Investment strategies for institutional investors3e7220cf... · · 2018-02-07Investment strategies for institutional investors ... provide long-term stable income and offers liability-matching

Investment strategies for institutional investors This brochure is for Professional Clients only. Please do not redistribute.

04 Fixed Income

06 Multi-Sector Credit 08 Global Investment Grade Credit 10 Senior Secured Loans 12 Emerging Market Debt 14 US Municipal Bonds

16 Liquidity Management

18 Global Liquidity

20 Quantitative Equity

22 Global Multi Factor Enhanced 24 Low Volatility

26 Multi Asset

28 Global Targeted Return30 Global Targeted Income32 Balanced-Risk Allocation

34 Real Estate

36 UK Residential 38 European Core40 European Hotels

42 About Invesco

44 Responsible Investing45 Contacts

Contents

03

Alex MillarHead of UK Institutional, Invesco

Nearly a decade after the financial crisis began, institutional investors are continuing to adjust to today’s ‘new normal’ involving modest global growth, low inflation, low yields and continuing central bank intervention. With experienced investment teams located in key cities globally and a pure focus on investment management, Invesco is well positioned to stay on top of developments that impact the markets and securities in which we invest. From fixed income and multi-factor equity strategies – to diversified multi-asset solutions and real estate opportunities, this brochure features a range of traditional and alternative strategies to help you achieve your investment objectives, whether over a short, medium or long-term investment horizon. Alongside strategies we launched back in the 1990s, you will also find innovative new ones to address some of today’s challenges. Acknowledging the low yield environment, the Global Targeted Income strategy aims to offer sustainable income with capital preservation using the Invesco Perpetual Multi Asset team’s ‘ideas based’ approach.1 While on page 40 we introduce a European Hotel real estate strategy that seeks to provide long-term stable income and offers liability-matching attributes by capitalising on the growing business and tourist demand for quality hotels in Europe. We hope you find this brochure of interest, and look forward to discussing how Invesco might help your organisation achieve its financial objectives.

Focusing on the challenges and opportunities ahead

Alex MillarHead of UK Institutional, Invesco

1 There is no guarantee that the strategy will achieve these aims and an investor may not get back the full amount invested, as capital is at risk.

2 Alex Millar was appointed Head of UK Institutional in December 2017.

Fixed Income

04

06 Multi-Sector Credit 08 Global Investment Grade Credit 10 Senior Secured Loans12 Emerging Market Debt14 US Municipal Bonds

05

Invesco Fixed Income Whether seeking portfolio diversification, enhanced income, greater return potential or a reduction in volatility, our expertise in fixed income can help identify the right strategies to help meet investment goals. Invesco Fixed Income has been actively investing in fixed income markets for more than 30 years and we believe our consistency, connectivity and creativity can add value for institutional clients.

Our global perspective and deep local market knowledge help us uncover investment opportunities and navigate increasingly complex markets.

Global presence– 10 locations in key markets– Regional hubs in Atlanta, London and Hong Kong– US$295bn in assets under management

Experienced team– 166 investment professionals– Averaging 18 years of industry experience– Deep macro and credit research– Focused and accountable portfolio management

Wide range of capabilities– Single and multi-sector– Regional and global– Investment vehicles to meet client needs

Risk management– State-of-the-art risk management tools– Experienced, accountable and performance-driven

Strong, independent research– Fundamentals-based macro and credit research– Experienced investment professionals who provide high-conviction ideas

Partnership approach– Ability to tailor solutions– Client success defines our success

Invesco Fixed Income US$295bn AUM – 30 June 2017

Global Investment Grade

Multi-Sector

Stable Value

Structured Securities

Bank Loans

High Yield

Emerging Markets

Global Liquidity

Municipals

Fixed Income Multi-Sector Credit

In the current low-yield environment and with duration risk concerns from potential interest rate moves, we believe a dynamic approach to fixed income is required to generate positive returns over the credit cycle.

Using such an approach, the Invesco Active Multi-Sector Credit strategy targets favourable outcomes in income, total return and risk from a balance of tactical beta capture and discriminating security selection in core global credit asset classes. The aim of the strategy is to generate returns on a par with high yield, but with less volatility and credit risk.

Diversification is achieved by allocating across global investment grade corporates, emerging market bonds, bank loans1 and high-yield bonds, as well as taking advantage of other credit opportunities that arise. Within the strategic and tactical allocation process, the strategy will gain exposure to actively selected debt securities based on fundamental credit research.

With the ability to tactically shift risk profile by asset class, sector and duration to express the team’s highest conviction ideas and market developments, the approach provides the potential for enhanced risk-adjusted returns not available in a single sector or static allocation portfolio.

As a core holding for institutional investors, the strategy provides broad global credit exposure with integrated risk management on a daily basis and may help hedge overall risks more effectively.

Investment objective The strategy aims to provide a favourable total return over a full market cycle. It seeks to achieve its objective through an active strategic and tactical asset allocation process to credit-related debt securities globally.

Investment scope The strategic allocation2 uses the following four credit asset classes: – Global Investment Grade Credit – Emerging Market Debt – Bank Loans – High-Yield Debt

The investment team also looks to allocate opportunistically to other credit sectors such as residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS), municipal bonds, and collateralised loan obligations (CLOs). The strategic asset allocation process applies a risk balanced approach to each of the credit sectors with the tactical overlay allowing the portfolio managers to shift these allocations to take advantage of the current market environment to capture short-term relative value opportunities among the credit sectors.

Philosophy and approachCredit markets present diversity in credit quality, structure and geographical origin. The team believes a dynamic, multi-sector approach to credit investing is most likely to capture potential value and opportunity. Balancing bottom-up and top-down investment considerations, the team seeks to capture potential excess returns in investment grade corporate bonds, emerging market bonds, bank loans and high yield bonds, as well as taking advantage of other credit opportunities that arise.

The team focus on three layers of performance opportunities: – Strategic beta: from allocating to the

four constituent asset classes– Tactical beta: managing asset class

exposure using qualitative expertise and the judgement of experienced teams

– Alpha: through fundamental issuer analysis and superior security selection

Layering these three components, the team believes they have the ability to produce superior risk-adjusted returns versus the market and narrower credit strategies.

Key facts

Strategy inception 2014 (Invesco Active Multi-Sector Credit Composite inception: 01/10/14)3

Total team assets4 US$428m

Reference benchmark5 Synthetic index comprising: – 40% Barclays Capital Global Investment

Grade Credit Index USD Hedged– 30% S&P Leveraged Loan Index – 15% Barclays Capital Emerging

Markets Index USD Hedged – 15% Barclays Capital Global High Yield

Corporate Index USD Hedged

Available investment vehiclesPooled vehicle (Luxembourg SICAV with UCITS status)Segregated account

Joseph Portera Head of Global High Income, Invesco Fixed Income

06

Investment teamThe Active Multi-Sector Credit strategy team is led by Joseph Portera who has 36 years’ industry experience. Alongside Joseph Portera are fellow Portfolio Managers, Avi Hooper and Ken Hill. The senior team are supported by Invesco Fixed Income’s Investment Strategy Team and four sector portfolio managers who average 19 years’ industry experience, along with their respective teams. Invesco Fixed Income has been actively investing in fixed income markets for more than 30 years and currently manages US$295bn of assets on behalf of institutional and private investors globally. Their dedicated team includes over 160 fixed income professionals in ten locations across the globe.4

1 Please note: Bank loans are not invested in directly by the strategy. Exposure to loans will generally be taken via investment in Collateralised Loan Obligations (CLOs), collective investment schemes, Floating Rate Notes (FRNs) as well as swaps and other derivatives.

2 A base allocation derived from historic credit cycle analysis.

3 Representative composite of the Multi-Sector Credit strategy.

4 Source: Invesco, as at 30 June 2017.5 The strategy/composite is not managed to

a benchmark. Market returns are shown for a synthetic index for comparative purposes only. Other composites may use different benchmarks.

Distinguishing attributes – Coverage of credit markets globally with expertise in the respective countries,

industries, issuers and securities– Tactical asset allocation employed seeking to maximise returns arising from varying

asset classes through the credit cycle– Opportunistic bucket to tactically take advantage of relative value opportunities as

we see fit– Seeks to deliver returns with a lower risk profile and lower correlation to equities

than high yield– Strategy is benchmark agnostic

07

Allocation by credit sector (%) Full cycle Allocation allocation bands

Investment Grade Corporate Bonds 40 30 – 60

Emerging Market Bonds 15 0 – 30

Banks Loans1 30 15 – 40

High-Yield Bonds 15 0 – 30

Opportunistic Credit ≤10 0 – 15

Cash and Cash Equivalents ≤15 ≤15

Invesco Active Multi-Sector Credit Composite3 Performance as of 31 July 2017 (USD, gross)

6.0

4.0

2.0

8.0

YTD 1 year Since inception (1/10/14)

(%)2 years 3 years

Invesco Active Multi-Sector Credit CompositeMarket returns5 (USD)

Since Inception YTD 1 year 2 years 3 years 01/10/14

Invesco Active Multi-Sector Credit 4.79 6.77 6.00 4.55 5.32 Composite (USD, gross)

Market returns4 4.02 4.93 5.43 4.21 4.65

Source: Invesco as at 31 July 2017. All returns for periods greater than 12 months are annualised. This information provided by Invesco is supplemental to the Global Investment Performance Standards (GIPS®) disclosure; please see page 53. Performance is gross of management fees. Management fees and other costs related to the management of an investment portfolio will detract from clients’ actual returns. Past performance is not a guide to future returns. Invesco Active Multi Sector Credit Composite inception date: 01/10/2014.

Annualised

08

Fixed Income Global Investment Grade Credit

Mike Hyman, CIO Global Investment Grade and Emerging Market Debt, Invesco Fixed Income

Lyndon Man Senior Portfolio Manager, Global Investment Grade,Invesco Fixed Income

Since the global financial crisis, allocations to global investment grade corporate bonds have grown substantially and continue to trend higher1, as investors have been drawn to this high-quality asset class. Invesco Fixed Income’s (IFI) investment grade credit strategies look to offer a yield spread over the underlying government yield while remaining high in quality in a rising but low-yield environment. Driven by a core set of beliefs, our theme-based approach seeks out relative value opportunities across global corporate bond markets. Investment themes are constructed to seek to perform well in all market conditions whilst macro overlays are designed to potentially reduce downside capture during periods of weakness. There is a large investible universe spanning geographies, sectors and industries, and a wide range of security types and rating classifications which provide the opportunity to target relative value. Alongside a pooled investment vehicle, we offer clients customised investment solutions to meet unique risk and return objectives.

Investment objective The strategy aims to generate an attractive total return by investing in investment grade corporate bonds. The strategy pursues a theme-based approach designed to identify relative value opportunities in the corporate bond markets.

Investment scope The strategy primarily invests in investment grade European, US, Asian and emerging market credit with the flexibility to seek value in high-yield bonds for so called ‘rising stars’ and ‘fallen angels’ as well as subordinated debt.

Philosophy and approachWe believe the following four principles:– Skill in determining key long-term

market drivers is critical for generating attractive returns in investment grade credit strategies

– A thematic approach to investing can provide an effective and efficient approach to capturing value

– Research teams can enhance credit views by evaluating insights across geographies, asset classes and industries

– We believe portfolio construction that targets relative value is critical for generating strong long-term performance

IFI’s structured and disciplined, yet flexible investment process is designed to leverage information and experience across Invesco Fixed Income’s global team, with portfolio management and credit research teams working in partnership.

The portfolio management team construct macro themes identified by them to be the most appropriate using security selection in order to best represent the view and potentially capture the highest risk-adjusted returns within the guidelines of the strategy.

Key facts

Strategy Inception 1971 (Global Investment Grade Corporate Bond Composite inception: 30/09/09)2

Total team assets3 US$37bn

Reference benchmark4 Bloomberg Barclays Global Aggregate Corporate TR (Hedged, USD)

Available investment vehicles Pooled vehicle (Luxembourg SICAV with UCITS status) Segregated account

09

1 Source: Morningstar Asset Flows as at 30 April 2017.

2 Representative composite of the Global Investment Grade Credit strategy.

3 Source: Invesco, as at 30 June 2017.4 The strategy/composite is not

managed to a benchmark. Composite returns are benchmarked to the Bloomberg Barclays Global Aggregate Corporate TR Hedged USD. The benchmark is used for comparative purposes only. Other composites may use different benchmarks.

Investment teamThe Investment Grade team is led by Mike Hyman, who has 26 years’ industry experience. Alongside Mike Hyman are Senior Portfolio Managers Lyndon Man and Luke Greenwood with a combined 39 years of experience who lead the management of Global Investment Grade Credit.

Invesco Fixed Income has been actively investing in fixed income markets for more than 30 years and currently manages approximately US$295bn of assets on behalf of institutional and private investors globally. Their dedicated team includes over 160 fixed income professionals in ten locations across the globe.3

Distinguishing attributes – Thematic investing, with neutral market direction positioning– Stylistically unbiased: We leverage the full scope of our research platform to identify

and exploit multiple alpha sources to drive performance– Agile approach: We implement active rotation across a breadth of alpha sources to

find the best risk-adjusted return opportunities– Collaborative culture: Our team is aligned to share our strong research capabilities

across region, asset class and capital structure to maximise information advantages

Invesco Global Investment Grade Corporate Bond Composite2, 4 Performance as of 31 July 2017 (USD, gross)

Invesco Global Investment Grade Corporate Bond Composite Bloomberg Barclays Global Aggregate Corporate TR (Hedged USD)

YTD 3 years 5 years (%)Since inception (30/09/09)

8.0

4.0

6.0

2.0

1 year

Source: Invesco as at 31 July 2017. All returns for periods greater than 12 months are annualised. This information provided by Invesco is supplemental to the GIPS® disclosure; please see page 54. Performance is gross of management fees. Management fees and other costs related to the management of an investment portfolio will detract from clients’ actual returns. Past performance is not a guide to future returns. Invesco Global Investment Grade Corporate Bond Composite inception date: 30/09/09.

Investment process

For illustrative purposes only.

Platform-wide toolkit of investment views

Macro positioning Macro and credit investable themes

Issuer and securityselection/best ideas

– Risk posture– Macro risk factor

positioning– Sector allocation

– Structural/cyclical– Region/country/industry– Capital structure– Curve positioning

– Identify winners/ avoid losers

– Liquidity/availability– Primary market

opportunities

Portfolio management

Client portfolio

Fixed Income Senior Secured Loans

10

Scott Baskind Head of Global Senior Loans, Invesco Fixed Income

Senior secured loans provide an alternative to traditional fixed-interest and high-yield bonds, offering the potential for consistent income independent of market cycles. For institutional investors facing a changing interest rate environment, senior secured loans’ floating rate structure can provide a useful hedge against inflation and duration risk; when interest rates rise, so does income. Positioned at the top of the capital structure and backed by the collateral of the borrower’s assets, senior secured loans are the highest priority to be repaid in the event of a default or bankruptcy. With potentially lower volatility and correlation of investment returns compared to traditional asset classes, senior secured loans can offer an attractive risk-return profile within a diversified portfolio.

Investment objective The principal investment objective of the strategy is to seek to provide a high level of current income, consistent with the preservation of capital, by investing primarily in senior secured loans whose interest rates float at a spread above LIBOR, collateralised loan obligations and second liens of non-investment grade companies. The strategy will seek to achieve its investment objective by acquiring investments that meet the investment policies and credit standards.

Philosophy and approachOur long-term, consistent approach to managing the senior secured loan portfolio uses active, bottom-up research combined with a top-down macroeconomic overlay.

We seek corporations with excellent management teams, consistent and dependable sources of cashflow and reliable collateral packages that provide a second source of repayment. To manage risk, we keep the portfolio broadly diversified with a focus toward larger, more liquid loans.

Our investment process seeks to optimise portfolio returns while minimising downside credit risk investing through a full credit cycle.

Each investment opportunity undergoes a comprehensive due diligence review of the issuer, management team, financial sponsor and industry, resulting in two internal ratings:

1) Default Risk Rating: Grading of issuers with respect to the risk of default.

2) Recovery Risk Rating: Grading of issuers with respect to the projected recovery rates in the case of default.

Detailed fundamental analysis combining bottom-up and top-down credit views produces an internal risk rating recommendation, which is debated and approved by the Investment Committee. The approved internal risk rating determines the initial eligibility and attractiveness of each asset for inclusion in the portfolio.

With an emphasis on portfolio risk management, the team undertakes a robust programme of surveillance that includes: daily meetings to discuss changes in the market, sectors, specific issuers and upcoming new deals. These meetings are supplemented with formal monthly Investment Committee reviews of the portfolio strategy based on macroeconomic forecasts.

