Your SlideShare is downloading. ×
0
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Invesco japan equity_citywire_ny_jun_2011
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Invesco japan equity_citywire_ny_jun_2011

796

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
796
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
8
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Invesco’s Japanese Equity PlatformCitywire Conference New York 20th-22nd June 2011This document is exclusively for use byprofessional clients and financial advisorsin Continental Europe and is not forconsumer use. These products are notavailable to US Investors. See Page36 for Important Information. Please donot redistribute this document.
  • 2. A Table of Contents1. At a Glance Invesco Japanese Value Equity Fund Invesco Japanese Equity Advantage Fund2. Invesco Japanese Value Equity Fund3. Invesco Japanese Equity Advantage Fund4. Outlook: Why Japan now?Appendix2
  • 3. 1. At a Glance Invesco Japanese Value Equity Fund Invesco Japanese Equity Advantage Fund
  • 4. Invesco Japanese Value Equity FundThe Core Japanese Equity fund Fund size: $650million The Japanese equity value strategy total AUM: $6.4billion *Fund size and AUM are as at the end of May 2011 Large cap focus Currently 67 names held (as at the end of May 2011) Relative value Relatively cheap + long-term growth consideration Bottom–up team approach Six experienced investment professionals based in Tokyo True long term investor Low turnover Strong performance Proven long-term track record4
  • 5. Invesco Japanese Equity Advantage FundThe fund focusing on strong franchise Strong alpha has been generated over the ref. index by 3.88%1, annualised, for the last 5years No style bias No style or market cap bias concentrating 41 names (as at the end of May 2011) Franchise value Strong free cash flow based upon sustainable business franchise, leading to generate shareholder value Bottom–up team approach Six experienced investment professionals based in Tokyo True long term investor Low turnover Strong performance Outperforming the ref. index* every year since inception, regardless of market cycles 1. Past performance should not be construed as a guarantee of future performance. As of 31 May, 2011. The ref. index* is TOPIX. Performance returns reflect the average annual rates of return. Invesco Japanese Equity Advantage Fund Class HN shares performance figures are presented NET of investment management fees and are quoted in JPY terms. Performance returns are compared to those of an unmanaged market index and are considered to be a relevant comparison to the portfolio. Comparisons of performance assume the reinvestment of all dividends and income. Performance figures are based on price comparison of NAV to NAV. Securities of small capitalization companies involve greater risk and the markets for such securities may be more volatile and less liquid. The performance before fund merger date is the one of MS INVF Japanese Equity Advantage Fund I shares.5
  • 6. 2. Invesco Japanese Value Equity Fund
  • 7. Investment PhilosophyFocus on relative values with long term perspective •Philosophy Because financial markets tend to focus on short-term factors, stock prices often fail to reflect the intrinsic value of companies. We believe that longer-term investors can take advantage of these pricing anomalies by purchasing stocks of companies that are currently under-priced, and by selling them before their prices reach excessive levels.1 •Investment Approach – Value-orientated, bottom-up approach to stock selection focuses on quality of earnings and competitiveness over the long-term with stock prices presenting attractive relative values. – Preliminary valuation screens are based on price to cash flow, price to book value, and price to earnings – In-depth fundamental research and company visits analyse business strategy, franchise, competitiveness, management quality and long-term growth opportunities •Key Strengths - Proven strong long-term track record - Consistent investment style - Stable and experienced investment team - True long-term investor; low portfolio turnover 1. The views and opinions expressed herein are those of Invesco.7
  • 8. Investment Decision Making Process Investment Investment Portfolio Research/ Risk Management Policy Construction Stock selection•Tokyo Investment •Screening •Portfolio managers’ •Risk analysis (monthly) Strategy Committee weighting decision •Company Visits •Performance analysis (monthly) —Conviction (monthly) •Stock Assessment and•Investment Evaluation Meeting —Liquidity •Investment Risk Environment Management Committee Analysis —Reference Index (monthly) —Economic Outlook —Investment guideline (Domestic/Overseas) —Sell discipline —Currencies —Interest Rates —Equity MarketsThe information presented represents how the portfolio management team generally applies their investment processes undernormal market conditions.8
