Article

Invesco Select Trust plc – Global Equity Income Share Portfolio: manager insights

13 April 2022
Stephen Anness
Stephen Anness
Head of Global Equities

In this video update, Stephen Anness provides an update on the global equity market after the first quarter of the year and shares his views on the outlook for Global Equities.

Stephen answers the following questions:

  • There has been a lot to worry investors in Global Equities in 2022, inflation and Ukraine war especially, are you surprised how well markets are holding up?
  • Have you adjusted your process or approach in the light of events?
  • How did the investment trust perform over the first quarter of the year?
  • Have many changes been made in the portfolio over the first quarter? 
  • How do you see the outlook for Global equities for the rest of 2022 and into 2023?

Glossary of terms

Also known as monetary policy tightening. Tightening monetary policy typically involves central banks raising interest rates to reduce the demand for credit, and selling government bonds to the market to reduce the money supply and liquidity in the economy. 

 

 

 

 

A cyclical stock is a stock whose profits are significantly impacted by level of economic growth and optimism in the global economy. Cyclical stocks tend to perform well in periods when the global economy is growing, and less well when the economy is slowing down or in recession.

A company whose profits are highly correlated with the positive or negative developments in global economic growth

We no longer saw the upside opportunity for growth in AMEX profits outweighing the potential downside risks to profits. Hence the company became a much less attractive investment proposition.

Loose monetary policy, also known as expansionary monetary policy is when a Central bank seeks to expand or grow an economy. This is done by lowering interest rates to increase the demand for credit, reducing the reserves the banking sector must hold in order for them to make more commercial loans, or buying government bonds from the market in exchange for cash to stimulate liquidity (so called ‘quantitative easing’).

The US Federal Reserve

The term ‘hawkish’ means a more aggressive stance towards monetary policy designed to reduce inflationary pressures. For example, a central bank is described as hawkish they might have tightened monetary policy by increasing interest rates or might be expected to take stronger action. 

  • 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 use of borrowings may increase the volatility of the NAV and may reduce returns when asset values fall.

     

    The Invesco Select Trust plc uses derivatives for efficient portfolio management which may result in increased volatility in the NAV. In addition, some companies are suspending, lowering or postponing their dividend payments, which may affect the income received by the product during this period and in the future.

     

    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.

  • All data as at 13 April 2022.

     

    This is marketing material and not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.

     

    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