Key facts

Strategy Inception 1989 (US Unconstrained Senior Loan Composite inception: 31/08/06)1


Reference benchmark3 Credit Suisse Leveraged Loan Index

Available investment vehicles Pooled vehicle (Luxembourg based Specialised Investment Fund) Segregated account

11

Investment teamInvesco’s Senior Secured Management team is led by Scott Baskind, who is the president and managing director of Invesco’s senior loan business and serves as the group’s chief investment officer. Scott joined Invesco in 1999 and has over 21 years’ industry experience. Invesco Fixed Income has been actively investing in senior secured loans for over 26 years and currently manages approximately US$295bn of assets on behalf of institutional and private investors globally. Invesco’s bank loan team is comprised of 28 investment professionals, 22 credit analysts, one head trader and five Investment Committee members, all of whom have portfolio management responsibilities.2

1 Representative composite of the Senior Secured Loans strategy.

2 Source: Invesco, as at 30 June 2017.3 The strategy/composite is not

managed to a benchmark; The Credit Suisse Leveraged Loan Index is a total return index designed to mirror the investable universe of the US Dollar denominated leveraged loan market. The benchmark is used for comparative purposes only. Other composites may use different benchmarks.

Distinguishing attributes – We are one of the leading pure-play investment managers with an exclusive focus on

senior secured loans– We have experience of managing senior secured loans since 1989– Our clients benefit from our long-term, consistent approach and our ability to deliver

customised, opportunistic loan strategies– Our US, European and global senior secured loan strategies have a consistent track

record of delivering competitive returns versus the market– Senior secured loan strategies may offer an attractive capital adjusted yield for insurers

Invesco US Unconstrained Senior Loan Composite1, 3 Performance as of 31 July 2017 (USD, gross)

Invesco US Unconstrained Senior Loan Composite Credit Suisse Leveraged Loan Index

8.0

YTD 1 year 3 years

6.0

4.0

2.0

(%)5 years Since inception(31/08/06)


Invesco US Unconstrained Senior 2.63 7.16 4.05 5.27 5.45 Loan Composite (USD, gross)

Credit Suisse Leveraged Loan 2.76 6.83 3.77 4.79 4.46 Index (USD)

Source: Invesco as at 31 July 2017. All returns for periods greater than 12 months are annualised. This information provided by Invesco is supplemental to the GIPS® disclosure; please see page 51. Performance is gross of management fees. Management fees and other costs related to the management of an investment portfolio will detract from clients’ actual returns. Past performance is not a guide to future returns. Invesco US Unconstrained Senior Loan Composite inception date: 31/08/06.

Annualised

Fixed Income Emerging Market Debt

12

Mike Hyman, CIO Global Investment Grade and Emerging Market Debt, Invesco Fixed Income

Rashique Rahman Head of Emerging Market Debt, Invesco Fixed Income

Once again, investor concerns about global growth and higher interest rates are on the rise. And with these concerns, many investors are rethinking the outlook for their bond portfolios. What should they consider? Diversification. And, since the introduction of unconventional monetary policy by the US Federal Reserve (Fed) in 2009, we believe this should not be limited to fixed income in developed markets, but should also include emerging markets. According to the International Monetary Fund, emerging markets’ growth is expected to outpace developed markets’ growth by 3%. By 2021, emerging markets are forecast to represent 62% of world gross domestic product.1 In terms of risk/return, emerging market bonds have the potential to provide lower risk than equities with higher returns than comparably rated developed market bonds. In this way, the strategy can play a similar role as high yield, yet adding a diversified source of credit risk. Alongside this, emerging markets have low historical correlations to other asset classes and may reduce overall portfolio volatility through diversification.

Investment objective The strategy aims for high current income and long-term capital growth from investments in fixed-interest securities of emerging market issuers. The team manages a diversified portfolio of emerging market bonds from different countries to achieve portfolio diversification.

Investment scope The strategy invests primarily in sovereign debt of emerging market issuers denominated in US dollars. It may also make material investments in quasi-sovereign and corporate debt issued in these countries and may take smaller positions in local-currency denominated debt. The strategy may also utilise derivatives for investment, market access, efficient portfolio management or hedging purposes.

ProcessA repeatable team-based process, marrying macro and fundamental research aggregated from Invesco’s global platform, is central to our investment process. The strategy employs macro calls to set portfolio risk levels and exposure to individual factors and sectors. Fundamental credit research generates best ideas to populate portfolios in line with our macro calls. Portfolio construction is based on

high-conviction views, bearing in mind specific guidelines and risk management of each portfolio or strategy.

Philosophy and approachOur investment philosophy is centred on understanding macro drivers coupled with fundamental credit analysis. We believe the long-term economic cycle significantly influences the outcome for emerging market debt and currencies, both from the standpoint of expected policy responses and market dynamics. We believe our position in the cycle has implications for asset allocation, as well as the amount of risk to take.

We believe periods of dislocation may subject emerging market debt to periods of divergence between fundamental and market outcomes. With our focus on rigorous analysis, we aim to generate alpha by being nimble when market disruption creates investment opportunities.

Key facts

Strategy Inception 1996 (Emerging Market Bond Composite inception: 31/12/96)2


Reference benchmark JP Morgan EMBI Global Diversified


13

1 Source: International Monetary Fund, October 2016 (latest available data).

2 Representative composite of the Emerging Market Debt strategy.

3 Source: Invesco, as at 30 June 2017.4 The strategy/composite is not managed

to a benchmark; Composite returns are benchmarked to the JP Morgan EMBI Global Diversified Index. The benchmark is used for comparative purposes only. Other composites may use different benchmarks.

Investment teamThe team is led by Mike Hyman CIO – Global Investment Grade and Emerging Market Debt and Rashique Rahman, Head of Emerging Market Debt.

They are supported by four EM-dedicated portfolio managers who average 19 years of industry experience, as well as EM-dedicated analysts and Invesco Fixed Income’s global fixed income research platform. Invesco Fixed Income has been actively investing in fixed income markets for more than 30 years and currently manages approximately US$295bn of assets on behalf of institutional and private investors globally. Their dedicated team includes over 160 fixed income professionals in ten locations across the globe.3

Distinguishing attributes – Our highly experienced team utilises Invesco’s globally integrated resources– We leverage our global platform with the abilities of macro and credit research

professionals who are specifically focused on fixed income– Our analysts’ best investment ideas are effectively implemented due to our focus on

macro themes and asset allocation– We have a performance-driven culture built upon understanding market dynamics

and improving consistency of investment returns

Invesco Emerging Market Bond Composite2, 4 Performance as of 31 July 2017 (USD, gross)

Invesco Emerging Market Bond Composite JP Morgan EMBI Global Diversified Index

Source: Invesco as at 31 July 2017. All returns for periods greater than 12 months are annualised. This information provided by Invesco is supplemental to the GIPS® disclosure; please see page 49. Performance is gross of management fees. Management fees and other costs related to the management of an investment portfolio will detract from clients’ actual returns. Past performance is not a guide to future returns. Invesco Emerging Market Bond Composite inception date: 31/12/96.

YTD 1 year 3 years 5 years 7 years Since inception (31/12/96)

(%)

10.0

2.0

4.0

6.0

8.0

Investment framework


Sources of risk/return

Time horizon

Macro-thematic– Global macroeconomic

and market factors– 3- to 6-month horizon– Largest potential driver of risk/return

Idiosyncratic– Fundamental views– Country/credit specific– 6- to 18-month horizon– Significant proportion

of risk/return

Tactical– Short term– Often valuation driven– Least % of risk positioning

Fixed Income US Municipal Bonds

14

Mark Paris CIO and Head of Municipal Strategies,Invesco Fixed Income

Municipal bonds have played a pivotal role in building the framework of America’s modern infrastructure, and today fund a wide range of state and local projects including schools, hospitals, universities, airports, bridges, highways, and water and sewer systems. US municipal bonds are often thought of as tax-exempt vehicles appropriate only for US investors, however, they can offer potential advantages to global investors. Municipal bond yields compare favourably to major fixed income segments, even exclusive of their tax advantage, while their high credit quality is demonstrated by low historical default rates. As municipal debt is typically self-amortizing, with periodic debt service payments consisting of both principal and interest, refinancing risk is low. Comparing ratings for municipal versus corporate issuers, from 1974 to 2016, approximately 93% of municipal issuers assessed by Moody’s were rated single-A, or higher.1 At the end of 2016, the median rating for US municipal credits was Aa3, compared to a median rating of Baa3 for global corporates.1 In addition to these attributes, municipal bonds have historically exhibited very low correlation to other asset classes, including equities and US Treasuries, and may also help diversify institutional portfolios.

Investment objective The strategies seek to generate a high level of current income and capital appreciation with low default rates by investing in US municipal bonds. Their broad portfolios consist of bonds issued by various US states to diversify investments across sectors, rating classes and maturities, therefore managing risk.

Investment scopeThe strategies invest across the entire municipals universe, which currently comprises more than 37,000 government and non-government issuers, including both general obligation bonds and revenue bonds across all sectors. The strategies offer access to a range of credit qualities (from high grade to high yield), maturities (from short-intermediate to long-term) and geographies (from national to US state specific).

Philosophy and approach Invesco Fixed Income (IFI) believes in an investment approach that balances (macro) top-down with (micro) bottom-up inputs, creating information advantages that can exploit opportunities in any geographical region and/or market environment. With multiple sources of return contributing to performance and given the firm’s strong credit research capabilities, the potential to repeat performance is greatly enhanced.

Key components to the team’s philosophy:

– Inclusive culture – harnessing the collective input of investment specialists closest to the sources of information influential on asset prices

– Combined conviction – effectively capturing and vetting the broad collection of informed perspectives to capture the firm’s strongest convictions across portfolios

– Process transparency – the team utilises a proprietary framework that provides a high degree of visibility and accountability for every formalised investment decision

The municipal bond market continues to grow in complexity and the investment team believes that market inefficiencies provide an opportunity to capture value for investors. Through proprietary fundamental research, the team seeks to find areas that offer the most value on a risk-reward basis. For example, in the health care sector, the investment team analyses industry costs, reimbursement trends, and demographics to get a clear picture of the environment for non-profit hospitals.

Key facts

Strategy Inception 1990 (Municipal Income Composite inception: 31/12/99)2


Reference benchmark4 S&P Municipal Bond 5+ Year Investment Grade Index (Invesco Municipal Income Composite)

Available investment vehicles Segregated account

1 Source: US Municipal Bond Defaults and Recoveries 1970-2016, Moody’s Investors Service, 13 April 2017.

2 Representative composite of the US Municipal Bond strategy.

3 Source: Invesco, as at 30 June 2017.

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Investment teamLed by Mark Paris, Chief Investment Officer and Head of Municipal Strategies, our team of dedicated Municipal Bond professionals have an average of over 20 years of industry experience. This team is supported by Invesco Fixed Income’s Investment Strategy Team and four sector portfolio managers who average 19 years’ industry experience, along with their respective teams. Invesco Fixed Income has been actively investing in fixed income markets for more than 30 years and currently manages approximately US$295bn of assets on behalf of institutional and private investors globally. Their dedicated team includes over 160 fixed income professionals in ten locations across the globe.3

4 The strategy/composite is not managed to a benchmark; Composite returns are benchmarked to the S&P Municipal Bond 5+ Year Investment Grade Index. The benchmark is used for comparative purposes only. Other composites may use different benchmarks.

5 Strategic Insight Simfund/MF Desktop, based on assets under management as of 31 December 2015 (latest available data).

Distinguishing attributes– Municipal bonds offer high credit quality, historically low default rates, attractive

yields and a low historical correlation to equities and US Treasuries – Invesco’s investment philosophy has been used since the inception of the strategy

(August 1990), demonstrating the viability of the investment process over full market cycles

– Invesco’s position among the top-ten municipal investment managers by assets enables us to access preferred market opportunities and gain valuable market insight5

– The team’s scale affords us the opportunity to manage across markets which we believe enhances our ability to be successful in the future

– Our team has established relationships with more than 120 national and regional tax-exempt debt dealers, helping us to achieve superior execution in daily transactions

– Our ability to aggregate trades across multiple portfolios enables us to obtain lower institutional pricing, which can contribute to fund performance

US 10-year cumulative default rates 1970-2016 (in %) Municipal Corporate bonds bonds

Aaa 0.00 0.38

Aa 0.02 0.78

A 0.07 2.22

Baa 0.40 3.93

Ba 4.23 16.28

B 17.77 36.17

Caa – C 26.41 50.31

All Moody’s 0.09 2.38 investment grade

All Moody’s 8.17 29.70 high yield

All Moody’s 0.15 10.29 rated securities

Source: US Municipal Bond Defaults and Recoveries 1970-2016, Moody’s Investor Services, data through 31 December 2016, released 13 April 2017.

Invesco Municipal Income Composite2, 4 Performance as of 31 July 2017 (USD, gross)

6.0

YTD 1 year 3 years 5 years Since inception (31/12/99)

4.0

2.0

5.0

3.0

1.0

(%)

Invesco Municipal Income CompositeS&P Municipal Bond 5+ Year Investment Grade Index (USD)

Annualised

Since inception YTD 1 year 3 years 5 years 31/12/99

Invesco Municipal Income 4.95 0.38 4.78 4.28 5.58 Composite (USD, gross)

S&P Municipal Bond 5+ Year 4.76 0.11 4.26 3.53 5.31 Investment Grade Index (USD)

Source: Invesco as at 31 July 2017. All returns for periods greater than 12 months are annualised. This information provided by Invesco is supplemental to the GIPS® disclosure; please see page 50. Performance is gross of management fees. Management fees and other costs related to the management of an investment portfolio will detract from clients’ actual returns. Past performance is not a guide to future returns. Invesco Municipal Income Composite inception date: 31/12/99.

Liquidity Management

16

18 Global Liquidity

17

Invesco Global LiquidityWe believe in a disciplined investment process, high credit quality solutions, distinguished client engagement and consistent performance. We seek to exceed our clients’ expectations by producing a return consistent with principal preservation and liquidity.

Why Invesco Global Liquidity?– With over 35 years’ experience, we are an experienced partner for

institutional investors who pursue principal preservation, liquidity and a competitive return

– Our disciplined approach to liquidity management leverages the efforts of two distinct teams — portfolio management and credit research — to seek to provide a competitive return through a range of economic conditions

– We design customised solutions to meet the evolving liquidity needs of clients and the market

Invesco Global Liquidity strategies US$99bn AUM as of 31 July 2017

US Government

Treasury

North American Prime

Offshore Prime

Cash Plus & Ultra-Short

US Tax-Exempt

18

Liquidity Management Global Liquidity

Laurie Brignac Head of Global Liquidity Portfolio Management, Invesco Fixed Income

Paul Mueller Senior Portfolio Manager Global Liquidity, Invesco Fixed Income

For more than 35 years, the Invesco Global Liquidity team has been committed to a disciplined investment approach that includes a primary focus on the preservation of capital and daily liquidity, while seeking to deliver a competitive yield. Available through short-term UCITS money market funds or separately managed accounts, Invesco’s short-term money market strategies provide an alternative to a bank deposit across US dollar, sterling and euro currencies. Typical investors include corporate treasurers or institutions with large cash balances requiring security, continuous credit management, wide counterparty diversification and immediate liquidity.

Key facts

Strategy Inception 1980

Total strategy assets US$99bn

Available investment vehicles Pooled vehicle (Irish Unit Trust with UCITS status) Segregated account

Proposition – A portfolio alternative to cash,

liquidity and reserve management– Demand driven by Basel III, low rates and

emphasis on transparency and process

Philosophy and approach At the core of the investment process are two discrete teams – portfolio management and credit research – working independently in pursuing a singular focus: safety, liquidity and yield:

– Safety: Preservation of capital is paramount in the investment management process of Invesco’s money market funds. The majority of our funds are AAA-rated by at least one nationally recognised statistical rating organisation (NRSRO) and stress testing is performed regularly on the portfolios

– Liquidity: The team performs daily assessments of market liquidity and each portfolio’s allocation is based on multiple liquidity parameters

– Yield: Throughout various economic conditions, Invesco’s investment process has provided competitive performance. Portfolios are priced competitively to deliver a competitive yield and meet clients’ performance needs

The cash management team reviews the macroeconomic fundamentals in formulating an overall investment strategy, which is then incorporated in to each portfolio based on its investment objective and liquidity needs. Portfolio diversification is a key element in portfolio construction and includes diversification not only of issuers, but of security types, maturity periods, industries, indexes and affiliation amongst entities to capture any contagion risk. The Global Liquidity team utilises an approved list, which contains issuers and securities that have been evaluated and approved by the Invesco Global Liquidity Research team. The portfolio management team analyses eligible investment options in the market, taking into consideration an issuer’s frequency of issuance and size in the market, price action, modes of issuance, yield and credit ratings.

