Invesco Sel. Uk Regulatory News (IVPU)

Invesco Select Trust Plc - Half-year Report

PR Newswire

London, February 3

LEI: 549300JZQ39WJPD7U596

INVESCO SELECT TRUST PLC

HALF-YEARLY FINANCIAL REPORT

SIX MONTHS ENDED 30 NOVEMBER 2021

Financial Performance

Cumulative Total Returns(1)(3)

To 30 November 2021

Period end Net Asset Value, Share Price and Discount

(1) Alternative Performance Measure (APM). See pages 36 to 38 for the explanation and calculation of APMs. Further details are provided in the Glossary of Terms and Alternative Performance Measures in the Company’s 2021 Annual Financial Report.

(2) With effect from 1 June 2021, the benchmark adopted by the Balanced Risk Allocation Portfolio is comprised of 50% 30-year UK Gilts Index, 25% GBP hedged MSCI World Index (net) and 25% GBP hedged S&P Goldman Sachs Commodity Index. Prior to this, the benchmark was ICE BoA Merrill Lynch 3 month LIBOR plus 5% per annum. Accordingly, both the new and old benchmark are shown.

(3) Source: Refinitiv/Bloomberg.

Interim Management Report Incorporating Chairman’s Statement

Investment Objective and Policy

The Company’s investment objective is to provide shareholders with a choice of investment strategies and policies, each intended to generate attractive risk-adjusted returns.

The Company’s share capital comprises four Share classes: UK Equity Shares, Global Equity Income Shares, Balanced Risk Allocation Shares and Managed Liquidity Shares, each of which has its own separate portfolio of assets and attributable liabilities.

The Company enables shareholders to alter their asset allocation to reflect their views of prevailing market conditions. Shareholders have the opportunity, every three months, to convert between share classes, free of capital gains tax and free of charges.

The Company’s investment policy is disclosed in full on pages 39 to 41 of the Company’s 2021 Annual Financial Report.

Performance

In net asset value (NAV) terms, with dividends reinvested, the UK Equity Share Portfolio returned +5.5% over the six months to the end of November 2021, and +8.6% on the share price, compared with its benchmark, the FTSE All-Share Index total return of +1.9%.

The Global Equity Income Share Portfolio returned +8.5% in NAV terms, and +10.3% on the share price, compared with its benchmark, the MSCI World Index £ total return over the period of +12.7%.

The Balanced Risk Allocation Share Portfolio returned 0.0% in NAV terms, and +3.4% on the share price. The portfolio’s benchmark, the Composite Benchmark Index returned +7.7%.

The Managed Liquidity Share Portfolio had a return of -0.1% based on NAV and +2.0% based on the share price.

In the period under review sentiment towards financial markets, and equities in particular, remained generally favourable against a backdrop of increasing vaccination levels and continued economic growth, with the focus increasingly shifting toward the implications of rising inflation and central bank policy responses as global recovery proceeds.

The UK Equity Portfolio has been jointly managed throughout the period under review by Ciaran Mallon and James Goldstone following completion of the combination of Invesco Income Growth Trust plc (‘IIGT’) with the Company’s UK Equity Share Portfolio in late April 2021. It is pleasing to see a positive start with performance ahead of the benchmark index, the strongest contributions coming from stocks held in the industrials, consumer discretionary and utilities sectors, whilst the underweight to healthcare stocks was the main detractor in the period. The portfolio also benefitted from being geared throughout the period. We are already seeing the advantages of scale and the lower management fees consequent on the IIGT transaction, with improved liquidity in the UK Equity Shares and an expected lower ongoing charges ratio.

The Global Equity Income Portfolio, managed by Stephen Anness, saw positive performance, with markets generally firm throughout the period. Whilst the portfolio outperformed its peer group (the AIC Global Equity Income sector) it underperformed the benchmark. This was principally due to being underweight the US equity market which saw strong performance, and overweight Chinese equities where tightening regulation in many sectors of the economy impacted valuations and undermined sentiment towards the Asian region in general. The portfolio benefitted from being geared in the period.

The Balanced Risk Allocation Portfolio by its very nature has a combination of equities, bonds and commodities exposures and is managed by Invesco's Global Asset Allocation Team, based in Atlanta. During the period under review, its share price performance was positive although the NAV was flat, and both lagged the new comparator composite benchmark. Bonds generated positive results for the period whilst equity performance was flat and commodities posted negative performance; tactical allocation between the different asset classes also detracted from returns.

Throughout the period, interest rates around the globe remained at, or very near, record lows and whilst share price performance was positive, the NAV return on the Managed Liquidity Portfolio, managed by Derek Steeden, was –0.1%. As has been mentioned in the past, this Share class has a lower risk profile than the Company’s other three Share classes. Nevertheless, it is not designed to be a cash fund, and as such is not without risk to capital.

Dividends

The Board has declared equal first, second and third quarterly dividends for the current year for each of the equity share classes. These were all at the same level as last year. Accordingly, for the UK Equity shares each of these dividends was 1.50p, making 4.50p declared for the financial year to date. For the Global Equity Income shares each of these dividends was 1.55p, making 4.65p declared for the financial year to date.

Your Board recognises that income is an important component of the total return of these share classes and the ability of companies to make dividend distributions is closely monitored. With pressure on income streams from Covid-19 the Board has not set targets for annual dividends for the current financial year. However, as in recent years, the earnings of the UK Equity and Global Equity Income Portfolios can be augmented with contributions from any revenue reserves and capital reserves, where required.

It continues to be the case that in order to maximise the capital return on the Balanced Risk Allocation Shares, the Directors only intend to declare dividends on the Balanced Risk Allocation Shares to the extent required, having taken into account the dividends paid on the other Share classes, to maintain the Company’s status as an investment trust. None have been declared to date.

As set out in the Company’s 2021 Annual Financial Report, a dividend of 1.00p has been paid in respect of the current financial year on the Managed Liquidity Shares. In the prevailing low interest rate environment, it is unlikely that more than one Managed Liquidity dividend will be paid in the year.

Discount and Share Buy Backs

The Company has continued to operate a discount control policy for all four share classes through the period and the discounts have remained within a reasonably narrow range.

During the period the Company bought back 9,506,500 UK Equity shares at an average price of 182.9p, with increased activity in the months following the IIGT transaction as some shareholders looked to reweight their holdings; 160,000 Global Equity Income shares at an average price of 237.7p; 90,000 Balanced Risk Allocation shares at an average price of 167.5p; and 63,000 Managed Liquidity shares at an average price of 104.0p.

