.
The trust actively uses the unique advantages of the closed-end structure to do this, including gearing, an enhanced dividend policy and an active discount control policy which has historically prevented the trust’s shares from slipping to a significant discount to NAV.
A key differentiator of this trust is that it is split into four ‘share classes’, each pursuing different strategies, and each led by a different manager but sharing the costs of the structure. Alongside the Global Equity Income shares, the others are UK Equity, Balanced Risk Allocation and Managed Liquidity. Investors in the trust can switch between the share classes on a quarterly basis. This profile focuses only on the Global Equity Income share class.
The IP Select Global Equity Income Share portfolio is relatively concentrated, comprising approximately 50 stocks. The GIG management team looks to invest in high-quality companies at attractive valuations, offering attractive yields, sustainable income and capital upside. The trust currently has significant exposure to oil companies and banks, with the majority of assets geographically split across the UK (17%), the US (32.1%) and Europe (37.1%).
The start of the year saw global equities struggle, demonstrated in Q1 of 2018, which was the worst quarter for the sector in more than two years. However, global equity markets have recovered over the past two months and continue to shake off the pessimism that arose as a result of angst over threats to global trade.
Despite this volatile environment, the trust has outperformed the MSCI World over the 12 months to the end of April 2018, delivering NAV returns of 10.4% compared to the index returns of 6.3%. Over five years, the NAV total returns are 77.6%, outperforming the average trust in the Morningstar IT Global Equity Income sector (42.8%) and the MSCI World NR index (76.1%).
Accompanying the strong NAV returns, the trust has seen year-on-year increases in dividend payments. Over the past five years, investors have benefited from a dividend increase of 13.5% per annum, some of which has come from capital. At the current price, the shares yield 3.2% as of 31 April 2018.
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Fund History: Invesco Perpetual Select: Global Equity Income
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