This document is exclusively for use by professional clients and financial advisors in Continental Europe and is not for retail client use. Please do not redistribute. All opinions and forecasts expressed are those of the investment team and are subject to change without notice. Fund name: Invesco Capital Shield 90 (EUR) Fund Fund manager: Martin Kolrep, Frankfurt Launch date: 9 May 2003 Fund domicile: Luxembourg Legal structure: A sub-fund of Invesco Funds (Luxembourg SICAV) Fund currency: EUR Fund volume: EUR 104.5 mln Unit type: Accumulation Initial Charge: Up to 5.25% Management fee p.a.: (A) 1.0% (C) 0.6% (E) 1.5% Minimum investment: (A) USD 1,500 (C) USD 250,000 (E) EUR 500 Reference index: Euribor 3 Month ISIN: (A) LU0166421692 (C) LU0166421858 (E) LU0166422070 Bloomberg: (A) INVCSAA LX (C) INVCSCA LX (E) INVCSEA LX See the Prospectus or Simplified Prospectus for full details of the investment objectives and risk considerations for the fund. Fund objective and Policy The Fund aims to provide a total return through investment in a diversified portfolio of short-term debt securities and money market instruments including commercial paper, and exposure to bond and equity markets through the use of derivatives. The Fund may take both long and short positions through derivatives. The maximum equity exposure is 50% of the net assets, and the maximum bond exposure is 100% of the net assets. To a lesser extent, the Fund may invest directly in long-term debt and equity securities. In addition the Fund may seek exposure to commodity markets through exchange traded commodities, exchange traded funds and derivatives on commodity indices for up to 20% of its net asset value. Performance (A shares in EUR, net of fees, inception date 9 May 2003)* 8% 6% 4% 2% 0% -2% -4% -6% -8% October 2011 3 months 1 year 3 years 5 years Since inception Fund 1.26% -0.88% 2.09% -.36% -3.86% 12.10% Euribor 3 Month 5.52% 4.40% 4.96% 2.39% 3.16% 2.16% 2.23% 1.43% -0.51% Invesco Capital Shield 90 (EUR) Fund A Euribor 3M 4.45% -5.18% 4.83% -4.12% 2.53% 0.63% 1.36% 1.17% 0.82% 0.14% 0.41% 1.35% 3.95% 13.77% 23.60% Monthly Performance in % (A shares in EUR, net of fees, inception date 9 May 2003)* Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD 2003 1.10 0.10-0.49 0.79 0.30 1.28 0.10 1.16 4.40 2004 0.00 1.25 0.57-1.41-0.19 0.57-0.76-0.38 0.38 0.48 0.67 1.23 2.39 2005 0.00 0.28-0.09-0.47 1.59 1.02 0.37-0.27 1.19-0.45 1.54 0.71 5.52 2006 1.24 0.35 0.79 0.35-1.38 0.00 0.00 0.79 0.69 0.52 0.51 1.02 4.96 2007 0.42-0.50 0.08 1.35 1.25 0.25-1.23-1.16 0.34 0.17-0.92-0.51-0.51 2008-0.17-0.26-0.94 0.34 1.11 0.85-0.76 0.17-3.98-0.88-0.71 0.00-5.18 2009 0,54-5.08-0.94 0.57 0.09 0.00 0.00 0.00-1.03 0.38 0.19 1.23-4.12 2010-1.68 0.09 2.37 0.19-2.04-0.57 1.04 0.00 2.35 0.83-0.18 1.64 4.01 2011 0.09 1.43-1.77 1.26 0.00-0.44 0.98-0.44-1.69 1.26 0.63 * Data as of 31 October 2011. Since January 2009, Invesco has made contributions to the fund on an ad hoc basis. During February 2009, the NAV declined and did not meet the Investment Advisor s target to preserve at least 90% of the highest ever NAV during the life of the fund and the floor was reset to 90% of the NAV on 14 August 2009. Past performance is not an indication of future performance and provides no guarantee for the future and is not constant over time.. 1.26% 4.01% 2003 2004 2005 2006 2007 2008 2009 2010 2011 since inception (annualised) 1 Invesco Capital Shield 90 (EUR) Fund
Performance commentary Investors worldwide reacted positively to the news that a deal had finally been reached amongst political leaders to tackle the Euro zone debt crisis. The agreement, which some market participants deemed to be light on detail, caused a sharp rally in equities and set a positive tone for the more credit sensitive areas of the bond market. By the end of the month, however, Spanish and Italian bond yields, which are considered to be a crucial indicator regarding sentiment, continued to rise. Economic data released in the US, most notably third quarter GDP figures, as well as encouraging corporate results, contributed to the more buoyant mood. Robust retail sales numbers from China and third quarter GDP growth of 9.1% year-on-year proved more than enough to convince Asian markets that China was not heading for a hard landing In October, the Euro Stoxx 50, the FTSE 100, the S&P 500 and the Nikkei 225 were up 9.5%, 8.1%, 10.9% and 3.3%, respectively. Global government bond prices were lower with the JP Morgan Global Government bond index in local currency being down 0.8%. The US 10- year Note Future was down 2.5%. The 10-year Japanese Government Bond Future retreated 0.1% and the Bund Future for German 10-year government bonds was down 0.8%. The yields for 10-year government bonds moved higher by 14 basis