Fund in focus - Funds - The Share Centre

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Fund in focus

Each week, our analysts put the spotlight on a fund from our Platinum 120 range of quality funds, which they believe has strong management and performance prospects for the medium/long term (generally 3+ years). Each fund is given a risk rating and is classified by IMA Sector to give you a broad idea of its objectives or underlying assets. This week's Fund in focus is...

Invesco Perpetual Global Equity Income Y Inc


  FundIMA SectorCurrent
price (pence)
Our risk ratingAdd to watchlist?
 Invesco Glbl Eqty Inc Y IncIA Global Equity Income250.6900 M5Watch
Recommended at 117.79p on 20 January 2017

Find out more about this fund.

Our view

Global Global markets still remain fragile, as the International Monetary Fund (IMF) projects a pickup in activity in 2017, albeit with a wide dispersion of possible outcomes. It is anticipating a rise of global GDP growth of 3.4% in 2017 from 3.1% in 2016.

Weak growth, debt mountains, strong dollar impacting emerging markets, volatile commodity prices and policy makers potentially running out of fire power in the possible event of a downside surprise, the importance of picking a strong active manager remains paramount.

Global equity funds provide investment diversification of assets, regions and sectors. The US is a market leader in the information technology arena, as well as being innovative in the automobile market along with Germany and Japan, whereas Denmark is innovative in energy development via wind power. Therefore, the utilisation of a global fund in an investment portfolio should potentially provide access to the best companies in the sectors and assets that a home market bias cannot deliver directly.

Investors are being persuaded more and more to invest a proportion of their capital across the world and seek out companies with attractive dividend policies to provide alternative sources of income, as Brexit puts pressure on UK interest rates and raises question marks over the UK's growth outlook

Fund positioning

The fund has around a 32% exposure to European equities, 22% exposure to the UK and around 33% of the fund weighted to North America. The remaining exposure is in Asian regions.

At present (Jan 2017) the fund manager has a preference towards financials, industrials and energy. The fund has 55 holdings of which c.30% make up the top 10.

About the fund

The portfolio is formulated using the very best ideas from their tried and trusted Global Equity Group approach. With such a broad arena, it is down to the specialists within each region to identify potential investment opportunities and from these the ultimate decision falls to Nick Mustoe.

The fund's strategy is to look for companies with an attractive valuation that have sustainable profit margins and can deliver returns through the economic cycle. The companies should be able to offer growing and sustainable dividends.

Observations

The Invesco Perpetual Global Equity Income fund seeks to provide investors with a rising level of income together with long-term capital growth by investing in global equities. For investors wishing to diversify their portfolio through global exposure and seek the potential for income, this fund may well suit.

Comment last reviewed: Jan 2017

Author: Sheridan Admans, Investment Research Manager

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