Invesco trust throws lifeline to underperforming UK manager

Invesco trust throws lifeline to underperforming UK manager

The board of the Invesco Perpetual Select UK Equity Portfolio trust has vowed to stick with its underperforming manager for the time being.

The Invesco Perpetual Select trust is a collection of four separate portfolios, with investors able to choose between the UK Equity Portfolio, the Global Equity Income Portfolio, the Balanced Risk Portfolio and Managed Liquidity Portfolio.  

In the year to 31 May 2018, the UK equity portfolio underperformed the FTSE All Share Index. The trust returned 1.1 per cent during the period in question, while the index returned 6.6 per cent.

The trust’s chairman, Patrick Gifford, wrote in the firm's results out this morning (31 July): "The performance of the UK Equity Portfolio was disappointing. The board believes it is highly probable that the manager’s policy of investing in well-financed, cash generative companies on reasonable valuations will be successful.

"However, there have been setbacks in its delivery, notably from a few stock-specific problems. Aversion to the mining industry during a cyclical upswing and the entirely reasonable unwillingness to chase highly valued technology companies also contributed to underperformance.

"It is, however, the case that the manager has an excellent longer term record, which gives us confidence that good performance can be delivered."

The UK Portfolio is managed managed by James Goldstone.

The trust has underperformed the AIC UK All Companies sector average over the past three and five years to 30 July.

Anthony Leatham, investment trust analyst at Peel Hunt, predicted the value style of investing deployed by managers such as Mr Goldstone would return to favour soon, saying investors would do well to ensure they have exposure to that style of investing.