  • 9. Stock Selection ProcessIn-depth analysis and substantial discussions with collective wisdom of the team Investment universe: 1,700 Stocks Quantitative screening 200-400 Stocks •Cheapest quartile (weighted average) Fundamental screening •Price/Book OR Price/Cash flow OR •Macro economic idea Price/Earnings (Tokyo Investment 100-150 Stocks Strategy Committee) •Market capitalization 30 billion or more •Stock and industry In-depth research idea (internal Stock Assessment and analysts) Evaluation Meeting 50-70 Stocks •Interactive •Long-term value communication •Opportunity Portfolio •Catalyst construction •Weight consideration •Liquidity •Valuation •Review •Stability The information presented represents how the portfolio management team generally applies their investment processes under normal market conditions.9
  • 10. Portfolio Construction • Approximately 50–70 stock holdings depending on market conditions • Weighting consideration Conviction Valuation Liquidity Diversification • Diversification: Different Characteristics of Value Temporarily undervalued due to short term market conditions while still holding world- Growth Value class technologies and products Cyclical Value Undervalued in the current business cycle Stable Value Undervalued and not affected by business cycles Deep Value Temporarily undervalued to an excess level due to specific conditions Special Value Neglected in the market even with high growth and earnings potential This is conceptual and we do not set quantitative rules according to these classifications.10
  • 11. Sell Discipline• Consider sales upon departure from the cheapest one third of screening universe (price/book, price/cash flow, price/earnings)• Sell for material negative fundamental developments Most Expensive Least Expensive Sell Candidate Neutral Purchase (Hold) Candidate Price/Book, Price/Cash Flow or Price/Earnings 33%1 25%1Source: Invesco1.Weighted average base.11
  • 12. Invesco Japanese Value Equity FundCumulative Performance, Presented in JPY Performance Returns1 as of 31 May, 2011 The inception date of the Fund is 24 May, 19932 (%) 5 0 -5 -10 -15 1 Year 3 Years 5 Years 10 Years Since Inception Japanese Equity Value -4.65 -14.50 -9.02 -2.75 -1.18 TOPIX -2.68 -14.19 -10.36 -3.02 -2.451. Past performance should not be construed as a guarantee of future performance. Performance returns reflect the average annual rates of return. Periods less than 1 year are not annualized. Invesco Japanese Value Equity Fund Class HN shares performance figures are presented NET of investment management fees and are quoted in JPY terms. Performance returns are compared to those of an unmanaged market index and are considered to be a relevant comparison to the portfolio. Comparisons of performance assume the reinvestment of all dividends and income. Performance figures are based on price comparison of NAV to NAV.2. Inception date is the date of former Morgan Stanley Investment Funds Japanese Value Equity Fund’s inception.Notes: The performance before fund merger date is the one of MS INVF Japanese Value Equity Fund Class I shares.
  • 13. Invesco Japanese Value Equity FundCalendar Year Performance, Presented in JPYPerformance Returns1 as of 31 May, 2011The inception date of the Fund is 24 May, 19932 (%) 60 50 40 30 20 10 0 -10 -20 -30 -40 -50 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 YTD Japanese Value -6.49 -0.87 13.99 -43.1 -5.35 12.35 34.88 11.27 19.96 -18.2 -19.4 -14.4 47.71 -3.78 -5.16 -1.3 0.7 4.61 Equity Fund TOPIX -5.65 0.96 7.62 -40.6 -11.1 3.02 45.23 11.34 25.19 -17.5 -18.9 -25 59.69 -6.57 -19.4 -6.06 2.09 9.111. Past performance should not be construed as a guarantee of future performance. Performance returns reflect the average annual rates of return. Periods less than 1 year are not annualized. Invesco Japanese Value Equity Fund Class HN shares performance figures are presented NET of investment management fees and are quoted in JPY terms. Performance returns are compared to those of an unmanaged market index and are considered to be a relevant comparison to the portfolio. Comparisons of performance assume the reinvestment of all dividends and income. Performance figures are based on price comparison of NAV to NAV.2. Inception date is the date of former Morgan Stanley Investment Funds Japanese Value Equity Fund’s inception.Notes: The performance before fund merger date is the one of MS INVF Japanese Value Equity Fund Class I shares.