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Short-Term Investment Company (Global Series) plc (STIC Global) – Portfolio information1

Sterling Liquidity Portfolio Euro Liquidity Portfolio US Dollar Liquidity Portfolio

Inception 6 January 1997 11 January 1999 1 November 1995

ISIN IE0008004719 IE0004904748 IE0008040424

Bloomberg STSTLIC STEURIC STUSDIC

NAV per Share 1.00 1.00 1.00

Income Accrued Daily, paid monthly Accrued Daily, paid monthly Accrued Daily, paid monthly

Liquidity Same Day Same Day Same Day

Cut Off 2pm London 2.30pm CET 4.00pm ET (NY)

Legal Form Irish Unit Trust Irish Unit Trust Irish Unit Trust (with UCITS status) (with UCITS status) (with UCITS status)

Domicile Ireland Ireland Ireland

Net Assets £1.68bn EUR2.4bn US$4.08bn

Max Weighted Average Maturity 60 days 60 days 60 days

Max Weighted Average Life 90 days 90 days 90 days

Fitch Ratings AAAmmf AAAmmf AAAmmf

Standard & Poor’s AAAmmf AAAmmf AAAmmf

Moody’s – – Aaa-mf

1 STIC ratings are subject to change and are based on several factors, including an analysis of the portfolio’s overall credit quality, market price exposure and management. Fund ratings are provided to indicate the creditworthiness of the underlying holdings in the portfolio and offer a forward-looking opinion about fixed income funds’ capacity to maintain stable principal (net asset value). See page 57 for additional information about credit ratings. Fund credit ratings are not an indication of performance.

Features

Typical account minimum

Investment management

Portfolio customisation

Valuation

Portfolio liquidity

Portfolio quality

Portfolio maturity (maximum)

Credit restrictions

Access and support

Fees

Reporting/due diligence

Source: Invesco.

Separately Managed Accounts Invesco Separately Managed Account

£100m (or equivalent)

Invesco Advisers, Inc.

Flexible

Daily mark-to-market and/or amortised cost

Customised to client’s needs

AAA to Investment Grade. Dependent on client’s risk tolerance and investment guidelines



Direct access to investment professionals and to dedicated support and service group

Competitive pricing commensurate with the obligations of the portfolio

Standard reporting package with frequency based on client needs

Why Separately Managed Accounts?

Customisation Institutional investors looking for a diversified and customisable investment solution may find Separately Managed Accounts (SMAs) an attractive alternative.

Meeting unique needs SMAs can achieve different returns from pooled investment vehicles because they do not have to adhere to the same liquidity, maturity and credit requirements. The characteristics of the SMA can be tailored to meet specific client objectives.

Professional investment management SMAs are segregated portfolios that benefit from the same professional investment management as pooled investment vehicles, but can be more closely aligned with the specific return and risk objectives of the investor. Securities are owned directly by the investor, but are managed and traded by a professional investment manager on their behalf.

Quantitative Equity

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22 Global Multi Factor Enhanced24 Low Volatility

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Invesco Quantitative StrategiesInterest in factor-based investing has increased meaningfully in recent years, as market participants seek precise and systematic solutions to achieve their investment objectives. Our active factor-based investment strategies aim to deliver client outcomes that go beyond the limitations of traditional benchmark-centric active management and traditional passive investing.

For over 30 years the Invesco Quantitative Strategies (IQS) team has employed an active, research-intensive investment process designed to benefit our clients over the long term.

Why Invesco Quantitative Strategies?

Collaborative culture– We employ a team approach in everything we do, which draws from the

collective expertise of the entire group– This forces us to consider solutions from many different viewpoints– The result is more original and robust investment solutions for our clients

Purposeful evolution– We embrace a responsive yet evolutionary approach to process enhancement– We are committed to the continuous pursuit of improvements in all facets

of our investment process

Engineered discipline– We believe systematically applying quantitative investment management

techniques helps to differentiate between assets, measure and manage risk, and construct portfolios

– Our transparent and repeatable investment process has been time-tested over the past 30 years across various market cycles

Proven expertise – With primary offices in Frankfurt, Boston, New York, Melbourne and

Tokyo, the team comprises over 40 investment professionals that specialise in either research or portfolio management

– The team has been active since 1983 and currently manages over US$35bn (as at 30 June 2017)

– We are a true solutions business that incorporates sophisticated, scientific skills in risk premia, strategic and tactical asset allocation

Invesco Quantitative Strategies US$35bn AUM – 30 June 2017

Active

Passive

Low Volatility

Enhanced

Long Short

Market Neutral

Balanced Solutions

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Quantitative Equity Global Multi Factor Enhanced

Michael Fraikin Global Head of Research, Invesco Quantitative Strategies Alexander Uhlmann, CFA Director Portfolio Management, Invesco Quantitative Strategies

For more than 30 years, the Invesco Quantitative Strategies (IQS) team has successfully run a diverse range of innovative investment solutions using quantitative tools and techniques. We are convinced that an active approach to factor investing implemented in a systematic way can add value for our clients through the application of deeply researched factor definitions and strict risk management. Our strategy seeks to provide exposure to the global equity market at a risk level that is almost identical to that provided by passive investments, but with a return that is meaningfully superior after costs. The Invesco Global Enhanced strategy is designed to have the potential to deliver above benchmark performance over a market cycle, and has exhibited historically competitive and consistent risk and return characteristics over 1 year, 3 year and 5 year periods.1

Investment objective The Invesco Global Enhanced strategy aims to achieve long-term capital growth from investment primarily through a portfolio of investments in global companies.

Philosophy and approachOur investment philosophy is founded on the belief that equity markets are not completely efficient, and that an active approach to factor investing implemented in a systematic way can add value for our clients through the application of deeply researched factor definitions. We also believe that stable and consistent results are more likely to be delivered from a systematic approach that is team-based rather than one that is centred on an individual. We believe our strategies benefit from the local insight and understanding of our investment team. These global investment specialists systematically apply our proprietary model and proprietary risk management framework to develop investment solutions to help meet client needs.

The portfolio weights differ from the weights of stocks in the relevant benchmark indices, allowing a measured exposure to desirable factors such as value, quality and momentum, tightly controlling exposure to other factors (for example, size, beta, foreign exchange, where the team may aim for a neutral weighting versus the benchmark). This allows our investment team to capture the long-term excess returns to those factors, without taking undue relative risk in broadly diversified portfolios.

Key facts

Strategy inception 2005 (Global Enhanced – Institutional Composite inception: 31/07/05)2

Total strategy assets3 US$3bn

Reference benchmark4 MSCI World Index Net Return USD

Available investment vehicles Pooled vehicle (UK ICVC with UCITS status) Segregated account

1 Source: Invesco, eVestment as at 31 July 2017. The strategy performance refers to Invesco Global Enhanced – Institutional Composite. Risk is the annualised standard deviation of monthly returns.

2 Representative composite of the Global Multi Factor Enhanced strategy.

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Investment team The Invesco Global Enhanced strategy is led by Michael Fraikin and Alexander Uhlmann of Invesco’s Quantitative Strategies team. IQS is located in Frankfurt, New York, Boston, Melbourne and Tokyo.

Distinguishing attributes – Independent thinking – that seeks to

identify the best factors for modelling, from insights on key fundamental and behavioural concepts

– An engineered discipline – quantitative modelling that seeks to identify sources of potential excess returns within specified risk parameters

– A purposeful evolution of investment insights and management process that are forward looking and have proven effective through time

– Partnership with an experienced and dedicated investment team committed to your success through long-term value creation

ProcessOur investment process uses a proven global team approach, in conjunction with locally based portfolio managers and research analysts. Our investment team evaluate a rich and diverse set of companies, believing a common sense approach should be key to stock selection. They look for low correlation factors that have demonstrated our model’s forecasting ability. Using efficient and effective information processing techniques, they follow a rigorous risk management process, looking for the potential to capture long-term excess returns without taking undue relative risk in broadly diversified portfolios. With a rigorous focus on active risk control, the team tightly constrain the risk taken in terms of beta, size, sector, industry, country and currency level, and adapt to changing market conditions. The performance is generated through a quantitative bottom-up investment process driven by factor exposures:– Improving earnings expectations suggests further upside surprises – Market sentiment consistent with further upside– Management and quality supports shareholder value and is evidence of quality– Attractive stock price valuation relative to its earnings and cash generating ability

3 Source: Invesco as at 30 June 2017.4 Composite returns are benchmarked to

the MSCI World Net Return index. The benchmark is used for comparative purposes only. Other composites may use different benchmarks.

AnnualisedInvesco Global Enhanced – Institutional Composite2, 4 Performance as of 31 July 2017 (USD, gross) (%) Since inception YTD 1 year 3 years 5 years 31/07/05

Invesco Global Enhanced – 12.49 17.43 7.68 12.93 7.63 Institutional Composite (USD, gross) MSCI World NR USD 13.31 16.12 6.64 11.63 6.42Active performance -0.82 1.31 1.04 1.30 1.21

Source: Invesco, eVestment as at 31 July 2017. All returns for periods greater than 12 months are annualised. This information provided by Invesco is supplemental to the GIPS® disclosure; please see page 46. Performance is gross of management fees. Management fees and other costs related to the management of an investment portfolio will detract from clients’ actual returns. Past performance is not a guide to future returns. Invesco Global Enhanced – Institutional Composite inception date: 31/07/05.

For illustrative purposes only. 5 Not all factors are used in all regions and sub-models. Additional factors are used in specific sub-models and definitions may

vary across regions.

Stock selection Quantifying our insights

Factors5

Quantifiable Predictive Complementary

ConceptsStock selection universes

Stock return forecast

Market sentiment

Management and quality

Earnings expectations

Value

– Earnings Momentum– Earnings Revisions– Cashflow Surprise– Revisions Against Trend

– Price Momentum– Long-Term Reversal– Short-Term Reversal– Short Interest

– Net External Financing– Net Asset Growth– Capital Efficiency– Fundamental Health

Score– Liability Payback Horizon

– Cashflow Yield– Gross Profit Yield– Earnings Yield– Dividend Yield

What is market sentiment telling us?

What is management doing?

How attractive are valuations?

How are expectations changing?

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Quantitative Equity Low Volatility

A sustained period of low interest rates and ongoing stock market volatility has created a challenging environment for institutional investors focused on matching liabilities, and this has led to increased interest in low volatility equity strategies. We believe we can add value for our clients through the systematic application of fundamental and behavioural insights. Using the predictive ability of our proprietary multi factor stock selection model, we aim to generate attractive risk-adjusted returns over a market cycle while avoiding the unrewarded volatility often associated with higher risk stocks. The IQS Low Volatility equity strategy takes a benchmark agnostic approach to stock picking to give a stronger focus on our ‘best ideas’, with more leeway in country, sector and industry weights and not allocating to unattractive index heavyweights. We believe that an unconstrained opportunity set offers the freedom to seek the highest level of return at reduced levels of risk. By taking risks only where we expect to be rewarded, we constrain portfolio volatility leading to an expected beta of less than one, helping reduce equity risk, especially during crisis periods.

Investment objective The team combines a high alpha strategy with a low beta strategy to outperform its benchmark in four out of five possible market scenarios. The result is a low beta portfolio with high alpha potential. The strategy aims for a low beta strategy because high volatility stocks on average do not perform better than low volatility stocks.

Philosophy and approachIQS’ investment philosophy is based on translating fundamental and behavioural finance insights into portfolios, through a systematic and structured process.

The IQS stock selection model is built on four major factors: Market Sentiment (price momentum), Earnings Expectations (earnings momentum), Management & Quality (profitability, balance sheet, management quality), and Value. A combination of these insights with rigorous risk control allows the investment team to manufacture investment products with attractive risk and return characteristics. IQS’ investment process is entirely quantitative, and fundamentals such as valuation, quality or earnings data are used in a strictly systematic way.

The IQS Low Volatility equity strategy implements a proven, repeatable investment process using the Global Portfolio Management System (GPMS), with long-standing real-life track records. The low volatility characteristics of the strategy are achieved through the portfolio construction which takes into account the forecasted attractiveness of return as well as risk characteristics of each stock in the equity universe. The IQS team believes that a balance of return drivers tends to provide more consistent returns, as the market rewards different themes over time.

Key facts

Strategy inception 2005 (European Low Volatility Composite inception: 31/12/05)1

Total strategy assets2 US$12bn (Global and regionally focused strategies)

Reference benchmark3 MSCI Europe Net Return index


Alexander Uhlmann, CFA Director Portfolio Management, Invesco Quantitative Strategies

Thorsten Paarmann Senior Portfolio Manager,Invesco Quantitative Strategies

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Investment teamWith over 40 investment professionals located in Frankfurt, Boston, New York, Melbourne, and Tokyo, Invesco Quantitative Strategies applies a functional team approach utilising quantitative investment techniques. In this context the research team drives the investment process forward and provides the daily assessment of stock attractiveness and risk, while the portfolio management team is responsible for portfolio construction and implementation as well as investment communication.

1 Representative composite of the Low Volatility strategy.

2 Source: Invesco as at 30 June 2017.3 European Low Volatility Composite

returns are benchmarked to the MSCI Europe Net Return index. The benchmark is used for comparative purposes only. Other composites may use different benchmarks.

Distinguishing attributes– Active, research-intensive investment process that harnesses investment insights

that are forward looking and have proven effective through time– The combination of individual stock selection and the low volatility equity approach

produces a conservative portfolio with highly attractive individual holdings, below average market risk and a asymmetric return profile

– Reduced market risk – only low volatility stocks offering high diversification potential (or low correlation with other stocks) are selected for the portfolio

– Partnership with an experienced and dedicated investment team committed to your success through long-term value creation

– Approach aims to out-perform its benchmark over a medium term horizon (typically a 3-year rolling period) with lower drawdown risk

Invesco European Low Volatility Composite1, 3 Performance as of 31 July 2017 (GBP, gross) (%)


Invesco European Low Volatility 13.91 18.66 14.62 16.17 11.95 Composite (GBP, gross) MSCI Europe NR GBP 11.35 20.56 10.82 13.05 6.81Active performance 2.56 -1.90 3.80 3.12 5.14

Source: Invesco as at 31 July 2017. All returns for periods greater than 12 months are annualised. This information provided by Invesco is supplemental to the GIPS® disclosure; please see page 47. Performance is gross of management fees. Management fees and other costs related to the management of an investment portfolio will detract from clients’ actual returns. Past performance is not a guide to future returns. Invesco European Low Volatility Composite inception date: 31/12/05.

Annualised

Integrated investment process using the Global Portfolio Management System (GPMS)


Final portfolio manager review

Portfolio

Transaction cost forecast

– Liquidity– Market capitalisation/

free-float– Trading platform– Broker commissions

Portfolio guidelines & constraints

– Tracking error– Individual position

weight– Beta/size– Countries & currencies– Sectors & industries– Sustainability criteria

Optimisation through GPMS

Stock return forecast Stock risk forecast

Multi Asset

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28 Global Targeted Returns30 Global Targeted Income32 Balanced-Risk Allocation

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Invesco Multi Asset strategies Invesco has a long history of developing client-driven investment solutions.

Combining diversification with robust risk management, our distinctive multi asset strategies aim to provide reduced volatility and smoother returns to help investors achieve their financial objectives.

Invesco Perpetual Multi Asset For over 40 years, Invesco Perpetual has been synonymous with fundamental research-driven investing. Our Multi Asset investment team, led by David Millar, supplements this rich seam of investment ideas with its own extensive experience and proven capability to develop and implement risk-managed portfolios.

The Invesco Perpetual Multi Asset team consists of 12 dedicated macro specialists who are solely focused on targeted return and targeted income strategies. The Multi Asset team came together in 2013 with the launch of the Global Targeted Returns strategy which has since grown to over £19bn in assets. This was followed in 2016 with the launch of the Global Targeted Income strategy. Invesco Global Asset Allocation The Invesco Global Asset Allocation team consists of 17 dedicated specialists including five portfolio managers with an average of over 20 years of experience and 15 years with Invesco. Based in the US, the team manages over US$23bn in assets across three multi-asset strategies – including balanced core, income and global macro approaches – and a commodities strategy.

Using a risk-balanced approach, the strategy seeks to participate meaningfully during periods of economic strength and protect during periods of economic stress.

Invesco Multi Asset investment centres

Invesco Perpetual Multi Asset – Henley Invesco Global Asset Allocation – Atlanta

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Multi Asset Global Targeted Returns

Dave Jubb Fund Manager, Multi Asset, Invesco Perpetual David Millar Head of Multi Asset, Invesco Perpetual

Richard Batty Fund Manager, Multi Asset, Invesco Perpetual

Potential stock market volatility, subdued global growth and low interest rates continue to create a challenging environment for institutional investors and their ability to meet target liabilities and funding requirements. Finding opportunities for capital growth and income while limiting the potential for losses has resulted in a growing demand for multi asset strategies – particularly those which offer liquidity and genuine diversification to help spread the overall risk, and provide the potential for positive long-term returns. The Multi Asset team believes that the only way to achieve true diversification is to break away from the focus on asset class constraints. Instead, the team focuses on a conviction-led approach to sourcing good investment ideas, using both traditional asset types and derivatives before applying robust risk management to blend these ideas into a truly diversified portfolio, with a clearly defined return and volatility target.

