Download European Fixed Interest - Invesco Global Product Range

European Fixed Interest
April 2017
This marketing document is for Professional Clients
and Financial Advisers in Continental Europe (as defined
in the important information), Qualified Investors in
Switzerland and Professional Clients in the UK only and
is not for consumer use. Please do not redistribute.
The Invesco Perpetual Fixed Interest Team
 Two experienced Co-Heads – over 25 years each in bond markets
 20 year track record
 €34.6bn assets under management
 Active approach
Source: Invesco Perpetual as at 31 March 2017. The funds and strategies featured in this document are managed by the firm’s
investment centre in Henley (UK), Invesco Perpetual. Invesco Perpetual is a business name of Invesco Asset Management Limited
(IAML) and forms part of Invesco UK Ltd, which itself forms part of Invesco.
2
The Invesco Perpetual Fixed Interest Team
Stable team, hiring and promoting
Fund Manager
Paul Causer
Team Co-Head
23 years (33)
Paul Read
Team Co-Head
22 years (31)
Michael Matthews
Fund Manager
22 years (23)
Stuart Edwards
Fund Manager
11 years (20)
Rhys Davies
Fund Manager/
Senior Analyst,
CFA
13 years (15)
Julien Eberhardt
Fund Manager/
Senior Analyst,
CFA
9 years (11)
Thomas Moore
Fund Manager/
Senior Analyst,
CFA
1 year (18)
Jack Parker
Deputy Fund
Manager/Senior
Macro Analyst,
CFA, 7 years (9)
Tom Hemmant
Senior Analyst,
ACA
6 years (14)
Jessica Svantesson
Credit Analyst
2 years (11)
Herin Shah
Credit Analyst,
ACA
2 year (16)
Mark McDonnell
Macro Analyst
2 years (4)
Dan Dewar
Senior Dealer
4 years (23)
Gareth Dunsmore
Senior Dealer
2 years (14)
Simon Cheng
Desk Analyst/
Dealer
9 years (13)
Olivia Finch
Junior Dealer
4 years (6)
Analyst / Fund Manager
Asad Bhatti
Fund Manager/
Senior Analyst,
CFA
14 years (17)
Alex Ivanova
Deputy Fund
Manager/Senior
Analyst, CFA
2 year (16)
Analyst
Edward Craven
Senior Analyst,
ACA
6 years (13)
Markets & Risk
Dominic de Ban
Head of Markets
& Risk
6 years (28)
Product Management
Lewis
Aubrey-Johnson
Head of Fixed
Income Products
13 years (20)
Fund Management Assistant
Alister Brown
Product Director
6 years (27)
Cathal Dowling
Product Director
3 years (18)
Mei Ong
Fund Management
Assistant
17 years (23)
Source: Invesco Perpetual as at 31 March 2017. Years refers to time in team. () refers to industry experience. Subject to rounding.
3
Fixed interest funds and sizes
(€m)
UK funds
14,853.6
Offshore funds
Invesco Euro Corporate Bond Fund (Luxembourg domiciled)
3,420.6
Invesco Pan European High Income Fund (Luxembourg domiciled)2 (Up to 30% in equities)3
7,802.0
Invesco Global Total Return (EUR) Bond Fund (Luxembourg domiciled)
1,433.4
Invesco Global Bond Fund (Luxembourg domiciled)1
107.7
Invesco Global Income Fund (Luxembourg domiciled) (Up to 65% in equities)4
103.2
Luxembourg domiciled fund
Dublin domiciled fund2
10.0
802.5
13,679.3
Investment Companies
Other
Total
330.5
5,745.0
34,608.4
Source: Invesco Perpetual as at 31 March 2017. Figures may not sum due to rounding. 1US$ denominated fund – Exchange rate used was 1.0696. 2GBP denominated
fund – Exchange rate used was 1.1691. There may be differences in fee structures, in minimum investment amounts, etc. 3Whilst the Prospectus allows for more
flexibility, for the fund to be included in the Morningstar GIF OS EUR Cautious Allocation, this limit applies. 4Whilst the Prospectus allows for more flexibility, for the
fund to be included in the Morningstar GIF OS EUR Moderate Allocation – Global, these limits apply. The generic funds referenced in this page, which are not
registered for distribution in Continental Europe, are shown only to provide supplemental information on the AuM of the team referenced in this
material. Not all share classes of the fund are the same nor do they necessarily suit every investor. Please check the most recent version of the fund
prospectus in relation to the criteria for the individual share classes and contact your local Invesco office. Please also refer to the important
information slides at the end of the document.
4
Fixed interest AUM breakdown
Asset breakdown
€m
Currency breakdown
€m
Investment grade credit
12,899.5
Sterling
14,927.5
High yield
13,187.6
Euro
11,464.7
Government bonds
3,320.7
US$
7,715.2
Equity
3,674.9
Other
501.0
Cash & derivatives
1,510.8
Total
34,608.4
Other
14.8
Total
34,608.4
Source: Invesco Perpetual as at 31 March 2017. Figures may not sum due to rounding.
5
Our approach
We will only take risk if we expect to be rewarded
Active
We do not track indices. No minimum holding requirements
at stock, sector or country level
Flexible and pragmatic
Our approach is informal, iterative and flexible. We have
flexible funds which enable us to reduce risk when we are
cautious
Market oriented
We have a strong network of trading counterparties in
London and other financial centres
6
We have a four stage investment process
Macro Analysis
Credit Analysis
Value
assessment and
security selection
Portfolio
construction and
risk management
For illustrative purposes only.
7
Stage 1 is macro analysis
 The aim of our macro analysis is to
– Develop a view of the economic outlook
– Anticipate broad trends in yields and spreads
 We use a wide variety of sources to identify key economic themes
–
–
–
–
–
Primary data sources (via Bloomberg and Macrobond)
Sell side strategists and economists
Invesco economists (team resources and John Greenwood)
Henley equity colleagues
Company management
 We produce frequent written analysis and meet regularly to discuss
market evolution, economic data and credit research
–
–
–
–
Weekly team meeting
Monthly strategy meeting
Ad hoc economic and credit meetings
Written analysis includes daily market reports, weekly market and economic
reports, company specific reports and meeting summaries
For illustrative purposes only.
8
Stage 2 is credit analysis
Team responsibilities and idea generation
 Our seven credit analysts cover industrial sectors across high yield and
investment grade
 Idea generation is the responsibility of analysts and fund managers.
Ideas come from:
– Expected issuance
– Financial reporting
– A change in credit spread
– Change in business outlook
– M&A activity
– Governance concerns
– Change in credit rating
– New research
– Meetings with management
– Views from Henley equity colleagues
For illustrative purposes only.
9
Analyst sector coverage
Asad
Bhatti
Rhys
Davies
Julien
Eberhardt
Emerging
markets
Chemicals
Telecom
Banks: US,
Europe, Japan
Media
Metals &
mining
Autos
Edward
Craven
Tom
Hemmant
Jessica
Svantesson
Herin
Shah
Thomas
Moore
Utilities
Infrastructure
Insurance
Retail
Energy
Transportation
Other
financials
Consumer
Gaming
Technology
Infrastructure
Technology
Rental
Leisure
Paper &
packaging
Services
Construction
Distressed
Building
materials
Construction
Source: Invesco Perpetual.
10
Banks: UK,
Nordic,
Australia
Food
Credit analysis encompasses a range of inputs
Ratings
Operational
Balance sheet
Cashflow
Protection
Moody’s
Management
Capital structure
EBITDA
Covenants
S&P
Competitive position
Leverage
Capital expenditure
Assets values
Fitch
Business outlook
Equity
Working capital
Franchise
Cash
Interest coverage
Banks
Debt mix / maturity
Source: Invesco Perpetual.
11
Stage 3 is value assessment and security selection
 Value assessment is the fund manager’s judgement
 We consider the risk and return profile of a bond relative to
cash and government bonds as well as corporate bonds
 Each bond selected on merit (no index tracking)
 We seek to understand why an opportunity may exist
12
Stage 4 is portfolio construction and risk management
 We maintain well diversified funds but can express conviction
 Bond weightings in portfolios are a function of the risk and return
of a bond in the context of the fund
 We manage portfolio risk from the perspective of:
– Individual positions (price, spread, yield, reporting, news flow, research)
– Overall credit risk (rating, sector and issuer exposure)
– Liquidity
– Duration
– VaR and performance contribution (using Barclays Point)
 We are also closely monitored:
– Investment Oversight Team with a dedicated fixed income risk specialist
– CIO Challenge Process (meeting with CIO and Head of Investment Oversight Team)
– Independent Risk Function (IRF) which reports to the boards of Management
Companies
– Compliance (investment and borrowing powers monitoring etc. using Charles River
Development pre-trade compliance system*, prospectus review)
– Internal Audit (systems/trading monitoring)
*External systems used for portfolio performance and compliance purposes.