Share Class Conversions

The Company enables shareholders to adjust their asset allocation to reflect their views of future market conditions. Shareholders have the opportunity to convert their holdings of Shares into any other class of Share, without incurring any tax charge (under current legislation). The conversion dates for the year ending 31 May 2022 are: 2 August 2021; 1 November 2021; 1 February 2022; and 3 May 2022. The total number of Share class conversions that have occurred over the first three conversion opportunities resulted in net flows of £4.6 million out of the UK Equity Share Portfolio; of £4.2 million into the Global Equity Income Share Portfolio; of £0.6 million into the Balanced Risk Allocation Share Portfolio; and £0.2 million out of the Managed Liquidity Share Portfolio. Should you wish to convert Shares at future conversion dates, conversion forms, which are available on the Manager’s website at www.invesco.co.uk/investmenttrusts, or CREST instructions must be received at least ten days before the relevant conversion date.

Outlook

At the time of writing, whilst the level of vaccinations in many countries appears to be limiting the severity of the current wave of infections, the prevalence of the virus has had an impact both on health service resources and the broader workforce, which has presented a headwind to the speed of global economic recovery.

Accompanying these trends, the scaling back of central bank stimulus, rising inflation and concerns around the speed and extent of interest rate increases has led to a surge in bond yields and a cost-of-living squeeze. The UK government has already taken the first steps in raising interest rates, with the Fed making similar soundings. Geo-political factors, including Chinese policy and fears around a potential Russian invasion of Ukraine further add to uncertainty.

Despite this challenging backdrop, there are reasons to be optimistic. Latterly, we are seeing encouraging signs of many countries beginning to learn to live with Covid-19 and restrictions being lifted, alongside the expectation of a likely eventual shift in the virus’s status from ‘pandemic’ to ‘endemic’. ‘This would create a generally more normalised and stable environment to underpin economic growth, albeit there will be differences from country to country.

As I noted in the Company’s 2021 Annual Financial Report, the route back out from restricted economies across the globe is likely to experience road-bumps; investors and portfolio managers will have to navigate these and other factors as the year proceeds but they should provide attractive investment opportunities along the way of which the four portfolios of your Company can take advantage. The Company’s two equity portfolios have a bottom-up stock-picking approach that is not constrained by a rigid target benchmark. The equity managers also have the additional tool of gearing that they can employ (within overall parameters set by your Board) to reflect their view of the attractiveness of the asset class. Your UK Equity portfolio managers continue to run a balanced portfolio, positioned to make the most of recovery situations, whilst having some ballast to help insulate against further market shocks. Your Global Equity Income portfolio manager has the unfettered ability to search globally for idiosyncratic stock specific opportunities. The Balanced Risk Allocation portfolio’s strategy is to allocate a risk budget across the asset classes of bonds, equities and commodities and aims to provide attractive total returns regardless of the economic or inflationary backdrop. Lastly, the Managed Liquidity portfolio should be a beneficiary of interest rate rises.

In an environment such as this, the Company’s multi-portfolio structure, with its range of investment strategies and quarterly conversion facility, provides a flexible asset allocation tool for shareholders, or their advisors, to reflect their future market expectations. I believe your Company’s structure and portfolios remain well positioned to traverse a variety of market conditions over the long term.

Victoria Muir

Chairman

4 February 2022

Related Party Transactions

Under United Kingdom Generally Accepted Accounting Practice (UK Accounting Standards and applicable law), the Company has identified the Directors and their dependents as related parties. No other related parties have been identified during the period. No transactions with related parties have taken place which have materially affected the financial position or the performance of the Company.

Principal Risks and Uncertainties

Explanations of the Company’s principal risks and uncertainties are set out on pages 44 to 46 of the Company’s 2021 Annual Financial Report, which is available on the Manager’s website.

These are summarised as follows:

• Investment Objectives and Attractiveness to Investors – the investment policies may not achieve the published investment objectives;

• Market Movements and Portfolio Performance – falls in stock markets will affect the performance of the individual Portfolios and securities held within the Portfolios;

• Risks Applicable to the Company’s Shares – the prices of Shares in the Company may not appreciate and the level of dividends may fluctuate;

• Viability and Compulsory Conversion of a Class of Share – lack of demand for one of the Company’s Share classes could result in the relevant portfolio becoming too small to be viable. If ownership of a class of Shares becomes too concentrated the Directors may serve notice on holders of the affected class requiring them to convert to another class;

• Liability of a Portfolio for the Liabilities of Another Portfolio – in the event that any Portfolio was unable to meet its liabilities, the shortfall would become a liability of the other Portfolios;

• Gearing – borrowing will amplify the effect on shareholders’ funds of gains and losses on the underlying securities;

• Hedging – where hedging is used there is a risk that the hedge will not be effective;

• Regulatory and Tax Related – whilst compliance with rules and regulations is closely monitored, breaches could affect returns to shareholders;

• Additional Risks Applicable to Balanced Risk Allocation Shares – the use of financial derivative instruments, in particular futures, forms part of the investment policy and strategy of the Balanced Risk Allocation Portfolio. The degree of leverage inherent in futures trading potentially means that a relatively small price movement in a futures contract may result in an immediate and substantial loss to the Portfolio; and

• Reliance on Third Party Service Providers – the Company has no employees, so is reliant upon the performance of third party service providers, particularly the Manager, for it to function.

In the view of the Board these principal risks and uncertainties are as equally applicable to the remaining six months of the financial year as they were to the six months under review.

Despite the disruption to markets and revenue streams from Covid-19, and the impact on global economies, the Company continues to operate effectively and to pursue its investment objectives. Resilience of the Company, its Board and its service providers has been demonstrated throughout and the Directors remain confident that the Company’s investment strategies will continue to serve shareholders well over the longer term.

Going Concern

The financial statements have been prepared on a going concern basis. The Directors consider this to be appropriate as the Company has adequate resources to continue in operational existence for a period of at least 12 months after approval of the financial statements. In reaching this conclusion, the Directors took into account the value of net assets; the Company’s Investment Policy; its risk management policies; the diversified portfolio of readily realisable securities which can be used to meet funding commitments; the credit facility and the overdraft which can be used for short-term funding requirements; the liquidity of the investments which could be used to repay the credit facility in the event that the facility could not be renewed or replaced; its revenue; the uncertain economic outlook in wake of the Covid-19 pandemic; and the ability of the Company in the light of these factors to meet all its liabilities and ongoing expenses.

UK Equity Share Portfolio Performance Record

Total Return

(1) Source: Refinitiv.