Investment objective The strategy aims to achieve a positive total return in all market conditions over a rolling three-year period. The strategy targets a gross return of 5% per annum above UK 3-month LIBOR (or an equivalent reference rate) and aims to achieve this with less than half the volatility of global equities, over the same rolling three-year period.1

Philosophy and approachThe team believes that positive total returns can be achieved in all market environments over a rolling three-year period through an unconstrained approach to sourcing return ideas and through robust risk management. The team considers a wide array of asset types, geographies, sectors and currencies to identify what they consider to be, the most attractive investment ideas. The strategy can have up to around 50 investment ideas in its portfolio at any time, typically between 20 and 30. The expectation is that when the investment ideas are blended together, overall volatility should be reduced. The strategy uses a wide range of financial instruments to implement these investment ideas, including derivatives. It invests around 70% of assets under management in other investment strategies from the Invesco group, with the remaining 30% in cash or near-cash instruments as cover for derivatives exposure.

Key facts

Strategy Inception 2013 (Global Targeted Returns UK Composite inception: 30/09/13)2

Total strategy assets £19.34bn

Reference index2 UK 3-month LIBOR

Expected risk2

Expected portfolio risk3 3.67% Total independent risk4 14.14%

Structure Pooled vehicle (UK ICVC with UCITS status) Segregated account

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Investment teamThe strategy is managed by the Invesco Perpetual Multi Asset team. The investment team has a wealth of experience in running multi asset strategies. Fund managers David Millar, Dave Jubb and Richard Batty have more than 60 years of investment expertise between them, including a combined total of over 23 years’ experience in delivering targeted absolute returns.

Distinguishing attributes – Unconstrained research agenda and

genuine diversification, with exposure to a wide array of asset types, geographies, sectors and currencies

– Run by dedicated macro specialists who have a fundamental, long-term investment horizon

– Access to diversified alpha sources across the Invesco Perpetual and Invesco product range

– Truly global organisation

1 There is no guarantee this gross performance target or volatility target will be achieved. Global equities represented by the MSCI World index.

2 The Global Targeted Returns UK Composite is managed in accordance with the Global Targeted Returns strategy. The composite reference index is UK 3-month LIBOR and is used for comparative purposes only. Each portfolio in the strategy may differ due to specific investment restrictions and guidelines.

3 Expected portfolio risk is the expected volatility as measured by the standard deviation of current ideas over the last three and a half years and is subject to change.

4 Independent risk is the expected volatility of an individual idea as measured by its standard deviation over the last three and a half years and is subject to change.

Process The team’s approach follows a rigorous three-step process:

Step 1 Research-approving ideas: The team considers the risk/reward associated with each idea, including the asset classes and instruments which could be used and any wider economic trends that could affect the idea.

Step 2 Risk-based fund management – combining ideas: Every idea must contribute the right blend of risk and return. Each idea is assessed to see how volatile it is in isolation, how it affects every other idea and its impact on overall volatility of the portfolio.

Step 3 Dealing and governance – implementing ideas: The implementation of each investment idea goes through four phases: order, comply, execute and review.

What the strategy invests in

Equities

Government bonds

Corporate bonds

Real estate

Alpha strategies

Volatility instruments

Inflation products

Currencies

Commodities

Invesco Global Targeted Returns UK Composite2 Performance as of 31 July 2017 (GBP, gross)

(%)YTD 1 year 3 years Since inception(30/09/13)

2 years

6.0

5.0

4.0

2.0

3.0

1.0

Annualised


Global Targeted Returns UK 2.56 3.82 4.25 4.42 5.74 Composite (GBP, gross)

UK 3-month LIBOR 0.20 0.38 0.49 0.51 0.51

Source: Invesco as at 31 July 2017. All returns for periods greater than 12 months are annualised. This information provided by Invesco is supplemental to the GIPS disclosure; please see page 48. Performance is gross of management fees. Management fees and other costs related to the management of an investment portfolio will detract from clients’ actual returns. Past performance is not a guide to future returns. Invesco Global Targeted Returns UK Composite inception date: 30/09/13.

Global Targeted Returns UK Composite UK 3-month LIBOR

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Multi Asset Global Targeted Income

Investment objective The strategy aims to deliver a gross income of 3.5% per annum above UK 3-month LIBOR (before the deduction of corporation tax), whilst aiming to preserve capital in all market conditions over a rolling three-year period. The strategy aims to achieve this with less than half the volatility of global equities, over the same rolling three-year period.1

Philosophy and approachThe team believes that the strategy’s investment objective can be achieved through an unconstrained approach to sourcing return ideas and through robust risk management.

The team considers a wide array of asset types, geographies, sectors and currencies to identify what they consider to be good investment ideas. The strategy can have up to around 50 investment ideas in its portfolio at any time, typically between 20 and 30. The expectation is that when the investment ideas are blended together, it will produce a robust balance of risk and return while preserving capital and reducing overall volatility.

The strategy uses a wide range of financial instruments to implement these investment ideas, including derivatives. It invests around 70% of assets under management in other investment strategies from the Invesco group, with the remaining 30% in cash or near-cash instruments as cover for derivatives exposure.

The use of derivatives enables the fund managers to add and remove risk efficiently and can enhance both the income potential and capital preservation qualities of the portfolio.

Key facts

Strategy inception 2016 (Invesco Perpetual Global Targeted Income Fund inception: 30/11/16)2

Total strategy assets £116.9m

Reference index2 UK 3-month LIBOR

Expected risk Expected portfolio risk3, 4 3.81% Total independent risk3, 5 14.66%

Available investment vehicles Pooled vehicle (UK ICVC with UCITS status) Segregated account

Sebastian MackayFund Manager, Multi Asset,Invesco Perpetual

Richard BattyFund Manager, Multi Asset,Invesco Perpetual

Gwilym SatchellFund Manager, Multi Asset,Invesco Perpetual

Over the past few years, low interest rates and market uncertainty has meant that sustainable income has been hard to come by using traditional investments, creating a challenging environment for pension funds, insurance companies and the many people who rely on them. For institutional investors looking for income, we believe there is a wide role for income focused, targeted return strategies which aim to preserve capital at an acceptable level of risk and offer a relatively low correlation with traditional assets. A multi asset investment approach, where a single fund invests across several asset classes using a variety of investment techniques, offers the potential to help spread the overall risk taken and provide more stable returns compared to investing in just one asset class. Our Multi Asset team’s ‘ideas-based’ approach provides broad diversification by accessing a wide range of asset classes including equities, bonds and currencies, which are then combined into a single risk-adjusted portfolio using a range of financial instruments. Rigorously tested against extreme economic scenarios, the strategy is managed by our experienced team with proven capability in managing multi asset funds.

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Investment teamThe strategy is managed by the Invesco Perpetual Multi Asset team. The investment team has a wealth of experience in running multi asset strategies. Fund managers Sebastian Mackay, Richard Batty and Gwilym Satchell have more than 45 years of investment expertise between them. The fund benefits from the diverse skillsets they each bring, supplemented by the insight and experience of the rest of the team.

Distinguishing attributes – Unconstrained research agenda and

genuine diversification, with exposure to a wide array of asset types

– Targets a gross income of 3.5% each calendar year above UK 3-month LIBOR, before corporation tax, paying a regular monthly income1

– Along with providing sustainable income, the team seek to preserve capital and keep volatility to less than half that of global equities over a rolling three-year period1

– One of the core features of the strategy is accessing the comprehensive investment expertise within Invesco

Process The Global Targeted Income strategy uses the same approach and process and follows the same philosophy as the Global Targeted Returns strategy of investing in good, long-term investment ideas. What differentiates the Global Targeted Income strategy is the way certain ideas are structured to meet the dual income and capital preservation objective.

Step 1: Research-approving ideas: The team considers the risk/reward associated with each idea, including the asset classes and instruments which could be used and any wider economic trends that could affect the idea.

Step 2: Risk-based fund management – combining ideas: Every idea must contribute the right blend of risk and return. Each idea is assessed to see how volatile it is in isolation, how it affects every other idea and its impact on overall volatility of the portfolio. The team use daily priced instruments to ensure liquidity.

Step 3: Dealing and governance – implementing ideas: The implementation of each investment idea goes through four phases: order, comply, execute and review.

What the strategy invests in

Types of assets Income generating instruments

Currencies

Corporate bonds

Alpha strategies

Volatility instruments

Inflation products

Equities

Commodities

Real estate

Government bonds

FX forwards, FX options

CDS, Bonds

Invesco Perpetual & Invesco strategies, Collective investment schemes

Options

Equities, Futures, Total return swaps, Equity options

Total return swaps

REITS

Futures, Bonds, Swaps, Swaptions

Index linked bonds

Invesco Perpetual Global Targeted Income Fund2 Performance as of 31 July 2017 (GBP, gross) Since inception

3 months YTD 30/11/16

Invesco Perpetual Global Targeted Income Fund 0.13 3.50 6.46 (GBP, gross)

Invesco Perpetual Global Targeted Income Fund -0.09 2.99 5.85 Class Z (Inc) (GBP, net)

UK 3-month LIBOR -0.08 0.20 0.23

Source: Invesco, Bloomberg as at 31 July 2016. Past performance is not a guide to future returns. See page 57 for further information. Invesco Global Targeted Income Fund inception date 30/11/2016.

1 There is no guarantee that the strategy will achieve these aims and an investor may not get back the full amount invested, as capital is at risk. Global equities represented by the MSCI World index.

2 The Invesco Perpetual Global Targeted Income Fund is a representative account managed in accordance with the Global Targeted Income strategy. The fund’s reference index is UK 3-month LIBOR and is used for comparative purposes only. Other portfolios within the strategy may use other reference indices.

3 Risk data relates to the Invesco Global Targeted Income Fund. Other portfolios in the strategy may differ due to specific investment restrictions and guidelines.

4 Expected portfolio risk is the expected volatility as measured by the standard deviation of the current portfolio of ideas over the last three and a half years and is subject to change.

5 Independent risk is the expected volatility of an individual idea as measured by its standard deviation over the last three and a half years and is subject to change.

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Multi Asset Balanced-Risk Allocation

The Invesco Balanced-Risk Allocation strategy is designed to help investors achieve their goals throughout the course of the economic cycle. With a focus on economic diversification, the strategy aims to lessen the impact of negative environments, such as inflation or recession, while still being able to participate during periods of economic growth. By strategically balancing the amount of risk exposure taken, this approach seeks to achieve better risk-adjusted returns across economic environments and reduce drawdowns compared to traditional equity-tilted balanced portfolios. This involves a strong focus on risk management, particularly in those periods where risky assets, especially equities, do poorly. Simply reducing overall risk with a focus on standard deviation results in a symmetric reduction in the upside and downside. Using a risk parity approach to multi asset investing, we believe that we can create a portfolio of stocks, bonds and commodities that significantly reduces downside exposure while maintaining the majority of the upside potential.

Investment objectiveThrough balancing the risk contribution from each of three asset classes – equities, bonds and commodities – and seeking to tactically shift the allocation, the strategy’s objective is to provide a total return with low to moderate correlation to traditional financial market indices.

Investment scopeThe investment universe comprises global debt securities, equities and commodities. The strategy may gain exposure to equities and debt either directly or through the use of financial derivative instruments.

Philosophy The Invesco Global Asset Allocation team aims to create diversified portfolio that can significantly reduce downside exposure while participating meaningfully in rising markets. The team strive to achieve this in two ways:

– Using three asset classes – equities, bonds and commodities – the primary approach is to strategically balance the amount of risk exposure a portfolio has to the major economic environments: This should limit the impact of surprise outcomes on the portfolio

− Secondly, the team tactically shift the balance to each environment in order to emphasise those assets that we believe are most likely to perform well

This approach seeks to limit the effect that one underperforming asset or asset class may have on overall portfolio performance, while also offering the potential for growth in different economic environments. The team seeks to capture attractive returns in three primary economic environments: inflationary growth (via commodities), non-inflationary growth (via developed market equities) and recession (via developed government bonds).

Although the portfolio may underperform equity-tilted peers during strong growth periods, over a full economic cycle the aim is to provide long-term equity-like returns with reduced volatility, for a smoother investment experience.

Key facts

Strategy Inception 2008 (Invesco Balanced-Risk Allocation Composite inception: 30/09/08)1

Total team assets2 US$23bn Reference benchmark3 Bloomberg Barclays U.S. Treasury 3-month Bellwether and 60% MSCI World Index/ 40% JP Morgan GBI Global Europe


Scott Wolle, CIO Global Asset Allocation

33

Investment teamLed by Scott Wolle, Chief Investment Officer of the IGAA team, the team is collectively responsible for the asset allocation, portfolio construction, research, and security selection for the Invesco Balanced-Risk Allocation strategy. Based in the USA and Germany, the IGAA team has 17 members overall with an average industry experience of 22 years.2

Distinguishing attributes– Prepare, protect and participate –

The strategy seeks to minimise the negative effects of market downturns and participate during periods of market growth

– Innovative investment approach – We use an economic diversification framework overlaid with a tactical component to adjust overall portfolio risk and take advantage of current market conditions

– Lower correlation – The strategy seeks a low to moderate correlation to traditional financial market indexes

– Track record – Our strategy has delivered an attractive risk/return profile in differing economic cycles

– Trusted partner – Invesco ranks as one of the world’s largest balanced-risk managers with an experienced, long-tenured team of investment professionals

– Liquidity and transparency – Daily pricing and ample liquidity

1 Representative composite of the Invesco Balanced-Risk Allocation strategy.

2 Source: Invesco, as at 30 June 2017.3 The strategy/composite is not managed

to a benchmark; Composite returns are benchmarked to the Bloomberg Barclays U.S. Treasury 3-month Bellwether and 60% MSCI World Index/ 40% JP Morgan GBI Global Europe. Benchmarks are used for comparative purposes only. Other composites may use different benchmarks.

Process

1. Strategic allocation Based on historic volatility and correlation analyses, the fund management seeks to weight the assets – stocks, bonds and commodities – so that they each contribute an equal amount of risk in terms of the portfolio’s standard deviation to provide for economic diversification. The selection of different asset types plays a key role here and aims to maximise the Sharpe ratio.

2. Tactical allocation Complementing the strategic allocation, the process aims to enhance the potential return by analysing the attractiveness of individual assets based on tactical allocation models. These tactical allocation models draw on factors categorised under: valuation, economic environment, trend and sentiment.

3. Implementation The strategic and tactical allocation models are rules based and are implemented systematically on a monthly basis. The risk target of the strategic element – represented by the portfolio’s standard deviation – is 8%; the risk target for the tactical allocation is 2%. The tactical element allows for ex-ante adjustments of overall portfolio risk. On the other hand, it can cause the strategic equally weighted risk contributions of individual asset classes to deviate up or down within a fixed range.

Invesco Balanced-Risk Allocation Composite Performance as of 31 July 2017

Invesco Balanced-Risk Allocation CompositeBloomberg Barclays U.S. Treasury 3-month Bellwether 60% MSCI World Index/ 40% JP Morgan GBI Global Europe

YTD 1 year 3 years Since inception(30/09/08)

(%)5 years

6.0

2.0

10.0

8.0

4.0


Invesco Balanced-Risk Allocation 4.41 4.56 4.47 5.27 8.90 Composite (USD, gross)

Bloomberg Barclays U.S. Treasury 0.40 0.57 0.28 0.21 0.21 3-month Bellwether

60% MSCI World Index/ 40% JP 8.97 9.20 5.20 7.82 6.96 Morgan GBI Global Europe

Source: Invesco as at 31 July 2017. All returns for periods greater than 12 months are annualised. This information provided by Invesco is supplemental to the GIPS disclosure; please see page 52. Performance is gross of management fees. Management fees and other costs related to the management of an investment portfolio will detract from clients’ actual returns. Past performance is not a guide to future returns. Invesco Balanced-Risk Allocation Composite inception date 30/09/08.

Annualised

Real Estate

34

36 UK Residential 38 European Core40 European Hotels

35

Invesco Real Estate (IRE) IRE is the global real estate investment management arm of Invesco Ltd., investing in direct property and publicly traded real estate securities. It has a proven track record of over 30 years of investing across the risk/return spectrum, through a number of real estate market cycles and on behalf of institutional investors across the globe.

IRE’s services range from fund management, transactions and asset management, through to structuring and finance. Underpinning this service is IRE’s applied research philosophy: it strives to identify and invest in the right markets at the right time using the forward-looking forecasts of its global in-house research team. Institutional investors looking to invest in real estate through Invesco Real Estate have access to a wide range of options to implement their investment strategy. These include opportunities across the risk return spectrum and across the globe.

IRE’s on-the-ground transactions team has excellent local market contacts to source deals off-market, and our fund managers have the expertise required to manage strategies through market cycles in conjunction with the in-house asset management team.

Source: Invesco Real Estate as at 30 June 2017.

