Complete your registration today for a chance to win £50 John Lewis vouchers in our weekly draw Enter now
Fund Profile

Invesco Perpetual UK Smaller Companies 01 May 2020

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Invesco Perpetual UK Smaller Companies. 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
A new version of this profile is available. View Latest
Overview

The Invesco Perpetual UK Smaller Companies Trust (IPU) management team has been in place for many years, with Robin West joining long-term manager Jonathan Brown in 2014. Over the cycle they aim to achieve top quartile performance with below average volatility compared to their peers. The team aim to achieve this through a diversified portfolio and fundamental stock picking, and by applying a consistent investment philosophy.

The UK’s smaller companies equity market was hit harder than most during Q1 2020. As we discuss in the Performance section, IPU declined slightly less than most peers but has not rebounded as strongly. This trend is in line with what shareholders might expect, based on previous cycles.

With reference to the lockdown and expected economic downturn, the managers have closely reviewed their portfolio. As we discuss in the Portfolio section, they view the majority of holdings as ‘low’ and ‘medium’ risk to COVID-19 related issues. The 13% that the managers classify as ‘high’ risk are companies within the retailing and leisure sectors. Overall Jonathan and Robin believe they are well placed to support any investee companies that require additional financing, having gone into the crisis with cash of around 6-7%. Their preference for well financed businesses means they believe that 76% of the companies in their portfolio are unlikely to need equity financing to get them through the crisis.

IPU recently announced that the 2020 dividend will be held at last year’s level. However, in view of current circumstances, the board will pay a dividend for the current financial year of no less than 2% of the 31 January 2021 share price.

Analyst's View

We believe that IPU’s attractions are many. The managers represent a dependable team with an enviable track record of achieving peer group-beating returns through the cycle, but with below average volatility. They apply their investment process consistently, and their valuation-driven approach means that shareholders can be reassured that the team won’t lose their heads, even when others are.

The trust has now achieved six consecutive calendar years of outperforming the benchmark, in both up and down markets. We attribute this success to the cautious nature of the managers’ stock picking, their preference for high quality companies, and their continual recycling of strong performers into better value opportunities.

The board’s recent dividend commitment means that, while investors might be disappointed that the dividend level will not be maintained into next year, they can place a high degree of reliance on the dividend for the current financial year. Perhaps more importantly, the board retains its commitment to pay a dividend yield of higher than the average of the peer group after the crisis abates.

IPU was issuing shares from treasury as recently as January, which in our view is testament to the attractive package that the trust presents. The trust’s consistent management, sector leading returns with below average volatility, and its yield premium relative to the investment trust peer group all justify the premium rating to peers that IPU currently enjoys.

bull bear
Consistent investment process delivers strong results through cycle, with lower volatility Dividend level won't be maintained next year
Highly stable and experienced team Trades at a premium rating to peers, and narrow discount in absolute terms
Commitment to deliver a yield premium to the peer group Portfolio tends to trade at a P/E premium to benchmark
Continue to Portfolio