UK Equity Share Portfolio Managers’ Report

Q: How has the Company performed in the 6 months to 30 November 2021?

A: The Portfolio outperformed its benchmark over the six months to 30 November 2021, with a net asset value total return of +5.5%. Over the same period the FTSE All-Share Index total return was +1.9%. Market sentiment was once again dominated by pandemic news and its impact on the economy. Inflation concerns continued as the consumer price index (CPI) rose more than expected causing many to think that the Bank of England would be forced to raise interest rates but in fact they held firm before raising rates after the period end in December. The additional issues of Brexit, UK domestic politics and US-China trade relations also continued to play a part in the background but the period was marked towards the end of November, by the emergence of a new Covid-19 variant, Omicron, which eroded much of the market gains for the period, as new travel restrictions were quickly brought in.

Q: What have been the key contributors and detractors to performance over the six month period to the end of November?

A: Over the period, positive performance relative to the benchmark was seen in seven out of the eleven sectors in which the portfolio is invested, and stock selection within the consumer discretionary and industrials sector was generally strong.

The biggest contribution to positive performance versus the FTSE All-Share Index over the period was the portfolio’s overweight to industrials where the holdings of Ultra Electronics, Bunzl, Experian, Ferguson and Ashtead all performed strongly. Ultra Electronics received a bid approach from Cobham, a defence company owned by US private equity firm Advent. In the same sector Johnson Service, the linen hire business which is focussed in the workwear and hospitality sector, detracted due to a difficult period post lockdowns.

The portfolio’s overweight to consumer discretionary stocks was the second best performing sector on a relative basis. RELX, Future and JD Sports Fashion all produced positive relative performance, but hospitality stocks Restaurant Group, Whitbread, and Young & Co’s Brewery were weaker on fears of further lockdowns. Next and DFS Furniture were also weaker. Travel and leisure stocks, which fall into this sector, also saw their share prices fall suddenly on news of Omicron. Consequently, not holding International Consolidated Airlines, easyJet and TUI was helpful for relative performance.

Exposure to utilities is a large overweight in the portfolio and the holdings of Drax, National Grid, United Utilities and SSE all performed well on a relative basis. Within financials, being underweight banks was overall positive for relative performance and specifically not holding HSBC, Standard Chartered and Lloyds was helpful to relative performance, as was not holding large insurer Prudential. Whilst the portfolio’s holding of fund administration business JTC performed well, other holdings in the sector, namely Phoenix, Jupiter Fund Management and Lancashire were weaker and detracted from relative performance.

Overall the portfolio’s underweight exposure to healthcare was the largest detractor to performance over the period with PureTech Health and Smith & Nephew underperforming. Biotherapeutics company PureTech Health had contributed strongly to relative performance in the previous 12 months to this period following some significantly positive developments, most notably the approval of group company Gelesis’s obesity product “Plenity”. The company aims to address significant areas of un-met medical need with novel and lower risk route to market products and approaches, along the brain-immuno-gut axis and has an encouraging pipeline of treatments, a number of which are already approved. Smith & Nephew suffered a difficult period due to supply chain issues and reduced elective surgeries as a result of the pandemic.

Basic materials were the second largest detractor to relative performance over the six month period but only marginally so. Gold miners Newmont and Barrick Gold were weaker as the gold price failed to make progress despite the concerns around persistent global inflation and the impact of negative real interest rates, which one would normally expect to be supportive of gold. On the flipside this underperformance was almost entirely offset by Croda International, the speciality chemicals manufacturer. The company has been a provider of speciality ingredients for vaccine production during the pandemic and has performed well over the period. Additionally, not owning large international industrial metals & mining company Rio Tinto, which had a weak six months of performance, was also helpful.

The consumer staples sector was overall marginally positive for relative performance but witnessed some mixed outcomes. On the one hand, the portfolio’s holdings of Nichols and Fevertree detracted overall from relative performance. Additionally not holding international alcoholic beverage producer and distributer Diageo, which performed well over the period, was unhelpful to relative performance. However, these disappointments were offset by positive performance from the portfolio’s holding of Tesco and additionally benefiting from not having exposure to Unilever or Reckitt Benckiser, which were weaker over the period.

Source: Factset, December 2021

Q: How has gearing impacted the performance over the period?

A: The use of gearing in the portfolio over the period enhanced performance. Net gearing at the start of the 6 month period was around 6% and at the end of the period was around 8%. This level is below the limit of 25% set by the Board.

The appropriate gearing is under regular review. Gearing provides an opportunity to enhance the Portfolio’s returns relative to the FTSE All-Share Index over time. Looking to the future our view remains that UK companies remain attractively valued compared to their 20 year average and compared to other developed markets such as the US.

Q: How has the portfolio evolved over the period and how is it currently positioned?

A: There have been no material changes to the portfolio, merely some adjustments due to individual circumstances. The holding of Fevertree was exited and following the bid for Ultra Electronics in the summer, we have substantially reduced the holding as the transaction approaches its conclusion and redeployed capital elsewhere. We have also reduced the holdings of Young & Co’s Brewery and CVS the veterinary services group, which has performed very well since the start on the pandemic. Proceeds from these sales were used to increase the portfolio’s existing position in PRS REIT and to introduce a new holding of Hiscox the insurer.

On a sectoral basis and relative to the FTSE All-Share Index, we remain over-weight utilities and consumer discretionary stocks. The overweight to utilities offers an inflation linked return that in our view remains underappreciated. We have also maintained our exposure to energy as these companies stand to benefit from higher oil prices as limited supply growth is outstripped by stronger demand. It is also possible that they will benefit from a rerating as they are rewarded for their increased commitment to invest in low carbon energy projects.

We remain under-weight consumer staples which we see as expensive, and financials in general but we do have a sizeable position in Barclays which is the biggest holding in the Portfolio. We believe that Barclays is still the best of the UK banks with the most promising strategy.

Previously, we have spoken to five broad investment themes that the portfolio is exposed to. It is best to think of these themes as more of an outcome of the investment process rather than a conscious element of the portfolio construction. Our conviction is very much in these key stocks that are spread across “UK Domestics” (27% of the value of the portfolio), “International Value” (26%), “International Growth” (27%), “Recovery” (7%) and “Transformers” (12%). The weighting to these themes is virtually unchanged since our last report for the year ended 31 May 2021.

Q: What is your outlook for the next 12 months and beyond? Why invest in the UK now?

