INVESCO GLOBAL FOCUS (UK) - INVESCO - OUR RESEARCH. YOUR SUCCESS - RSMR Research

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CONTINUE READING
UND PROFILE
              INVESCO
              INVESCO GLOBAL FOCUS
              (UK)
              January 2021

              OUR RESEARCH. YOUR SUCCESS
CONTENTS

       FUND PROFILE – INVESCO GLOBAL FOCUS (UK)_______________________________4

       IA GLOBAL SECTOR____________________________________________________5

       INVESCO ASSET MANAGEMENT___________________________________________6
       Fund Manager
       Fund Objectives & Targets

       INVESCO GLOBAL FOCUS (UK)____________________________________________7
       Investment Philosophy & Process
       Risk Management

       PAST & CURRENT POSITIONING/STRATEGY__________________________________10

       PERFORMANCE_______________________________________________________12
       Performance Under Randall Dishmon

       SUMMARY & EVALUATION_______________________________________________1       4

       ABOUT US____________________________________________________________17
       Working with advisers
       Working with providers
       Ratings

                                                                                      Page 3
FUND PROFILE – INVESCO GLOBAL FOCUS (UK)

         OUR FUND PROFILES provide an in-depth review of our leading rated funds and are designed to give advisers, paraplanners
         and analysts an ‘under the bonnet’ view of the fund. In providing more detailed commentary than a standard fund factsheet
         we believe our fund profiles set the standard for the next generation of research notes, aiding in fund selection and in
         meeting the ongoing suitability requirements expected by the FCA, and helping ensure firms deliver good client outcomes.

         All of our rated funds are subject to rigorous and ongoing scrutiny on both a qualitative and quantitative basis. Our fund
         methodology is available for download from the RSMR Hub – www.rsmr.co.uk

         Invesco Global Focus (UK) has been rated by RSMR since December 2017 under its previous guise of the Invesco Global
         Opportunities fund. In February 2020, the name was changed to the Global Focus fund and the management switched to
         Randall Dishmon of Oppenheimer, a company that Invesco bought in 2019. Randall has run the Global Focus strategy since
         2007 and built an impressive track record of performance. The aims of the fund remain the same, to produce a capital return
         over the long term, and Randall achieves this by building a portfolio of stocks that have a structural advantage in some way.

         The investment process is strongly rooted in the guiding tenets of the Global Focus Strategy investment philosophy, which
         Randall has run successfully since 2007 at Openheimer. The fund is highly differentiated from its previous incarnation, the
         Global Opportunities fund run by the previous team headed by Stephen Anness in Henley Upon Thames, and from the other
         global funds on the RSMR Rated List.

         The Invesco Global Focus strategy has an impressive performance track record in the US and should be considered as an option
         by investors looking for an equity fund with global exposure.

                                     Robin Ghosh – Senior Investment Research Manager, RSMR

                                     Robin joined RSMR in 2018 as Investment Research Manager & Portfolio Manager for the Rfolios
                                     discretionary portfolio service.

                                     He has been in the industry for nearly 20 years. After starting his career in Leeds at a firm
                                     of stockbrokers he moved in 2004 to BWD Rensburg, which later became Investec Wealth &
                                     Investment, as a discretionary investment manager. He managed the portfolios for a wide range
                                     of private clients, trusts and charities. Then, after a brief spell as a wealth advisor, he joined
                                     the wealth management arm of a regional law firm, managing the investments for a number
                                     of families, their pensions and trusts. There, he was also part of the research team and asset
                                     allocation committee member that was responsible for maintaining the firm’s investment models.