Fund History

21 Feb 2024 Pitch doctoring
Our analyst argues the upcoming budget should see radical action to boost the UK market…
01 Feb 2024 Bring some yin-yang into your portfolio in 2024
Inherent contradictions within portfolios can give them stability in a polarised world...
26 Jan 2024 Heading to the polls
We look at elections around the world and what they mean for investors…
28 Dec 2023 Fund Analysis
IPU is gearing up, attracted by UK small-cap valuations…
08 Dec 2023 Time to tell Sid?
British investors could be missing a trick by ignoring out-of-favour UK equities…
17 Nov 2023 Don’t Panic!
Our analysts look for value against a backdrop of bombed out investment trust discounts…
08 Nov 2023 Once more into the breach?
With yawning discounts across the board, some sectors have been hit harder than others - our analysts think there could be value there for those with the sangfroid to fight for it...
17 Nov 2023 Henderson Opportunities and Invesco Perpetual UK Smaller Companies
James Henderson and Jonathan Brown
Rewatch this webinar which is part of our November online event 'Discounted opportunities in a tough market'...
Watch Recording
16 Aug 2023 Time to take the plunge
UK smaller companies have historically outperformed after every fall. Is this the moment to brave the uncertainty..?
05 Jun 2023 Fund Analysis
IPU’s managers are quietly confident in the UK, and valuations may prove attractive in the long term…
19 May 2023 More UK M&A
The bids keep coming, the valuations stay low…
05 May 2023 Lessons from history
Previous crises suggest that small-caps are more recession-proof than we think…
02 May 2023 Investing in the UK with investment trusts
How investment trusts can help investors in UK companies...
17 Mar 2023 A feast for your ISAs – the second course
Dividends, UK small caps, energy and more…
17 Mar 2023 Invesco Perpetual UK Smaller Companies - Income, but not as you know it
Jonathan Brown & Robin West
Rewatch this webinar from our month-long online series 'A feast of ideas for your ISA' hosted by the team at Kepler Trust Intelligence throughout March...
Download Presentation
18 Jan 2023 Fortune favours the brave
Our research suggests a recession has already been priced into small cap trusts, but risks abound...
18 Jan 2023 Fund Analysis
A change in sentiment could lead to a sharp recovery for IPU...
11 Jan 2023 Solving the Rubik’s Cube
We reveal the winners of our investment trust ratings for 2023…
28 Dec 2022 Calling time
As the year draws to its close, our analysts highlight the articles they think are the team’s best calls from 2022…
14 Oct 2022 An unreasonable discount?
Shares in Invesco Perpetual UK Smaller Companies Investment Trust plc are trading 17% below their net asset value…
30 Sep 2022 No money, mo problems
More gloom in the UK may provide opportunities for investors…
10 Aug 2022 Get ‘em while they’re hot
Wide discounts in the UK Smaller Companies sector may present long term investors with good entry opportunities…
17 Jun 2022 What does more PE activity in the UK mean for investors?
More acquisitions are arguably a sign the UK still offers good value for money…
15 Jun 2022 Staying active
We highlight several alternatives to passive investments for investors looking for core exposure in uncertain markets...
27 May 2022 Fund Analysis
IPU has delivered strong relative performance year-to-date…
25 Mar 2022 Slides and Audio: Invesco Perpetual UK Smaller Companies
Download the presentation and listen to the audio from our 'Ideas for your ISA' virtual Spring event on 15 March...
23 Mar 2022 Fifteen ideas for your ISA
Slides and audio from our event last week, featuring fund managers running money in every major market in the world...
02 Mar 2022 Investing in the UK with investment trusts
How closed-ended funds can help investors in UK companies...
31 Jan 2022 Investing for income with investment trusts
How investment trusts can support your dividend goals…
05 Jan 2022 The UK market’s hidden gems
London-listed small caps have flourished over the past decade and the Invesco Perpetual team believes that’s likely to continue into 2022…
30 Dec 2021 Great expectations
As the last of the mince pies wilts in the fridge, topped with a generous helping of stilton, the Kepler Trust Intelligence team stick a finger in the air and point toward their top picks for the year ahead…
03 Nov 2021 Fund Analysis
With stock-picking once again being rewarded, IPU is performing well…
28 Jul 2021 How are the mighty fallen
Dividend culture as we knew it is dead, according to Kepler's David Johnson, but investment trusts offer a solution...
26 May 2021 Stand and deliver
Is a high OCF daylight robbery or should investors keep calm and carry on? Our analysts debate the perennial question…
17 Mar 2021 Fund Analysis
IPU is back up the performance tables once again, thanks to the managers’ valuation led approach...
06 Jan 2021 This time next year Rodney...
We review the performance of the team’s ‘top picks’ for 2020 – including some proper plonkers – and place our bets for the year ahead…
25 Nov 2020 Britannia Redux?
UK equities have been despised for almost five years and could offer extreme rebound potential…
19 Nov 2020 Fund Analysis
On a material discount once again, IPU looks attractive for long term investors...
11 Nov 2020 Now that's what I call a discount!
Presentations and audio from our conference focussed on discount opportunities in the investment trust sector…
