Discount Control Policy On 31 20 Invesco Perpetual Select Trust plc adopted a zero tolerance discount policy and will offer or, as the case may be, purchase shares in any of the Company s share classes with a view to maintaining the middle market price at which a share in the relevant share class trades on the main market of the London Stock Exchange at close to its most recently published net asset value. This policy ensures that there should always be adequate liquidity to enable shareholders to buy or sell, as required. Share Class Information The Invesco Perpetual Select Trust plc was launched on 23 November 2006. It offers the choice between four share classes, each of which has its own separate portfolio of assets and liabilities. Invesco Perpetual manages the UK Equity Share, Global Equity Income Share and Managed Liquidity Share Portfolios which provide exposure to Invesco Perpetual s best UK and international investment ideas and a short-term cash portfolio. The investment trust also offers a Balanced Risk Portfolio, managed by the Invesco Global Asset Allocation Team based in Atlanta, USA. This portfolio seeks to offer risk-adjusted returns in differing economic and infl a tionary environments. With the opportunity to access a wide array of markets, the investment trust enables shareholders to tailor their asset allocation to reflect their view of prevailing market conditions by being offered the opportunity to switch tax free 1 between asset classes every quarter. Further information can be found on the last page of this factsheet. 1 Current tax levels and reliefs may change. Depending on individual circumstances, this may affect investment returns. Mark Barnett Head of UK Equities Invesco Perpetual UK Equity Share Portfolio The investment objective of the UK Equity Share Portfolio is to provide shareholders with an attractive real long-term total return by investing primarily in quoted UK equities. Nick Mustoe Chief Investment Offi cer (lead) and Invesco Perpetual Global Equity Income Group Invesco Perpetual Global Equity Income Share Portfolio The investment objective of the Global Equity Income Share Portfolio is to provide an attractive and growing level of income return and capital appreciation over the long term, predominantly through investment in a diversified portfolio of equities worldwide. Stuart Edwards Fund Manager, UK Fixed Interest Team Invesco Perpetual Managed Liquidity Share Portfolio The investment objective of the Managed Liquidity Share Portfolio is to produce an appropriate level of income return combined with a high degree of security. Scott Wolle CIO of the Invesco Global Asset Allocation team Invesco Perpetual Balanced Risk Share Portfolio The investment objective of the Balanced Risk Share Portfolio is to provide shareholders with an attractive total return in differing economic and infl a tionary environments, and with low correlation to equity and bond market indices by gaining exposure to three asset classes: debt securities, equities and commodities. Further details of the Company s Investment Policy and Risk and Investment Limits can be found in the Report of the Directors contained within the Company s Annual Financial Report. Key Information IPST - UK Equities IPST - Global Equity Income IPST - Managed Liquidity IPST - Balanced Risk Investment Trust Size Switching Dates IVPU.L IVPG.L IVPM.L IVPB.L 5.5m February, May, and November
UK Equity Share Portfolio www.invescoperpetual.co.uk/selectuk Ordinary share price 5-year performance 1 250 200 0 FTSE All-Share Index (Rebased) 10 11 October saw the FTSE All-Share index rise by 4.7% (total return; ), as fears as to the extent of China s economic slowdown moderated. This in turn resulted in natural resource-related companies seeing some recovery in their share prices such that, over the month, the strongest performing sector was Oil and Gas. In this environment, larger companies, which are dominated by the more internationally exposed companies, including resource-related companies, outperformed smaller companies. Among the strongest contributors to the UK equity share portfolio s returns was BP Group. A rising oil price and the release of robust third-quarter profits which beat analysts estimates, helped drive performance. Detracting from the portfolio performance TalkTalk Telecom saw its share price fall on news that it had been the victim of a cyber-attack. Chief Executive Dido Harding subsequently commented - We can confi r m that the scale of attack was much smaller than we originally suspected, but this does not take away from how seriously we take what has happened and our investigation is still on-going. Portfolio review The portfolio strategy remains unchanged from the recent past. The fund manager favours companies in the market which offer visibility of revenues, profits and cash-flows in this low growth world and which are managed for the purpose of delivering shareholder value in the form of a sustainable and growing dividend. We continue to believe that well managed companies which seek to deliver sustainable dividend growth provide the best long term investment opportunities. IVPU.L 76.0m Share Price 169.3p Capital Net Asset Value 168.3p Cum-Income NAV 167.9p Premium to Cum-Income NAV 0.8% Dividend Yield 2 3.8% Gearing 3 1% Annual Management Charge (AMC) 0.65% Ongoing Charges (incl. AMC) 0.94% (31 October 20) This share class may also earn a performance fee; please refer to the latest Annual Financial Report for details. dividends) by the current ordinary share price. 