IRE – Global capability, local teams

Founded 1983

Employees 199

Properties 412

Founded 1996

Employees 137

Properties 133

Founded 2006

Employees 115

Properties 33

USA Europe Asia

36

Real Estate Invesco Real Estate UK Residential Fund

With the UK forecast to be one of the fastest growing populations in the EU this decade, together with its well-publicised deficit in dwelling stock, we believe the residential or ‘private rented sector’ (PRS) continues to offer attractive opportunities. PRS is an established and well-understood asset class in parts of Europe and North America/Canada, and is now growing in the UK thanks to the investment opportunity created by this increasing supply and demand imbalance. Alongside its identifiable and reliable income characteristics, PRS or ‘Build-to-Rent’ (BtR) can potentially enhance long-term portfolio diversification through its expected low correlation with UK equities, gilts and commercial real estate (see comparative performance chart opposite). Targeting the most compelling UK PRS opportunities, the Invesco Real Estate UK Residential Fund is currently pursuing a strong pipeline of potential residential opportunities to the value of c.£700m across Greater London, the South East, the Midlands and the North.

Investment approach The Invesco Real Estate team’s investment approach focuses on large-scale, high-quality opportunities in recognised locations, within proven letting markets. By having a strong reputation, an experienced team and a track record as well as working directly with contractors and developers, the team is able to source off-market opportunities, which they believe can be an important differentiator in the sector. The Fund seeks to: – Create institutional quality PRS product

and provide active management; and:– Maximise net operating income and

create capital value: – Current target net IRR of 8%-10%1

– Current target net income return of 4%1

Investment pipelineThe active investment pipeline represents approximately £700m in value across a range of opportunities:

– Diversified portfolio of 10 projects across Greater London and other regional UK cities

– Average estimated gross purchase price of c.£67m

– Average size of c.216 units

Key facts

Manager Invesco Real Estate Management S.à.r.l., Luxembourg

Launch date 21 December 2015

Fund structure Luxembourg special limited partnership. Open-ended, denominated in Sterling.

Liquidity Redemptions with 90 days’ notice subject to available liquidity and a maximum redemption period of two years

Leverage Maximum 35% of aggregate market value of investments

Minimum investment £10m

Fund size £302m as of June 2017

Invesco Real Estate Atlanta, Beijing, Dallas, Hong Kong, Hyderabad, London, Luxembourg, Madrid, Milan, Munich, New York, Newport Beach, Paris, Prague, San Francisco, Seoul, Shanghai, Singapore, Sydney, Tokyo, Warsaw

37

Investment teamLed by John German, Senior Director of Residential Investments, and supported by Alicia Graham, Patrik Harbusch and Finn Mashur on transactions and fund operations, the team understands the UK residential market and has established relationships with which to source the best opportunities to deliver attractive returns. Invesco Real Estate has £49.9bn of real estate assets under management worldwide, with around 450 staff in 21 offices supporting the global real estate business as at 30 June 2017.

1 Subject to change. Please note there is no guarantee performance targets can be achieved.

2 Includes all UK funds in the INREV universe for the specified investment style.

3 Source: MSCI, Macrobond, INREV and Invesco Real Estate, April 2017.

4 Source: 2005-2008: English House Condition Survey; 2008-2016: English Housing Survey, full household sample. Data as of April 2017. Latest available data.

5 Source: MSCI and Macrobond, April 2017. Latest available data.

Distinguishing attributes – Access to the UK’s fast growing and highest performing real estate asset class over

the medium to long-term (10-15 years)3,4 – Low correlation with commercial real estate, equities and bonds5

– Long-term return profile– Relative stability of income the sector may offer– Environmental, Social and Governance considerations fully integrated, from

acquisition planning, development to ongoing property management

Case study South East portfolio, various locations, UK

Source: Invesco Real Estate as at 30 June 2017. The image is intended to illustrate the type of acquisitions completed in the Fund.

Why the South East portfolio?– Acquisition of 580 Build-to-Rent units– Stabilised income-producing portfolio,

therefore no development and limited lease-up risk

– Well-positioned sites across five UK towns and cities: Bedford, Bracknell, Crawley, Exeter and Stevenage

The buildings meet our requirements for implementing a UK PRS strategy– Established and proven property

management platform– Proven letting markets– Large enough scale– Active asset management– Clear exit strategy

In 2017, Invesco Real Estate completed a portfolio transaction for the fund of Build-to-Rent properties in five locations

Comparative performance (%) MSCI UK Residential has outperformed MSCI UK All Property over the longer-term (10-15 years) and MSCI European Residential, UK Equities and UK Gilts over all periods

Sources: MSCI Macrobond, INREV and Invesco Real Estate as at April 2017, latest available data. Total return, annualised, in sterling. Past performance is not a guide to future returns.

MSCI UK ResidentialMSCI European ResidentialCore Funds2

Value Add Funds2

MSCI UK All PropertyMSCI Europe Residential (ex. UK)UK Equities FTSE 100UK Gilts

3 years 5 years 10 years 15 years

16.0

12.0

8.0

4.0

14.0

10.0

6.0

2.0

(%)

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Real Estate European Core: Invesco Real Estate – European Fund

In a low interest environment, institutional investors increasingly want to be able to invest in cross-border or specific growth sectors in order to capture opportunities in a range of markets. This objective allows them to potentially access a diverse array of opportunities due to different positions within the occupier and investment market cycles. The Invesco Real Estate – European Fund (IREEF) is an open-ended direct real estate vehicle focused on ‘core’ institutional quality investment opportunities throughout Europe. What could a core real estate strategy provide to an investor?

– Diversified portfolio: By geography and sector-type (office, retail, industrial and, most recently, residential)

– Income orientation: A portfolio of assets that have both relatively durable and growing income and are of a nature that maximises liquidity when desired

– Conservative balance sheet: Strong, well-structured and simple balance sheet

– Benefits within a multi asset class portfolio: Over the last 15 years, core real estate has provided diversification benefits due to its low correlation to stocks and bonds, lower volatility relative to publically-traded investments and higher correlations to inflation than stocks and bonds

– Transparent and efficient vehicle: For example, transparency of valuations and an efficiently structured investment vehicle

Investment approachThe fund’s focus is on core institutional-quality real estate in eight countries across Europe: France, Germany, Italy, the Netherlands, Poland, UK, Spain and Sweden.

The fund emphasises long-term, relatively stable income and the opportunity for both income and capital growth as:– It invests in office, retail, industrial

and residential properties located in qualified markets across Europe.

– Currently, income is expected to comprise approximately two-thirds of the total return over the long term.

– The long-term strategic range for leverage is a loan-to-value of 30%.

Asset profile (30/06/17)

Office portfolio – 12 investments, 313,434 sqm and

84.8% leased– Well-located in established office

locations within gateway cities, with close proximity to public transport

– High occupancy with good quality tenant profile

– Solid market fundamentals; enhancing income and total return

Retail portfolio– 18 investments, 948,315 sqm and

93.0% leased– Well-located retail portfolio diversified

across countries– High occupancy with good quality

tenant profile – Solid market fundamentals

Industrial portfolio– 3 investments, 154,749 sqm and

100% leased– Portfolio characterised by low vacancy,

long leases and secure income– All properties fit the strategy of quality

locations, quality building specifics and rents at market levels

Key facts


Launch date 1 August 2008

Fund structure Fonds Commune de Placement (FCP) domiciled in Luxembourg and regulated by the Luxembourg financial market regulator (CSSF)

Fund life Open ended

Liquidity Redemptions with 90 days’ notice subject to available liquidity and a maximum redemption period of two years

Leverage Target of 30% leverage

Minimum investment €5m

Fund size €3.1bn as at 30 June 2017


39

Investment teamInvesco Real Estate (IRE) has a dedicated portfolio management team who are focused on the performance of this flagship fund. This team works closely with, and are supported by, IRE’s wider team of specialists in other disciplines of the pan-European business to ensure the smooth running of the portfolio.

Portfolio construction


– Market fundamentals– Regulatory/legal

environment– Reliability of transaction

process– Performance measurement

Target range for sector allocation is a deviation of no more than 20% to MSCI PEPFI Index

On-the-ground real estate expertise and market coverage

Market (country) Selection

Sector typeallocation

Execution of property business plan

Propertyspecific selection

1 Distributions are included on an ‘as declared’ basis, which reflects industry standards. Longer term measures reflect compounded quarterly numbers. Annualised quarterly distributions are based on the latest quarterly distribution % (distribution/drawn equity) x four quarters as of 30 June 2017.

IREEF performance (EUR, %) As of 30 June 2017

Gross – IncomeGross – Appreciation

6.0

4.0

2.01.13

0.81

0.050.05

4.73

1.45

3.42

1.45 5.09

2.27

3.79

2.28

1.57

5.30 1.58

4.02

1.80

5.511.80

4.24

Q2 17 (%)1 year 3 years 5 years Since inception(01/08/08)

8.0

Since inception Total return (EUR, %) Q2 17 1 year 3 years 5 years 01/08/08

IREEF – Gross 1.18 6.23 7.44 6.94 7.39

IREEF – Net 0.86 4.91 6.13 5.65 6.10

Source: Invesco Real Estate as of 30 June 2017. Returns stated above are total net returns and denominated in Euros. Performance is calculated quarterly as movement in NAV per Unit plus distribution expressed as a percentage.1 Net performance is presented based on Class A units. Fund inception date: 1 August 2008. Performance shown is starting from 12 months after the purchase of the first asset for IREEF on 31 December 2009. Past performance not indicative of future results.

Net – IncomeNet – Appreciation

Distinguishing attributes – Cross-border specialists work hand-in-hand with dedicated fund team– High-quality and diverse pan-European portfolio focused on the fundamentals– Long-term performance driven through sustainable and growing Net Operating Income

40

Real Estate Invesco Real Estate – European Hotel Fund

Hotels are now seen by many as a mainstream asset class due to the increasing transparency of data around hotel investments and performance, making investors more comfortable with the sector. Supported by hotels’ strong income component, diversification benefits within a multi-asset portfolio and its demonstrated relative resilience compared to commercial real estate during the global financial crisis, increasing investor confidence in the sector means global hotel investment continues to accelerate. With European tourism growing, additional demand is expected from Asian and Indian tourists who are increasingly travelling independently and seeking ‘affordable luxury’. New hotel concepts are gaining market penetration – including lifestyle brands and extended stay offerings from aparthotels to serviced apartments – together with the emergence of independent management platforms offering lease contracts. There are compelling reasons why hotels attract institutional investment:– Cashflow generative assets – a good match for lease liabilities with

explicit oversight of affordability of rent. Daily pricing of underlying rooms typically provides an inflation hedge, with long-term real term growth in revenues. Leases typically provide a minimum income floor with indexation and potential turnover linked profit rent

– Growth sector – strong operating performance driven by growth in tourism and business travel. Supply reaction in Europe has been muted, while new trends and sub sectors offer further medium term evolution and growth

– High quality – core locations by virtue of serving tourism and business demand. New supply is raising the quality of existing stock, and ongoing tenant investment as part of their business maintains quality of real estate

Investment approachThe fund is focused on providing long-term stable income with potential capital value improvements by investing directly in hotel real estate. The fund’s attributes include: – High-quality real estate and locations –

modern, mid-market hotels in strategic locations such as city centres, airports and conference centres

– Diversification by country, brand and operator – smaller number of larger hotels to comprise the core portfolio, supplemented with smaller brands in growing segments: lifestyle brands, aparthotels, serviced apartments

– Direct ownership of long duration leased hotel assets – leases can offer potential downside protection, but structured with opportunities to capture growth in income through turnover performance

– Majority of return from income – target gross income return in the region of 6-7% p.a. Sector development and asset management to support and create capital value growth

– Optimising risk and return – income risk from hotel trading is mitigated by long lease contracts, encompassing fixed guarantee, hybrid and variable leases

Investment highlights– Immediate European footprint on launch

of the Fund with four hotels in excellent locations in Germany and the Netherlands

– High-quality portfolio of full service hotels which have received significant capital investments and benefit from further upside opportunities

– Leased to an established operator with franchise agreement with a well-known international brand, on a base rent plus profit rent agreement

– Stable historical income: Invesco’s dedicated hotel portfolio has enjoyed stable income even through the downturn in 2009

Key facts


Launch date July 2017

Fund structure FCP-RAIF domiciled in Luxembourg and regulated by the Luxembourg financial market regulator (CSSF)

Fund life Open ended

Liquidity Redemptions based on NAV and open market real estate valuations

Leverage Maximum of 50% LTV

Minimum investment €10m

Target To achieve a 7%-8% p.a. total return over a rolling five-year period with a 6%-7% p.a. income, gross of fees.1


41

Investment teamInvesco Real Estate (IRE) has a dedicated portfolio management team who are focused on the performance of the European Hotel Fund. IRE is a pioneer in investing institutional monies in the sector – it was one of the first investment managers to devise a dedicated hotel strategy for the European real estate industry and have invested c.€3.2bn into the sector over the past decade. This dedicated team of hotel specialists have first-hand hotel and real estate investment management experience across all the major functions.

The depth of resources provided by the existing platform as part of a large organisation ensures IRE can add more value to the investment process. We strongly believe in a team approach across our firm, as opposed to relying upon any single individual or promoting a star fund manager approach, in order to ensure a seamless and consistent service and approach across all of our client mandates.

Distinguishing attributes – Strategy focused on stable, long duration income targeting 6-7% p.a. income and

7-8% p.a. total return, gross of fees1

– Investing into hotels with long duration 15-25 year leases, which can provide for greater stability of income return and reduce total return volatility throughout cycles

– Invesco Real Estate has an 11-year history of managing hotel funds and separate accounts– Access to a growing sector offering stable underlying income

European Hotels vs. Commercial Property performance (EUR, %) Stable return sector

Source: MSCI as of April 2017. Latest data available. 2016 – Provisional – using Hotel sector within Pan-European Universe. E=estimate.

Total return

HotelsAll Property

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

E (%)

10.0

0.0

15.0

5.0

-5.0

Invesco Real Estate European Hotel Fund

Crowne Plaza Amsterdam, the Netherlands

2 Source: Invesco Real Estate as at 30 June 2017. The image is intended to illustrate the type of acquisitions completed in the Fund.

The Crowne Plaza Amsterdam is one of four European hotels in excellent locations in the Netherlands and Germany included on the launch of the Fund.2

1 There is no guarantee that these targets can be achieved.

42

Our focus is on helping your organisation achieve its financial objectives Over the years we’ve grown to become one of the UK’s leading independent asset managers, offering institutions diversified strategies and solutions spanning equities, fixed income, multi asset, real estate, private equity and other alternatives. We’re recognised for providing specialist investment expertise and insight across an ever-widening range of investment capabilities, supporting local authority and corporate pension schemes, insurance companies and other UK institutions. While clients choose Invesco for many reasons, our high conviction style, passion to exceed and commitment to providing a superior investment experience underpins everything we do. And as part of Invesco Ltd. we have the global capability needed to deliver our best ideas to investors around the world, drawing upon the talent of our portfolio managers, analysts and researchers across Europe, North America and Asia-Pacific supported by client service teams in over 20 countries.

Global organisation – Assets under management of

US$876bn – Investment professionals located in

13 countries – More than 6,500 employees worldwide

Investment excellenceWithout distraction from competing businesses, we have a pure focus on investment management. We search the world for the best opportunities, and each investment team follows a clear, disciplined process to build portfolios and mitigate risk.

Providing choicesWe manage investment strategies across all major asset classes and deliver them through a variety of vehicles to meet investor needs.

Our capabilities include equities, fixed income, multi asset, real estate, private equity and liquidity management.

Client focusWe understand the differing needs of our clients and customise our service to each.

We look to create open and supportive business partnerships, while never losing sight of our ultimate aim: long-term outperformance.