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IA GLOBAL SECTOR

The IA Global sector comprises funds which invest at least 80% of their       It is important to remember that the global equity indices are not
assets globally in equities and which have the prime objective of achieving   necessarily representative of the real-world economy. Single stocks on the
growth of capital.                                                            US market, like Tesla, could have the same market value as all the other
                                                                              global companies in that sector. Likewise, the weighting to the top 5 US
This sector, with around 380 active funds and assets of £150 billion1, is
                                                                              stocks in the global indices is greater than the weighting to the Japanese
one of the largest and most diverse IA sectors. It includes a broad range
                                                                              and UK stock markets combined, which is why the exposure to the US in
of global equity ranging from global large cap and thematic (water, clean
                                                                              the MSCI World Index is so large at 66%.
energy, financials, technology), to global small cap equity funds.
                                                                              Diversification is important and demonstrates the benefit of active over
The variations between the funds makes it difficult for an investor to
                                                                              passive investing, where the fund manager does not have to concentrate
compare them as strategies will clearly perform differently depending
                                                                              their investments in the largest index names but rather they have the
on market conditions. It is important to recognise this when looking at
                                                                              ability to add alpha by investing across different geographies and market
both absolute and relative performance numbers, and this is particularly
                                                                              caps.
relevant for the Invesco Global Focus Fund (UK) which has its own unique
style and philosophy.

Stock markets are forward looking, tending to discount events 9 months
to a year in advance. This means sentiment and expectations can be
powerful drivers of market performance. That is why uncertainty is a major
cause of market volatility, and 2020 was certainly a year for that. Markets
are looking through some of that uncertainty to a global economy making
a slow and hard-fought recovery.

The Covid-19 pandemic has demonstrated the importance for investors
to think not just geographically, but also in terms of sectors and themes
which arguably have been a greater driver of returns than country
selection. Even in the US, the best performing major market, there has
been a huge divergence within the S&P 500, especially the internet related
names and the median US listed company. This pattern has been seen
across the globe with the market leaders in every country ‘new economy’
related names. Within the service sector companies not reliant on high
levels of personal service have fared best, whilst those dependent on
high levels of human interaction have seen significant declines in demand
for their product, often with a highly damaging impact on their balance
sheets. This has resulted in the permanent destruction of value for equity
holders.
                                                                              1 – As at November 2020 – Investment Association.

                                                                                                                                                           Page 5
INVESCO ASSET MANAGEMENT

         Invesco is one of the world’s leading independent investment firms,
         solely focused on investment management. It is listed on the New York
         Stock Exchange and is a constituent of the S&P 500 Index. Employees
         and employee trusts hold approximately 8% of the shares of Invesco. It
         operates in over 25 countries and employs over 8,700 people.

         The firm maintains a strong capital position, significant access to liquidity
         facilities and a substantial cash position on its balance sheet. Operating
         profits, investment performance and sales remain strong on a relative basis.

         Invesco offers a diversified range of investment strategies, spanning all
         major equity, fixed income, asset allocation and alternative asset classes.
         These strategies are managed across various worldwide investment centres,
         each of which focus on distinct asset classes, investment styles or regional
         expertise and adhere to clearly defined investment philosophies aligned with
         client expectations. Each team is able to operate independently, allowing
         them to follow their specific investment style and expertise.

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INVESCO GLOBAL FOCUS (UK)