A: Even with the rapid spread of the Omicron variant we are optimistic for a continuing recovery in the global economy. The roll out of vaccines and boosters in the developed world has continued and, in the UK, has enabled the economy to stay open for business. It is now clear that the Omicron variant is less severe than Delta. As such we think it extremely unlikely that the Government would want to pursue any economically harmful lockdown strategy again. Undoubtedly there is still some uncertainty around further variants and indeed other issues that might affect the UK equity market, including geopolitical tensions and the risk of persistent inflation. Consequently we have constructed a balanced portfolio that can perform in a range of economic and market regimes. This balance is expected to reduce the reliance on unpredictable macro outcomes and leave the performance of the portfolio to be driven by the performance of the individual companies we have invested in.

We have frequently referenced our analysis that shows UK equities to be cheap across a blend of valuation measures, relative to history, and in particular relative to the US market. We have also said that this opportunity is evident in every major sector, not just at an index level. Increased interest in UK companies from international buyers through merger and acquisition activity may indicate that these opportunities are being recognised by other companies and private equity buyers.

Too often the UK equity market is criticised for lacking a meaningful technology sector to justify a discount when compared with other equity markets. It is true that the UK market has less exposure to software, social media, semiconductor manufacturing etc. than some of its international peers. However our decisions to invest the portfolio in RELX, Experian, Next, Ultra Electronics and Future for example were all based on market leading and transformational use of technology which looks set to deliver very attractive returns into the future.

We are confident in the long-term prospects of the companies that we own in the UK Equity Portfolio which comprises our highest conviction, best ideas. The portfolio is concentrated around high quality, cash generative businesses, with strong liquidity that are likely to further enhance their competitive positions, and this leaves us feeling very optimistic for the year ahead in 2022.

James Goldstone & Ciaran Mallon

Joint Portfolio Managers

4 February 2022

UK Equity Share Portfolio List of Investments

AT 30 November 2021

Ordinary shares listed in the UK unless stated otherwise

AIM Investments quoted on AIM.

† FTSE Industry Classification Benchmark.

UK Equity Share Portfolio Income Statement

Summary of Net Assets

Summary of Changes in Net Assets

(1) Refers to the assets acquired in respect of the business combination with Invesco Income Growth Trust plc. Details are shown in note 13(f) of the Company’s 2021 Annual Financial Report.

Global Equity Income Share Portfolio Performance Record

Total Return

(1) Source: Refinitiv.

Global Equity Income Share Portfolio Manager’s Report

Q: What were the key features of the Global Equity market over the six months to the end of November 2021?

A: During the six months to the end of November 2021, the MSCI World Index appreciated by around 12.7% in sterling, in total return terms. Whilst markets were firm through the period, the bulk of the return in sterling terms arose through currency weakness; the same index rose by just over 5.1% in US dollar terms. It was notable that the headwind facing equity income strategies remained strong with the MSCI High Dividend Index falling by 3.5% over the period.

Notable features over the last six months have included a lack of equity market volatility through the period, despite ongoing persistent inflationary pressures; bond yields have remained subdued. Indications of monetary tightening from central banks have so far remained tentative.

The Covid-19 pandemic was relegated to a more minor concern as some form of normality returned to most western economies through the summer and autumn. Even the emergence of the new Omicron strain, at the end of November, was quickly shrugged off by investors.

Despite strong share price (and earnings growth) performance in recent years, the IT and e-commerce sectors continued to perform well through the period. That notwithstanding, the market began to differentiate in the e-commerce/social media space between companies with greater or less regulatory pressure, and in semiconductors between those companies facing cyclical peaks in demand and those with a secular growth opportunity.

Perhaps one of the biggest developments in Global Equities through the period was tightening regulation in many sectors of the Chinese economy, which impacted performance of Chinese equities in particular and undermined sentiment towards the Asian region in general, making Asia the weakest performing region in the world.

Q: How did the Portfolio perform over the period?

A: The Portfolio delivered a net asset value total return of +8.5% in the period, underperforming the MSCI benchmark total return by 4.2%. The key positive and negative contributors to performance relative to benchmark are shown below.

Source: Factset, December 2021

In summary, at a geographical level, the US was the strongest region in global markets, Asia Pacific the weakest. Our relative under exposure to the US and over exposure to Asia was a key drag on performance. This can be seen clearly in our top and bottom contributors to performance at a stock level in the tables above.

As already mentioned, regulatory change in China impacted the profit outlook for companies involved in the education, computer gaming and e-commerce sectors in particular. We were exposed to those changes through our holdings in Tencent, the e-commerce /search platform and NetEase which specialises in online gaming. We continue to view Tencent as having significant upside in the medium term so have continued to maintain a position in the company. However, we felt the degree of uncertainty with NetEase to be higher and the upside less, hence we have exited the position.

Our holding in Standard Chartered, which is UK listed but whose business is primarily in Asia was also weak. In part this was due to the uncertainty caused by regulatory change in China and also by the relatively slow recovery of the region from the Covid-19 pandemic, where rigid travel restrictions and lockdowns remain common in many countries. In addition, concerns over the contagion from the collapse of the Evergrande Group has also hurt our holdings in the insurance sector such as Ping An Insurance and AIA.

The other two key detractors, relative to benchmark, were stocks we did not own; Apple and Tesla. For Tesla our rationale is clear, whilst we acknowledge the strength of their technology, design and mercurial founder, we cannot make the numbers work. The lack of free cash generation now and in coming years together with the threat from legacy carmakers ‘getting their acts together’ in electric vehicles makes it a name we do not want to be invested in. For Apple, we underestimated the growth in free cash flow and the continued growth potential in its legacy products. We preferred to deploy our capital into IT stocks where we had higher conviction such as Microsoft and Alphabet.

Turning to the best performers, Microsoft continues to execute well on its growth strategy in cloud computing. Despite strong performance we see continued steady growth in earnings and cashflows for a number of years ahead.

We were also pleased by the performance of Home Depot, the US DIY retail chain. The market for home improvements continues to grow in North America even after the lockdown induced spike in spending. Home Depot has continued to take market share and expand its offering into the professional sector.

During the early summer we carried out extensive work on KKR & Co, the US based private equity fund manager. We believed the market was underestimating the potential growth in the business model and the scope for margin enhancement, therefore taking the opportunity to invest. The thesis is playing out as planned with strong results announced in November.

Q: Asia Pacific has been weak, but you still have considerable exposure there?

A: Yes, whilst we acknowledge the impact on sentiment from Chinese regulatory changes and slow recovery of the regional economy from Covid-19, we see opportunities. Over the six month period the Hang Seng Index in Hong Kong has fallen by 18.6% whilst the S&P 500 has risen by 9.4% (both in US dollar terms). There are some excellent companies with appealing growth prospects, balance sheets are generally in good health and with this recent under-performance valuations are more enticing. We have increased our research focus in the region.