3 Gearing reflects the amount of net borrowings invested, i.e. borrowings less cash. It is based on net borrowings as a percentage of net assets. The Board has prescribed limits on the amount of gearing that may be used to raise equity exposure to a maximum of 25% of net assets where it is appropriate. Dividend payment dates July, October, and April Reynolds American - US common stock British American Tobacco Imperial Tobacco BT Group AstraZeneca Roche - Swiss common stock BP Provident Financial BAE Systems Capita Share Price 1.9 16.3 71.6 6.4 - Net Asset Value 1.3.1 7 1.3 - FTSE All-Share Index -5.7 3.0 27.7 41.1 85.8 Rolling -month NAV performance 1 Industry breakdown % Financials 30.2 Consumer Goods 17.1 Industrials.3 Health Care.3 Consumer Services 9.8 Telecommunications 6.6 Utilities 4.5 Oil & Gas Net Asset Value 6.5 20.9 33.4.3 10.1 Ordinary Share Price 6.8 21.9 40.5 9.5.2 Top 10 holdings % 5.5 4.7 4.4 4.2 3.6 3.1 3.0 Total 37.4
Global Equity Income Share Portfolio www.invescoperpetual.co.uk/selectglobal Ordinary share price 5-year performance 1 180 160 0 0 MSCI WORLD INDEX (NET) (Rebased) 10 11 In October, global equity markets regained much of the ground lost during the summer. A combination of decreasing concern over China and better-than-expected US corporate earnings results boosted investor sentiment. The US Federal Reserve (Fed) dropped previous warnings about the risks that a lack of global economic growth could pose to the US economy as it signalled that an increase in interest rates could happen at its December meeting. While growth in the US economy slowed sharply in the third quarter, US consumers continued to spend at a robust pace, suggesting that the economic expansion remains on track. Real US GDP rose at an annualised rate of 1.5% for the period, well below the second quarter, but in line with expectations. Whether the Fed follows through and raises interest rates in December depends in part on the resilience of employment figures, which so far have helped to give consumers the confi d ence to spend, in conjunction with reduced fuel costs. Portfolio strategy The investment trust s strategy for the global equity share portfolio is to look for companies with what we view as attractive valuations that we believe can sustain profi t margins and deliver returns through the economic cycle and that offer growing and sustainable dividends. We seek companies that we believe are high quality, with attractive franchises and balance sheets with a conservative level of debt. During October, we added to a number of Asian equity holdings following recent share price weakness. We also added modestly to our energy holdings and funded the move through reducing exposure to more defensive stocks in the investment trust (those less sensitive to the economic cycle) whose valuations have risen recently. IVPG.L 55.2m Share Price 160.5p Capital Net Asset Value 7.6p Cum-Income NAV 6.4p Premium to Cum-Income NAV 2.6% Dividend Yield 2 2.8% Gearing 3 10.5% Annual Management Charge (AMC) 0.65% Ongoing Charges (incl. AMC) 0.95% (31 October 20) This share class may also earn a performance fee; please refer to the latest Annual Financial Report for details. dividends) by the current price. 3 Gearing reflects the amount of net borrowings invested, i.e. borrowings less cash. It is based on net borrowings as a percentage of shareholders funds. The Board has prescribed limits on the amount of gearing that may be used to raise equity exposure to a maximum of 20% of net assets where it is appropriate. Dividend payment dates July, October, and April Geographical breakdown % Europe 36.2 Americas 30.9 23.0 Pacific Rim - ex Japan 4.8 Asia Emerging Markets 2.6 Japan BT Group Novartis Legal & General British American Tobacco Microsoft Amgen Philip Morris International Roche BP Airbus Switzerland United States United States United States Switzerland France Share Price -0.9.6 60.4 64.3 - Net Asset Value -3.7 9.0 48.8 56.9 - MSCI World Index (net) -3.6 5.4 45.1 60.4 101.3 Rolling -month NAV performance 1 Net Asset Value -7.8 17.5 23.5 9.7 3.1 Ordinary Share Price -7.5.8 38.2 5.6 6.6 Top 10 holdings % Total 29.0 3.6 3.4 2.9 2.6 2.6