points to 2.03% in Germany, by 20 basis points to 2.11% in the US, and increased 2 basis points to 1.05% in Japan. Commodities recovered mostly from the September losses. The DJ UBS Agriculture Index was up 2.6% while the price for crude oil increased 17.6%. Gold continued to rise and was up 6% while the price of copper gained 12.5%. All commodity returns are expressed in US-Dollar terms. Performance Attribution over the last three months (31 July 2011 31 October 2011) Contribution from equity market exposure -1.40% Contribution from bond market exposure 1.14% Contribution from commodity market exposure -0.78% Euribor 3 Months 0.41% Residual contribution 0.07% Total gross fund performance (sum of contributions) -0.56% The performance attribution shows the contribution to the total fund performance by asset class. The residual shows contributions that cannot be explained directly and are typically due to valuation effects or intra-day trading. The total fund performance is shown on a gross basis before management fees. 2 Invesco Capital Shield 90 (EUR) Fund
Current tactical asset allocation commentary The fund s overlay investment has resumed on 14 August 2009. Within the overlay investment the fund gains exposure to equity, bond and commodity markets through the use of derivatives and exchange traded products. Tactical asset allocation model results Equities As of 30/09/2011 As of 31/10/2011 Global Bullish (++) Bullish (++) Euro zone Bullish (++) Bullish (++) UK Bullish (++) Bullish (++) US Bullish (++) Bullish (++) Japan Bullish (++) Bullish (++) Germany Moderately bullish (+) Moderately bullish (+) US Bullish (++) Bullish (++) Japan Moderately bullish (+) Moderately bullish (+) Commodities Agriculture Bullish (++) Bearish (- -) Crude Oil Bearish (- -) Bearish (- -) Gold Bullish (++) Bullish (++) Copper Bullish (++) Bearish (- -) Equities: The outlook for global equities remained bullish during the month of October. Markets are significantly undervalued according to our model. Compared to last month end, the trend improved and the economic environment indictors were somewhat lower. The picture is very similar on the regional models. : All bond market scores remained unchanged during the month of October. The outlook for US government bonds is bullish and the outlook for German and Japanese government bonds is moderately bullish. Even though the US and the German market are overvalued according to our model, the high risk aversion and in the case of the US the relatively high difference between long-term and short-term bond yields lead to positive outlooks. In Japan, risk aversion and trend are the main drivers for the positive outlook. Within the month, the US and Japanese model outlook moved lower one notch due to temporarily weaker trends. Commodities: The model outlook was unchanged at bullish for gold, while the outlook for crude oil remained bearish. There was a signal change for Agriculture from bullish to bearish at the beginning of the month, triggered by a weaker trend. The outlook for copper also moved to bearish from bullish on signs of oversupply and economic slowdown. Given the tragic events in Japan we have decided to close all positions as regards to Japanese equities and bonds. 3 Invesco Capital Shield 90 (EUR) Fund
It is the intention of the Investment Adviser to preserve at least 90% of the NAV since the reset of the price floor on 14 August 2009 (not guaranteed). The Investment Adviser undertakes every reasonable effort to preserve this floor but neither the Investment Adviser, nor any other Invesco entity, guarantees the floor. During February 2009, the NAV declined and did not meet the Investment Advisor s target to preserve at least 90% of the highest ever NAV during the life of the fund. Although every effort will be made do reach the stated targets, these are not guaranteed. Asset allocation as at 31 October 2011 30% 15% 0% -15% 3.6% Equity Euro zone 3.6% Equity UK 9.2% Equity US 0.0% Equity Japan 11.4% Germany 15.8% US 0.0% 0.0% 0.0% 3.9% 0.0% Japan Agriculture Crude oil Gold Copper Exposure to equity markets is created using equity index futures. Exposure to bond markets is created using interest rate futures on 10 year government bonds. Exposure to commodities is created using exchange traded products. Remaining assets are in short term debt securities, money market funds or overnight deposits. 4 Invesco Capital Shield 90 (EUR) Fund