  • 14. Cumulative returnPerformance Returns1 as of 31 May, 2011The inception date of the Fund is 24 May, 19932 160 Series1 Series2 140 120 100 80 60 24 May 1993=100 40 (Excess) 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 40 30 20 10 0 -10 -20 1993 1995 1997 1999 2001 2003 2005 2007 2009 20111. Past performance should not be construed as a guarantee of future performance. Invesco Japanese Value Equity Fund Class HN shares performance figures are presented NET of investment management fees and are quoted in JPY terms. Performance returns are compared to those of an unmanaged market index and are considered to be a relevant comparison to the portfolio. Comparisons of performance assume the reinvestment of all dividends and income. Performance figures are based on price comparison of NAV to NAV.2. Inception date is the date of former Morgan Stanley Investment Funds Japanese Value Equity Fund’s inception.Notes: The performance before fund merger date is the one of MS INVF Japanese Value Equity Fund Class I shares.
  • 15. Top/bottom active industry weightingsInvesco Japanese Value Equity Fund As of 30 April, 2011 Topix Differences Top 5 industries Value (%) (%) (%) Electric Appliances 26.53 14.72 11.81 Chemicals 13.32 6.05 7.28 Machinery 10.41 5.50 4.91 Other Products 6.10 1.98 4.13 Wholesale Trade 8.44 5.52 2.92 Topix Differences Bottom 5 industries Value (%) (%) (%) Banks 0.00 9.03 -9.03 Information & Communication 1.86 5.99 -4.13 Electric Power & Gas 0.00 3.40 -3.40 Insurance 0.00 2.64 -2.64 Real Estate 0.00 2.29 -2.29Subject to change daily. Provided for informational purposes only and should not be deemed as a recommendation to buy the securitiesmentioned or securities in the industries shown above.15
  • 16. Top 10 HoldingsInvesco Japanese Value Equity Fund As of 30 April, 2011 Company % of Portfolio Industry Mitsubishi Corp. 3.87 Wholesale Trade Canon 3.61 Electric Appliances Toyota Motor 2.96 Transportation Equipment Kyocera 2.94 Electric Appliances Mitsubishi Heavy Industries 2.88 Machinery Nissan Motor 2.85 Transportation Equipment Toshiba 2.82 Electric Appliances Astellas Pharmaceutical 2.41 Pharmaceutical Fujitsu 2.28 Electric Appliances Panasonic 2.24 Electric Appliances Portfolio Weightings 28.85Top ten holdings are for informational purposes only and should not be considered a recommendation to buy the securities mentioned.The portfolio is actively managed, therefore, the securities listed may or may not be held in the portfolio today.16
  • 17. Summary: Invesco Japanese Value Equity Fund • Strong and stable investment team • Consistent investment philosophy and process from long-term perspectives • Strong track record since the team’s formation in 1993 • Premier institutional accounts across the globe • May be suitable for investors looking for core Japanese exposure17
  • 18. 3. Invesco Japanese Equity Advantage Fund
  • 19. Key FeaturesFocus on selected Japanese companies •Philosophy We believe investments at compelling valuations in companies with significant free cash flow, the cash that remains after capital investments, through their intangibles have a potential to add value for shareholders. Intangible values such as brand, technology and customer loyalty within a strong business franchise are difficult to create or replicate and allow companies to sustain a competitive advantage. The effective use of intangibles with controlled expenditures for tangible assets can generate strong free cash flow and increase shareholder value. •Investment Approach – No style or capitalisation bias, Bottom-up approach to stock selection focusing on identifying companies that generate substantial free cash flow through the effective use of not only their physical capital, but also their intangible values. – Preliminary