Q: How has the portfolio evolved over the period?

A: Overall, the broad shape of the portfolio in terms of sector and geographic exposures has not changed materially since May. Whilst rising share prices made some of our existing holdings less attractive, the portfolio has evolved as we have identified several new holdings that fulfil the key criteria we seek namely:

Good Quality: We seek businesses that are strong enough to thrive through the economic cycle. Competitively advantaged within their industry, with strong balance sheets and no obvious ESG (Environmental, Social and Governance) risks. Their management teams need to have demonstrated capital allocation policies that have created value for all shareholders.

Cashflow: We view strong free cashflow as the best measure of a company’s health. It allows the company to pursue opportunities which enhance shareholder value: investing at attractive rates, paying dividends, buying back shares or paying down debt.

Price: We need to be able to buy the company at a price that represents a significant discount to intrinsic value. In short, we want to buy good companies when they are ‘on sale’.

Key disposals through the period included Facebook, where after a period of outperformance we saw less upside potential, especially in view of the range of regulatory issues the company faces. We also sold our holding in Alimentation Couche Tard, the Canadian convenience store and gas station operator. Its share price had recovered after an aborted takeover bid which dented our confidence in management’s strategy.

We also exited our holding in Ashtead, which has been a brilliant business for us to own since early 2020. Despite being in a cyclical industry (construction rental equipment) it proved incredibly resilient during the lockdowns, and has performed extremely well during the recovery owing to its market position and balance sheet strength in a fragmented industry. Our decision to exit the position was purely driven by the lack of further upside potential given the strong share price performance, rather than any underlying issue.

We sold Total following good share price performance on the back of the recovering oil price, recycling some of the proceeds into an existing holding, Lundin Energy. Lundin Energy is the industry leader in terms of low cost production, has low political risk as is based in Norway, and also leads the sector in terms of reducing carbon intensity.

We added a new position in Broadcom, the US listed semi-conductor producer. It has a dominant position in telecom networking equipment where we see continued growth for at least the next five years. It generates strong free cashflow and offers an attractive dividend yield. Its strong management team has made several astute acquisitions in recent years.

We also added a position in out of favour Hong Kong based Link REIT. A combination of political uncertainty and Covid-19 has depressed the value of its portfolio of assets. As we move away from Covid-19 lockdowns a recovery in retail sales should lead to an improvement in rental income and capital value. The trust has diversified their exposure (previously mainly Hong Kong) to UK, Australia, Japan, Singapore and China. Management have a long and consistent track record of disciplined capital allocation and delivering NAV per share and dividend growth over time. It offers an attractive yield of around 4.5%.

The table below gives the key portfolio valuation metrics versus the benchmark MSCI World benchmark.

Source: Bloomberg, December 2021

Q: Has the ability to use leverage helped you over the period?

A: Clearly in what has been a rising market, the use of leverage has been a tailwind for the NAV over the period. We have reduced the amount of leverage to around 8% at the end of the period, reflecting the fact that the upside we see generally in markets is less pronounced in view of strong share prices in most parts of the world.

Q: How do you see the outlook for Global Equities in the coming year?

A: We remain constructive on the outlook for markets, though remain cautious not to expect returns contiguous with those enjoyed in 2021.

During 2022, we see a number of similar challenges and opportunities as we faced twelve months ago. Covid-19 remains a concern around the world, although many western countries seem to be learning to live with it, especially as the Omicron variant proves to be milder. Inflation also remains a threat and appears to be less transient than we hoped. The bond market remains sanguine at present, a change in sentiment in the bond market, perhaps driven by a more hawkish central bank outlook on raising interest rates, especially in the US, would increase volatility and threaten equity market ratings.

On the other hand, there remains much to be positive about. The consumer in most parts of the world remains in robust financial health, and there remains considerable pent-up demand for goods and services. There seems no appetite politically for a return to the policies of austerity in any major economy. Furthermore, due to strong earnings growth over the past year, stock market valuations are now below where they were pre-pandemic.

Our sense is that equity markets will continue to grind higher in the coming year, although they will lag the growth in earnings, implying a modest market derating. Whilst the market moves of 2021 have reduced some of the glaring valuation disparities, any upward move in interest rate expectations may still lead to some market volatility and derate the most expensive stocks in the market, especially those not generating free cashflow and rerate those seen as beneficiaries from rising interest rates, such as the banking sector.

The focus of our efforts continues to be on identifying idiosyncratic stock specific opportunities in all sectors of the market. We look for good quality companies, which are competitively advantaged with no obvious ESG risks. We look for companies with strong and growing free cashflows, able to sustain and grow dividends. We aim to buy them when we see them trading at a discount to intrinsic value.

Stephen Anness

Portfolio Manager

4 February 2022

Global Equity Income Share Portfolio List of Investments

AT 30 November 2021

Ordinary shares unless stated otherwise

ADR American Depositary Receipts – are certificates that represent shares in the relevant stock and are issued by a US bank. They are denominated and pay dividends in US dollars.

H H-Shares – shares issued by companies incorporated in the People’s Republic of China (PRC) and listed on the Hong Kong Stock Exchange.

R Red Chip Holdings – holdings in companies incorporated outside the PRC, listed on the Hong Kong Stock Exchange, and controlled by PRC entities by way of direct or indirect shareholding and/or representation on the board.

† MSCI and Standard & Poor’s Global Industry Classification Standard.

Global Equity Income Share Portfolio Income Statement

Summary of Net Assets

Summary of Changes in Net Assets

Balanced Risk Allocation Share Portfolio Performance Record

Total Return

(1) Source: Refinitiv.

(2) With effect from 1 June 2021, the benchmark adopted by the Balanced Risk Allocation Portfolio is comprised of 50% 30-year UK Gilts Index, 25% GBP hedged MSCI World Index (net)

 and 25% GBP hedged S&P Goldman Sachs Commodity Index. Prior to this, the benchmark was ICE BoA Merrill Lynch 3 month LIBOR plus 5% per annum. Accordingly, both the new and old benchmark are shown. Source: Refinitiv/Bloomberg

Balanced Risk Allocation Share Portfolio Manager’s Report

Q: How has the strategy performed in the period under review?