About Invesco

43

● 09

● 11

● 10

● 07

● 06

● 02● 01

● 12● 13

● 08● 05

● 04 ● 03

17 ● 18 ● 16

●

● 20

15 ●● 22

21 ●● 14

●19

●23

● 31

● 32

● 29 28●

● 30

● 26 25 ●

● 27

24 ●

33 ●

● 3435 ●

Invesco Private Capital– Private equity funds of funds– Customised portfolios

Locations: London, New York, San Francisco

Invesco Canada Trimark investments – Canadian, regional, sector

and global equity – Canadian and global fixed income– Balanced portfolios

Location: Toronto, Vancouver

Invesco Perpetual– Global and regional equity,

including UK, European, US, Asian, Japanese and emerging markets

– Multi asset– Fixed income

Locations: Henley

Invesco Global Asset Allocation– Global macro– Risk parity– Commodities– Active balanced solutions

Locations: Atlanta, Frankfurt

Invesco Asia-Pacific– Asia ex-Japan– Greater China– Japan– Australia

Locations: Beijing, Hong Kong, Melbourne, Mumbai, Shenzhen, Singapore, Sydney, Taipei, Tokyo

Invesco PowerSharesIndex-based exchange traded funds (ETFs) and actively managed ETFs– Domestic and international equity– Taxable and tax-free fixed income– Commodities and currencies

Locations: Chicago

Invesco Global Core Equity– Emerging markets– International and global equity– US equity

Locations: Atlanta, San Francisco

WL Ross & Co.– Private equity: Contrarian

buyouts, distressed and special situations

Locations: Beijing, New York, Tokyo1

1 WL Ross joint venture.

Invesco Real Estate– Global direct real estate– Global securities

Locations: Atlanta, Beijing, Dallas, Hong Kong, Hyderabad, London, Luxembourg, Madrid, Milan, Munich, New York, Newport Beach, Paris, Prague, San Francisco, Seoul, Shanghai, Singapore, Sydney, Tokyo, Warsaw

Invesco Fundamental Equity– US growth equity– US value equity– International and global

growth equity– Sector equity– Balanced portfolios

Locations: Austin, Houston, San Francisco

Invesco Fixed Income– Global liquidity– Stable value– Global and US broad fixed income– Global alternatives and bank loans

Locations: Atlanta, Chicago, Hong Kong, London, Louisville, New York, Palm Harbor (Florida), San Diego

Invesco Quantitative Strategies– US, global, regional and emerging equity– Long/short strategies– Active low volatility– Balanced solutions

Locations: Boston, Frankfurt, Melbourne, New York, Tokyo, Toronto

Source: Invesco Ltd; as at 30 June 2017. The listed investment teams do not all have products available in the UK.

01 Toronto02 Chicago03 San Francisco04 Newport Beach05 San Diego06 Louisville07 Dallas08 Austin09 Houston10 Palm Harbor11 Atlanta12 Boston13 New York14 London15 Henley16 Paris17 Luxembourg18 Munich 19 Milan20 Madrid21 Frankfurt22 Prague 23 Warsaw24 Beijing25 Tokyo26 Seoul27 Shanghai28 Shenzhen29 Hong Kong30 Taipei31 Mumbai32 Singapore33 New Delhi34 Melbourne35 Sydney

44

Responsible investing

Invesco’s commitment to sound investment stewardship Invesco is committed to delivering an investment experience that helps people get more out of life. A key part of this effort is providing strong, long-term investment performance to our clients around the globe while meeting our fiduciary obligations and ensuring a sustainable environment for future generations.

Globally, Invesco manages over US$57bn in sustainable investments1, managed by 19 investment teams in ten investment centres.

We are signatories to the Principles for Responsible Investment (PRI), UK Stewardship Code and Japan Stewardship Code and recognise the importance of considering environmental, social and governance (ESG) issues as part of a robust investment process.

Our ESG approach is rooted in our investment strategies, products, proxy voting, active ownership, engagement and other oversight practices to ensure we are meeting the highest levels of fiduciary and corporate responsibility.

We view our commitment to integrating ESG as an additional layer of due diligence that reinforces our high conviction and long-term horizon approach to investing.

Invesco 2016 Investment Stewardship and Proxy Voting Annual ReportOur commitment to responsible investing

For further information, please ask for a copy of our latest Invesco Investment Stewardship & Proxy Voting Annual Report.

Invesco ESG capabilities:

10Investment centres

19Strategies1

US$57bnAUM in sustainable investments1

9Dedicated Responsible Investment team

#1In GRESB ‘U.S. Diversified’ 2016 rankings2 (Invesco Real Estate)

UK Tier 1 firmFor our strong stewardship policy under the UK Stewardship Code

1 Invesco’s US$57bn ESG AUM is managed by 19 investment teams in 10 investment centres. As at 30 September 2017.

2 Invesco is ranked #1 in the Capital Markets industry out of 19 companies, and we are ranked #9 in the Financial Sector out of 93 companies. The rankings are based on eight key performance indicators outlined here. For more information, please visit the 2016 Newsweek Green Rankings FAQ. Any reference to a ranking provides no guarantee for future performance results and is not constant over time.

45

James McAuliffeHead of UK Client Relationships020 7543 [email protected]

Magdalena KennedyClient Director020 3219 2723 [email protected]

Stuart BoucherClient Director020 7543 [email protected]

Katy HenricksonClient Director020 7543 [email protected]

Stephen MessengerUK Institutional Sales Director020 7543 [email protected]

Dean HeaneyUK Institutional Sales Director 020 7543 3541 [email protected]

Ed CollingeHead of UK Insurance 020 7543 3591 [email protected]

Chris EvansHead of Consultant Relations EMEA 01491 [email protected]

Abhi Jain, CFAHead of Consultant Relations UK020 7543 [email protected]

Sachin Bhatia, CFAConsultant Relations Director020 7034 [email protected]

Website: www.invesco.co.uk/institutional Twitter: @InvescoUKinsti LinkedIn: Invesco UK Institutional

Alex MillarHead of UK Institutional01491 [email protected]

Contact us

46

Composite: Global Enhanced Institutional (USD) Gross returns as of 31 July 2017 Benchmark: MSCI The World Index (net return) Gross Rate Net Rate Benchmark Composite Benchmark Composite Percentage Total firm Composite of Return of Return Return 3-Year Ann 3-Year Ann Number of assets of firm assets Dispersion (%) (%) (%) St Dev (%) St Dev (%) portfolios (USDm) assets (%) (USDbn) (%)

Q2 2017 3.42 3.32 4.03 – – 3 1150 – – 0.26

Q1 2017 6.09 5.98 6.38 – – 3 1112 – – 0.37

2016 9.08 8.65 7.51 11.01 11.08 3 1034 0.2 599.0 0.80

2015 0.39 (0.01) (0.87) 10.73 10.96 3 931 0.2 575.1 n/a

2014 6.67 6.25 4.94 10.36 10.37 1 554 0.1 584.9 n/a

2013 29.39 28.87 26.68 13.57 13.73 1 542 0.1 572.8 n/a

2012 17.19 16.72 15.83 16.83 16.98 1 445 0.1 497.1 n/a

2011 (4.08) (4.46) (5.54) 20.01 20.44 1 384 0.1 479.8 n/a

2010 12.43 11.98 11.76 23.21 24.05 2 652 0.1 475.3 n/a

2009 29.79 29.27 29.99 20.70 21.70 2 531 0.2 298.2 n/a

2008 (38.15) (38.40) (40.71) 16.36 17.26 2 409 0.2 254.6 n/a

2007 7.18 6.75 9.04 n/a n/a 2 660 0.2 328.6 n/a

2006 21.94 21.45 20.07 n/a n/a 1 346 0.1 243.8 n/a

2005 (5 months) 7.22 7.04 6.53 n/a n/a 1 288 0.2 174.6 n/a

Annual Compound Rates of Return Ending 31 July 2017:

1 Year 17.44 16.97 16.12

3 Years 7.68 7.25 6.64

5 Years 12.94 12.49 11.63

11 Years 6.97 6.54 5.78

Since inception 7.63 7.20 6.42 (31/07/05)

3. The Composite returns are benchmarked to the MSCI The World Index (net return). The benchmark is used for comparative purposes only and generally reflects the risk or investment style of the product. Investments made by the Firm for the portfolios it manages according to respective strategies may differ significantly in terms of security holdings, industry weightings, and asset allocation from those of the benchmark. Accordingly, investment results and volatility will differ from those of the benchmark.

4. Valuations and portfolio total returns are computed and stated in U.S. Dollars. The Firm consistently values all portfolios each day on a trade date basis. Portfolio level returns are calculated as time-weighted total returns on daily basis. Accrual accounting is used for all interest and dividend income. Past performance is not an indication of future results.

5. Composite dispersion is measured by the standard deviation across asset-weighted portfolio returns represented within the composite for the full year. It is considered not meaningful for composites with fewer than three portfolios during the year. The three-year annualised standard deviation measures the variability of the composite and the benchmark returns over the preceding 36 months. The standard deviation is not presented when there is less than 36 months or fewer than five portfolios in the composite.

6. Gross-of-fee performance results are presented before management and custodial fees and are net of trading expenses, non-reclaimable withholding tax on dividends (where material), interest income and capital gains.

7. The representative institutional fee is: 0.40%

8. The minimum portfolio size for the composite is USD 5,000,000.

9. A complete list and description of Firm composites and performance results is available upon request.

10. Additional information regarding policies for valuing portfolios, calculating performance, and preparing compliant presentations is available upon request.

Invesco Worldwide claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Invesco Worldwide has been independently verified for the periods 1 January 2003 through 31 December 2015. The legacy firms that constitute Invesco Worldwide have been verified since 2001 or earlier. The verification reports are available upon request. Verification assesses whether (1) the Firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the Firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. The composite creation date is 07/07/2011.

1. Invesco Worldwide, the Firm, is defined as follows: Invesco Worldwide (“The Firm”) manages a broad array of investment strategies around the world. The Firm comprises U.S.-based Invesco Advisers, Inc. (excluding Unit Investment Trusts) and all wholly owned Invesco firms outside of North America (excluding Religare Enterprises Ltd). All entities within the Firm are directly or indirectly owned by Invesco Ltd. Invesco Canada Ltd. is also a GIPS-compliant firm whose assets are managed by a subsidiary of Invesco Ltd. Invesco Senior Secured Management, Inc., Invesco Private Capital, Inc., and Invesco PowerShares Capital Management LLC are affiliates of the Firm. Each is an SEC-registered investment adviser and is marketed as a separate entity. Invesco Great Wall Fund Management Co. Ltd is a fund management company established under China Securities Regulatory Commission’s approval, and its assets are excluded from total Firm assets.

2. The Global Enhanced – Institutional product contains institutional accounts that target to achieve a positive long-term return, relative to an appropriate benchmark, that is competitive, consistent, and predictable, with low volatility (ex post tracking error target 2.5% or less). Appropriate benchmarks in this context are those that reflect a global investment universe and include markets from all of the following regions: North America, Europe including the UK and Asia/Pacific; the US market must also be part of such a benchmark. The benchmark can be either All Country or Developed Markets. The process is focused on maximising return by integrating a sharp focus on the three critical components of investment performance: return, risk, and transaction costs.

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Composite: European Low Volatility (GBP) Gross returns as of 31 July 2017 Benchmark: MSCI Europe

Gross Rate Net Rate Benchmark Composite Benchmark Composite Percentage Total firm Composite of Return of Return Return 3-Year Ann 3-Year Ann Number of assets of firm assets Dispersion (%) (%) (%) St Dev (%) St Dev (%) portfolios (GBPm) assets (%) (GBPbn) (%)

Q2 2017 5.38 5.26 3.36 – – 7 5792 – – 1.91

Q1 2017 6.44 6.32 6.17 – – 7 5445 – – 0.58

2016 15.00 14.35 18.80 10.61 11.23 7 5384 1.1 484.8 0.11

2015 11.22 10.56 2.78 11.61 12.27 7 5633 1.4 390.2 0.52

2014 6.60 5.96 (0.34) 10.69 12.28 7 3470 0.9 375.1 0.26

2013 28.46 27.69 22.91 11.88 14.56 7 1776 0.5 345.9 0.19

2012 15.55 14.86 13.89 13.72 16.56 6 957 0.3 305.8 0.74

2011 (0.50) (1.10) (10.39) 16.04 20.70 3 669 0.2 308.7 n/a

2010 12.98 12.31 7.14 20.04 24.47 1 336 0.1 303.6 n/a

2009 15.73 15.04 20.93 18.50 22.31 2 241 0.1 184.6 n/a

2008 (14.65) (15.16) (25.82) 17.29 17.81 2 243 0.1 177.1 n/a

2007 12.07 11.41 11.95 n/a n/a 2 160 0.1 165.1 n/a

2006 28.88 28.11 17.29 n/a n/a 2 35 0.0 124.6 n/a


1 Year 18.66 18.09 20.56

3 Years 14.62 13.98 10.82

5 Years 16.17 15.51 13.05

11 Years 11.35 10.70 6.62

4. Valuations and portfolio total returns are computed and stated in GBP. The Firm consistently values all portfolios each month on a trade date basis. Accrual accounting is used for all interest and dividend income. Past performance is not an indication of future results.

5. Composite dispersion is measured by the standard deviation across asset-weighted portfolio returns represented within the composite for the full year. It is considered not meaningful for composites with fewer than three portfolios during the year. The three-year annualised standard deviation measures the variability of the composite and the benchmark returns over the preceding 36 months. The standard deviation is not presented when there is less than 36 months.


7. The representative institutional fee is: 0.75%. The representative retail management fee is: 1.50%


9. A complete list of composite descriptions is available upon request.


Invesco Worldwide claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Invesco Worldwide has been independently verified for the periods 1 January 2003 through 31 December 2015. The legacy firms that constitute Invesco Worldwide have been verified since 2001 or earlier. The verification reports are available upon request. Verification assesses whether (1) the Firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the Firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. The composite creation date is 31/07/2006.

1. Invesco Worldwide, the Firm, is defined as follows: Invesco Worldwide (“The Firm”) manages a broad array of investment strategies around the world. The Firm comprises U.S.-based Invesco Advisers, Inc. (excluding Unit Investment Trusts) and all wholly owned Invesco firms outside of North America (excluding Religare Enterprises Ltd). All entities within the Firm are directly or indirectly owned by Invesco Ltd. Invesco Canada Ltd. is also a GIPS-compliant firm whose assets are managed by a subsidiary of Invesco Ltd. Invesco Senior Secured Management, Inc., Invesco Private Capital, Inc., and Invesco PowerShares Capital Management LLC are affiliates of the Firm. Each is an SEC-registered investment adviser and is marketed as a separate entity. Invesco Great Wall Fund Management Co. Ltd is a fund management company established under China Securities Regulatory Commission’s approval, and its assets are excluded from total Firm assets.

2. The European Low Volatility strategy aims to provide adequate long term total returns in Euro at a risk smaller than that of the equity market. In the strategy the expected return of an equity portfolio is optimised versus the expected risk using IQS forecasts of stock attractiveness. Whilst absolute limits on sector and stock weights exist, the strategy is likely to exhibit risk substantially below that of a European equity index and a different return pattern.

3. The composite returns are benchmarked to the MSCI EUROPE – net return index. The benchmark is used for comparative purposes only and generally reflects the risk or investment style of the product. Investments made by the Firm for the portfolios it manages according to respective strategies may differ significantly in terms of security holdings, industry weightings, and asset allocation from those of the benchmark. Accordingly, investment results and volatility will differ from those of the benchmark.

48

3. The reference index of the composite returns is UK 3-month LIBOR. The reference index is used for comparative purposes only and generally reflects the risk or investment style of the product. Investments made by the Firm for the portfolios it manages according to respective strategies may differ significantly in terms of security holdings, industry weightings, and asset allocation from those of the reference index. Accordingly, investment results and volatility will differ from those of the reference index.

4. Valuations and portfolio total returns are computed and stated in

Pound Sterling. The Firm consistently values all portfolios each month on a trade date basis. Accrual accounting is used for all interest and dividend income. Past performance is not an indication of future results.

5. Composite dispersion is measured by the standard deviation across

asset-weighted portfolio returns represented within the composite for the full year. The three-year annualised standard deviation measures the variability of the composite and the reference index returns over the preceding 36-month period. The standard deviation is not presented where there is less than 36 months or fewer than five portfolios in the composite.

6. Gross-of-fee performance results are presented before management

and custodial fees and are net of trading expenses, non-reclaimable withholding tax on dividends (where material), interest income and capital gains.

7. The representative institutional management fee is 0.70%; the

representative retail management fee is 1.57% 8. The minimum portfolio size for the composite is USD 5,000,000. 9. A complete list and description of Firm composites and performance

results is available upon request. 10. Additional information regarding policies for valuing portfolios,

calculating performance, and preparing compliant presentations is available upon request.

Invesco Worldwide claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Invesco Worldwide has been independently verified for the periods 1 January 2003 through 31 December 2014. The legacy firms that constitute Invesco Worldwide have been verified since 2001 or earlier. The verification reports are available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. The composite creation date is 04/02/2014. 1. Invesco Worldwide, the Firm is defined as follows:

Invesco Worldwide (“The Firm”) manages a broad array of investment strategies around the world. The Firm comprises U.S.-based Invesco Advisers, Inc. (excluding Unit Investment Trusts) and all wholly owned Invesco firms outside of North America (excluding Religare Enterprises Ltd). All entities within the Firm are directly or indirectly owned by Invesco Ltd.

Invesco Canada Ltd. is also a GIPS-compliant firm whose assets

are managed by a subsidiary of Invesco Ltd. Invesco Senior Secured Management, Inc. Invesco Private Capital, Inc. and Invesco PowerShares Capital Management LLC are affiliates of the Firm. Each is an SEC-registered investment adviser and is marketed as a separate entity. Invesco Great Wall Fund Management Co. Ltd is a fund management company established under China Securities Regulatory Commission’s approval and its assets are excluded from total Firm assets.