valuation screens are based on low capital expenditure (capex)-to-sales ratios, high operating profit margin improvement and high operating profit growth. – In-depth fundamental research and company visits are the keys to the process and analyse various types of intangible values such as brand quality, customer loyalty, technology, etc. •Key Strengths - Strong outperformance over TOPIX; 3.88%1 since inception May, 2006, annualised, as of 31 May, 2011, including both the downward market in 2007 and 2008 and the upward market in 2009 - Differentiated portfolio derived by unique approach trying to exploit intangible investment opportunities - Experienced and highly motivated Tokyo-based dedicated Japanese equity team1. Past performance should not be construed as a guarantee of future performance. Performance returns reflect the average annual rates of return. Invesco Japanese Equity Advantage Fund Class HN shares performance figures are presented NET of investment management fees and are quoted in JPY terms. Performance figures are based on price comparison of NAV to NAV. Inception date is the date of the former Morgan Stanley Investment Funds Japanese Equity Advantage Fund’s inception.Notes: The performance before fund merger date is the one of MS INVF Japanese Equity Advantage Fund I shares.19
  • 20. Invesco Japanese Equity Advantage FundCumulative Performance, Presented in JPY Performance Returns1 as of 31 May, 2011 The inception date of the fund is 31 May, 20062 10 6.05 5.31 3.72 3.88 5 3.88 2.91 0.95 0 -5 (%) -10 -15 -20 Since 2 Years 3 Years 4 Years 5 Years 3 Months 1 Year inception (annualized) (annualized) (annualized) (annualized) (annualized) Japanese Equity Advantage -7.97 -1.73 2.16 -8.14 -9.97 -6.47 -6.47 TOPIX -10.89 -2.68 -1.56 -14.19 -15.28 -10.36 -10.36 Excess Return 2.91 0.95 3.72 6.05 5.31 3.88 3.88 1. Past performance should not be construed as a guarantee of future performance. Performance returns reflect the average annual rates of return. Periods less than 1 year are not annualized. Invesco Japanese Equity Advantage Fund Class HN shares performance figures are presented NET of investment management fees and are quoted in JPY terms. Performance returns are compared to those of an unmanaged market index and are considered to be a relevant comparison to the portfolio. Comparisons of performance assume the reinvestment of all dividends and income. Performance figures are based on price comparison of NAV to NAV. Securities of small capitalization companies involve greater risk and the markets for such securities may be more volatile and less liquid. 2. Inception date is the date of the former Morgan Stanley Investment Funds Japanese Equity Advantage Fund’s inception. Notes: The performance before fund merger date is the one of MS INVF Japanese Equity Advantage Fund I shares.20
  • 21. Invesco Japanese Equity Advantage FundCalendar Year Performance, Presented in JPY Performance Returns1 as of 31 May, 2011 The inception date of the fund is 31 May, 20062 20 8.60 10 3.82 2.82 1.93 0.76 0 -10 (%) -20 -30 -40 -50 2011YTD 2010 2009 2008 2007 Japanese Equity Advantage -3.71 1.72 11.44 -32.01 -8.29 TOPIX -5.65 0.96 7.62 -40.62 -11.11 Excess Return 1.93 0.76 3.82 8.60 2.821. Past performance should not be construed as a guarantee of future performance. Performance returns reflect the average annual rates of return. Periods less than 1 year are not annualized. Invesco Japanese Equity Advantage Fund Class HN shares performance figures are presented NET of investment management fees and are quoted in JPY terms. Performance returns are compared to those of an unmanaged market index and are considered to be a relevant comparison to the portfolio. Comparisons of performance assume the reinvestment of all dividends and income. Performance figures are based on price comparison of NAV to NAV. Securities of small capitalization companies involve greater risk and the markets for such securities may be more volatile and less liquid.2. Inception date is the date of the former Morgan Stanley Investment Funds Japanese Equity Advantage Fund’s inception.Notes: The performance before fund merger date is the one of MS INVF Japanese Equity Advantage Fund I shares.21