13
Liquidity monitoring and management is critical
In response to poor secondary market liquidity, we have:
 Made the funds more liquid
 Expanded our trading desk
– Dominic de Ban, 28 years experience
– Dan Dewar, 23 years experience
– Gareth Dunsmore, 14 years experience
 Begun using alternative trading venues
– Tradeweb, Market Axess, Trumid, Bloomberg, Algomi
 Invested in liquidity monitoring (via the IRF and Barclays Point)
 But we can still trade
– Managing liquidations and seizing opportunities
Source: Invesco Perpetual as at 31 March 2017. Years experience subject to rounding.
14
A significant part of the market remains on
negative yield
Percentage of negative yielding assets in global fixed income market (%)
25
20
15
10
5
0
Dec 12
Jun 13
Dec 13
Jun 14
Dec 14
Jun 15
Dec 15
Jun 16
Dec 16
Percent of negative yielding assets
Source: BofA Merrill Lynch as at 31 March 2017. Based on the BoAML Global Fixed Income Index (GFIM). Effective yield measured.
15
YTD and 2016 Market snapshot
Credit
YTD Return
(%)
2016 Return
(%)
Pre-12
August (%)
Post-12
August (%)
Yield
(%)
Modified
Duration
Bunds
-0.80
4.07
6.70
-2.47
-0.08
7.34
5yr Bund (2.0% 2022)
-0.46*
1.08*
2.20*
-1.13*
-0.45
4.59**
10yr Bund (6.5% 2027)
-1.62*
1.25*
6.20*
-4.66*
0.30
8.12**
30yr Bund (2.5% 2046)
-3.81*
12.20*
27.40*
-11.93*
1.11
22.01**
10yr OAT (2.75% 2027)
-3.27*
3.41*
9.82*
-5.90*
1.07
9.23**
10yr BTP (6.5% 2027)
-3.95*
-3.17*
4.27*
-7.28*
2.34
7.94**
€ Non Financial Corporates
0.07
5.45
7.40
-1.82
0.93
5.57
€ Financial Corporates
0.29
2.86
3.98
-1.08
0.60
4.65
$ IG Corporates
1.42
5.96
9.14
-2.91
3.33
6.87
European Ccy High Yield
1.93
9.26
6.99
2.13
4.08
4.00
CoCos
4.48
7.33
3.42
3.77
6.45
3.69
Source: Invesco Perpetual, Bloomberg, 31 March 2017, unless otherwise noted. $ = USD. Indices are BoAML. Return data in local currency. *Price return.
**Bloomberg field: YAS_MOD_DUR. This is not financial advice and not a recommendation to buy / hold / sell these securities. There is no guarantee that
Invesco will keep these securities in its funds in the future
16
ECB bond purchasing programme
 Asset Purchase Programme extended to end-2017 at least,
but at reduced rate of €60bn per month from April 2017
 Non-bank investment grade corporate bonds eligible
 Maturity range 1-30yrs
 No minimum yield level
Source: Invesco Perpetual as at 31 March 2017.
17
Bund market – high duration and low yield
Source: Macrobond, BoAML, 4 April 2017. An investment cannot be made directly into this index.
18
Core yields low
Source: Macrobond, Bloomberg, 31 March 2017.
19
Bund yield curve and ‘peripheral’ spreads
German yield curve (%)
2.00
1.00
0.00
-1.00
31/03/2017
08/07/2016
30yr
20yr
15yr
3m
6m
1yr
2yr
3yr
4yr
5yr
6yr
7yr
8yr
9yr
10yr
-2.00
31/12/2015
Source: Macrobond, Bloomberg, 4 April 2017. 8 July 2016 marked the all time low for the 10-year Bund yield (-0.19%).
20
Spread remains near long-term median
Source: Macrobond, Bloomberg, 4 April 2017. An investment cannot be made directly into these indices.
21
Euro investment grade corporates
Yield and spread
Source: Macrobond, BoAML, 4 April 2017. Yield is to maturity. Spread is Government OAS. An investment cannot be made directly into these indices.
22
European currency high yield corporates
Yield and spread
Source: Macrobond, BoAML, 31 March 2017. Yield is to maturity. Spread is Government OAS. An investment cannot be made directly into these indices.
23
Contingent Capital
Strong recovery in recent months
Source: Macrobond, BoAML, 4 April 2017. An investment cannot be made directly into these indices.
24
The mix of investment income is changing
Equity income relatively high
FTSE All Share Dividend Yield - 10 Yr Gilt Yield (bps)
Euro Stoxx Dividend Yield - 10 Yr Bund Yield (bps)
400
600
300
500
200
400
300
100
200
0
100
-100
0
-200
-100
-200
-300
-300
-400
-500
1998
-400
2002
2006
2010
2014
FTSE AS 12mth Dividend Yield - 10 Yr Gilt Yield
-500
1998
2002
2010
2014
Euro Stoxx 50 Dividend Yield - 10 Yr Bund Yield
Source: Bloomberg as at 31 March 2017. An investment cannot be made directly into these indices.
25
2006
Invesco Pan European High Income Fund
Invesco Pan European High Income Fund
Key features
 An actively managed fixed income fund that can allocate up to
30% in equities*
 Uses high yield and higher yielding investment grade for income
and government bonds for relative security
 Asset allocation and fixed income managed by Paul Read and
Paul Causer, equities managed by Stephanie Butcher (member
of the European equities team)
*Whilst the Prospectus allows for more flexibility, historically allocation to equities has been less than 30% which allows the fund to
be included in the Morningstar GIF OS EUR Cautious Allocation sector. For the full objectives and investment policy please consult the
current prospectus.
27
Invesco Pan European High Income Fund
Asset allocation
Positioning of fund (%)
100
1000
90
900
80
800
70
700
60
600
50
500
40
400
30
300
20
200
10
100
0
HY
IG
Liquidity
Equity
Jan 17
BoAML Euro High Yield Index spread, bps (RHS)
Source: Invesco, BoAML. Data to 31 March 2017. Liquidity comprises cash and investment grade government bonds.
Portfolio characteristics are subject to change without notice. An investment cannot be made directly into this index.
28
Oct 16
Jul 16
Apr 16
Jan 16
Oct 15
Jul 15
Apr 15
Jan 15
Oct 14
Jul 14
Apr 14
Jan 14
Oct 13
Jul 13
Apr 13
Jan 13
Oct 12
Jul 12
Apr 12
Jan 12
Oct 11
Jul 11
Apr 11
Jan 11
0
Invesco Pan European High Income Fund
Investment themes (%)
Mar
16
Apr
16
May
16
Jun
16
Jul
16
Aug
16
Sep
16
Oct
16
Nov
16
Dec
16
Jan
17
Feb
17
Mar
17
14.9
16.1
13.5
13.9
13.9
15.4
15.7
12.6
12.9
14.9
16.2
16.6
15.7
Cash
3.2
3.0
0.7
2.7
3.3
5.8
6.0
4.2
4.1
6.6
8.1
8.3
7.7
Bonds maturing within 1 year*
0.5
0.8
0.5
0.3
0.6
0.0
1.8
1.8
2.0
3.7
3.4
3.3
3.3
11.2
12.2
12.4
10.9
10.0
9.6
7.9
6.5
6.9
4.6
4.7
4.9
4.7
Defensive
7.1
6.2
6.2
6.6
6.5
6.4
6.4
8.7
8.4
8.1
7.8
7.6
9.4
Investment grade
7.1
6.2
6.2
6.6
6.1
5.9
5.9
7.6
8.0
7.6
7.4
7.2
8.6
Covered and senior banks
0.0
0.0
0.0
0.0
0.5
0.4
0.4
1.0
0.4
0.4
0.4
0.4
0.8
57.3
57.2
59.2
59.0
59.2
57.8
57.6
57.8
57.3
56.5
56.0
55.8
54.8
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.0
0.2
0.2
0.2
13.5
13.6
14.2
13.9
13.8
13.6
12.8
13.0
13.0
13.0
13.3
13.6
13.6
2.8
2.8
2.8
2.8
2.8
2.8
2.8
3.3
3.3
3.6
3.7
3.6
3.7
Corporate high yield (inc. EM)
29.0
28.9
29.9
29.9
30.2
29.2
29.8
29.3
28.8
27.9
27.2
27.1
26.4
Hybrids and convertibles
12.0
11.8
12.4
12.4
12.3
12.1
12.2
12.2
12.1
12.0
11.6
11.3
10.9
Equities
20.6
20.7
21.1
20.6
20.7
20.8
20.6
21.2
21.6
20.8
20.4
20.3
20.4
Liquidity
Government**
Credit risk
‘Peripheral’ government
Subordinated banks
Subordinated insurers
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. Excludes derivatives and therefore may add to more or less than 100%.
