Invesco Perpetual UK Equities Small Cap investing Webcall July - PowerPoint PPT Presentation

Invesco Perpetual UK Equities Small Cap investing Webcall July 2017 Jonathan Brown, Fund Manager This presentation is for Professional Clients only and is not for consumer use. Robin West, Fund Manager 10824/LI/IPUKSCIT – Jan17

Excellent long-run performance from the Numis indices Total returns cumulative value (log scale) 100000 14,121 10000 6,069 970 1000 100 10 1 10824/LI/IPUKSCIT – Jan17 NSC 1000 NSCI FTSE All-Share Source: Numis as at 31 December 2016. 2

Invesco Perpetual UK Smaller Companies Equity Fund Net performance (%) Cumulative returns 160 142.9 Invesco Perpetual UK Smaller Companies Equity Fund 140 119.8 IA UK Smaller Companies NR 108.5 120 95.0 100 80 60 42.6 40 25.7 24.1 19.1 7.5 7.3 20 0 3 months 1 year 3 years 5 years 10 years Periods 3 mths 1 year 3 years 5 years 10 years 7.5 24.1 42.6 119.8 142.9 Invesco Perpetual UK Smaller Companies Equity Fund 7.3 19.1 25.7 95.0 108.5 IA UK Smaller Companies NR 5.8 18.8 23.4 92.2 119.7 Numis Smaller Companies (ex Inv Co’s ) Index 2 1 1 2 2 Quartile 23/47 12/47 9/46 12/40 14/33 Ranking Past performance is not a guide to future returns 10824/LI/IPUKSCIT – Jan17 Source: Lipper as at 31 March 2017. Fund performance figures are based on the Z (accumulation) share class. As this was launched on 12 November 2012, for the periods prior to this launch date, performance figures are based on the accumulation share class, without any adjustment for fees. Performance figures for all share classes can be found in the relevant Key Investor Information Document. Fund performance figures are shown in sterling, inclusive of reinvested income and net of the Ongoing Charge and portfolio transaction costs. The figures do not reflect the entry charge paid by individual investors. Sector average performance is calculated on an equivalent basis. Benchmark source: Thomson Datastream, total return, in sterling. 3

Invesco Perpetual UK Smaller Companies Equity Fund 10 year performance Total Return (% Growth) 160 140 120 100 80 60 40 20 0 -20 -40 -60 Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 IP UK Smaller Companies Equity Fund FTSE All-Share Index Numis Smaller Companies (ex Inv Co’s) Index 10824/LI/IPUKSCIT – Jan17 Past performance is not a guide to future returns Source: Lipper as at 31 March 2017. Fund performance figures are based on the Z (accumulation) share class. As this was launched on 12 November 2012, for the pe riods prior to this launch date, performance figures are based on the accumulation share class, without any adjustment for fees. Performance figures for all share classes can be found in the relevant Key Investor Information Document. Fund performance figures are shown in sterling, inclusive of reinvested income and net of the Ongoing Charge and portfolio transaction costs. The figures do not reflect the entry charge paid by individual investors. Benchmark source: Thomson Datastream, total return, in sterling. 4

Invesco Perpetual UK Smaller Companies Equity Fund Investment process and portfolio construction Unconstrained, long term, bottom up stock pickers with a macro overlay Research and idea Fundamental & Portfolio construction generation financial analysis and risk management  Over 1000 in-house research  Stock ideas generated from  Rigorous security selection profiles universe of circa 900 companies  Well diversified portfolio of 80-  Circa 350 company meetings 100 names and site visits each year  Growth focused  Structured sell discipline  Leverage off other Invesco  Fundamental analysis of teams company and market  Long term investors, resulting  External brokers and research low portfolio turnover  Detailed financial analysis and providers valuation appraisal  Multi-level system of risk  Overlay of macro ideas and management which promotes investment themes fund manager accountability 10824/LI/IPUKSCIT – Jan17 Source: Invesco Perpetual. For illustrative purposes only. 5

Dramatic fall in sterling in 2016 Sterling Exchange Rate Index (2005=100) 110 105 100 95 90 85 80 75 10824/LI/IPUKSCIT – Jan17 70 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Source: Bloomberg, as at 16 May 2017. 6