2. Portfolios within this composite are in GBP base currency and aim to achieve a positive total return in all market conditions over a rolling 3 year period. The composite portfolios target a gross return of 5% per annum above 3-month UK LIBOR (or an equivalent reference rate) and aim to achieve this with less than half the volatility of global equities, over the same rolling 3 year period. The composite portfolios seek to achieve their objective by using a range of investment strategies and techniques to invest actively in a broad selection of asset classes across all economic sectors worldwide.

Composite: Global Targeted Returns UK (GBP) Gross returns as of 31 July 2017 Benchmark: UK 3-month LIBOR

Gross Rate Net Rate Benchmark Composite Benchmark Composite Percentage Total firm Composite of Return of Return Return 3-Year Ann 3-Year Ann Number of assets of firm assets Dispersion (%) (%) (%) St Dev (%) St Dev (%) portfolios (GBPm) assets (%) (GBPbn) (%)

Q2 2017 1.29 0.90 0.08 – – 1 10368 – – n/a

Q1 2017. 1.84 1.44 0.09 – – 1 9489 – – n/a

2016 4.53 2.91 0.53 4.20 0.02 1 8415 1.7 484.8 n/a

2015 2.55 0.96 0.57 n/a n/a 1 4733 1.2 390.2 n/a

2014 9.54 7.84 0.54 n/a n/a 1 860 0.2 375.1 n/a

2013 (3 months) 2.84 2.43 0.13 n/a n/a 1 171 0.0 345.9 n/a


1 Year 3.82 2.21 0.38

2 Years 4.25 2.63 0.49

3 Years 4.42 2.80 0.51

Since Inception 5.74 4.10 0.51 (30/09/13)

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4. Interest rate futures, options, swaps, and forwards may be used to replicate cash investments, manage yield curve or other risk positions and to pursue investment strategies generally allowed by the Composite. Derivatives must be included in the duration calculations of portfolios in the Composite and must abide by the duration, credit quality, and all other constraints of Composite accounts. Funds in this composite are allowed to hedge the currency exposure for both hedging and return enhancement.



7. Gross-of-fee performance results are presented before management and custodial fees but after all trading commissions. Net-of-fee performance results are calculated by subtracting of management, registrar, custody, trustee and audit fees. The management fee schedule is as follows: 0.65% on the first US$50m; 0.55% on the next US $50m; 0.50% thereafter.

8. Effective 1 January 2011 the minimum portfolio size for the

Composite is $10,000,000.

9. The composite creation date is 3 May 2002.

10. Foreign currency exchange rates for calculation of the composite and benchmark are based on the WM/Reuters Closing Spot Rates TM that are fixed at approximately 4:00 p.m. London time.

11. A complete list of composite descriptions is available upon request. Policies for valuing portfolios, calculating performance, and preparing compliant presentations is available upon request.

Invesco Worldwide claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Invesco Worldwide has been independently verified for the periods 1 January 2003 through 31 December 2015. The legacy firms that constitute Invesco Worldwide have been verified since 2001 or earlier. The verification reports are available upon request. Verification assesses whether (1) the Firm has complied with all the composite construction requirements of the GIPS standards on a Firm-wide basis and (2) the Firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

1. Invesco Worldwide (“The Firm”) manages a broad array of investment strategies around the world. The Firm comprises U.S.-based Invesco Advisers, Inc. (excluding Unit Investment Trusts) and all wholly owned Invesco firms outside of North America (excluding Religare Enterprises Ltd). All entities within the Firm are directly or indirectly owned by Invesco Ltd. Invesco Canada Ltd. is also a GIPS-compliant firm whose assets are managed by a subsidiary of Invesco Ltd. Invesco Senior Secured Management, Inc., Invesco Private Capital, Inc., and Invesco PowerShares Capital Management LLC are affiliates of the Firm. Each is an SEC-registered investment adviser and is marketed as a separate entity. Invesco Great Wall Fund Management Co. Ltd is a fund management company established under China Securities Regulatory Commission’s approval, and its assets are excluded from total Firm assets.

2. The Emerging Market Bond strategy generates returns by actively managing a diverse portfolio of Emerging Market Bond securities in multiple countries. The strategy takes advantage of both external and local currency debt, and to a limited degree, Emerging Market Corporates from diverse sectors and industries. This strategy exploits the entire quality spectrum and combines a top-down country allocation with rigorous bottom-up credit analysis and valuation of individual issuers. The strategy employs disciplined portfolio construction which places a strong emphasis on risk management.

3. The Composite returns are benchmarked to the JP Morgan EMBI Global Diversified Index. The JP Morgan EMBI Global Diversified is a uniquely weighted index that tracks total returns for U.S. dollar-denominated Brady bonds, Eurobonds, traded loans, and local market debt instruments issued by sovereign and quasi-sovereign entities. The benchmark is used for comparative purposes only and generally reflects the risk or investment style of the product. Investments made by the Firm for the portfolios it manages according to respective strategies may differ significantly in terms of security holdings, industry weightings, and asset allocation from those of the benchmark. Accordingly, investment results and volatility will differ from those of the benchmark. Up to 25% of composite assets can be invested in countries or regions outside the benchmark.

Composite: Invesco Emerging Market Bond Composite (USD) Gross returns as of 31 December 2016 Benchmark: JP Morgan EMBI Global Diversified Index

Gross Rate Net Rate Benchmark Composite Benchmark Composite Total firm Composite of Return of Return Return 3-Year Ann 3-Year Ann Number of assets assets Dispersion (%) (%) (%) St Dev (%) St Dev (%) portfolios (USDm) (USDbn) (%)

2016 10.27 9.56 10.15 6.05 5.86 2 222.3 599.0 n/a

2015 2.08 1.42 1.18 7.29 6.61 3 274.0 575.1 0.5

2014 7.05 6.36 7.43 8.10 7.12 3 307.9 584.9 0.6

2013 (5.18) (5.79) (5.25) 9.80 7.49 4 353.5 572.8 0.5

2012 20.77 19.99 17.44 8.74 6.36 4 630.9 497.1 0.2

2011 5.34 4.66 7.35 10.01 7.19 2 346.6 479.8 n/a

2010 15.82 15.07 12.24 17.47 13.22 1 494.5 475.3 n/a

2009 42.53 41.61 29.82 17.34 12.92 1 247.6 298.2 n/a

2008 (23.06) (23.55) (12.03) 16.01 12.13 1 159.5 254.6 n/a

2007 6.23 5.54 6.16 6.54 4.93 1 392.6 328.6 n/a

Annualised Compound Rates of Return Ending 31 December 2016:

1 Year 10.27 9.56 10.15

2 Years 6.09 5.41 5.57

3 Years 6.41 5.72 6.19

5 Years 6.65 5.96 5.91

10 Years 6.97 6.28 6.88

Since Inception (31/12/96) 8.95 8.25 8.90

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4. Benchmark Comparison: The Bloomberg Barclays Municipal Bond Index covers municipal bonds with a minimum credit rating of Baa, an outstanding par value of at least $5m and be issued as a part of a transaction of at least $50m USD. The bonds must have been issued after 31 December 1990, and have a remaining maturity of at least one year. S&P Municipal Bond 5+ Year Investment Grade Index is comprised of market value-weighted investment grade U.S. municipal bonds that seek to measure the performance U.S. municipals whose maturities are greater than or equal to 5 years.

5. Calculation Methodology: Gross returns are presented before the deduction of management fees, brokerage commissions, and administrative fees; are net of all transaction costs; and are supplemental to net returns. Net returns include the effect of the maximum annual advisory fee as noted in the accompanying fee schedule. All information is expressed in U.S. dollars. Portfolio returns are net of all foreign withholding taxes, as applicable. The representative management fee for separate accounts is 0.30% on the first $50m USD; 0.25% on the next $50m; 0.20% thereafter.

6. Dispersion is calculated using the asset-weighted standard deviation of the annual returns of all portfolios that were included in the composite for the entire year. It is considered not meaningful for composites with fewer than three portfolios during the year.

7. The three-year annualised standard deviation measures the variability of the composite and the benchmark returns over the preceding 36-month period. The standard deviation is not presented where there is less than 36 months of performance history.

8. A complete list and description of the firm’s composites as well as additional information regarding policies for calculating and reporting composite and portfolio returns are available upon request.

Invesco Worldwide claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Invesco Worldwide has been independently verified for the periods 1 January 2003 thru 31 December 2015. The legacy firms that constitute Invesco Worldwide have been verified since 2001 or earlier. The verification reports are available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. The composite creation date is 31/12/1999.


2. The Invesco Municipal Income Composite was created on 31/12/1999. The strategy seeks a high level of current income exempt from federal income tax, consistent with preservation of capital. As part of the Invesco Morgan Stanley combination on 1 June 2010 this composite has been renamed the Invesco Municipal Income Composite. As of 09/24/2012, the Van Kampen name was removed from the composite name. As of 01/01/2010, an internal limit of 10% was imposed on its holdings of non-rated securities.

3. The Invesco Municipal Income Composite is benchmarked to the S&P Municipal Bond 5+ Year Investment Grade Index. Effective 27 June 2014, the benchmark changed from the Bloomberg Barclays Municipal Bond Index to the S&P Municipal Bond 5+ Year Investment Grade Index. The base currency for the Invesco Municipal Income Composite is USD.

Composite: Invesco Municipal Income Composite (USD) Gross returns as of 30 June 2017 Benchmark: Custom Invesco Municipal Income Index

Gross Rate Net Rate Benchmark Composite Benchmark Composite Percentage Total firm Composite of Return of Return Return 3-Year Ann 3-Year Ann Number of assets of firm assets Dispersion (%) (%) (%) St Dev (%) St Dev (%) portfolios (USDm) assets (%) (USDbn) (%)

Q2 2017 2.33 2.25 2.41 – – 1 2857 – – n/a

Q1 2017 1.97 1.89 1.47 – – 1 2812 – – n/a

2016 0.89 0.58 0.43 3.69 3.98 1 2794 0.5 599.0 n/a

2015 4.61 4.29 4.21 3.99 3.59 1 2401 0.4 575.1 n/a

2014 11.94 11.61 9.81 4.51 3.75 1 2296 0.4 584.9 n/a

2013 (2.68) (3.01) (2.55) 4.78 4.02 1 2164 0.4 572.8 n/a

2012 9.91 9.52 6.78 4.62 3.76 1 2096 0.4 497.1 n/a

2011 12.07 11.67 10.70 6.62 4.63 1 2011 0.4 479.8 n/a

2010 2.94 2.58 2.38 9.03 6.35 2 1304 0.3 475.3 n/a

2009 22.22 21.80 12.91 8.58 6.00 2 1445 0.7 207.4 n/a

2008 (12.48) (12.79) (2.47) 6.29 4.98 2 1258 0.4 313.1 n/a

2007 1.15 0.80 3.36 2.62 2.40 2 1602 0.3 505.9 n/a

2006 6.27 5.90 4.84 3.30 3.07 2 1761 0.4 463.2 n/a

2005 4.27 3.90 3.51 4.66 4.22 2 1792 0.4 418.2 n/a

2004 4.60 4.23 4.48 5.20 4.82 2 1966 0.5 415.0 n/a

2003 6.30 5.93 5.31 5.01 4.62 2 2180 0.5 410.7 n/a

2002 9.88 9.50 9.60 4.37 4.13 2 2290 0.6 372.3 n/a

2001 4.76 4.39 5.13 n/a n/a 2 2174 1.3 170.5 n/a

2000 10.70 10.31 11.68 n/a n/a 2 1819 1.1 173.2 n/a

Annual Compound Rates of Return Ending 30 June 2017:

Since Inception 5.51 5.15 5.18 (31/12/99)

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Composite: Invesco US Unconstrained Senior Loan Composite (USD) Gross returns as of 30 June 2017 Benchmark: Credit Suisse Leveraged Loan Index


Q2 2017 0.83 0.65 0.75 – – 9 7450 – – 0.12

Q1 2017 0.96 0.78 1.20 – – 8 7075 – – 0.10

2016 11.11 10.34 9.88 3.20 2.82 8 4869 0.8 599.0 0.02

2015 (0.63) (1.34) (0.38) 2.35 2.10 6 3522 0.6 575.1 0.02

2014 1.97 1.22 2.06 2.43 1.95 6 3449 0.6 584.9 0.02

2013 6.91 6.06 6.15 3.97 3.56 6 2526 0.4 572.8 0.02

2012 12.23 11.28 9.43 4.43 4.13 5 547 0.1 497.1 0.01

2011 3.47 2.57 1.82 8.03 7.63 4 195 0.0 479.8 0.02

2010 10.70 9.81 9.97 13.61 13.10 3 128 0.0 475.3 0.02

2009 50.52 49.37 44.87 13.59 13.12 4 125 0.1 207.4 0.04

2008 (28.62) (29.22) (28.75) n/a n/a 4 113 0.0 313.1 0.00

2007 1.89 1.00 1.88 n/a n/a 4 67 0.0 505.9 0.05

2006 (4 months) 2.69 2.39 2.56 n/a n/a 4 54 0.0 463.2 0.05

Annual Compound Rates of Return Ending 30 June 2017:

1 Year 8.23 7.46 7.49

3 Years 3.80 3.06 3.49

5 Years 5.37 4.59 4.83

Since Inception 5.41 4.58 4.42 (31/08/06)

4. The Credit Suisse Leveraged Loan Index is a total return index designed to mirror the investable universe of the US Dollar -denominated leveraged loan market. The benchmark is used for comparative purposes only.

5. The standard settlement date of senior loans is trade date plus 7 business days. Actual settlement may extend beyond the stated settlement date. Interest earned between stated and the actual settlement date is not accrued but is recorded on a cash basis that may result in a timing difference between monthly rates of return.

6. Calculation Methodology: Gross returns are presented before the deduction of management fees, brokerage commissions, and administrative fees; are net of all transaction costs; and are supplemental to net returns. Net returns are calculated using the weighted average of the net returns of the underlying portfolios in the composite. All information is expressed in U.S. dollars. Portfolio returns are net of all foreign withholding taxes, as applicable.

7. The representative management fee for separate accounts is 0.50% on the first US $150m; 0.45% on the second $150m and 0.425% on amounts above $300m. The commingled fee schedule is: 0.80% on investments US $160,000 up to $10m; 0.55% thereafter.

8. Dispersion is calculated using the asset-weighted standard deviation of the annual returns of all portfolios that were included in the composite for the entire year. It is considered not meaningful for composites with fewer than three portfolios during the year.

9. A complete list and description of the firm’s composites as well as additional information regarding policies for calculating and reporting composite and portfolio returns are available upon request.

10. The three-year annualised standard deviation measures the variability of the composite and the benchmark returns over the preceding 36-month period. The standard deviation is not presented where there is less than 36 months of performance history.

Invesco Worldwide claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Invesco Worldwide has been independently verified for the periods 1 January 2003 thru 31 December 2015. The legacy firms that constitute Invesco Worldwide have been verified since 2001 or earlier. The verification reports are available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.


2. The Invesco US Unconstrained Senior Loan Composite – USD includes all fee paying, fully discretionary, senior loan accounts. These accounts may consist of, but is not limited to, investment primarily in adjustable rate senior loans, collateralised loan obligations, second lien loans, mezzanine securities and credit derivatives relating to non-investment grade companies and denominated in USD. The Invesco US Unconstrained Senior Loan Composite – USD is benchmarked to the CS Leverage Loan Index. This composite was created on 31/08/06.

3. Effective 02/19/2015, the Invesco Zodiac US Senior Loan Composite – USD was renamed Invesco US Unconstrained Senior Loan Composite – USD. Invesco Senior Secured Management, Inc. has been the subadvisor for this strategy since the inception.

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4. The Balanced-Risk Allocation strategy invests entirely in long-only commodity, equity and bond futures in different regions around the globe targeting equity-like returns with bond-like risk. The composite’s notional value will generally not exceed 2 times capital.



7. Gross-of-fee performance results are presented before management and custodial fees but after all trading commissions and withholding taxes on dividends, interest and capital gains, when applicable. Net-of-fee performance results are calculated by subtracting the highest tier of our published fee schedule for the product from the monthly returns. The management fee schedule is as follows: 0.45% on the first $100m; 0.35% thereafter.

8. As of 31 May 2010, the Composite minimum has been changed to $25m. Prior to this date there was no Composite minimum.

9. The composite creation date is 28 October 2008.

10. A complete list of composite descriptions is available upon request. Policies for valuing portfolios, calculating performance, and preparing compliant presentations is available upon request.

Invesco Worldwide claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Invesco Worldwide has been independently verified for the periods 1 January 2003 through 31 December 2015. The legacy firms that constitute Invesco Worldwide have been verified since 2001 or earlier. The verification reports are available upon request. Verification assesses whether (1) the Firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the Firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.