 Manager                    Randall Dishmon                                   UtiliCorp United and as a Division Chief with KCI Technologies. He has a BS
                                                                              in Engineering from North Carolina State University, an MS in Engineering
 Structure                  UK Authorised ICVC with UCITS V status
                                                                              from John Hopkins University, and an MBA from the University of Michigan.
 IA Sector                  IA Global
 Launched                   20 October 1997                                   Other key figures in the team include:
 Fund Size                  £203.7 as at 31 December 2020
                                                                              Jonathan Hartman, CFA, Senior Research Analyst
Fund Manager                                                                  Jonathan Hartman is a senior research analyst for the Global Focus
                                                                              strategy. Prior to joining the firm full time in July 2013, from May 2012
The fund’s original strategy was launched on 20th October 1997 as the
                                                                              Jonathan worked at the firm part time, analysing companies for both the
Invesco Perpetual Global Dynamic Theme fund. On 27th February 2009,
                                                                              Global Focus and International Value strategies. Jonathan holds a B.A. in
the fund objective, manager and name changed to the Global Opportunities
                                                                              economics, with a major in finance, from Bucknell University. He is also a
fund and Stephen Anness assumed lead manager responsibilities. This
                                                                              CFA charterholder.
fund concentrated on two main areas, industry leaders and special
situations.
                                                                              James Burke, CFA, Senior Research Analyst
When Invesco’s Chief Investment Officer and Head of Global Equities Nick      James Burke is a senior research analyst on the Global Equity Team
Mustoe departed the firm at the end of 2019, Andrew Hall, Stephen Anness      dedicated to the Global Focus strategy. Prior to joining the firm, James
and Joe Dowling, took charge of his two flagship funds Global Equity and      was an analyst at J.H. Lane Partners LP, a value-focused investment
Global Equity Income. This created an opportunity for a manager from          firm investing across the capital structure. Prior to that, he was a high
another of Invesco’s investment centres to manage the fund.                   yield credit desk analyst and credit derivative products analyst at
In February 2020, New York based Randall Dishmon took over the                Morgan Stanley & Co. James holds a B.S. in General Mathematics and
management responsibilities of the fund and the name changed again. The       Management Science from Massachusetts Institute of Technology. He is
Global Focus fund replicates the strategy he has successfully run at the US   also a CFA charterholder.
firm Oppenheimer since its inception in 2007, which has now $2.6billion of    In addition to the portfolio managers, the team is supported by the wider
assets under management. In 2019 Oppenheimer was bought by Invesco            Global Equity Group of 17 additional investment professionals.
and Randall became a senior portfolio manager at Invesco.

Randall Dishmon is the lead manager on the Global Focus Strategy. He          Fund Objectives & Targets
previously worked as an Environmental Engineer in industry before joining     The objective of the fund is to achieve long-term (5 years plus) capital growth.
Oppenheimer (bought by Invesco in 2019) in 2001. He began his career at       The fund invests at least 80% of its assets in shares of companies globally.
Oppenheimer as a Research Analyst on the Global Equity Strategy from which
                                                                              The goal for the strategy is to outperform the MSCI All Country World index
he progressed to a senior analyst role and subsequently became co-manager
                                                                              over a full market cycle.
the Global Multi Cap Growth strategy before taking on his current role.
                                                                              The fund holds a concentrated portfolio of 30 to 55 stocks but typically 35
Prior to joining the firm, he worked for two years as a management
                                                                              to 40 stocks and may use derivatives (complex instruments) to manage
consultant for Booz Allen & Hamilton. He also served as a manager with

                                                                                                                                                                 Page 7
the fund more efficiently, with the aim of reducing risk, reducing costs     to be right. That’s why our investment philosophy is underpinned by three
         and/or generating additional capital or income.                                                    critical tenets” Randall Dishmon

         The reference to the UK in the fund’s name only relates to the fund’s        These tenets are:
         domicile and is unrelated to the fund’s objective and investment policy.
                                                                                      z Play only where there is opportunity

         Investment Philosophy & Process                                              z Play to win

         Under its previous guise of the Invesco Global Opportunities Fund, the       z Play when you are advantaged
         portfolio was constructed from 35-40 stocks but focused on two broad         The Global Focus philosophy, encapsulated in the three investment tenets,
         opportunity sets – industry leaders and special situations.                  is predicated upon the identification of structural growth trends that will
         Industry leaders are fundamentally excellent businesses where the power      drive sustainable growth due to favourable tailwinds in which the durable
         of market perception has temporarily undermined investor views of the        business attributes of a particular company can provide solutions and
         inherent business qualities. Special situations arise where the market       improve a company’s outlook. Randall and his team identify areas of
         extrapolates the status quo when in fact something tangible has changed.     structural growth as opportunities to research stock ideas. Conversely,
         The team was prepared to hold contrarian views, investing in ideas that      by concentrating on structural growth the team will then avoid industries
         would provide the most favourable risk/reward asymmetry irrespective of      with non-differentiated products or intensely competitive industries where
         the reference benchmark composition.                                         economics are unsustainable or poor.

