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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