*Bonds with less than a year to maturity are excluded from other categories to prevent double counting. **Government includes agency & supranational.
Portfolio characteristics are subject to change without notice.
29
Invesco Pan European High Income Fund
Credit risk themes (%)
% of fund
35
30
25
20
15
10
5
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
14
14
14
14
14
14
14
14
15
15
15
15
15
15
15
15
15
15
15
15
16
16
16
16
16
16
16
16
16
16
16
16
17
17
17
0
Peripheral governments
Subordinated banks
Corporate high yield
Hybrids & convertibles
Source: Invesco as at 31 March 2017.
30
Subordinated insurers
Invesco Pan European High Income Fund
VaR (%)
6
5
4
3
2
1
Jan 17
Oct 16
Jul 16
Apr 16
Jan 16
Oct 15
Jul 15
Apr 15
Jan 15
Oct 14
Jul 14
Apr 14
Jan 14
Oct 13
Jul 13
Apr 13
Jan 13
Oct 12
Jul 12
Apr 12
Jan 12
Oct 11
0
Source: Invesco as at 31 March 2017. On 30 August 2016 the VaR provider was changed from Statpro to Risk Metrics. The change
resulted in a 82bps decline in the VaR. The VaR is calculated daily to a 99% confidence interval, with a 20 business day holding period
and an effective observation period of 2 years. VaR = Value at risk.
31
Invesco Pan European High Income Fund
Performance contribution – 12 months to 31 March 2017
Total portfolio
1166
Equities
418
788
Duration
-21
Credit
US dollar
-42
Investment grade corporate
56
Euro
-2
High Yield
347
Sterling
23
Subordinated financials
222
Corporate hybrids
156
Other
0
Currency
-12
US dollar
-14
Sterling
-10
Other
Intraday
Other (inc EM & CDS)
28
2
10
Past performance is not a guide to future returns.
Source: Barclays Point, Invesco as at 31 March 2017. Figures may not sum due to rounding. Any difference between the total portfolio level and its
components is ‘residual’ and limited to a few basis points. Performance quoted is pre-fees. The contribution figures are estimates and should be used
for indicative purposes only. Data cleansing and retrospective information availability may cause changes. Portfolio characteristics are subject to change
without notice.
32
Invesco Pan European High Income Fund
Fixed income issue and issuer exposure
Top 10 issues
% of fund
Top 10 issuers
% of fund
US 2.5% 2046
1.62
US Treasury
3.23
UK 1% 2017
1.50
Federal Republic of Germany
2.50
Germany 1% 2025
1.39
EDF
1.68
US 0.875% 2017
1.07
Lloyds
1.50
Tesco 6.15% 2037
1.03
UK Treasury
1.50
Novartis 0% 2021
0.77
Virgin Media
1.37
Origin 4% 2074
0.69
Novartis
1.35
Apple 2.4% 2023
0.66
HSBC
1.28
EDF 5.25% perp
0.62
Unity
1.25
Belden 5.5% 2023
0.62
Tesco
1.25
Total top 10 bond issues
9.98
Total top 10 bond issuers
16.91
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. This is not financial advice and not a recommendation
to buy / hold / sell these securities. There is no guarantee that Invesco will hold these securities within its funds in the future.
33
Invesco Pan European High Income Fund
Subordinated bank exposure
Sector
% of fund
Top 5 positions
Yield (%)
% of fund
Lower Tier 2
3.23
Lloyds 7% perp (AT1)
5.70
0.60
Tier 2 Cocos
1.21
BBVA 9% perp (AT1)
4.09
0.50
Tier 1
0.58
Lloyds 6.375% perp (AT1)
4.72
0.48
Additional Tier 1
8.40
HSBC 6% perp (AT1)
4.54
0.46
Core Capital Deferred Securities
0.21
Deutsche Bank 6.0% perp (AT1)
6.64
0.45
Total
13.63
Total
2.50
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. Yield is based on in-house calculation. Where securities are mentioned, they do
not necessarily represent a specific portfolio holding and do not constitute a recommendation to purchase or sell. This is not investment advice for buying / holding
/ selling shares of the above mentioned companies. There is no guarantee that Invesco will hold these securities within its funds in the future. Top 5 positions
exclude bonds with <1year to maturity.
34
Invesco Pan European High Income Fund
High Yield and Corporate Hybrid exposure
High Yield Credit Rating*
BB
% of fund
Top 5 High Yield positions
Yield (%)
% of fund
15.76
Tesco 6.15% 2037
5.95
1.03
B
7.43
Belden 5.5% 2023
4.44
0.62
CCC
1.61
Wind 4% 2020
3.42
0.54
Anglo American 3.25% 2023
2.03
0.46
Unity 6.25% 2029
4.73
0.43
Total
24.81
Total
Hybrid Credit Rating
% of fund
Top 5 Hybrid positions
3.09
Yield (%)
% of fund
A
0.34
Origin 4% 2074
3.29
0.69
BBB
5.34
EDF 5.25% perp
5.42
0.62
BB
5.02
BHP Billiton 4.75% 2076
2.11
0.61
NR
0.07
RWE 2.75% 2075
3.28
0.59
Accor 4.125% perp
3.15
0.52
Total
10.76
Total
3.05
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. Where securities are mentioned, they do not necessarily represent a specific
portfolio holding and do not constitute a recommendation to purchase or sell. This is not investment advice for buying / holding / selling shares of the above
mentioned companies. There is no guarantee that Invesco will hold these securities within its funds in the future. Top 5 positions exclude bonds with <1year to
maturity. *Excludes EM and non-rated bonds.
35
Invesco Pan European High Income Fund
Top 10 equity holdings
Top 10 equity holdings
% of fund
Dividend yield %
Roche
0.90
3.33
Novartis
0.82
3.82
ING
0.68
4.90
Caixabank
0.67
3.45
Orange
0.61
4.42
AP Moeller
0.57
1.94
Deutsche Telekom
0.57
3.97
Ahold
0.57
3.15
Deutsche Post
0.56
3.43
BNP
0.55
4.45
Total top 10 equity holdings
6.51
Weighted portfolio dividend yield
4.09
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. This is not financial advice and not a recommendation
to buy / hold / sell these securities. There is no guarantee that Invesco will hold these securities within its funds in the future.
36
Invesco Pan European High Income Fund
Performance (A QD share class %)
Cumulative returns, %
YTD
1 year
3 years
5 years
Since
(28 Dec 2007)*
Invesco Pan European High Income Fund
2.66
9.81
14.59
51.29
110.99
Mstar GIFS EUR Cautious Allocation
1.08
3.51
6.25
14.15
20.60
Rank
8/92
3/87
6/77
1/66
1/38
1
1
1
1
1
Invesco Pan European High Income Fund
n/a
n/a
4.6
8.6
8.4
Mstar GIFS EUR Cautious Allocation
n/a
n/a
2.0
2.7
2.0
Quartile
Annualised returns, %
Calendar year returns, %
2008
2009
2010
2011
2012
2013
2014
2015
2016
Invesco Pan European High Income Fund
-30.3
61.6
13.7
-3.0
27.0
12.7
7.3
2.3
5.3
-7.2
9.1
3.4
-3.3
7.9
2.7
3.4
1.4
1.3
4
1
1
3
1
1
1
1
1
Mstar GIFS EUR Cautious Allocation
Quartile
Past performance is not a guide to future returns.
Data as at 31 March 2017. Fund performance figures are shown in euros, inclusive of reinvested income and net of the ongoing charges and portfolio transaction
costs. The figures do not reflect the entry charge paid by individual investors. Sector average performance is calculated on an equivalent basis. *Invesco Pan
European High Income Fund was launched on 31 March 2006. However, the fund changed strategy on 28 December 2007 so performance figures are only shown
since that date.
Source: © Morningstar 2017. All rights reserved. Use of this content requires expert knowledge. It is to be used by specialist institutions only. The information
contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied, adapted or distributed; and (3) is not warranted to be
accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information,
except where such damages or losses cannot be limited or excluded by law in your jurisdiction. Past financial performance is no guarantee of future results.
37
Invesco Euro Corporate Bond Fund
Invesco Euro Corporate Bond Fund
Key features
 Euro denominated fund
 Minimum 70% investment grade credit
 Up to 30% in a combination of high yield and government bonds
 No duration restrictions
 Little or no currency risk
These key features may be a mixture of internal, sector and prospectus guidelines. For the full objectives and investment policy please
consult the current prospectus.