         Randall is not benchmark aware but is looking to make a capital return       The fund invests when the balance of risk and reward is in their favour,
         in a sensible, repeatable, risk sensitive way. The new team focuses on       whilst also trying to preserve capital when the balance is not. The team
         building a high conviction portfolio of typically 35 to 40 stocks, with a    looks to purchase companies at an attractively price when there is a
         bottom-up approach to stock selection and looks to identify companies        significant gap between their estimate of the private market value of the
         with entrenched competitive advantages and the ability to compound high      business and the market price. The portfolio is built from the team’s best
         rates of growth over multi-year periods. The fund invests only where they    ideas and where risk/reward asymmetry is greatest.
         feel there is significant opportunity supported by sustainable, structural   The Global Focus fund’s team believe that investing involves taking some
         growth trends.                                                               risk to earn a return. They ensure the risks being taken are appropriate to
         To Randall Dishmon, successful investors must be expert at recognising       the potential rewards on offer and this requires a disciplined process.
         the difference between cyclical and structural trends. Cyclical change
         separates markets into growth companies and value companies and in           Fundamental Research
         Randall opinion, structural change separates the market into winners and     The fundamental company research is steered directly from the three
         losers. Losers do not mean revert.                                           tenets of the investment philosophy. The team asks the following questions
                                                                                      to focus the analysis and to give the team conviction in their decision-
           “We believe that to produce superior long-term investment results, you
                                                                                      making process:
           have to believe something different than what the market believes, you
           have to behave differently than how the market behaves, and you have       Is the business worth owning? This reiterates the idea of searching for

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structural growth ideas and assesses whether the company’s advantage in        typically hold between 35 and 40 companies with no regard for the index.
its sector is durable. Identifying the specific USP that a company may have    They also have no regard to metrics such as tracking error or investment
can be difficult and the team strives to calculate whether the company         style (growth / value). The holdings are weighted in the portfolio by the
can translate that advantage into revenue growth which over time will          attractiveness of the balance of risk and reward. The managers look to
compound returns. A feature of companies which grow like this is that          reward the best relative risk / reward positions with the highest weightings
they become incrementally more profitable as revenue grows. This will          and will hold stocks across various industries and geographies to provide
also be apparent in having a good balance sheet.                               sufficient diversification without, in their view, over diversifying the portfolio.

What is the right price? If the economics of the company are sound,            Once a stock is in the strategy, the team are constantly revisiting the
then the main determinant for the success of a position is the price paid.     investment thesis and will consider new, relevant information. They add
Is there a substantial gap between the team’s estimated value of the           to positions if the valuations appear attractive to shareholders and trim
business and market price? The team are conservative on their valuations       positions as the market price of a company approaches their estimate of
and consider a range of valuations such as the breakup value or what           its value. The team will sell stocks when they believe there are no further
price they would pay to take this company private. The team prefer to use      value creation opportunities available or when a management team takes
metrics which are harder to manipulate, such as cashflow or free cash          action that is not in shareholder interests.
flow yield. If they decide that a company meets its criteria, they are happy
to pay for the specific growth characteristics.                                Risk Management
Is Management working for shareholders? Does the management                    The team’s approach to managing risk is focused on absolute risk, or the
of the company allocate capital in a sensible way and treat external           ’real‘ risk of losing money. Randall believes that ’relative‘ risk measures
shareholders well? The team look at the history of the management team         such as volatility measurement, tracking error, beta and those based on
to see if they created shareholder value through corporate actions and         measuring a portfolio relative to an index or other portfolio is more to do
this will indicate how management may behave in the future. They ask           with fund manager ‘career risk’ rather than actual risk of losing money.
themselves simple questions like do they buy back stock at lows or highs?      Randall and his team believe in having a quality bias to the portfolio and
Have they carried out acquisitions strategically or as a vanity project? Are   in what companies they are willing to buy can have an effect in reducing
costs under control?                                                           absolute risk. A true compounding effect comes from owning a great
The team feel that honesty and integrity are an important characteristic       business over long periods of time. They know what they own very well by
in effective company management. These are signposts to how the                meeting the management and getting under the bonnet of each potential
management conduct themselves. Other signposts include whether                 company. Knowing what they own is necessary in determining the right
management conduct any related-party transactions, how much equity or          price for what they get as well as how it fits into the overall portfolio.
options issuance there is, and are management incentives based on the          An investment has many characteristics, one of which is asymmetry of
right behaviours?                                                              returns. These companies offer excellent upside with limited downside and
                                                                               there is no better risk management than that. Knowing what they own and
Portfolio Construction                                                         paying the right price makes this possible.
The team look to build a diversified portfolio of 30 to 55 stocks but will

