Invesco Select Trust plc – An investment trust for changing times
Invesco Select Trust is a closed-ended fund listed on the London Stock Exchange, but its structure sets it apart from its investment trust peers, and provides investors with a unique opportunity to invest their money across the globe.
Where does the investment trust invest?
Invesco Select is a multi-portfolio trust, which means it can invest across a number of different asset classes, including equities, bonds, commodities, and cash. Geographically, the investment trust can invest in all markets from the UK and US to Asia and everything in between.
What makes the investment trust unique?
While there are a number of multi-asset investment trusts available, Invesco Select has a distinctive structure comprising four independently managed portfolios.
The investment trust is broken down into a UK Equity portfolio, Global Equity Income portfolio, Balanced Risk Allocation portfolio, and Managed Liquidity portfolio.
Why are there four portfolios?
By offering four individual portfolios, investors gain access to a wider range of asset classes and global markets, and therefore access to greater potential sources of returns.
Each of the portfolios has its own individual investment strategy so investors can decide which areas and asset classes appeal to them the most and invest accordingly. The four portfolios also have differing risk profiles meaning investors can tailor their investment, only taking as much risk as they feel comfortable with.
Is my money invested in all the portfolios?
When you invest in Invesco Select Trust you decide which portfolios your money goes into. You can pick just one portfolio, invest in all four, or in any combination of the portfolios. If you think this is the year for UK equities, you may want to direct your funds into the UK Equity portfolio or if you want more global exposure you would lean towards the Global Equity Income portfolio.
Once I invest can I switch within the four portfolios?
Yes, you can. Markets change, investors’ needs change, and so Invesco Select Trust gives you the power to change your investment.
The structure of the investment trust allows quarterly conversions between the different portfolios - or share classes - to enable you to react to changing investment conditions. The investment trust sets out the conversion dates, which fall every three months.
Will I have to pay tax if I switch portfolios?
The capital structure of the investment trust means you can move between portfolios while remaining invested in the market. This means you will not trigger a ‘disposal’ for capital gains tax (CGT) purposes, which is paid on gains you make when you sell an investment.
The structure of the investment trust also means your money will remain invested in the stock market while you switch, and you won’t miss out on any potential stock market rises in the meantime.
Are all the portfolios run by the same manager?
Each of the portfolios are independently managed by their own team of experts. James Goldstone and Ciaran Mallon have run the UK Equity share portfolio since April 2021 after the Invesco Income Growth trust was combined into the Invesco Select trust.
Stephen Anness was appointed to run the Global Equity Income share portfolio in January 2020. Scott Wolle is in charge of the Balanced Risk Allocation sleeve of the trust and Derek Steeden oversees the Managed Liquidity share portfolio.
While all of the managers focus on a specific area and can shape their portfolios as they see fit, they do share a set of common underlying beliefs about what constitutes an attractive investment, such as strong company balance sheets, good management, and competitive positions in their markets. In addition, the Balanced Risk portfolio has the aim of managing the ups and downs of the stock market by spreading investment across a range of different asset classes, including equities, bonds, and commodities. The portfolio aims to provide a positive return to investors while offering a balance of risk for investors.
A full analysis is undertaken on each investment idea which ensures these criteria are met, and are sustainable. The equity holdings are reviewed regularly to ensure they continue to align with the investment trust’s investment criteria and objectives.
Which portfolio should I invest in?
Which portfolio, or portfolios, you decide to invest in depends entirely on your opinion on the future of domestic and global stock markets, which regions of the world you believe will do well, whether you are focusing on capital growth or income, the asset allocation you want in your portfolio, and the level of risk you feel comfortable taking.
The most popular portfolio in the Invesco Select Trust is the UK Equity portfolio, which is the largest part of the fund. This does not mean you have to invest money in this part of the fund if you choose not to.
If you are unsure about which portfolios to invest in, it may be a good idea to speak to a financial adviser who will be able to provide you with direction.
The unique benefit of Invesco Select Trust is that you are not stuck in one particular portfolio should stock markets change or your outlook or needs change. The option to convert from one portfolio into another provides you with the flexibility to ensure your investments are working for you, no matter the circumstance.
If you’d like to find out more about the different portfolios, please use the links below.
Risk warnings
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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.
When making an investment in an investment trust/company you are buying shares in a company that is listed on a stock exchange. The price of the shares will be determined by supply and demand. Consequently, the share price of an investment trust/company may be higher or lower than the underlying net asset value of the investments in its portfolio and there can be no certainty that there will be liquidity in the shares.
The Invesco Select Trust plc uses derivatives for efficient portfolio management which may result in increased volatility in the NAV.
The use of borrowings may increase the volatility of the NAV and may reduce returns when asset values fall.
The Invesco Select Trust plc – Global Equity Income Share Portfolio invests in emerging and developing markets, where difficulties in relation to market liquidity, dealing, settlement and custody problems could arise.
Fixed income securities may not always make interest and other payments nor is the solvency of the issuers guaranteed. Market conditions, such as a decrease in market liquidity, may mean that the product may not be able to sell those securities at their true value.
The Invesco Select Trust plc – Balanced Risk Allocation Share Portfolio makes significant use of derivatives for investment purposes, which may result in the product being significantly leveraged and may result in large fluctuations in the NAV.
The Invesco Select Trust plc – Balanced Risk Allocation Share Portfolio has exposure to commodities which are generally considered to be high risk investments and may result in large fluctuations in the NAV.
The Invesco Select Trust plc – UK Equity Share Portfolio invests in smaller companies which may result in a higher level of risk than a product that invests in larger companies. Securities of smaller companies may be subject to abrupt price movements and may be less liquid, which may mean they are not easy to buy or sell.
As a result of COVID-19, markets have seen a noticeable increase in volatility as well as, in some cases, lower liquidity levels; this may continue and may increase these risks in the future. In addition, some companies are suspending, lowering or postponing their dividend payments, which may affect the income received by the Invesco Select Trust plc UK Equity Share Portfolio and the Invesco Select Trust plc Global Equity Income Share Portfolio during this period and in the future.
Important information
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Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.
For more information on our products, please refer to the relevant Key Information Document (KID), Alternative Investment Fund Managers Directive document (AIFMD), and the latest Annual or Half-Yearly Financial Reports.
Further details of the Company’s Investment Policy and Risk and Investment Limits can be found in the Report of the Directors contained within the Company’s Annual Financial Report.
If investors are unsure if this product is suitable for them, they should seek advice from a financial adviser. For details of your nearest financial adviser, please contact IFA Promotion at www.unbiased.co.uk