Managed Liquidity Share Portfolio www.invescoperpetual.co.uk/selectml Ordinary share price 5-year performance 1 106 104 102 98 Consumer price infl a tion in the UK returned to 0.0% in with the Bank of England maintaining its view that the UK bank rate should remain at 0.5%. The minutes of the Monetary Policy Committee s (MPC) meeting show that there remain a range of views amongst members with the vote still split 8-1 in favour of leaving interest rates on hold. The US Federal Reserve s decision not to raise US interest rates in turn helped UK government bond yields to fall. 2 year Gilt yields finished the month 0.7% lower at 0.69%, while 3 month LIBOR, the interest rate at which the largest banks lend money to one another, fell slightly to 0.58%. Portfolio strategy The portfolio has positions in government, quasi-government and corporate bonds. In order to limit the exposure to interest rate risk and credit risk (the likelihood of an issuer defaulting), these bonds are both short dated and of high quality. The portfolio also holds some floating rate notes, debt instruments whose interest rates are reset at regular intervals. 10 11 IVPM.L 5.4m Share Price 102.8p Capital Net Asset Value 10p Cum-Income NAV 103.1p Discount to Cum-Income NAV 0.4% Dividend Yield 2 0.0% Annual Management Charge (AMC) 0.25% Ongoing Charges (incl. AMC) 0.37% (31 October 20) No gearing permissible Dividend payment dates 3 July, October, and April dividends) by the current ordinary share price. 3 Dividends payable to shareholders reflect the level of interest rates available in the market. During periods of very low interest rates, the Board may consider that any available cash be distributed only once per year to reduce administrative costs. Invesco Perpetual Money Fund - Accumulation (Gross) Short-Term Investment Company (Global Series) Share Price 1.5 1.1 2.8 4.3 - Net Asset Value -0.1-0.2 0.3 2.1 - Rolling -month NAV performance 1 Net Asset Value 0.5 1.1 0.3 0.2-0.1 Ordinary Share Price 0.0-1.0 3.9 0.4 1.4 Top 10 holdings % 89.4 10.6 Total.0
Balanced Risk Share Portfolio www.invescoperpetual.co.uk/selectbr Ordinary share price performance since launch 08.02. 1 0 0 0 110 IVPB.L 8.9m Share Price 117.3p Capital Net Asset Value 117.4p Cum-Income NAV 117.7p Discount to Cum-Income NAV 0.4% Dividend Yield 2 0.0% Exposure 3 1.4% Annual Management Charge (AMC) 0.75% Ongoing Charges (incl. AMC) 1.16% (31 October 20) dividends) by the current ordinary share price. 3 Exposure refl e cts the ratio of nominal asset exposure to NAV. % exposure means that the portfolio has no gearing. The Board has prescribed investment limits where the sub-funds investment in derivatives may create significant leverage exposure to certain equity and fi xed income markets. Leverage occurs when the investments in derivatives create greater economic exposure than the amount invested. The aggregate notional/contract value of such long financial derivative instruments is not expected to exceed 250% of the assets in the Sub-fund. Source: Dividends: This is a total return strategy and no dividends are expected. October saw a strong rebound in the global equity markets following weak performance in the third quarter. Most developed equity markets managed gains over the month. Several central banks have either unveiled or hinted at a more supportive monetary policy. Sweden, expanded its quantitative easing (QE) programme, while China cut interest rates and reserve requirements. The European Central Bank hinted at further interest rate cuts and potential expansion of its already massive QE programme to stem the rising concerns over global economic growth. It was a mixed month for the major government bond markets as the broad equity market rebound, along with uncertainty about the timing of a potential US interest rate hike, dampened enthusiasm for perceived safe haven assets. Broad commodity benchmarks declined modestly as they continued to be weighed down by US dollar strength, excess supplies and concerns over the Chinese economy. The Bloomberg Commodity index is now down 16.2% year-to-date and headed for its fifth straight annual loss, the longest slide on records since 1991. Portfolio strategy The investment trust produced a positive return over the month. Exposure to equities was the main positive contributor to returns. The investment trust s exposure to commodities also helped, particularly the agriculture sector. Sugar prices soared due to the anticipated impact of an El Nino weather pattern posing a threat to output in Australia at a time when both India and Brazil show production declines. Precious metals also provided a slight boost, but exposure to the industrial metals and energy both detracted from performance. Exposure to government bonds also hurt performance as yields pushed higher. In terms of tactical positioning, overweight exposure to most equity markets the investment trust is exposed to relative to the investment trust s strategic positioning proved conducive to returns. Portfolio exposure % % Bond- UK 17.1 Bond- Canada 17.1 Bond- Germany 16.2 Bond- Australia.7 Bond- Japan 1 Bond- US 9.1 Equity- Japan 6.5 Equity- UK 6.4 Total 1.4 Share Price -4.5 1.1.4 - - Net Asset Value -4.6-0.6 8.8 - - Share Price - - 11.1 5.9-0.9 Risk exposure Risk % Contribution % Equities Fixed Income Commodities 3.5 4.1 1.5 Equity- Hong Kong 6.4 Equity- Europe 5.7 Equity- US Small Cap 5.0 Equity- US Large Cap 3.8 Agriculture 7.9 Precious metals 6.4 Industrial metals 4.6 Energy 4.0 37.9 45.1 17.0 Total.0