                                                                                                                                                                     Page 9
PAST & CURRENT POSITIONING/STRATEGY

          In February 2020 Randall Dishmon and his team took over the fund. They         significantly through time. The team finds many of these companies in
          aligned the portfolio to mirror that of the Global Focus Strategy, run since   the consumer discretionary, consumer staples, information technology,
          2007, and with it the fund name changed to the Global Focus fund. The          healthcare, and sometimes financial sectors. However, they do not find
          portfolio has changed significantly since then. Under the previous team,       many names in the utilities, real estate, energy, or materials sectors. When
          the managers concentrated on two main areas, industry leaders and              the former sectors are in favour, or the latter sectors out of favour, it is
          special situations. There were several noticeable trends in the portfolio      typically positive for relative performance.
          over the years as the fund had significant exposure to financials and the
                                                                                         The portfolio holds some clear biases to industries and sectors where
          energy sector. The first of these trends was a significant allocation to US
                                                                                         the team finds opportunities which meet its criteria for ownership. Over
          financials through different segments within the sector. This financial
                                                                                         the last year, the largest holdings were in the Information Technology,
          exposure was reduced somewhat through 2017 and 2018 and now does
                                                                                         Healthcare, and Communication Services Sectors. Respectively, they
          not feature in the portfolio in any meaningful way. The energy sector is
                                                                                         averaged 35.79%, 25.30% and 19.66% of the portfolio. In addition, the
          another area where the managers had found valuation opportunities over
                                                                                         portfolio held no positions in the Energy, Consumer Staples, Real Estate or
          the years, but now does not feature prominently in the portfolio. Royal
                                                                                         Utilities sectors, each of which added to the team’s relative results, but in a
          Dutch Shell, Statoil and Swedish-based Lundin Petroleum were all held
                                                                                         much more modest fashion compared to the equites held in the portfolio.
          as the managers at the time were impressed by the commitment of these
          companies to lower their operating costs and capital expenditure in order      The structural growth trends which the manager believes are changing the
          to be profitable in a lower oil price environment. These companies have        world are as follows:
          since been disposed of as they do not exhibit the features or advantages
                                                                                         z Move to the cloud. The shift towards cloud-based tools and services
          that Randall and his team are looking for.
                                                                                         will continue stronger than before. Prior to Covid-19, it was considered a
          In 2018 the German Pharmaceutical company Bayer was the largest                ’nice to have‘. It is now considered essential. Randall sees this as a once
          allocation in the fund following the acquisition of Monsanto, a US based       in a generation type shift that is changing how every company on the
          agricultural company, which was held in the fund prior to the merger. The      planet does business. Not many things do that. He compares it to other
          managers believed that Bayer had a strong business with a diversified          seismic changes such as the transition from mainframes to PCs, email
          range of cash generating divisions for future growth Randall saw               and cell phones. Whilst the earlier changes were more recognisable,
          that these features were the advantages he was looking for and this,           the move to the cloud is more ‘behind the scenes’ and is not being fully
          Mastercard and Bristol-Myers Squibb are the only stocks retained in the        acknowledged by investors. Companies could save 80-90% on IT spend
          new portfolio.                                                                 by embracing this development.

