Page 11 - DIY Investor Magazine - May 2019

‘THE MOST OBVIOUS OPPORTUNITIES, TO MY MIND, LIE WITHIN RETAIL AND REAL ESTATE’
Meanwhile, in tobacco, increasing regulation and the rise of industry disruptors, such as US vaping firm JUUL, have spooked investors over the past eighteen months. However, to my mind the pessimistic consensus fails to appreciate the ability of the tobacco sector to remain agile and cash generative within an evolving industry and which includes a tighter regulatory framework. Meanwhile, I have also sought to diversify the portfolio by emphasizing exposure to businesses which are
not typically reliant on the growth in our economy to stimulate growth. This includes catastrophe insurers, alternative lenders (non-banks) and other non-core financials such as litigation financing.
As we move through 2019 macroeconomic factors both at home and abroad will no doubt continue to influence the performance of the UK equity market. However, as
I anticipate a revision to more rational pricing, I remain confident that my portfolios remain well diversified, with a range of income generating companies, which trading at attractive valuations offer opportunity for income and capital growth.
Catalysts for any reassessment of the UK equity market’s prospects must surely include a better-than-expected outcome for Brexit. To my mind, a positive outcome for the UK equity market rests on an end to the political no-man’s land which has perturbed investors for the past two years.
1 A budget surplus or deficit refers to the value of a government’s spending versus its income. If spending exceeds income then the budget is in deficit. If spending is below income, the budget is in surplus.
2 A measure of the size of an economy. GDP measures the monetary value of (a measure of the market value of all the final goods and services produced within an economy)
3 Mark is named manager of the Invesco Income, High Income and UK Strategic Income funds (UK), the Edinburgh Investment Trust plc and Perpetual Income and Growth Investment Trust plc.
Investment risks
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.
ICVCs
The funds may use derivatives (complex instruments) in an attempt to reduce the overall risk of their investments, reduce the costs of investing and/or generate additional capital or income, although this may not be achieved. The use of such complex instruments may result in greater fluctuations of the value of the funds. The Manager, however, will ensure that the use of derivatives within the funds does not materially alter the overall risk profile of the funds.
Investment trusts
When making an investment in an investment trust 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 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 Edinburgh Investment Trust plc uses derivatives for efficient portfolio management which may result in increased volatility in the NAV.
Perpetual Income and Growth Investment Trust plc may use derivatives for efficient portfolio management which could result in increased volatility in the NAV. may use derivatives for efficient portfolio management which could result in increased volatility in the NAV.
Important information
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 the most up to date information on our products, please refer to the relevant fund and share class-specific Key Investor Information Documents/Key Information Documents, the Supplementary Information Document/Alternative Investment Fund managers Directive document (AIFMD), the Annual or Interim/ Half-Yearly Financial Reports and the Prospectus, which are available using the contact details shown.
Issued by Invesco Asset Management Limited and Invesco Fund Managers Limited. Both issuing companies are authorised and regulated by the Financial Conduct Authority.
VIEW ALL INVESTOR MAGAZINE ARTICLES
11 DIY Investor Magazine | May 2019