Important Information The value of investments and any income will fluctuate (this may partly be as a result of exchange rate fluctuations) and investors may not get back the full amount invested. When making an investment in an investment trust you are buying shares in a company that is listed on a stock exchange. The price of the shares will be determined by supply and demand. Consequently, the share price of an investment trust may be higher or lower than the underlying net asset value of the investments in its portfolio and there can be no certainty that there will be liquidity in the shares. The investment trust may use derivatives for the purpose of efficient portfolio management. There may not be a price correlation between price movements in the underlying securities, currency or index, on the one hand, and price movements in the investments, which are the subject of the hedge, on the other. In addition, an active market may not exist for a particular derivative instrument at any particular time. The Invesco Perpetual Select Trust plc Global Equity Income portfolio may invest in emerging market securities. Investors should be prepared to accept a higher degree of risk than for an investment trust with a broader investment mandate, as difficulties in dealing, settlement and custody problems could arise. The Invesco Perpetual Select Trust plc Balanced Risk portfolio will make significant use of financial derivatives (complex instruments) which will result in large fluctuations in the value of the investment trust. Leverage created from borrowing on certain types of transactions including derivatives may impair the investment trust s liquidity, cause it to liquidate positions at unfavourable times or otherwise cause the investment trust not to achieve its intended objective. Leverage occurs when the economic exposure created by the use of derivatives is greater than the amount invested resulting in the investment trust being exposed to a greater loss than the initial investment. The Invesco Perpetual Select Trust plc Balanced Risk portfolio will gain exposure to commodities which are generally considered to be high risk investments and may result in large fluctuations in the value of the investment trust. The Directors intend that each portfolio will effectively operate as if it were a stand-alone company. However, prospective investors should be aware that in the event that any of the portfolios have insufficient funds or assets to meet all of its liabilities, such a shortfall would become a liability of the other portfolios. In addition, should the investment trust incur material liabilities in the future, a significant fall in the value of the investment trust s assets as a whole may affect the investment trust s ability to pay dividends on a particular class of Shares, even though there are distributable profi t s attributable to the relevant portfolio. The investment trust may use borrowings to invest in the market. The use of borrowings may enhance total return when the value of the investment trust s assets is rising, but it will have the opposite effect when asset values fall. The use of borrowings may increase the volatility of the share price and the net asset value per share. In certain circumstances, the investment trust may be required to repay borrowings and this could adversely affect income and capital returns. Where securities are mentioned in this document they do not necessarily represent a specific portfolio holding and do not constitute a recommendation to purchase, hold or sell. Where Invesco Perpetual has expressed views and opinions, these may change. Telephone calls may be recorded. For more information on our products, please refer to the latest Annual or Half-Yearly Financial Reports. This information is available using the contact details shown. Switching Details Shares will be convertible at the option of the holder into any other class of Shares every quarter, on or around 1 February, 1 May, 1 and 1 November. Notice from the shareholder to convert any class of Shares on any conversation date will be required up to a maximum of 10 business days prior to the relevant conversation date. Forms for conversion are available from www.invescoperpetual.co.uk/ipst Conversion from one class of Shares into another will be on the basis of a ratio derived from the prevailing underlying net asset value of each class of relevant Shares, calculated shortly before the date of conversion. The Directors have been advised that conversion of one class of Shares into another will not be treated as a disposal for the purposes of UK capital gains tax. Further information Client Services Telephone 0800 085 8677 Facsimile 091 416000 Email enquiry@invescoperpetual.co.uk www.invescoperpetual.co.uk/ipst Issued on behalf of the board of the Invesco Perpetual Select Trust plc by Invesco Fund Managers Limited. Perpetual Park, Perpetual Park Drive, Henley-on- Thames, Oxfordshire, RG9 1HH, UK Authorised and regulated by the Financial Conduct Authority.