39
Invesco Euro Corporate Bond Fund
Investment themes (%)
Mar
16
Apr
16
May
16
Jun
16
Jul
16
Aug
16
Sep
16
Oct
16
Nov
16
Dec
16
Jan
17
Feb
17
Mar
17
14.8
15.4
15.2
12.9
12.1
11.4
15.1
14.9
12.3
15.2
16.0
15.6
14.0
Cash
9.1
7.6
8.1
6.0
4.2
3.5
4.7
1.7
0.8
3.7
3.8
3.0
5.7
Bonds maturing within 1 year*
4.3
4.5
4.2
4.6
4.6
4.6
6.4
6.5
6.2
6.0
6.3
6.8
2.8
Government**
1.4
3.3
2.9
2.2
3.4
3.4
4.1
6.7
5.3
5.5
5.9
5.9
5.5
Defensive
51.2
51.0
51.9
54.4
54.7
54.8
51.4
50.5
50.9
49.0
47.6
48.7
48.2
Investment grade corporates
40.5
39.8
41.0
43.6
44.1
44.3
41.9
41.5
42.1
40.7
40.5
42.0
41.0
Covered and senior banks
10.7
11.2
10.8
10.8
10.6
10.5
9.5
9.0
8.7
8.3
7.2
6.8
7.1
Credit risk
34.0
33.5
33.0
33.0
33.5
34.1
33.6
34.4
36.5
36.0
36.4
35.9
37.8
‘Peripheral’ government
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.4
0.8
0.8
0.8
0.8
0.9
Subordinated banks
9.8
10.1
9.7
9.6
9.9
10.1
9.2
9.5
10.3
10.7
10.3
10.4
11.0
Subordinated insurers
7.9
7.3
7.0
6.8
6.9
7.1
6.9
6.9
7.1
7.1
7.4
7.4
7.8
Corporate high yield
6.2
6.0
6.1
6.0
6.0
6.0
6.3
6.46
6.2
6.2
6.4
6.4
6.7
10.1
10.1
10.1
10.7
10.7
10.9
11.2
11.2
12.0
11.3
11.5
10.9
11.5
Liquidity
Hybrids and convertibles
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. Excludes derivatives and therefore may add to more or less than 100%.
*Bonds with less than a year to maturity are excluded from other categories to prevent double counting. **Government includes agency & supranational.
Portfolio characteristics are subject to change without notice.
40
Invesco Euro Corporate Bond Fund
Credit exposure
Rolling 5 years
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
Cash+AAA
AA
A
BBB
High Yield
Mar 17
Sep 16
Mar 16
Sep 15
Mar 15
Sep 14
Mar 14
Sep 13
Mar 13
Sep 12
Mar 12
0%
Other*
Source: Invesco as at 31 March 2017. *Other is un-rated, CDS and futures. Portfolio characteristics are subject to change without notice.
41
Invesco Euro Corporate Bond Fund
Credit risk themes (%)
% of fund
16
14
12
10
8
6
4
2
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
14
14
14
14
14
14
14
14
15
15
15
15
15
15
15
15
15
15
15
15
16
16
16
16
16
16
16
16
16
16
16
16
17
17
17
0
Peripheral governments
Subordinated banks
Corporate high yield
Hybrids & convertibles
Source: Invesco as at 31 March 2017.
42
Subordinated insurers
Invesco Euro Corporate Bond Fund
Country and currency breakdown
Country breakdown
Pre hedged currency breakdown
35
100
90
30
80
70
20
% holding
15
10
5
60
50
40
30
20
Cash
EUR
GBP
Feb 17
Dec 16
Oct 16
Aug 16
Jun 16
Apr 16
Feb 16
Dec 15
Oct 15
Aug 15
Jun 15
Apr 15
Italy
Switzerland
0
Feb 15
Feb 17
Dec 16
Oct 16
Aug 16
Jun 16
Apr 16
Feb 16
Dec 15
Oct 15
Aug 15
Germany
Spain
United States
10
Dec 14
France
Netherlands
United Kingdom
Jun 15
Apr 15
Feb 15
Dec 14
Oct 14
0
Oct 14
% holding
25
USD
Source: Invesco as at 31 March 2017. Cash in pre-hedged currency breakdown mostly base currency. Portfolio characteristics are subject to change without notice.
43
Invesco Euro Corporate Bond Fund
Modified duration
Modified duration
Source: Invesco as at 31 March 2017.
44
BoAML Euro Corp Index modified duration
Apr 16
Apr 15
Apr 14
Apr 13
Apr 12
Apr 11
Apr 10
Apr 09
Apr 08
Apr 07
Apr 06
6.5
6.0
5.5
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Invesco Euro Corporate Bond Fund
Duration profile
Portfolio breakdown by duration (%)
30
25
20
15
10
5
Index
15+ years
7-10 years
5-7 years
3-5 years
10-15 years
Fund
1-3 years
< 1 year
0
Source: Invesco, Barclays Point as at 31 March 2017. Cash included in <1 year, index used for comparison is Barclays Euro Credit
Corporate Index.
45
Duration Times Spread
Option Adjusted Spread Duration
Mar 17
Dec 16
Sep 16
Jun 16
Mar 16
Dec 15
Sep 15
Jun 15
Mar 15
Dec 14
Sep 14
0
Jun 14
0
Mar 14
100
Dec 13
5
Sep 13
200
Jun 13
10
Mar 13
300
Dec 12
15
Sep 12
400
Jun 12
20
Mar 12
500
Dec 11
25
Sep 11
600
Jun 11
30
Mar 11
700
Dec 10
35
Basis points
Invesco Euro Corporate Bond Fund
Risk measures
Option Adjusted Spread (RHS)
Source: Invesco as at 31 March 2017. Spread duration measures the change in the price of a bond given a 1% change in its spread.
Spread times duration is a risk measure which measures the sensitivity to a change in relative spread (spread duration x spread).
46
Invesco Euro Corporate Bond Fund
VaR (%)
6
5
4
3
2
1
Jan 17
Oct 16
Jul 16
Apr 16
Jan 16
Oct 15
Jul 15
Apr 15
Jan 15
Oct 14
Jul 14
Apr 14
Jan 14
Oct 13
Jul 13
Apr 13
Jan 13
Oct 12
Jul 12
Apr 12
Jan 12
Oct 11
0
Source: Invesco as at 31 March 2017. On 30 August 2016 the VaR provider was changed from Statpro to Risk Metrics. The change
resulted in a 98bps decline in the VaR. The VaR is calculated daily to a 99% confidence interval, with a 20 business day holding period
and an effective observation period of 2 years. VaR = Value at risk.
47
Invesco Euro Corporate Bond Fund
Performance contribution – 12 months to 31 March 2017
Total portfolio
Duration
386
-157
Credit
548
Investment grade corporate
176
High Yield
72
27
US dollar
-73
Senior bank
Euro
-85
Subordinated financials
Sterling
1
Currency
-7
US dollar
-9
Sterling
-1
Intraday
3
187
Corporate hybrids
87
Convertibles
-1
Past performance is not a guide to future returns.
Source: Barclays Point, Invesco as at 31 March 2017. Figures may not sum due to rounding. Any difference between the total portfolio level and its
components is ‘residual’ and limited to a few basis points. Performance quoted is pre-fees. The contribution figures are estimates and should be used
for indicative purposes only. Data cleansing and retrospective information availability may cause changes. Portfolio characteristics are subject to change
without notice.
48
Invesco Euro Corporate Bond Fund
Fixed income issue and issuer exposure
Top 10 issues
% of fund
Top 10 issuers
% of fund
Germany 2.5% 2046
3.40
Federal Republic of Germany
3.40
Allianz 3.375% perp
1.40
Allianz
2.56
Walgreens 2.125% 2026
1.37
AT&T
2.41
Berkshire Hathaway 1.625% 2035
1.35
Apple
2.19
BHP Billiton 4.75% 2076
1.27
US Treasury
2.10
Unicredit FRN 2020
1.27
Intesa
2.04
Tesco 6.15% 2037
1.23
HSBC
1.98
Deutsche 6% perp
1.14
Deutsche Bank
1.88
US 2.5% 2/2046
1.11
Unicredit
1.84
Barclays 6.5% perp
1.11
Total
1.76
Total top 10 bond issues
14.66
Total top 10 bond issuers
22.17
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. This is not financial advice and not a recommendation
to buy / hold / sell these securities. There is no guarantee that Invesco will hold these securities within its funds in the future.
49
Invesco Euro Corporate Bond Fund
Subordinated bank exposure
Sector
% of fund
Top 5 positions
Yield (%)
% of fund
Lower Tier 2
3.74
Deutsche Bank 6% perp (AT1)
6.64
1.14
Additional Tier 1
7.23
Barclays 6.5% perp (AT1)
5.70
1.11
Rabobank 5.5% perp (AT1)
4.38
0.92
HSBC 5.25% perp (AT1)
4.92
0.89
HSBC 4.25% perp (LT2)
4.00
0.70
Total
10.97
Total
4.76
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. Yield is based on in-house calculation. Where securities are mentioned, they do
not necessarily represent a specific portfolio holding and do not constitute a recommendation to purchase or sell. This is not investment advice for buying / holding
/ selling shares of the above mentioned companies. There is no guarantee that Invesco will hold these securities within its funds in the future. Top 5 positions
exclude bonds with <1year to maturity.