                                                                                         z Rise of ecommerce. Ecommerce is accelerating. It has become the
          Positioning Under Randall Dishmon
                                                                                         only option in a Covid-19 world, and post Covid behaviour will likely still
          The new portfolio has no predetermined style bias. The investment team
                                                                                         favour not going to out shopping as much. Every crisis in the past 20 years
          owns a collection of names that benefit from structural changes that
                                                                                         has sped up the market share gains of ecommerce.
          were barely evident 4 or 5 years ago and many of the companies which
          populate the portfolio now may not have existed or were not public             z The electrification of money. The trend started in 1950 with the first
          companies in the early years of the strategy. The portfolio can shift          credit card, and it has grown globally at a rapid rate since. The manager

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expects it to accelerate during the Covid-19 environment and continue              company’s history. The company has multiple brands with Venom and
afterwards.                                                                        Xoom making it a very diverse company in the digital payment area and
                                                                                   the stock has been in the strategy from its IPO.
z Diagnostics and research. It has been on the rise for two decades and
will again accelerate because of this environment.                                 A mistake Randall Dishmon made was not investing in Microsoft. With
                                                                                   hindsight, Dishmon stated, it would have been a good fit for the strategy,
Examples of stock ideas include:
                                                                                   but for a long while the management were sat on $60bn of cash awaiting
Thermo Fisher, a global life sciences company which provides R&D                   a strategic acquisition.
platforms for testing technology. The company is the global leader in this
                                                                                   In terms of software as a service, there are holdings in Service Now and
field and revenue is up 50% over the past 5 years to $25,5bn in 2019.
                                                                                   Salesforce. In data analytics and machine learning, they hold Splunk and
They have 75,000 employees worldwide and the diversified business
                                                                                   Alteryx.
model contains four areas: Laboratory, Products & Services, Life Science
Solutions, Analytica Instruments and Speciality Diagnostics. 75% of
income is in recurring business.

Illumina, another life sciences research company. Most organisations doing
work in R&D, diagnostics and testing are in some way a customer of the
firm. The shares price has increased by over 70% from the March low. Other
companies include BeiGene a leading amino oncology franchise and Novo
Nordisk, a company which is at the cutting edge in the field of diabetes.

Twilio is one of the largest holdings in the fund and builds tools for people to
implement world class consumer services through software functionality. It
reflects the structural moves towards ecommerce and the cloud.

Facebook is another large holding in the strategy. The manager sees
it as potentially being a money printing machine as the move towards
digital advertising is a structural change and Facebook will be a major
beneficiary. Whatsapp and Instagram, apps owned by Facebook, are likely
to be as big as Facebook in the future, therefore investors should not
worry so much about the current valuation.

Paypal is a payment option on 94% of online shops and there has been
a significant increase in users since the beginning of the Covid-19 crisis.
21.3m new accounts added over Q2 2020, the strongest quarter in the

                                                                                                                                                                Page 11
PERFORMANCE

          Performance of fund vs IA Sector
                                                 Performance of fund vs IA Sector
           150
           140
           130
           120
           110
           100
            90
            80
            70
               18

                     18

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                                            02

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          02

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                       02

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               02

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                                                                                                                       02
                                                     IA Global NR             Invesco Global Focus (UK) Z Acc
          Source: Invesco