Small company valuations Index PE 12m fwd Growth Div Yield 12m fwd Div Growth (ex-loss makers) 12m fwd (ex-non payers) 12m fwd FTSE All Share 14.2x 15.3% 4.1% 4.7% FTSE All Share 14.7x 8.8% 3.4% 7.2% (Median) Numis Small Companies Index 13.1x 9.6% 3.4% 7.9% Numis Small Companies 13.2x 9.0% 3.5% 6.6% (Median) 12m forward PE ratio by FTSE index 12m forward EPS growth by FTSE index (%) 18.0x 30 16.0x 20 14.0x 12.0x 10 10.0x 0 8.0x 6.0x -10 4.0x -20 2.0x 10824/LI/IPUKSCIT – Jan17 FTSE 100 Mid 250 Small Cap FTSE 100 Mid 250 Small Cap 0.0x -30 Nov 07 Nov 08 Nov 09 Nov 10 Nov 11 Nov 12 Nov 13 Nov 14 Nov 15 Nov 16 Nov 07 Nov 08 Nov 09 Nov 10 Nov 11 Nov 12 Nov 13 Nov 14 Nov 15 Nov 16 May 07 May 08 May 09 May 10 May 11 May 12 May 13 May 14 May 15 May 16 May 07 May 08 May 09 May 10 May 11 May 12 May 13 May 14 May 15 May 16 Source: Peel Hunt as at 28 February 2017. 7

Invesco Perpetual UK Smaller Companies Equity Fund Market cap breakdown (%) 100 5.86 9.24 £1.5 bn 90 15.45 80 31.96 £1bn -1.5bn 70 60 37.03 £500m - 1bn 50 37.24 40 £100m - 500m 30 £0m - 100m 34.51 20 23.45 10 Cash 0.98 1.49 2.79 0 IP UK Smaller Co's Numis Smaller Co's Equity Fund (ex Inv Co's) Index 10824/LI/IPUKSCIT – Jan17 Source: Invesco Perpetual / Numis as at 31 March 2017. Data may not sum due to rounding. 8

Invesco Perpetual UK Smaller Companies Equity Fund Sector breakdown Fund Active weight Index 1 (%) (%) (%) 4.75 4.10 0.65 Oil & Gas 1.67 4.63 -2.96 Basic Materials 30.41 26.17 4.24 Industrials 4.09 10.48 -6.39 Consumer Goods 9.70 4.55 5.15 Health Care 21.01 18.72 2.29 Consumer Services 1.41 1.03 0.38 Telecommunications 0.00 0.10 -0.10 Utilities 13.22 24.21 -10.99 Financials 10.96 6.01 Technology 4.95 2.79 0.00 Cash 2.79 10824/LI/IPUKSCIT – Jan17 Source: Invesco Perpetual as at 31 March 2017. 1 Index is Numis Smaller Companies (ex Inv Cos) Index. 9

Current themes for the Fund Self Help / Roll out / Structural Recovery Roll up Growth 4imprint  BooHoo    CVS  Coats Group  FDM Hilton Food Group   JD Sports   Johnson Service Group   Keywords Studios SDL    10824/LI/IPUKSCIT – Jan17 Severfield Source: Invesco Perpetual as at 31 March 2017. For illustrative purposes only. 10

Important information This presentation is for Professional Clients only and is not for For the most up to date information on our ICVCs, please refer to the consumer use. relevant fund and share class-specific Key Investor Information Documents, the Supplementary Information Document, the Annual or Interim Short The value of investments and any income will fluctuate (this may partly be Reports and the Prospectus, which are available using the contact details the result of exchange rate fluctuations) and investors may not get back shown. the full amount invested. Past performance is not a guide to future returns. Where Jonathan Brown and Robin West have expressed opinions, they are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco Perpetual investment professionals. This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities. Smaller company funds are higher risk than funds that can invest in larger company sizes. Market conditions, such as a decrease in market liquidity, may mean that it is not easy to buy or sell securities. The Invesco Perpetual UK Smaller Companies Equity Fund may use derivatives (complex instruments) in an attempt to reduce the overall risk of its investments, reduce the costs of investing and/or generate additional capital or income, although this may not be achieved. The use of such complex instruments may result in greater fluctuations of the value of the 10824/LI/IPUKSCIT – Jan17 Fund. The Manager, however, will ensure that the use of derivatives within the Fund does not materially alter the overall risk profile of the Fund. Issued by: Invesco Fund Managers Limited Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire, RG9 1HH Website: www.invescoperpetual.co.uk Authorised and regulated by the Financial Conduct Authority 11