50
Invesco Euro Corporate Bond Fund
High Yield and Corporate Hybrid exposure
High Yield Credit Rating
% of fund
Top 5 High Yield positions
Yield (%)
% of fund
BB
5.37
Tesco 6.15% 2037
5.95
1.23
B
1.00
Ziggo 3.75% 2025
3.28
0.52
CCC
0.33
Owens-Illinois 3.125% 2024
3.10
0.45
Total
6.70
Telecom Italia 5.25% 2055
5.19
0.39
XPO 5.75% 2021
4.42
0.34
Total
2.93
% of fund
Top 5 Hybrid positions
Yield (%)
% of fund
A
1.15
BHP Billiton 4.75% 2076
1.27
1.27
BBB
7.60
GDF Suez 3% perp
0.77
0.77
BB
2.76
Orange 4.25% perp
0.70
0.70
Total 2.625% perp
0.62
0.62
Telefonica 6.5% perp
0.57
0.57
Hybrid Credit Rating
Total
11.51
Total
3.94
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. Where securities are mentioned, they do not necessarily represent a specific
portfolio holding and do not constitute a recommendation to purchase or sell. This is not investment advice for buying / holding / selling shares of the above
mentioned companies. There is no guarantee that Invesco will hold these securities within its funds in the future. Top 5 positions exclude bonds with <1year to
maturity.
51
Invesco Euro Corporate Bond Fund
US$ exposure
US$ bond exposure breakdown
Government
Investment Grade
% of fund
2.10
10.27
Top 10 US$ positions
Average
Rating
Yield
(%)
% of
fund
BB
5.95
1.23
AAA
3.05
1.11
AA
2.93
1.00
AAA
3.05
0.99
AA
2.76
0.70
HSBC 4.25% 2024
A
4.00
0.70
Merck 2.8% 2023
A
2.74
0.69
Apple 3.45% 2045
AA
4.04
0.62
Novartis 4.4% 2044
AA
3.98
0.60
Apple 2.4% 2023
AA
2.70
0.54
Tesco 6.15% 2037
US
2.5
2/2046
High Yield
1.46
Novartis 3.4% 2024
Bank LT2
0.84
US
Bank AT1
1.50
Exxon 3.176% 2024
Total
16.17
2.5
Total
5/2046
8.19
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. Where securities are mentioned, they do not necessarily represent a specific portfolio
holding and do not constitute a recommendation to purchase or sell. This is not investment advice for buying / holding / selling shares of the above mentioned
companies. There is no guarantee that Invesco will hold these securities within its funds in the future.
52
Invesco Euro Corporate Bond Fund
Performance (A Acc share class %)
Cumulative returns, %
YTD
1 year
3 years
5 years
Since launch
(31 Mar 2006)
Invesco Euro Corporate Bond Fund
0.56
2.56
6.82
24.35
75.17
Mstar GIFS EUR Corporate Bond
0.35
2.02
7.86
19.98
41.49
38/192
71/190
129/169
42/141
1/68
1
2
4
2
1
Invesco Euro Corporate Bond Fund
n/a
n/a
2.2
4.5
5.2
Mstar GIFS EUR Corporate Bond
n/a
n/a
2.6
3.7
3.2
Rank
Quartile
Annualised returns, %
Calendar year returns, %
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Invesco Euro Corporate Bond Fund
-0.7
-6.6
30.2
6.3
-1.4
20.3
3.2
8.0
-1.7
2.5
Mstar GIFS EUR Corporate Bond
-1.1
-7.8
15.6
4.2
1.0
11.8
2.3
6.7
-0.6
3.5
2
3
1
1
4
1
1
2
4
4
Quartile
Past performance is not a guide to future returns.
Data as at 31 March 2017. Fund performance figures are shown in euros, inclusive of reinvested income and net of the ongoing charges and portfolio transaction
costs. The figures do not reflect the entry charge paid by individual investors. Sector average performance is calculated on an equivalent basis.
Source: © Morningstar 2017. All rights reserved. Use of this content requires expert knowledge. It is to be used by specialist institutions only. The information
contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied, adapted or distributed; and (3) is not warranted to be
accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information,
except where such damages or losses cannot be limited or excluded by law in your jurisdiction. Past financial performance is no guarantee of future results.
53
Invesco Global Total Return (EUR)
Bond Fund
Invesco Global Total Return (EUR) Bond Fund
Key facts
 Unconstrained fund – governments, credit, high yield
 Can be 100% in cash and near cash1
 No duration restrictions – can be short duration
 Can take active currency positions including via derivatives
 Launched September 2010
These key features may be a mixture of internal, sector and prospectus guidelines. For the full objectives and investment policy please consult the
current prospectus. 1Includes short-term bonds and money market instruments.
55
Invesco Global Total Return (EUR) Bond Fund
Asset allocation
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
Cash
Government bonds
IG Corporates
Sub IG
Source: Invesco as at 31 March 2017. Excludes derivatives. Portfolio characteristics are subject to change without notice.
56
Mar 17
Sep 16
Mar 16
Sep 15
Mar 15
Sep 14
Mar 14
Sep 13
Mar 13
Sep 12
Mar 12
Sep 11
Mar 11
Sep 10
0%
Invesco Global Total Return (EUR) Bond Fund
Investment themes (%)
Mar
16
Apr
16
May
16
Jun
16
Jul
16
Aug
16
Sep
16
Oct
16
Nov
16
Dec
16
Jan
17
Feb
17
Mar
17
Liquidity
41.1
40.5
41.8
47.9
47.2
50.5
53.4
50.8
48.7
48.5
48.8
52.2
53.5
Cash
10.0
3.7
6.9
15.4
10.6
14.7
13.2
6.1
2.1
2.4
8.1
11.1
12.2
1.0
1.0
1.1
1.1
0.0
0.0
5.4
5.6
9.0
9.2
6.0
5.8
5.5
Government
30.1
35.7
33.8
31.5
36.7
35.8
34.7
39.1
37.6
36.9
34.8
35.3
35.7
Defensive
10.8
10.6
9.4
9.3
10.0
9.9
9.8
9.8
9.9
9.8
8.8
9.0
7.1
Investment grade corporates
10.8
10.6
9.4
9.3
9.3
9.2
9.1
9.1
9.2
9.1
8.1
8.2
6.4
0.0
0.0
0.0
0.0
0.7
0.7
0.7
0.7
0.7
0.7
0.7
0.7
0.7
48.2
48.8
49.0
43.3
43.4
40.2
37.1
39.0
41.0
41.9
42.4
39.3
39.6
2.2
2.1
0.5
0.2
0.4
0.4
0.4
1.1
2.1
2.1
2.9
2.4
2.6
18.9
18.9
19.9
18.8
19.4
17.7
17.7
18.7
19.1
19.7
19.6
17.3
15.8
1.3
1.3
1.4
1.4
1.4
1.4
1.4
1.5
1.5
1.5
1.5
1.5
1.3
17.0
17.9
18.1
14.8
14.2
12.6
12.4
12.4
12.8
13.1
12.9
12.8
10.8
Hybrids and convertibles
8.6
8.5
9.0
7.9
7.9
8.0
5.1
5.1
5.3
5.3
5.3
5.0
4.3
Emerging markets
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
4.9
Bonds maturing within 1 year*
Covered and senior banks
Credit risk
‘Peripheral’ government
Subordinated banks
Subordinated insurers
Corporate high yield
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. Excludes derivatives and therefore may add to more or less than 100%. *Bonds with
less than a year to maturity are excluded from other categories to prevent double counting. Portfolio characteristics are subject to change without notice.
57
Invesco Global Total Return (EUR) Bond Fund
Credit risk themes (%)
% of fund
30
25
20
15
10
5
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
14
14
14
14
14
14
14
14
15
15
15
15
15
15
15
15
15
15
15
15
16
16
16
16
16
16
16
16
16
16
16
16
17
17
0
Peripheral governments
Subordinated banks
Subordinated insurers
Corporate high yield
Hybrids & convertibles
Emerging markets
Source: Invesco as at 31 March 2017.
