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LONDON (Alliance News) - Invesco Perpetual Select Trust PLC on Tuesday said opportunities to find attractive stocks based on their valuation and ability to generate free cash flow "fortunately continue to exist".
The trust's share capital comprises four share classes: UK Equity Shares, Global Equity Income Shares, Balanced Risk Shares and Managed Liquidity Shares, each of which has its own separate portfolio of assets and attributable liabilities.
In net asset value terms, with dividends reinvested, the UK Equity Portfolio returned 4.5% over the six months to the end of November 2016 compared with its benchmark, the FTSE All-Share Index's total return of 9.6%.
The Global Equity Income Portfolio returned 17.3% in NAV terms, compared with its benchmark, the MSCI World Index's total return over the period of 20.2%.
The Balanced Risk Portfolio returned 4.6% in NAV terms compared with its benchmark of three-month LIBOR plus 5% per annum, which had a total return of 2.8%. The share price total return was negative 3.9%.
The trust's Managed Liquidity Shares, whose objective is derived from cash returns, returned 0.0% based on the NAV and 0.2% based on the share price.
"Events on the political front were so striking in the reporting period that it is clearly very dangerous to make any predictions," said Chairman Patrick Gifford, pointing to the Brexit vote and the US election in particular.
The chairman said a hard Brexit now looks likely which will have repercussions on the UK economy and may have material consequences politically, and said recent actions by the US President Donald Trump suggest "depressingly, that protection and zero sum nationalism are key parts of the administration policy".
However, Gifford said the group's "portfolio managers have always stressed that their approach in equities is to pick attractive stocks based on their valuation and ability to generate free cash flow".
"Fortunately such opportunities continue to exist. Profitability may indeed improve as the US and Continental European economies grow a little faster and many British companies benefit from the weakness of sterling," the chairman added.
Shares in the trust were flat at 174.61 pence on Tuesday afternoon.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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