2. The objective of the Balanced-Risk Allocation investment strategy is to outperform the index, Bloomberg Barclays U.S. Treasury 3-month Bellwether, by 6% over a rolling three to five year investment horizon. The strategy will strive to achieve this objective with a proprietary risk parity strategy that targets 8% portfolio risk and seeks to minimise the risk of large draw downs with a risk-balanced investment process. Portfolio risk is defined as the annualised standard deviation of the strategy’s returns. The strategy is intended to target equity-like returns with bond-like risk. Effective 30 March 2012, the Composite name was changed from Invesco Premia Plus Composite to Invesco Balanced-Risk Allocation Composite – USD.

3. The composite is benchmarked to the Bloomberg Barclays U.S. Treasury 3-month Bellwether index. During April 2009, the decision was made to retroactively change the Composite’s benchmark from the Citigroup Treasury Bill-3 Month index to the Barclays U.S. Treasury 3-month Bellwether index. The benchmark was changed due to data availability. The benchmark is used for comparative purposes only. Investments made by the Firm for the portfolios it manages according to respective strategies may differ significantly in terms of security holdings, industry weightings, and asset allocation from those of the benchmark. Accordingly, investment results and volatility will differ from those of the benchmark.

Composite: Invesco Balanced-Risk Allocation Composite (USD) Gross returns as of 31 July 2017 Benchmark: Bloomberg Barclays U.S. Treasury 3-month Bellwether Index


Q2 2017 (0.13) (0.24) 0.21 – – 2 4580 – – n/a

Q1 2017 2.74 2.63 0.11 – – 2 4571 – – n/a

2016 12.65 12.14 0.35 5.92 0.06 2 4375 0.7 599.0 n/a

2015 (3.19) (3.62) 0.07 6.32 0.03 2 3577 0.6 575.1 n/a

2014 6.70 6.22 0.05 6.26 0.02 2 3405 0.6 584.9 n/a

2013 2.67 2.21 0.08 7.07 0.03 2 2657 0.5 572.8 n/a

2012 12.32 11.81 0.12 6.97 0.03 2 1509 0.3 497.1 n/a

2011 11.81 11.31 0.11 8.44 0.03 2 985 0.2 479.8 n/a

2010 15.26 14.75 0.15 n/a n/a 1 489 0.1 475.3 n/a

2009 21.41 20.86 0.23 n/a n/a 1 344 0.1 298.2 n/a

2008 (3 months) (3.10) (3.21) 0.27 n/a n/a 1 24 0.0 254.6 n/a


1 Year 4.56 4.09 0.57

3 Years 4.47 4.00 0.28

5 Years 5.27 4.80 0.21

Since Inception 8.90 8.42 0.21 (30/09/08)

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Composite: Invesco Active Multi-Sector Credit Composite (USD) Gross returns as of 31 July 2017 Benchmark: Synthetic credit index (see below)


Q2 2017 1.79 1.66 1.50 – – 1 336 – – n/a

Q1 2017 1.97 1.84 1.70 – – 1 330 – – n/a

2016 9.89 9.35 9.09 3.67 3.13 1 325 0.1 599.0 n/a

2015 (0.53) (1.03) (0.28) n/a n/a 1 257 0.0 575.1 n/a

2014 5.30 4.77 4.71 n/a n/a 1 263 0.0 584.9 n/a

2013 (2 months) 0.71 0.63 0.09 n/a n/a 1 101 0.0 572.8 n/a


1 Year 6.77 6.24 4.93

2 Years 6.00 5.47 5.43

3 Years 4.55 4.03 4.21

Since Inception 5.32 4.80 4.65 (31/10/13)

3. Valuations and portfolio total returns are computed and stated in US Dollar. The firm consistently values all portfolios each day on a trade date basis. Portfolio level returns are calculated as time-weighted total returns on daily basis. Accrual accounting is used for all interest and dividend income. Past performance is not an indication of future results.

4. Composite dispersion is measured by the standard deviation across asset-weighted portfolio returns represented within the composite for the full year.

5. Gross-of-fee performance results are presented before management and custodial fees but after all trading commissions and withholding taxes on dividends, interest and capital gains, when applicable. Net-of-fee performance results are calculated by subtracting the highest tier of our published fee schedule for the product from the monthly returns.

6. The minimum portfolio size for the Composite is 1 US Dollar.

7. The composite creation date is 01/10/2014.

8. The strategy is not managed to a benchmark, however market returns shown are for a synthetic index comprising: 40% Barclays Capital Global Investment Grade Credit Index USD Hedged; 30% S&P Leveraged Loan Index; 15% Barclays Capital Emerging Markets Index USD Hedged; 15% Barclays Capital Global High Yield Corporate Index USD Hedged.

9. At the close of business on 31 December 2009, Invesco Ltd. completed the merger of Invesco Aim Advisors, Inc., Invesco Global Asset Management (N.A.), Inc., Invesco AIM Capital Management, Inc., Invesco Aim Private Asset Management, Inc., into Invesco Institutional (N.A.), Inc. which was renamed Invesco Advisers, Inc. Total firm assets as of 31 December 2009 do not reflect this merger.

10. On 1 June 2010 Invesco acquired Morgan Stanley’s retail asset management business, including Van Kampen Investments. Through this transaction, Invesco acquired approximately $119bn in assets under management including mutual funds and separate accounts. These assets were previously part of the Morgan Stanley GIPS firm and will now be part of the respective Invesco GIPS firms. Morgan Stanley was GIPS verified by Ernst & Young through 31 December 2008.

11. A complete list and description of Firm composites and performance results is available upon request. Additional information regarding policies for calculating and reporting returns is available upon request.

Invesco Worldwide has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). The objective of the Invesco Active Multi-Sector Credit strategy is to deliver returns in excess of those available in the investment grade market with a risk profile less than that of the high yield bond market. The strategy seeks to achieve this objective primarily through sector positioning both within and across investment in Sector Funds and active security selection within the Sector Funds. The Sector Funds are managed pools of credit-related assets principally consisting of corporate bonds, emerging market debt, bank loans and high yield bonds, but which may include opportunistic allocations into other credit-related assets. The strategy intends to invest a substantial amount of total assets of the strategy in the Sector Funds. Investment allocations in the Sector Funds will be performed in a manner believed to produce favourable returns across a full credit cycle. The strategy utilises an affiliate as sub-advisor for one of the sector funds.

1. Invesco Worldwide (“The Firm”) manages a broad array of investment strategies around the world. The Firm comprises all Invesco firms outside of North America, combined with two major Invesco firms within the United States, Invesco Institutional (N.A), Inc. (“IINA”), and Invesco Global Asset Management (N.A.), Inc. (“IGNA”). The Firm was incepted on 1 January 2003. For periods prior to 1 January 2006, the Firm excluded the managed account businesses within IINA and IGNA. From that date forward, these portfolios are included within the Firm definition. During 2006, the Firm completed a project to bring its stable value portfolios into compliance retroactively.

2. Effective from 1 January 2001. During 2007, the Firm incorporated the fixed income business of Invesco Aim, an affiliate of IINA and IGNA, into its operating structure and currently includes this business, with the exception of the fixed income portion of balanced accounts managed by Invesco Aim, which are excluded from firm assets, within its Firm definition. Historic assets under management prior to 2006 and 2007, respectively, have not been restated to reflect these extensions of the Firm definition. IINA and IGNA were verified from 1 January 2001 and 1 January 1995, respectively. The ex-North America Invesco firms (previously defined separately for performance reporting purposes as “Invesco Global”) were verified from 1 January 1997. All verifications have been completed through 31 December 2009. Composite history and Firm assets prior to 1 January 2003 are those of its respective components. All entities within the Firm are directly or indirectly owned by Invesco Ltd. GIPS compliant firms whose assets are managed by subsidiaries of Invesco Ltd. are Invesco Worldwide, Invesco Aim Private Asset Management, Inc., Invesco Trimark Ltd., Invesco Aim U.S., and Atlantic Trust. Invesco Senior Secured Management, Inc. and Invesco Private Capital, Inc. are affiliates of the Firm. Each is an SEC registered investment adviser and is marketed as a separate entity. Their assets are excluded from total Firm assets.

54

Composite: Invesco Global Investment Grade Corporate Bond Composite (USD) Gross returns as of 31 July 2017 Benchmark: Bloomberg Barclays Global Aggregate Corporate TR Hedged USD


Q2 2017 2.79 2.69 1.91 – – 1 1060 – – n/a

Q1 2017 2.44 2.34 1.20 – – 1 451 – – n/a

2016 7.24 6.81 6.22 4.37 3.47 1 287 0.0 599.0 n/a

2015 2.39 1.99 (0.24) 4.49 3.52 1 149 0.0 575.1 n/a

2014 11.70 11.25 7.60 4.06 3.37 1 99 0.0 584.9 n/a

2013 2.49 2.08 0.07 4.63 3.94 1 45 0.0 572.8 n/a

2012 13.96 13.50 10.92 3.96 3.55 1 53 0.0 497.1 n/a

2011 3.25 2.84 4.79 n/a n/a 1 18 0.0 479.8 n/a

2010 7.09 6.66 7.24 n/a n/a 1 21 0.0 475.3 n/a

2009 (3 months) 2.44 2.34 1.48 n/a n/a 1 9 0.0 298.2 n/a


1 Year 4.31 3.90 1.93

3 Years 6.44 6.02 4.03

5 Years 6.87 6.44 4.09

Since Inception 7.16 6.73 5.31 (30/09/09)

3. The composite returns are benchmarked to the Bloomberg Barclays Global Aggregate Corporate TR Hedged USD. The benchmark is used for comparative purposes only and generally reflects the risk or investment style of the product. Investments made by the Firm for the portfolios it manages according to respective strategies may differ significantly in terms of security holdings, industry weightings, and asset allocation from those of the benchmark. Accordingly, investment results and volatility will differ from those of the benchmark.

4. Valuations and portfolio total returns are computed and stated in US Dollar. The Firm consistently values all portfolios each month on a trade date basis. Accrual accounting is used for all interest and dividend income. Past performance is not an indication of future results.

5. Composite dispersion is measured by the standard deviation across asset-weighted portfolio returns represented within the composite for the full year. The three-year annualised standard deviation measures the variability of the composite and the benchmark returns over the preceding 36-month period. The standard deviation is not presented where there is less than 36 months or fewer than five portfolios in the composite.


7. The representative retail management fee is: 1%


9. A complete list and description of Firm composites and performance results is available upon request.


Invesco Worldwide claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Invesco Worldwide has been independently verified for the periods 1 January 2003 through 31 December 2015. The legacy firms that constitute Invesco Worldwide have been verified since 2001 or earlier. The verification reports are available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. The composite creation date is 30/09/2009. 1. Invesco Worldwide, the Firm, is defined as follows:

Invesco Worldwide (“The Firm”) manages a broad array of investment strategies around the world. The Firm comprises U.S.-based Invesco Advisers, Inc. (excluding Unit Investment Trusts) and all wholly owned Invesco firms outside of North America (excluding Religare Enterprises Ltd). All entities within the Firm are directly or indirectly owned by Invesco Ltd. Invesco Canada Ltd. is also a GIPS-compliant firm whose assets are managed by a subsidiary of Invesco Ltd. Invesco Senior Secured Management, Inc., Invesco Private Capital, Inc., and Invesco PowerShares Capital Management LLC are affiliates of the Firm. Each is an SEC-registered investment adviser and is marketed as a separate entity. Invesco Great Wall Fund Management Co. Ltd is a fund management company established under China Securities Regulatory Commission’s approval, and its assets are excluded from total Firm assets.

2. The Global Investment Grade Corporate Bond Composite contains all discretionary, separately managed global investment grade corporate bond funds managed against a recognised index. The strategy intends to achieve, in the medium to long term, a competitive overall investment return with relative security of capital in comparison to equities. The strategy will invest at least 70% of its assets in investment grade corporate bonds. At purchase all corporate bonds bought will be investment grade corporate bonds. Accounts in the composite are managed by the Invesco Fixed Income team, utilising the investment process the team adopts. Currency risk is hedged into base currency (US$). The level of leverage under normal market circumstances is expected to amount to 230% of the net asset value of the Fund. Such level might be exceeded or might be subject to change in the future.

55

Important information

This brochure is for Professional Clients only. Please do not redistribute. All information as at 31 July 2017 sourced from Invesco unless otherwise stated. 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. Past performance is not a guide to future returns. Forecasts are not reliable indicators of future performance. As with all investments there are associated risks. Please obtain and review all relevant materials carefully before investing. 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.

Invesco Global Senior Secured Loans strategies This document does not form part of any prospectus. It contains general information only and does not take into account individual objectives, taxation position or individual financial needs. It does not constitute a recommendation of the suitability of any investment strategy for a particular investor. Nor does it constitute an offer or solicitation by anyone in any jurisdiction in which such an offer is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. As with all investments, there are associated inherent risks. Please obtain and review all relevant materials carefully before investing. Many senior loans are illiquid, meaning that the investors may not be able to sell them quickly at a fair price and/or that the redemptions may be delayed due to illiquidity of the senior loans. The market for illiquid securities is more volatile than the market for liquid securities. The market for senior loans could be disrupted in the event of an economic downturn or a substantial increase or decrease in interest rates. Senior loans, like most other debt obligations, are subject to the risk of default. Further information can be obtained from the Invesco UK team.

Invesco Global Liquidity – Short-Term Investment Company (Global Series) plcFund credit ratings: Long-term ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest). Short-term credit ratings are measured on a scale that generally ranges from A-1 (highest) to SP-3 (lowest) for Standard & Poor’s and from P-1 (highest) to NP (lowest) for Moody’s. S&P ratings will also denote those securities that possess extremely strong safety characteristics with a plus sign (+) designation. Ratings are subject to change without notice. For more information on rating methodologies, please visit the following NRSRO websites; www.standardandpoors.com and select ’Understanding Ratings’ under Rating Resources on the homepage; www.moodys.com and select “Rating Methodologies’ under the Research and Ratings on the homepage; www.fitchratings.com and select ’Ratings Definitions’ on the homepage. Fund credit ratings are not an indication of fund performance.

Invesco Perpetual Global Targeted Income Fund The fund makes significant use of financial derivatives (complex instruments) which will result in the fund being leveraged and may result in large fluctuations in the value of the fund. Leverage on certain types of transactions including derivatives may impair the fund’s liquidity, cause it to liquidate positions at unfavourable times or otherwise cause the fund not to achieve its intended objective. Leverage occurs when the economic exposure created by the use of derivatives is greater than the amount invested resulting in the fund being exposed to a greater loss than the initial investment. The fund may be exposed to counterparty risk should an entity with which the fund does business become insolvent resulting in financial loss. This counterparty risk is reduced by the Manager, through the use of collateral management. The securities that the fund invests in may not always make interest and other payments nor is the solvency of the issuers guaranteed. Market conditions, such as a decrease in market liquidity for the securities in which the Fund invests, may mean that the Fund may not be able to sell those securities at their true value. These risks increase where the Fund invests in high yield or lower credit quality bonds and where we use derivatives. As one of the key objectives of the fund is to provide income, the ongoing charge is taken from capital rather than income. This can erode capital and reduce the potential for capital growth.

Invesco Real Estate UK Residential Fund and Invesco Real Estate European Hotel Fund The value of property is generally a matter of an independent valuer’s opinion. Property and land can be difficult to sell, so investors may not be able to sell such investments when they want to. The fund is a dedicated Luxembourg open-ended unregulated fund. It qualifies as an alternative investment fund (AIF) managed by Invesco Real Estate Management S.à.r.l. as external alternative investment fund manager (AIFM). The fund is offered in accordance with the Alternative Investment Fund Managers Directive. The fund will not be marketed, and marketing materials of the fund may only be distributed, in other jurisdictions without public solicitation and in compliance with the private placement rules set forth in the laws, rules and regulations of the jurisdictions concerned, if at all. The marketing of the fund in certain jurisdictions may be restricted by law.

Invesco Real Estate European Fund Property and land can be difficult to sell, so investors may not be able to sell such investments when they want to. The value of property is generally a matter of an independent valuer’s opinion and may not be realised. The fund, as a Specialised Investment Fund, is authorised for ‘Well-Informed Investors’ only (as defined in the Luxembourg Law dated 13 February 2007). Marketing of the fund’s shares is permitted to Professional Clients in the UK in accordance with the Alternative Investment Fund Managers Directive. The fund’s shares will not be marketed, and the Prospectus and marketing materials of the fund may only be distributed, in other jurisdictions without public solicitation and in compliance with the private placement rules set forth in the laws, rules and regulations of the jurisdictions concerned. The marketing of the fund in certain jurisdictions may be restricted by law.

Contact us

UK Institutional Team Portman Square House 43-45 Portman Square London, W1H 6LY United Kingdom Telephone: 020 7543 3534

Website: www.invesco.co.uk Twitter: @InvescoUKinsti LinkedIn: Invesco UK Institutional Telephone calls may be recorded.

Issued by Invesco Asset Management Limited Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, United Kingdom Authorised and regulated by the Financial Conduct Authority

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