58
Invesco Global Total Return (EUR) Bond Fund
Country and currency breakdown
Country breakdown
Pre hedged currency breakdown
100
35
90
30
80
70
20
% holding
15
10
5
60
50
40
30
20
10
Cash
EUR
GBP
USD
Feb 17
Dec 16
Oct 16
Aug 16
Jun 16
Apr 16
Feb 16
Dec 15
Oct 15
Aug 15
Jun 15
Apr 15
Italy
Switzerland
Australia
Feb 15
Feb 17
Dec 16
Oct 16
Aug 16
Jun 16
Apr 16
Feb 16
Dec 15
Oct 15
Aug 15
Germany
Spain
United States
0
Dec 14
France
Netherlands
United Kingdom
Jun 15
Apr 15
Feb 15
Dec 14
Oct 14
0
Oct 14
% holding
25
Other
Source: Invesco as at 31 March 2017. Cash in pre-hedged currency breakdown mostly base currency. Portfolio characteristics are subject to change without notice.
59
Invesco Global Total Return (EUR) Bond Fund
Portfolio duration and its composition
Currency bloc durations
18
16
14
12
10
8
6
4
2
0
Total duration
European Euro
Source: Invesco, Barclays Point as at 31 March 2017.
60
Pounds Sterling
Swiss Franc
Mar 17
Dec 16
Sep 16
Jun 16
Mar 16
Dec 15
Sep 15
Jun 15
Mar 15
Dec 14
Sep 14
Jun 14
Mar 14
Dec 13
Sep 13
Jun 13
Mar 13
Dec 12
Sep 12
Jun 12
Mar 12
Dec 11
Sep 11
Jun 11
Mar 11
Dec 10
-2
United States Dollar
Invesco Global Total Return (EUR) Bond Fund
Portfolio duration and its composition
Contribution to duration
10
8
6
4
2
0
Total duration
European Euro
Source: Invesco, Barclays Point as at 31 March 2017.
61
Pounds Sterling
Swiss Franc
Mar 17
Dec 16
Sep 16
Jun 16
Mar 16
Dec 15
Sep 15
Jun 15
Mar 15
Dec 14
Sep 14
Jun 14
Mar 14
Dec 13
Sep 13
Jun 13
Mar 13
Dec 12
Sep 12
Jun 12
Mar 12
Dec 11
Sep 11
Jun 11
Mar 11
Dec 10
-2
United States Dollar
Invesco Global Total Return (EUR) Bond Fund
Risk measures
45.00
1200
40.00
30.00
800
25.00
600
20.00
15.00
400
10.00
200
5.00
0
Duration Times Spread
Option Adjusted Spread Duration
Mar 17
Dec 16
Sep 16
Jun 16
Mar 16
Dec 15
Sep 15
Jun 15
Mar 15
Dec 14
Sep 14
Jun 14
Mar 14
Dec 13
Sep 13
Jun 13
Mar 13
Dec 12
Sep 12
Jun 12
Mar 12
Dec 11
Sep 11
Jun 11
Mar 11
Dec 10
0.00
Option Adjusted Spread (RHS)
Source: Invesco as at 31 March 2017. Spread duration measures the change in the price of a bond given a 1% change in its spread.
Spread times duration is a risk measure which measures the sensitivity to a change in relative spread (spread duration x spread).
62
Basis points
1000
35.00
Invesco Global Total Return (EUR) Bond Fund
VaR (%)
6
5
4
3
2
1
Jan 17
Oct 16
Jul 16
Apr 16
Jan 16
Oct 15
Jul 15
Apr 15
Jan 15
Oct 14
Jul 14
Apr 14
Jan 14
Oct 13
Jul 13
Apr 13
Jan 13
Oct 12
Jul 12
Apr 12
Jan 12
Oct 11
0
Source: Invesco as at 31 March 2017. On 30 August 2016 the VaR provider was changed from Statpro to Risk Metrics. The change
resulted in a 37bps decline in the VaR. The VaR is calculated daily to a 99% confidence interval, with a 20 business day holding period
and an effective observation period of 2 years. VaR = Value at risk.
63
Invesco Global Total Return (EUR) Bond Fund
Performance contribution – 12 months to 31 March 2017
Total portfolio
589
Credit
Investment grade corporate
Duration
-161
US dollar
-143
Euro
Sterling
-32
14
High Yield
Senior bank
Subordinated financials
-8
-21
Other (inc EM)
Sterling
-15
Intraday
10
332
52
US dollar
12
2
Convertibles
Credit derivatives
Options
229
68
-19
-4
93
Corporate hybrids
Currency
Other
769
2
Past performance is not a guide to future returns.
Source: Barclays Point, Invesco as at 31 March 2017. Figures may not sum due to rounding. Any difference between the total portfolio level and its
components is ‘residual’ and limited to a few basis points. Performance quoted is pre-fees. The contribution figures are estimates and should be used
for indicative purposes only. Data cleansing and retrospective information availability may cause changes. Portfolio characteristics are subject to change
without notice.
64
Invesco Global Total Return (EUR) Bond Fund
Issue and issuer exposure
Top 10 issues
% of fund
Top 10 issuers
% of fund
US Strips 0% 2044
4.27
US Treasury
Germany 2.5% 2046
3.86
Federal Republic of Germany
7.00
US 0.875% 2017
3.31
UK Treasury
5.06
Tesco 6.15% 2037
2.90
US Strips
4.27
UK 1.75% 2019
2.83
Unicredit
3.12
Unicredit 8% perp
2.41
Tesco
2.90
Italy 2.8% 2067
2.26
Telefonica
2.52
Telefonica 4.9% 2017
2.19
Republic of France
2.27
US 1.625% 2026
1.87
Republic of Italy
2.26
US 0.125% 2021
1.85
RBS
1.66
Total of top 10 issues
27.75
Total of top 10 issuers
18.26
49.31
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. This is not financial advice and not a recommendation
to buy / hold / sell these securities. There is no guarantee that Invesco will hold these securities within its funds in the future.
65
Invesco Global Total Return (EUR) Bond Fund
Performance (A Acc share class %)
Cumulative returns, %
YTD
1 year
3 years
5 years
Since launch
(15 Sep 2010)
Invesco Global Total Return (EUR) Bond Fund
1.72
4.24
6.65
18.78
35.96
Mstar GIFS Global Flexible Bond – EUR Hedged
1.02
4.14
3.71
11.88
18.06
25/107
46/100
27/71
13/36
5/27
1
2
2
2
1
Invesco Global Total Return (EUR) Bond Fund
n/a
n/a
2.2
3.5
4.8
Mstar GIFS Global Flexible Bond – EUR Hedged
n/a
n/a
1.2
2.3
2.6
Rank
Quartile
Annualised returns, %
Calendar year returns, %
2011
2012
2013
2014
2015
2016
Invesco Global Total Return (EUR) Bond Fund
3.1
18.4
2.0
6.5
-0.3
1.8
Mstar GIFS Global Flexible Bond – EUR Hedged
0.6
10.6
0.4
2.4
-1.7
3.6
1
1
2
1
2
3
Quartile
Past performance is not a guide to future returns.
Data as at 31 March 2017. Fund performance figures are shown in euros, inclusive of reinvested income and net of the ongoing charges and portfolio transaction
costs. The figures do not reflect the entry charge paid by individual investors. Sector average performance is calculated on an equivalent basis.
Source: © Morningstar 2017. All rights reserved. Use of this content requires expert knowledge. It is to be used by specialist institutions only. The information
contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied, adapted or distributed; and (3) is not warranted to be
accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information,
except where such damages or losses cannot be limited or excluded by law in your jurisdiction. Past financial performance is no guarantee of future results.
66
Invesco Global Income Fund
Invesco Global Income Fund
Key features
 Launched 12 November 2014
 Income and capital growth objective
 Fixed income component and asset allocation managed by
Paul Read and Paul Causer
 Global Equity Income Group manage the equity component
(replica of the UK-domiciled Global Equity Income strategy)
 In the Morningstar Moderate Allocation sector (equity allocation
range 35-65%)
 Flexible in fixed income – duration and credit risk
 Modest currency risk permitted
These key features may be a mixture of internal, sector and prospectus guidelines. For the full objectives and investment policy please
consult the current prospectus.