11 Nov 2020 Slides and Audio: Invesco Perpetual UK Smaller Companies
View the presentation and listen to the audio from our 'Discounts in Focus' event on 05 November...
22 Oct 2020 Spotlight on discounts
As our event focussed on discounts approaches, we update our portfolio of discount opportunities and review discounts across the wider IT universe…
17 Sep 2020 Five small cap trusts on very wide discounts
The UK Smaller Companies Sector is battered and bruised, but bombed out valuations among trusts in the sector look interesting...
17 Jun 2020 Jonathan Brown & Robin West
This stockpicking duo have managed the Invesco UK Smaller Companies trust as a team since 2014...
06 May 2020 The fight in the dog
We look at the characteristics which have separated the winners from the losers among small-cap trusts in the current crisis, with some surprising results...
01 May 2020 Fund Analysis
IPU has performed defensively during the selloff, and now trades on a small discount once again...
11 Mar 2020 Seeking big opportunities in UK smaller companies
20 Nov 2019 Making the grade: Kepler's rated trusts report strong performance in 2019
Earlier this year, we launched our new ratings for income and growth. Since then, the 40 trusts to have been awarded the elite Kepler Trust Intelligence ratings have performed strongly…
30 Oct 2019 Steady hands lead to smaller companies success
Invesco Perpetual UK Smaller Companies offers investors a proven approach to a particularly compelling sector...
15 Oct 2019 Fund Analysis
Fundamental stock pickers, aiming to achieve top quartile performance with below average volatility…
06 Sep 2019 Realising potential on the financial front line
Invesco UK Equities managers Jonathan Brown and Robin West discuss three stocks that have fulfilled their investment thesis over the last few years...
01 Aug 2019 Rethinking UK equity income
Despite being a popular allocation for investors, the UK Equity Income sector is currently plagued by the problem of concentration. Our analysis suggests smaller companies could be a strong alternative source of diversified income…
27 Mar 2019 NEVeR MiND tHE B*LL*CKS
We cut through the histrionics and discover, with surprising results, what life has really been like for British investors since David Cameron put it to 'the people'....
21 Mar 2019 Fund Analysis
A UK smaller companies fund which aims to achieve above average returns through the cycle with lower volatility...
06 Feb 2019 Income for the long haul
With 'ISA season' looming we identify investment trusts which offer long-term, dependable income streams for yield-hungry investors...
13 Dec 2018 Efficiency is everything
With fee structures under increasing scrutiny, we analyse which trusts limit their costs without sacrificing standards...
24 Oct 2018 Fund Analysis
A consistent and cautious approach has contributed to Invesco Perpetual UK Smaller Companies outperforming over the longer term...
12 Sep 2018 Fake news...
Small cap funds, despite their reputation to the contrary, are less volatile and have delivered better risk adjusted returns than their large cap peers...
15 Aug 2018 The income edge
Last year saw investment trusts soar in popularity among both retail investors and wealth managers. We examine why this has happened, as well as the structural advantages of investment trusts for income-hungry investors...
19 Jun 2018 Pretty little things
Many smaller companies managers have been shifting into micro caps in 2018, should investors be following suit?
19 Jun 2018 Fund Analysis
A UK smaller companies fund which aims to achieve above average returns through the cycle with lower volatility...
08 Jun 2018 Unearthing opportunities in smaller companies
Jonathan Brown and Robin West, UK Equities Fund Managers, explain how they identify prospects in the small cap market and how they have applied it to their portfolios.
05 Apr 2018 The search for discounted yield
We scour the investment trust universe for trusts offering chunky yields on a discount...
24 Oct 2017 Fund Analysis
A smaller companies portfolio with a strong track record and an experienced management team offering an unusually high income...
View all

Welcome to Kepler Trust Intelligence

Please enter a valid email address
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid email address
{{item.msg}}
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
{{item.msg}}
Please enter a company name
{{item.msg}}
Please enter a location name
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a platform
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a trust
{{item.msg}}
?
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
{{item.msg}}
Please select an option
{{item.msg}}
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
{{item.msg}}
Please enter your first name
{{item.msg}}
Please enter your last name
{{item.msg}}
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid password
{{item.msg}}
How will this information be used? Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase.
Our Website uses Cookies Cookies are small text files held on your computer. They allow us to give you the best browsing experience possible and mean we can understand how you use our site. Some cookies have already been set. You can delete and block cookies, but parts of our site won’t work without them. By using our website you accept our use of cookies. For further information please refer to the Kepler Privacy Notice.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.