31st Jul 2019 12:42
(Alliance News) - Invesco Perpetual Select Trust PLC said Wednesday all of its portfolios underperformed against their benchmarks for its recently ended financial year, reporting negative returns.
For the 12 months to the end of May, the UK equities portfolio's net asset value negative return was 4.9%, compared to the FTSE All-Share Index's 3.2% negative return for the period.
For the UK portfolio, it was a challenging year as the US-China trade war and a dovish stance from the US Federal Reserve in the face of weakening growth and a worsening trade dispute. Portfolio-wise, the main detractors were Babcock International PLC, Victoria PLC and easyJet PLC.
The global equity income portfolio made a negative return of 1.3% for the year, compared to the MSCI World Index in sterling terms reporting a positive return of 5.3%.
Invesco Perpetual said the global portfolio posted a disappointing performance due to its underweight exposure to the US, which during the period was by far the strongest performer of all the major regions. Instead the portfolio had an overweight exposure to the much weaker UK and Europe.
The balanced risk allocation portfolio made a negative return of 2.7%, from the three-month plus LIBOR at 5% per year's 5.8% positive return.
The balanced risk portfolio was said to be hindered by its strategic exposure to equities and commodities, which both weakened since the second half of 2018 on concerns over international trade.
In addition, Chair Patrick Gifford will be retiring from his role with effect at the trust's annual general meeting on October 3, after 13 years in the role since 2006.
"After a financial year of low returns and reasonable profit growth, markets have become rather cheaper. Economic growth is still continuing, though at a slightly slower pace, and profits are still rising. Given the prevalence of very low nominal and real interest rates, markets should offer reasonable, though probably not very exciting returns, especially because there is very little euphoria around," Gifford said.
Invesco Perpetual's UK Equities shares remained flat at 176.50 pence, while the Global Equity shares were up 0.5% at 209.00p, and the Balanced Risk shares remained untraded at 141.50p on Wednesday.