68
Invesco Global Income Fund
Current investment themes (%)
Mar
16
Apr
16
May
16
Jun
16
Jul
16
Aug
16
Sep
16
Oct
16
Nov
16
Dec
16
Jan
17
Feb
17
Mar
17
Liquidity
23.6
21.5
20.3
26.9
28.3
27.2
30.3
31.3
28.4
33.2
28.3
25.6
12.6
Cash
11.4
9.8
7.6
12.0
15.0
14.4
16.7
18.8
15.8
22.2
18.5
17.7
5.9
0.9
0.9
1.9
1.5
0.6
0.6
1.8
1.6
1.6
1.4
1.2
1.0
0.8
11.3
10.9
10.7
13.3
12.6
12.1
11.8
11.0
11.0
9.7
8.6
6.9
5.9
Defensive
3.4
3.9
4.0
3.9
3.5
4.4
3.0
2.7
2.6
2.3
2.0
2.3
4.4
Investment grade
1.6
2.2
2.3
2.3
2.2
3.1
3.0
2.7
2.6
2.3
2.0
2.3
4.4
Covered and senior banks
1.7
1.7
1.7
1.6
1.2
1.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
37.6
39.4
39.2
34.6
33.7
32.2
31.4
31.4
32.9
29.5
35.3
37.5
46.8
0.7
0.7
0.7
0.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
16.1
17.5
16.5
13.3
13.1
13.2
12.7
12.8
13.0
11.6
13.1
16.9
16.5
2.1
2.1
2.0
1.9
1.9
1.8
2.0
2.3
2.7
2.4
7.9
8.2
7.2
11.8
12.2
13.5
13.3
13.5
11.9
11.6
12.2
12.2
10.9
9.9
10.0
12.3
Emerging markets
2.4
2.6
2.6
2.6
2.6
2.5
2.5
1.8
2.7
2.9
2.8
1.1
8.0
Hybrids and convertibles
4.5
4.4
4.0
2.8
2.7
2.7
2.6
2.3
2.2
1.8
1.6
1.3
2.8
35.5
35.2
36.5
34.7
34.6
35.8
35.1
34.6
36.2
35.0
34.5
34.6
36.2
Bonds maturing within 1 year*
Government
Credit risk
‘Peripheral’ government
Subordinated banks
Subordinated insurers
Corporate high yield
Equities
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. Excludes derivatives and therefore may add to more or less than 100%. *Bonds with
less than a year to maturity are excluded from other categories to prevent double counting. Portfolio characteristics are subject to change without notice.
69
Invesco Global Income Fund
Fixed income issue and issuer exposure
Top 10 issues
% of fund
Top 10 issuers
% of fund
Lloyds 12% perp
3.08
US Treasury
5.88
US 1.25% 2018
2.77
Lloyds
3.97
Verizon 4.125% 2027
2.66
AXA
2.73
Legal & General 6.385% 2059
2.48
Intesa
2.73
Intesa 8.047% perp
2.23
Verizon
2.66
SSE 5.625% perp
2.12
Legal & General
2.48
US 2% 2025
1.79
SSE
2.12
AXA 5.453 perp
1.55
Marfrig
1.81
Marfrig 7% 2024
1.42
Stonegate
1.75
ICBPI 7.125% 2021
1.32
ICBPI
1.72
Total of top 10 issues
21.41
Total of top 10 issuers
27.84
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. This is not financial advice and not a recommendation
to buy / hold / sell these securities. There is no guarantee that Invesco will hold these securities within its funds in the future.
70
Invesco Global Income Fund
Top 10 equity holdings
Top 10 equity holdings
% of fund
Dividend yield %
JPMorgan
1.33
2.33
Microsoft
1.16
2.34
Chevron
1.07
4.04
Novartis
1.07
3.82
Caxiabank
1.06
3.45
EADS
0.98
2.14
BAT
0.97
3.50
Orange
0.95
4.42
Pfizer
0.94
3.74
ING
0.94
4.90
Total Top 10 Equity Holdings
Weighted Portfolio Dividend Yield
10.48
3.67
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. This is not financial advice and not a recommendation
to buy / hold / sell these securities. There is no guarantee that Invesco will hold these securities within its funds in the future.
71
Invesco Global Income Fund
Performance (A EUR Acc share class %)
Cumulative returns, %
YTD
1 year
Since launch
(12 Nov 2014)
Invesco Global Income Fund
2.49
9.92
15.06
Mstar GIFS EUR Moderate Allocation - Global
2.22
6.67
7.22
203/483
92/441
52/391
2
1
1
Invesco Global Income Fund
n/a
n/a
6.1
Mstar GIFS EUR Moderate Allocation - Global
n/a
n/a
3.0
Rank
Quartile
Annualised returns, %
Calendar year returns, %
2015
2016
Invesco Global Income Fund
4.0
6.7
Mstar GIFS EUR Moderate Allocation - Global
1.7
2.0
2
1
Quartile
Past performance is not a guide to future returns.
Data as at 31 March 2017. Fund performance figures are shown in euros, inclusive of reinvested income and net of the ongoing charges and portfolio transaction
costs. The figures do not reflect the entry charge paid by individual investors. Sector average performance is calculated on an equivalent basis.
Source: © Morningstar 2017. All rights reserved. Use of this content requires expert knowledge. It is to be used by specialist institutions only. The information
contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied, adapted or distributed; and (3) is not warranted to be
accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information,
except where such damages or losses cannot be limited or excluded by law in your jurisdiction. Past financial performance is no guarantee of future results.
72
Invesco Global Bond Fund
Invesco Global Bond Fund
Key features
 Fund launched July 1994 and managed by Invesco Perpetual
Fixed Interest team since December 2004
 Managed by Stuart Edwards since April 2010, co-manager
Jack Parker since July 2015
 US$ denominated fund
 Predominantly government bonds
 Flexibility in credit
 No duration restrictions
 Currency risk
These key features may be a mixture of internal, sector and prospectus guidelines. For the full objectives and investment policy please
consult the current prospectus.
74
Invesco Global Bond Fund
Tools available
 Duration management
 Currency management
 Country selection
 Yield curve positioning
 Credit risk
75
Invesco Global Bond Fund
Current investment themes (%)
31 Dec 11 31 Dec 12 31 Dec 13 31 Dec 14 31 Dec 15 31 Dec 16 31 Mar 17
Cash
20.6
13.5
10.4
11.2
10.6
8.8
8.0
Government & Agency
51.2
63.2
64.6
62.5
66.9
62.6
59.5
Government
42.0
43.0
30.8
17.5
21.1
16.2
10.7
Inflation-linked Government
0.0
0.0
2.9
15.1
22.7
32.2
31.3
Peripheral Government
0.0
8.7
19.5
18.8
13.4
7.9
7.9
EM Government
0.8
3.1
3.1
4.2
6.0
5.3
8.5
Government Agency
8.4
8.5
8.4
7.2
3.7
1.0
1.2
Corporates*
28.6
23.3
24.6
26.8
22.5
28.4
26.8
Banks
19.6
13.8
11.7
9.8
7.3
10.3
10.6
Non-Bank Investment Grade
2.7
6.9
12.6
16.8
15.2
18.1
16.2
Non-Bank High Yield
6.3
2.6
0.3
0.2
0.0
0.0
0.0
Global EM Bond Fund**
0.0
0.0
0.0
0.0
0.0
0.0
5.2
-0.4
0.0
0.4
-0.4
0.1
0.3
0.4
Derivatives
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. Portfolio characteristics are subject to change without notice. *Includes developed
and emerging market corporates. **The generic fund which is not registered for distribution in Continental Europe, is shown only to provide the following supplemental
information: Emerging Markets exposure gained through holding a UK domiciled fund managed by the Invesco Perpetual Fixed Interest Team.
76
Invesco Global Bond Fund
Issue and issuer exposure
Top 10 issues
% of fund
Top 10 issuers
% of fund
US 0.125% 2026
9.84
US Treasury
US 0.625% 2026
8.52
Republic of Italy
3.92
US 0.125% 2021
5.61
Kingdom of Spain
3.76
UK 1.5% 2026
3.26
Barclays
3.65
US 0.375% 2027
3.03
UK Treasury
3.26
Australia 1.75% 2020
2.97
Republic of Portugal
3.23
Portugal 2.2% 2022
2.80
Poland Government
3.03
Barclays 3.25% 2021
2.65
Australian Government
2.97
US 1% 2046
2.24
Intesa
2.88
Poland 2.5% 2026
2.08
United States of Mexico
2.86
Total of top 10 issues
43.00
Total of top 10 issuers
31.28
60.85
Source: Invesco as at 31 March 2017. Figures may not sum due to rounding. This is not financial advice and not a recommendation
to buy / hold / sell these securities. There is no guarantee that Invesco will hold these securities within its funds in the future.
77
Invesco Global Bond Fund
Currency exposure
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
-10%
2004
2005
GBP
2006
EUR
2007
USD
2008
2009
2010
2011
2012
2013
2014
2015
2016
Other*
Source: Invesco as at 31 March 2017. *Other includes AUD, CAD, CHF, HUF, JPY, MXN, NOK, NZD, PLN, SEK & ZAR when held. Portfolio
characteristics are subject to change without notice.
78
Invesco Global Bond Fund
Modified duration
8.0
7.5
7.0
6.5
6.0
5.5
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
2004
2005
2006
2007
Source: Invesco as at 31 March 2017.