A: For the six months to 30 November 2021 the Balanced Risk Portfolio posted a flat return of 0.0%. Bonds were the only asset class to generate positive results for the period with commodities posting negative performance while equity performance was flat. Rising inflationary pressures and signs of slowing growth across the economies that were among the first to emerge from Covid-19 lockdowns presented a tough environment for stock and bond markets in the first five months of the period. The discovery of a new mutated form of Covid-19, dubbed the Omicron variant, in late November sparked fears that a new outbreak could trigger renewed shutdowns sent risky asset prices lower, while safe havens saw demand jump. Against this backdrop, equities and commodities struggled, while bond markets rose.

Q: What were the biggest contributors and detractors to performance?

A: Strategic exposure to bonds was the top contributor as yields fell across all six markets as safe-haven demand emerged in the wake of the Omicron discovery. US government bonds were the top contributor followed by the UK and Australia.

Strategic exposure to stocks produced flat returns as gains in Europe, the UK and US large caps were not strong enough to outweigh losses in US small caps and emerging market equities. Emerging market equities were the top detractor where the economic slowdown in China, along with concerns over the default of a large conglomerate, weighed on prices. US large caps were the top contributor as growth-oriented sectors benefited from the lower interest rate environment.

Strategic exposure to commodities detracted from performance as negative performance in November outweighed gains from earlier in the period. Energy was the top contributor as the Organization of the Petroleum Exporting Countries (OPEC) agreed to an output agreement that maintains the group’s oil production below pre-pandemic levels. Precious metals were the largest detractor due to the Federal Reserve expressing that they would likely begin to taper bond purchases. The taper news helped propel a rally in both the dollar and interest rates that served as the principal catalysts for investors to reduce exposure to the monetary metals.

Q: How did the tactical allocation perform?

A: Tactical positioning detracted from results as losses from positioning in bonds and commodities outweighed gains from positioning in stocks.

Q: What is your 30 day outlook?

A: The year ended with a rebound in manufacturing activity as indicated by Purchasing Managers’ Indexes (PMIs). The rebound may be the result of firms getting around to filling existing orders as supply chain issues have begun to ease, freeing up sparse components. Demand looks to have remained relatively flat. The bounce in activity may be vulnerable to the spread of the Omicron variant. First, the survey data taken in December was compiled prior to the spike in cases, which may have resulted in outlooks being too optimistic. Second, if cases continue to climb, activity will take a hit as people stay home to fulfill quarantine periods. We have already seen similar impacts such as the rash of flight cancellations over the holiday period. As always, we believe the rational approach to uncertainty is to balance risks across possible outcomes and tactically tilt based upon a weight of the evidence.

Scott Wolle

Portfolio Manager

4 February 2022

Balanced Risk Allocation Share Portfolio List of Investments

Derivative instruments held in the Balanced Risk Allocation Share Portfolio are shown on the next page. At the period end all the derivative instruments held in the Balanced Risk Allocation Share Portfolio were exchange traded futures contracts. Holdings in futures contracts that are not exchange traded are permitted as explained in the investment policy disclosed in full on pages 39 to 41 of the Company’s 2021 Annual Financial Report.

Balanced Risk Allocation Share Portfolio List of Derivative Instruments

AT 30 November 2021

Balanced Risk Allocation Share Portfolio Income Statement

Summary of Net Assets

Summary of Changes in Net Assets

Managed Liquidity Share Portfolio Performance Record

Total Return

(1) Source: Refinitiv.

(2) Includes a £34,000 (1.40p per share) refund of management fees in respect of prior year overcharges.

Managed Liquidity Share Portfolio Manager’s Report

Q: How does the Portfolio generate returns?

A: The investment objective of the Portfolio is to produce an appropriate level of income return combined with a high degree of security. We aim to generate returns by investing mainly in sterling-based high quality debt securities and similar assets but with the flexibility to invest in assets with a greater weighted average maturity than a money market fund. Accordingly, the value of the Portfolio may rise or fall.

The majority of the Portfolio is invested in the iShares – Sterling Ultrashort Bond UCITS ETF. We review the Exchange Traded Fund universe annually and reconfirmed this fund in December 2021. The ETF delivers an attractive yield for a low level of credit risk (average rating A+), while maintaining a low average maturity and demonstrating sufficiently strong liquidity. The ETF invests in Sterling denominated investment grade corporate bonds and quasi-government bonds, aiming to track performance of the Markit iBoxx GBP Liquid Investment Grade Ultrashort Index. It has a weighted average maturity of under one year and an effective duration of 0.2 years.

We also hold a portion of the Portfolio in the AAA-rated Invesco Liquidity Funds plc Sterling to meet short term payment obligations.

Q: What has the performance of your fund been over the last six months?

A: The Managed Liquidity Portfolio NAV total return for the six months to 30 November 2021 was –0.1%. The Portfolio delivered a modest level of income (+0.2%) but this was offset by a modest reduction in bond prices as a result of rising interest rates over the period. By comparison, 1 year UK Government Bonds fell 0.3% over the same period.

Q: What’s the outlook for returns?

A: We expect the US Federal Reserve to join the Bank of England in raising interest rates, beginning in March. Market pricing already anticipates multiple hikes on both sides of the Atlantic and so such a rise will not necessarily lead to falling bond prices.

Financial conditions remain supportive for high quality (AAA, AA and A-rated) issuers which supports capital preservation for portfolios such as the Managed Liquidity Portfolio, notwithstanding that demand for such paper remains strong limiting the potential for returns.

Inflation is likely to remain above central bank targets into 2022 and this has driven real yields (net of inflation) deeply negative. While we do expect the Portfolio to deliver low and stable returns above cash deposits, returns are not expected to exceed inflation.

Derek Steeden

Portfolio manager

4 February 2022

Managed Liquidity Share Portfolio List of Investments

AS AT 30 November 2021

Income Statement

Managed Liquidity Share Portfolio Summary of Net Assets

AS AT 30 November 2021

Summary of Changes in Net Assets

Directors’ Responsibility Statement

The Directors are responsible for preparing the half-yearly financial report using accounting policies consistent with applicable law and UK Accounting Standards.

The Directors confirm that, to the best of their knowledge:

– the condensed set of financial statements contained within the half-yearly financial report has been prepared in accordance with the FRC’s FRS 104 Interim Financial Reporting;

– the interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R of the FCA’s Disclosure Guidance and Transparency Rules; and

– the interim management report includes a fair review of the information required on related party transactions.

The half-yearly financial report has not been audited or reviewed by the Company’s auditor.

Signed on behalf of the Board of Directors.