Risk Warnings The value of investments and income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the amount invested. The fund may invest in derivatives. Therefore, the net asset value of the fund may, at times, be highly volatile. The reference index of the Invesco Capital Shield 90 (EUR) Fund was chosen to reflect the longterm target of the fund which is to achieve an attractive total return. Please note, however, that this index is not an indicator of the fund's volatility which is expected to be higher due to the exposure to bond and equity markets. Investors should note that due to the net asset value falling in excess of 10% sufficient income needs to be generated by the debt securities component to enable a significant participation in the markets to be regained (which may take some time). Transactions in futures carry a high degree of risk as the amount of the initial margin is small relative to the value of the futures contract so that transactions are leveraged or geared. A relatively small market movement may have a proportionately larger impact which may work for or against the investor. Please refer to the latest Full Prospectus, the relevant Simplified Prospectus, any local Addendum, as well as the latest annual and semiannual reports for more information on the fund. Important Information This document is exclusively for use by professional clients and financial advisors in Continental Europe and is not for retail client use. Please do not redistribute. All opinions and forecasts expressed are those of the investment team and are subject to change without notice. For information on fund registrations, please refer to the appropriate internet site or your local Invesco office. This marketing document does not form part of any prospectus. Whilst great care has been taken to ensure that the information contained herein is accurate, no responsibility can be accepted for any errors, mistakes or omissions or for any action taken in reliance thereon. Opinions and forecasts are subject to change without notice. The reference index of the fund was chosen to reflect the long-term target of the fund which is to achieve an attractive total return. Please note, however, that this index is not an indicator of the fund's volatility which is expected to be higher due to the exposure to bond and equity markets. The value of investments and the income from them can go down as well as up (this may partly be the result of exchange rate fluctuations in investments which have an exposure to foreign currencies) and investors may not get back the amount invested. Past performance is not an indication of future performance provides no guarantee for the future and is not constant over time. The performance data shown does not take account of the commissions and costs incurred on the issue and redemption of units. Any reference to a ranking, a rating or an award provides no guarantee for future performance results and is not constant over time. The fund invests in bonds and other fixed income securities that are subject to the risk that issuers do not make payments on such securities. The fund may be adversely affected by a decrease in market liquidity which may impair the fund s ability to acquire or to dispose of securities at their intrinsic value. Investors should read the fund simplified and full prospectuses for specific risk factors and further information. This document is not an invitation to subscribe for shares in the fund and is by way of information only. It is not intended to provide specific investment advice including, without limitation, investment, financial, legal, accounting or tax advice, or to make any recommendations about the suitability of the fund(s) for the circumstances of any particular investor. You should take appropriate advice as to any securities, taxation or other legislation affecting you personally prior to investment. Asset management services are provided by Invesco in accordance with appropriate local legislation and regulations. www.invescoeurope.com This document is issued in: - Luxembourg, France, Finland, Greece, Norway, Sweden and Portugal by Invesco Asset Management S.A., 18, rue de Londres, F-75009 Paris; - the Netherlands by Invesco Asset Management S.A., J.C. Geesinkweg 999, 1096 AZ Amsterdam; - Belgium by Invesco Asset Management SA Belgian Branch (France), Avenue Louise 326 B31, 1050 Brussels; - Italy by Invesco Asset Management SA Sede Secondaria, Via Cordusio 2, 20123 Milano; - Spain by Invesco Asset Management SA, Sucursal en España, Calle Recoletos 15 Piso1, 28001 Madrid; - Austria by Invesco Asset Management Österreich GmbH, Rotenturmstrasse 16-18A-1010 Vienna; - Germany by Invesco Asset Management Deutschland GmbH, An der Welle 5, 60322 -Frankfurt/M., regulated by Bundesanstalt für Finanzdienstleistungsaufsicht; and - Switzerland by Invesco Asset Management (Schweiz) AG, Stockerstrasse 14, 8002 Zurich, who acts as representative for the fund in Switzerland. Paying agent for the fund in Switzerland: Fortis Banque (Suisse) S.A, Geneva, Zurich branch, Rennweg 57, 8001 Zurich. 5 Invesco Capital Shield 90 (EUR) Fund