79
2008
2009
2010
2011
2012
2013
2014
2015
2016
Invesco Global Bond Fund
Performance (A USD Semi-AD share class %)
Cumulative returns, %
YTD
1 year
3 years
5 years
Since
(31 Dec 2004)*
Invesco Global Bond Fund
1.24
-0.18
-2.50
3.69
41.35
Mstar GIFS Global Bond
1.92
-2.05
-6.50
-2.66
30.21
140/188
45/169
47/146
20/120
15/56
3
2
2
1
2
Invesco Global Bond Fund
n/a
n/a
-0.8
0.7
2.9
Mstar GIFS Global Bond
n/a
n/a
-2.2
-0.5
2.2
Rank
Quartile
Annualised returns, %
Calendar year returns, %
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Invesco Global Bond Fund
6.2
8.0
4.9
2.3
3.6
7.4
8.1
1.2
-0.6
-1.4
-0.5
Mstar GIFS Global Bond
6.1
8.5
3.2
8.1
5.2
3.1
6.6
-2.2
-1.3
-5.8
0.7
2
3
2
4
4
1
2
1
3
1
3
Quartile
Past performance is not a guide to future returns.
Data as at 31 March 2017. Fund performance figures are shown in USD, inclusive of reinvested income and net of the ongoing charges and portfolio transaction
costs. The figures do not reflect the entry charge paid by individual investors. Sector average performance is calculated on an equivalent basis. *Invesco Perpetual
Fixed Income team has managed the fund since December 2004.
Source: © Morningstar 2017. All rights reserved. Use of this content requires expert knowledge. It is to be used by specialist institutions only. The information
contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied, adapted or distributed; and (3) is not warranted to be
accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information,
except where such damages or losses cannot be limited or excluded by law in your jurisdiction. Past financial performance is no guarantee of future results.
80
Important information (1)
This marketing document is for Professional Clients and
Financial Advisers in Continental Europe (as defined on the
next slide), Qualified Investors in Switzerland and Professional
Clients in the UK only and is not for consumer use. Please do not
redistribute. Data as at 31 March 2017, unless otherwise stated.
This marketing document is not subject to regulatory
requirements that ensure impartiality of investment
recommendations and investment strategy recommendations.
Therefore, the prohibition of trading before the release of
investment recommendations and investment strategy
recommendations does not apply.
The information provided on the investments and investment strategy
(including current investment themes, the research and investment
process, and portfolio characteristics, weightings, and allocation)
represents the views of the portfolio manager at the time this material
was completed, and is subject to change without notice.
Changes in interest rates will result in fluctuations in the value of the
Invesco Pan European High Income Fund, Invesco Euro Corporate Bond
Fund, Invesco Global Income Fund and Invesco Global Bond Fund.
The Invesco Global Total Return (EUR) Bond Fund and Invesco Global
Income Fund will invest in derivatives (complex instruments) which will
result in the funds being leveraged and may result in large fluctuations
in the value of the funds.
The Invesco Pan European High Income Fund, Invesco Euro Corporate
Bond Fund, Invesco Global Total Return (EUR) Bond Fund, Invesco
Global Income Fund and Invesco Global Bond Fund may hold a large
amount of debt instruments which are of lower credit quality and may
result in large fluctuations in the value of the funds.
The Invesco Global Income Fund’s performance may be adversely
affected by variations in the exchange rates between the base currency
of the fund and the currencies in which the investments are made.
The value of investments and any income will fluctuate (this may partly
be the result of exchange rate fluctuations) and investors may not get
back the full amount invested.
There is currently a discretionary cap on the ongoing charge of 1.65% in
place for the Invesco Global Income Fund. This discretionary cap may
positively impact the performance of the Share Class.
Past performance is not a guide to future returns.
The distribution and the offering of the Invesco Pan European High
Income Fund, Invesco Euro Corporate Bond Fund, Invesco Global Total
Return (EUR) Bond Fund, Invesco Global Income Fund and Invesco
Global Bond Fund or their share classes in certain jurisdictions may be
restricted by law. Persons into whose possession this document may
come are required to inform themselves about and to comply with any
relevant restrictions. This does not constitute an offer or solicitation by
anyone in any jurisdiction in which such an offer is not authorised or to
any person to whom it is unlawful to make such an offer or solicitation.
Where the Invesco Perpetual Fixed Interest Team have expressed
opinions, they are based on current market conditions and are subject
to change without notice. These opinions may differ from those of other
Invesco investment professionals.
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.
Debt instruments are exposed to credit risk which is the ability of the
borrower to repay the interest and capital on the redemption date for
the Invesco Pan European High Income Fund, Invesco Euro Corporate
Bond Fund, Invesco Global Total Return (EUR) Bond Fund, Invesco
Global Income Fund and Invesco Global Bond Fund.
81
Persons interested in acquiring the Invesco Pan European High Income
Fund, Invesco Euro Corporate Bond Fund, Invesco Global Total Return
(EUR) Bond Fund, Invesco Global Income Fund and Invesco Global Bond
Fund should inform themselves as to (i) the legal requirements in the
countries of their nationality, residence, ordinary residence or domicile;
(ii) any foreign exchange controls and (iii) any relevant tax
consequences.
Important information (2)
The Invesco Pan European High Income Fund, Invesco Euro Corporate
Bond Fund, Invesco Global Total Return (EUR) Bond Fund, Invesco
Global Income Fund and Invesco Global Bond Fund are available only
in jurisdictions where their promotion and sale are permitted.
For the purposes of UK law, the Invesco Pan European High Income
Fund, Invesco Euro Corporate Bond Fund, Invesco Global Total Return
(EUR) Bond Fund, Invesco Global Bond Fund and Invesco Global
Income Fund are recognised schemes under section 264 of the
Financial Services & Markets Act 2000. The protections provided by the
UK regulatory system, for the protection of Retail Clients, do not apply
to offshore investments.
Class A (accumulation - EUR), Invesco Global Bond Fund – Class A
(semi-annual distribution - USD) and Invesco Global Income Fund –
Class A (accumulation – EUR). The funds are domiciled in Luxembourg.
For the distribution of this document Continental Europe is
defined as Austria, Belgium, Finland, France, Germany, Italy,
Luxembourg, The Netherlands, Norway, Spain, Sweden and
Switzerland.
Please refer to the most up to date relevant fund and share classspecific Key Investor Information Document for more information on
our funds, including details of fund-specific risks. Further information
on our products is available using the contact details shown.
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.
Germany, Austria and Switzerland: This document is issued in
Germany by Invesco Asset Management Deutschland GmbH. This
document is issued in Austria by Invesco Asset Management Österreich
- Zweigniederlassung der Invesco Asset Management Deutschland
GmbH and in Switzerland by Invesco Asset Management (Schweiz) AG.
This marketing document is not an invitation to subscribe for shares in Subscriptions of shares are only accepted on the basis of the most up
the fund and is by way of information only, it should not be considered to date legal offering documents. The legal offering documents (fund &
financial advice. The performance data shown does not take account of share class specific Key Investor Information Document, prospectus,
the commissions and costs incurred on the issue and redemption of
annual & semi-annual reports, articles and trustee deed) are available
units. Any reference to a ranking, a rating or an award provides no
free of charge at our website and in hardcopy and local language from
guarantee for future performance results and is not constant over time. the issuers: Invesco Asset Management Deutschland GmbH, An der
Asset management services are provided by Invesco in accordance
Welle 5, D-60322 Frankfurt am Main, Invesco Asset Management
with appropriate local legislation and regulations.
Österreich – Zweigniederlassung der Invesco Asset Management
Deutschland GmbH, Rotenturmstrasse 16-18, A-1010 Wien, and
Not all share classes of the funds are available for public sale in all
Invesco Asset Management (Schweiz) AG, Talacker 34, CH-8001
jurisdictions and not all share classes are the same nor do they
Zürich, who acts as a representative for the funds distributed in
necessarily suit every investor. There may be differences in fee
Switzerland. Paying agent for the funds distributed in Switzerland:
structures, in minimum investment amounts, etc. Please check the
most recent version of the fund prospectus in relation to the criteria for BNP PARISBAS SECURITIES SERVICES, Paris, succursale de Zurich,
Selnaustrasse 16, CH – 8002 Zurich.
the individual share classes and contact your local Invesco office for
full details of the fund registration status in your jurisdiction. Please be Issued in the UK by Invesco Global Investment Funds Limited,
advised that the information provided in this document is referring too: Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxon, RG9
Invesco Pan European High Income Fund – Class A (quarterly
1HH, UK. Authorised and regulated by the Financial Conduct Authority.
distribution - EUR), Invesco Euro Corporate Bond Fund – Class A
(accumulation - EUR), Invesco Global Total Return (EUR) Bond Fund –
82
12902/SR/Fixed Interest/Apr17 UK/CE 323