Fund Research

Invesco Asia

Last update 02 July 2019

Invesco Asia is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

Investment objective

To provide long-term capital growth by investing in a diversified portfolio of Asian and Australasian companies.

As at:

27/06/2019

Group/Investment

Invesco Asia Ord

Ticker

IAT

Management Company

Invesco

Manager Name

Ian Hargreaves

Association of Investment Companies (AIC) Sector

Asia Pacific

12 Mo Yield

2.7%

Dividend Distribution Frequency

Semi-Annually

Latest Market Capitalisation

£203,364,196

Latest Net Gearing (Cum Fair)

-1%

Latest Ongoing Charge Ex Perf Fee

1.00%

Turnover Ratio

0.0%

Shares Outstanding

 70,368,234

(Discount)/ Premium (Cum Fair)

-10.0%

Daily Closing Price

289p


Invesco Asia (IAT) invests in Asian companies in order to generate capital growth. The strategy is valuation sensitive and contrarian, but the process ensures a diversified portfolio which has managed to outperform in different types of market in recent years.

Over five years the trust has handsomely outperformed the index and its peers. NAV total returns have been 75.7% compared to 64.1% for the index and 64.4% for the Morningstar IT Asia Pacific ex Japan peer group and the share price returns have been even better: 80.1%. The trust has outperformed in two of the past three down markets as well as during the 2016 and 2017 sharp cyclical rally.

Stock selection has been key to the alpha generated, with positions in India and China particularly significant. Some positions have been held for many years and generated excess returns for shareholders: Samsung Electronics in Korea, Netease in China and UPL in India, for example.

Historically, the portfolio has tended to trade on a significant discount to NAV and peers, and the board struggled to shift it within their 10% maximum. However, it appears that the strong performance has finally led to a significant shift, with the discount below 10% for most of 2019, although still wider than the average of the peer group which it has outperformed. It is currently on a 9.7% discount.

A tender offer in 2018 saw some discount playing investors reduce their holdings, and the board has focused on broadening the shareholder base which we believe has helped the performance to affect the discount unlike in the past.

A revamped dividend policy may also have been significant: this year the board, under a new chairman, has committed to a progressive dividend policy, and has signalled the intention to use revenue and capital reserves to fulfil this if required. The trust has also implemented an interim dividend for the first time, although the yield of 2% is still relatively low. However, should the trust pay the same final dividend on top of the interim already paid, the yield would jump to 2.9% on the current price. We note that trusts with a higher yield in the Asia Pacific sectors tend to trade on tighter discounts.

Thomas McMahon

Important information

Invesco Asia is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

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Fund History: Invesco Asia

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