          It is important to note that the performance up to March 2020 is attributed     returns during the year but trade at valuations which are not justified
          to the previous investment team and such does not reflect the investment        by the managers assessment of intrinsic value. The biggest detractor to
          decisions of Randall Dishmon and his team.                                      performance was First Republic, having performed very well in 2016. The
                                                                                          managers added to this position significantly in Q4 2017, believing that the
          In 2017, the Invesco Global Opportunities fund outperformed, returning
                                                                                          market oversold the company given its future earning potential.
          16.8% against the sector average of 14%. With the improving global growth
          narrative, emerging markets performed strongly during the year aided            The fund (-14.84%) significantly lagged the sector average (-5.72%) in
          by improving commodity prices. This positive sentiment was particularly         2018. This was largely due to a stock-specific issue during August. Despite
          helpful for the Brazilian housebuilder, EZTEC, which was well placed to         having less US dollar exposure than the benchmark, the fund had returned
          take advantage of any recovery in Sao Paolo housebuilding activity. Rolls       nearly 8% up to the beginning of August 2018, outperforming the sector
          Royce was another strong contributor, rising 32% over the year as they          average. Between the 9th and 15th of August, the share price in Bayer, the
          continued to turn the business around with much greater focus on cash           fund’s largest holding, dropped nearly 20%, following a landmark verdict
          flow generation. Volkswagen outperformed in 2017 as a new management            by a California court that found that two of Bayer’s best-selling weed-killer
          team came in and transitioned the business into a more cash generative          products, contained chemicals which cause cancer. A sum of $289m in
          entity. Outperformance in 2017 was impressive given that market leadership      damages was awarded to a school groundskeeper with terminal cancer
          came through high-growth technology stocks which are not owned in the           and the company saw a large increase in legal cases since the verdict.
          fund. The likes of Apple, Amazon, Tencent and Alibaba drove benchmark           Invesco spoke to the company management at Bayer and their legal team,

Page 12
who were confident that they can overturn this decision through an appeal         In 2019, the performance of the representative strategy was driven by the
process. They also spoke to agricultural experts who confirmed that the           fund’s largest holdings, Facebook, Alibaba, ServiceNow Inc and Master
chemicals linked to cancer are widely contained in most herbicides that           Card, each returning over 50% over the year. Facebook was going through
have been used by farmers for decades. Following the additional piece of          an investment phase to address issues around security and privacy
due diligence, the managers maintained their weighting in the company,            and Dishmon and his team saw this as an opportunity as believed the
believing that company fundamentals were good and that the share                  problems were solvable and spending would end later that year. They
price would recover. The overweight exposure to the energy sector also            believed Facebook would still have exceptional growth characteristics and
detracted, with weakness in Borr Drilling and Baker Hughes showing                had been significantly mispriced. Alibaba was first bought by the team
losses.                                                                           in 2015 and added to in 2018. The company can succeed across retail,
                                                                                  payments, cloud services as Dishmon believes that the rise of China on
The fund recovered performance in 2019, returning 24.0% vs 21.9% for
                                                                                  the global scene and the modernization of the Chinese consumer economy
the IA Global sector. The main detractor came from developed markets
                                                                                  still has a long way to go. The team think Mastercard could be a winner
and particularly the UK. Thomas Cook suffered two profits warnings after
                                                                                  from deeper penetration of non-cash payment. Globally, cash remains the
2018 recorded the hottest temperatures on record across parts of Europe.
                                                                                  dominant form of payment, so the runway for growth remains good and
This impacted their key market and the fund sold out prior to it going
                                                                                  this company’s scale and network seems likely hard to dislodge. Nutanix
into administration but suffered significantly from the fallout. Borr Drilling
                                                                                  Inc is an enterprise cloud software company which helps companies
continued to suffer challenging market conditions as the fall in the oil
                                                                                  interconnect and manage hybrid cloud environments. The team opened a
prices led to a retreat in exploration, particularly in offshore oil fields.
                                                                                  position in the company in January, but they announced a sales slowdown
                                                                                  that sent its shares down soon after purchase.
Performance Under Randall Dishmon
2020 was an interesting year for the fund. With the pandemic as a                 The strategy’s main contributor to performance in 2018 was from Madison
backdrop and the resultant rise in volatility coupled with a change in            Square Garden which had been spun out of Cablevision, as the controlling
manager, you would be forgiven in thinking that the fund would have had           shareholders, the Dolan family, sought a higher value for their media and
a difficult period. Over the full year, the portfolio returned 37.83% vs the IA   cable empire. Abbott Laboratories contributed well, as it is a well-run
Global sector return of 15.27%. The new team took over the fund on the            business that the know well and expect to own for a long time to come.
1st March 2020 and despite aligning the portfolio to the new investment           The company’s 2017 acquisition of St. Jude Medical had gone well and
process, the fund has returned 53.39% against a return on the IA Global           contributed to the company’s top and bottom-line improvement. Facebook
sector of 22.73%. Performance was driven by the overweight exposure               and Alibaba were some of the main detractors from performance over
to the communications services sector. Twilio doubled and Facebook was            the year, as the tech sector sold off in Q4 and worries over rising Sino-US
up by over 50% over the period. The technology sector also contributed to         trade tension rose.
the active return with names such as Salesforce.com, ServiceNow Inc and
CrowdStrike contributing well.