Victoria Muir

Chairman

4 February 2022

Condensed Income Statement

FOR THE six months ENDED 30 November

The total column of this statement represents the Company’s profit and loss account, prepared in accordance with UK Accounting Standards. The return after taxation is the total comprehensive income and therefore no additional statement of other comprehensive income is presented. The supplementary revenue and capital columns are presented for information purposes in accordance with the Statement of Recommended Practice issued by the Association of Investment Companies. All items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the period. Income Statements for the different Share classes are shown on pages 10, 16, 21 and 24 for the UK Equity, Global Equity Income, Balanced Risk Allocation and Managed Liquidity Share Portfolios respectively.

Condensed Statement of Changes in Equity

FOR THE SIX MONTHS ENDED 30 NOVEMBER

Condensed Balance Sheet

Registered Number 5916642

AS AT 30 NOVEMBER 2021

Condensed Balance Sheet

AS AT 31 MAY 2021

Condensed Statement of Cash Flows

Notes to the Condensed Financial Statements

1. Accounting Policies

The condensed financial statements have been prepared in accordance with applicable United Kingdom Accounting Standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, FRS 104 Interim Financial Reporting and the Statement of Recommended Practice Financial Statements of Investment Trust Companies and Venture Capital Trusts, issued by the Association of Investment Companies in April 2021. The financial statements are issued on a going concern basis.

The accounting policies applied to these condensed financial statements are consistent with those applied in the Company’s 2021 Annual Financial Report.

2. Management Fees and Finance Costs

Investment management fees and finance costs are charged to the applicable Portfolio as follows, in accordance with the Board’s expected split of long-term income and capital returns:

The Manager is entitled to a management fee which is calculated and payable quarterly. The fee is based on the net assets of each Portfolio, at the following percentages:

– 0.55% per annum on net assets up to £100 million and 0.50% over £100 million (effective from 23 April 2021). Prior to this date fees were 0.55% per annum for both UK Equity and Global Equity Income Portfolios;

– 0.75% per annum for the Balanced Risk Allocation Portfolio; and

– 0.12% per annum for the Managed Liquidity Portfolio.

3. Investment Trust Status and Tax

It is the intention of the Directors to conduct the affairs of the Company so that it satisfies the conditions for approval as an investment trust company. Any company so approved is not liable for taxation on capital gains.

The tax charge represents withholding tax suffered on overseas income for the period.

4. Basic Return per Share

Basic revenue, capital and total return per ordinary share is based on each of the returns on ordinary activities after taxation as shown by the income statement for the applicable Share class and on the following number of shares being the weighted average number of shares in issue throughout the period for each applicable Share class:

5. Net Asset Values per Ordinary Share

The net asset values per ordinary share were based on the following Shareholders’ funds and shares (excluding treasury shares) in issue at the period end:

6. Classification Under Fair Value Hierarchy

FRS 102 as amended for fair value hierarchy disclosures sets out three fair value levels. These are:

Level 1 – The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly.

Level 3 – Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

The fair value hierarchy analysis for investments held at fair value at the period end is as follows :

Level 1 – This is the majority of the Company’s investments and comprises all quoted investments and Treasury bills.

Level 2 – This comprises liquidity funds held in the Balanced Risk Allocation and Managed Liquidity Portfolios, and any derivative instruments.

Level 3 – This includes the remaining legacy hedge fund investments of the Balanced Risk Allocation Portfolio.

7. Movements in Share Capital and Share Class Conversions

As part of the conversion process, 454,151 deferred shares of 1p each were created in the period. All deferred shares are cancelled before the period end and so no deferred shares are in issue at the start or end of the period.

Subsequent to the period end, 870,000 UK Equity Portfolio Shares and 30,000 Global Equity Income Portfolio Shares have been bought back to treasury at an average price of 196.1p and 248.0p respectively.

Also subsequent to the period end, the February 2022 Share class conversions have resulted in £1.3 million out of the UK Equity Share Portfolio; £1.2 million into the Global Equity Income Share Portfolio; £0.3 million into the Balanced Risk Allocation Share Portfolio; and £0.2 million out of the Managed Liquidity Share Portfolio.

8. Share Prices

9. Dividends on Ordinary Shares

First quarterly interim dividends for UK Equity, Global Equity Income and Managed Liquidity shares were paid on 16 August 2021. Second quarterly interim dividends for UK Equity and Global Equity Income were paid on 16 November 2021:

Dividends paid for the six months to 30 November 2021 totalled £3,203,000 (six months to 30 November 2020: £1,737,000). No dividend was paid in the prior year interim period to the holders of Managed Liquidity shares.

On 8 December 2021 the Company announced the third quarterly interim dividend for the year ending 31 May 2022. The dividend declared for UK Equity Shares of 1.50p and Global Equity Income Shares of 1.55p will be paid on 22 February 2022 and they went ex-dividend on 20 January 2022.

10. Status of Half-Yearly Financial Report

The financial information contained in this half-yearly financial report, which has not been reviewed or audited by the independent auditor, does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The financial information for the half years ended 30 November 2021 and 30 November 2020 has not been audited. The figures and financial information for the year ended 31 May 2021 are extracted and abridged from the latest audited accounts and do not constitute the statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and include the Independent Auditor’s Report, which was unqualified and did not include a statement under section 498 of the Companies Act 2006.

By order of the Board

Invesco Asset Management Limited

Company Secretary 

Date: 4 February 2022

Glossary of Terms and Alternative Performance Measures

Alternative Performance Measure (APM)

An APM is a measure of performance or financial position that is not defined in applicable accounting standards and cannot be directly derived from the financial statements. The calculations shown in the corresponding tables are for the six months ended 30 November 2021 and the year ended 31 May 2021. The APMs listed here are widely used in reporting within the investment company sector and consequently aid comparability.

(Discount)/Premium (APM)

Discount is a measure of the amount by which the mid-market price of an investment company share is lower than the underlying net asset value (NAV) of that share. Conversely, Premium is a measure of the amount by which the mid-market price of an investment company share is higher than the underlying net asset value of that share. In this interim financial report the discount is expressed as a percentage of the net asset value per share and is calculated according to the formula set out below. If the shares are trading at a premium the result of the below calculation will be positive and if they are trading at a discount it will be negative.

Gearing

The gearing percentage reflects the amount of borrowings that a company has invested. This figure indicates the extra amount by which net assets, or shareholders’ funds, would move if the value of a company’s investments were to rise or fall. A positive percentage indicates the extent to which net assets are geared; a nil gearing percentage, or ‘nil’, shows a company is ungeared. A negative percentage indicates that a company is not fully invested and is holding net cash as described below.

There are several methods of calculating gearing and the following has been used in this report:

Gross Gearing (APM)

This reflects the amount of gross borrowings in use by a company and takes no account of any cash balances. It is based on gross borrowings as a percentage of net assets.