This is indicative of Randall’s longer-term performance in the
representative strategy which has significantly outperformed the IA global
sector since its inception in 2007.

                                                                                                                                                                Page 13
SUMMARY & EVALUATION

          This is a high-conviction, bottom-up, unconstrained global equity fund           The combination of Randall Dishmon, an experienced fund manager,
          whereby the managers are seeking to invest in companies that can benefit         and a small but dedicated team of equity analysts has enabled the
          from structural changes taking place in the wider global economy. The            fund to produce a healthy capital returns relative to its peers over most
          team invest in industry leaders which can demonstrate a clear competitive        timeframes.
          advantage and the ability to compound high rates of growth over multi-
                                                                                           Overall, the managers track-record combined with the differentiated
          year periods. The managers strive to retain a low correlation to market
                                                                                           approach makes the Invesco Global Focus (UK) is a good option for
          factors by constructing a concentrated portfolio of best ideas portfolio
                                                                                           investors looking for exposure to global equities with a bias towards
          that is style agnostic and opportunity orientated, across a broad range of
                                                                                           quality growth companies.
          geographical regions and sectors. The active share in the fund is typically
          over 90% offering a truly differentiated approach to the index.

          The fund is managed by a small but experienced, tight-knit team, who
          are supported by the broader investment teams at Invesco. Lead manager
          Randall Dishmon joined Oppenheimer as a Research Analyst in 2001 on
          the Global Equity Strategy before setting up the Global Focus Strategy and
          growing it to manage over $2.6billion of assets currently. He brings with
          him a wealth of experience gained from industry where he worked as an
          environment engineer and a management consultant before moving into
          fund management. This experience gives Randall a broader view of the
          world and has a healthy degree of scepticism to the traditional methods of
          fund management.

          The manager has outperformed both the benchmark and the sector
          average over his tenure of this fund and the over longer term in the
          strategy. Given the smaller number of holdings, the fund tends to exhibit a
          higher level of volatility than its peers and the strategy will tend to lag in
          strong momentum markets, where valuation is less important to market
          participants and share prices are driven by other variables rather than the
          underlying fundamentals. This was particularly evident in 2014 and 2015
          when the strategy lagged the benchmark somewhat as investors favoured
          ‘bond proxy’ type companies. More recently in August/September 2018,
          the fund was down over 10%, largely due to a stock specific issue in its
          largest holding.

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Page 16
ABOUT US

Established in 2004 RSMR provides research and analysis to firms working        Ratings
across the UK’s personal financial services marketplace.
                                                                                Our innovative ratings are now recognised as market leading and cover
Our work is completed with total impartiality, without any conflict of          a broad area of investment solutions including single strategy funds, SRI
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                                                                                advisers and providers alike and a ‘must-have’ when selecting funds. Our
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We provide specialist research, analysis and support to a diverse range         and risk measures but places a greater emphasis on the ability of fund
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diligence.                                                                      We understand financial services and we will work alongside you to deliver
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Working with providers                                                             The data and information in this document does not constitute advice
                                                                                   or recommendation. We do not warrant that any data collected by us,
We work with all the leading fund groups, life and pension companies
                                                                                   or supplied by any third party is wholly accurate or complete and we
and platform operators across the financial services sector offering               will not be liable for any actions taken on the basis of the content or
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                                                                                                                                                             Page 17
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