Net Gearing or Net Cash (APM)

Net gearing reflects the amount of net borrowings invested, i.e. borrowings less cash and cash equivalents (incl. investments in money market funds). It is based on net borrowings as a percentage of net assets. Net cash reflects the net exposure to cash and cash equivalents, as a percentage of net assets, after any offset against total borrowings.

Total Return

Total return is the theoretical return to shareholders that measures the combined effect of any dividends paid, together with the rise or fall in the share price or NAV. In this half-yearly financial report these return figures have been sourced from Refinitiv who calculate returns on an industry comparative basis.

Net Asset Value Total Return (APM)

Total return on net asset value per share, assuming dividends paid by the Company were reinvested into the shares of the Company at the NAV per share at the time the shares were quoted ex-dividend.

(1) Total dividends paid during the period for the UK Equity Share Portfolio of 3.00p (31 May 2021: 6.65p), Global Equity Share Income Portfolio of 3.10p (31 May 2021: 7.10p) and Managed Liquidity Share Portfolio 1.00p (31 May 2021: nil), reinvested at the NAV or share price on the ex-dividend date. A fall in the NAV or Share price, subsequent to the reinvestment date, consequently further reduces the returns and vice versa if NAV or Share price rises.

Share Price Total Return (APM)

Total return to shareholders, on a mid-market price basis, assuming all dividends received were reinvested, without transaction costs, into the shares of the Company at the time the shares were quoted ex-dividend.

(1) Total dividends paid during the period for the UK Equity Share Portfolio of 3.00p (31 May 2021: 6.65p), Global Equity Share Income Portfolio of 3.10p (31 May 2021: 7.10p) and Managed Liquidity Share Portfolio 1.00p (31 May 2021: nil), reinvested at the NAV or share price on the ex-dividend date. A fall in the NAV or Share price, subsequent to the reinvestment date, consequently further reduces the returns and vice versa if NAV or Share price rises.

Benchmark

Total return on the benchmark is on a mid-market value basis, assuming all dividends received were reinvested, without transaction costs, into the shares of the underlying companies at the time the shares were quoted ex-dividend.

Notional Exposure

Notional exposure in relation to a future, or other derivative contract, is the value of the assets referenced by the contract that could alternatively be held to provide an identical return.

Volatility

Volatility refers to the amount of uncertainty or risk about the size of changes in a security’s value. It is a statistical measure of the dispersion of returns for a given security or market index measured by using the standard deviation or variance of returns from that same security or market index. Commonly, the higher the volatility, the riskier the security.

Directors, Investment Manager and Administration

Directors

Victoria Muir (Chairman of the Board and Nomination Committee)

Craig Cleland (Chairman of the Audit Committee)

Davina Curling (Senior Independent Director and Chairman of the Management Engagement Committee)

Mark Dampier (Chair of the Marketing Committee)

Tim Woodhead

All the Directors are, in the opinion of the Board, independent of the management company.

All Directors are members of the Management Engagement, Nomination and Marketing Committees.

All Directors, except the Chairman of the Board, are members of the Audit Committee.

Registered Office and Company Number

Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH

Registered in England and Wales: No. 3011768

Alternative Investment Fund Manager (Manager)

Invesco Fund Managers Limited

Company Secretary

Invesco Asset Management Limited

Company Secretarial contact: James Poole/Naomi Rogers

Correspondence Address

43-45 Portman Square, London W1H 6LY

Tel: 020 3753 1000Email: investmenttrusts@invesco.com

Depositary and Custodian

The Bank of New York Mellon (International) Limited1 Canada Square, London E14 5AL

Corporate Broker

Investec Bank plc30 Gresham Street, London EC2V 7QP

General Data Protection Regulation

The Company’s privacy notice can be found at www.invesco.co.uk/investmenttrusts

Invesco Client Services

Invesco has a Client Services Team, available to assist you from 8.30am to 6.00pm Monday to Friday (excluding UK Bank Holidays). Please note no investment advice can be given. Tel: 0800 085 8677.

www.invesco.co.uk/investmenttrusts

Registrar

Link Group,Central Square, 29 Wellington Street, Leeds, LS1 4DL

If you hold shares directly and have queries relating to your shareholding, you should contact the Registrar on 0371 664 0300. Calls are charged at the standard geographic rate and will vary by provider.

From outside the UK: +44 (0)371 664 0300. Calls from outside the UK will be charged at the applicable international rate. Lines are open from 9.00am to 5.30pm, Monday to Friday (excluding Bank Holidays in England and Wales).

Shareholders can also access their holding details via Link’s website www.signalshares.com

Link Group provides on-line and telephone share dealing services to existing shareholders who are not seeking advice on buying or selling. This service is available at www.linksharedeal.com or (0371 664 0445. Calls are charged at the standard geographic rate and will vary by provider. Calls from outside the UK will be charged at the applicable international rate. Lines are open 9.00am to 5.30pm Monday to Friday (excluding Bank Holidays in England and Wales).

Link Group is the business name of Link Market Services Limited.

Investor Warning

The Company, Invesco and the Registrar would never contact members of the public to offer services or require any type of upfront payment. If you suspect you have been approached by fraudsters, please contact the FCA consumer helpline on 0800 111 6768 and Action Fraud on 0300 123 2040. Further details for reporting frauds, or attempted frauds, can be found on page 40 of this Half-Yearly Financial Report.

The Association of Investment Companies

The Company is a member of the Association of Investment Companies. Contact details are as follows:

Tel: 020 7282 5555

Email: enquiries@theaic.co.ukWebsite: www.theaic.co.uk

Website

Information relating to the Company can be found on the Company’s section of the Manager’s website.

Each Share class has a separate web page that can be accessed via the Invesco investment trusts hub at www.invesco.co.uk/investmenttrusts.

The contents of websites referred to in this document, or accessible from links within those websites, are not incorporated into, nor do they form part of, this document.

The Company’s ordinary shares qualify to be considered as a mainstream investment product suitable for promotion to retail investors.

NATIONAL STORAGE MECHANISMA copy of the Half-Yearly Financial Report will be submitted shortly to the National Storage Mechanism ("NSM") and will be available for inspection at the NSM, which is situated at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Hard copies of the Half-Yearly Financial Report will be posted to shareholders and can be requested from the Company Secretary by email at investmenttrusts@invesco.com or at the Company’s correspondence address, 2nd Floor, 43-45 Portman Square, London W1H 6LY.

Invesco Asset Management Limited

Corporate Company Secretary

4 February 2022