  • 22. 1 year rolling excess return distribution Performance Returns1 as of 31 May, 2011 The inception date of the fund is 31 May, 20062 Upward market Downward market (Positive TOPIX return) (Negative TOPIX return) 1.Past performance should not Number of TOPIX 1 year return 15 33 be construed as a guarantee of future performance. Performance returns reflect the Number of positive excess 1 year return 11 30 average annual rates of return. Periods less than 1 year are not Win rate 73% 91% annualized. Invesco Japanese Equity Advantage Fund Class HN shares performance figures are Downward market Upward market presented NET of investment management fees and are quoted in JPY terms. Performance returns are 20% compared to those of an unmanaged market index and % of positive % of positive are considered to be a relevantExcess return vs. TOPIX excess return vs. excess return vs. comparison to the portfolio. Comparisons of performance 15% TOPIX : 91% TOPIX : 73% assume the reinvestment of all dividends and income. Performance figures are based on price comparison of NAV to NAV. Securities of small 10% capitalization companies involve greater risk and the markets for such securities may be more volatile and less liquid. 2.Inception date is the date of 5% the former Morgan Stanley Investment Funds Japanese Equity Advantage Fund’s inception. Notes: The performance before 0% fund merger date is the one of MS INVF Japanese Equity Advantage Fund I shares. -5% -50% -40% -30% -20% -10% 0% 10% 20% 30% TOPIX 22
  • 23. Top 10 HoldingsInvesco Japanese Equity Advantage FundData as of 30 April, 2011 % of TOPIX Top 10 Company Industry Business Portfolio Operator of well-known internet shopping Toyota Motor Rakuten 5.00 Services mall website "Rakuten Ichiba" Leading oriental herbal medicine producer Mitsubishi UFJ Fin Tsumura 4.97 Pharmaceutical in Japan Holds top market shares in laser printers Honda Motor Canon 4.91 Electric Appliances and digital cameras Trading firm for automobile-related and Canon Toyota Tsusho 4.55 Wholesale Trade other products Unique provider of medical-related Sumitomo Mitsui Fin M3 4.22 Services information support service via website One of Japan’s leading copier machine Mitsubishi Corp Ricoh 4.18 Electric Appliances makers Worlds largest producer of FA pneumatic Mizuho Fin SMC 4.17 Machinery equipment Takeda Keyence 4.10 Electric Appliances Specialist of FA sensors Pharmaceutical Hamamatsu R&D oriented company with cutting-edge Softbank 3.98 Electric Appliances Photonics optical technology as basic technology One of biggest Japanese general trading Komatsu Marubeni Corp. 3.73 Wholesale Trade companies Portfolio 43.82 WeightingsSource: InvescoThere is no guarantee that the securities will be held by Invesco funds in the future. and should not be deemed as a recommendation to buy thesecurities mentioned or securities in the industries shown above.23
  • 24. Free Cash Flow YieldInvesco Japanese Equity Advantage FundFree Cash Flow Yield of the portfolio is higher than that of listed companies. Data as of 31 December, 2010 Free Cash-flow Yield (%) 8% 6% 4% 2% 0% -2% Portfolio All Listed Companies -4% Listed Companies 10 year JGB Yeild (Mkt cap>¥25 billion) -6% Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Note: Free cash flow of listed companies = Forward Net Profit + Forward Depreciation Cost – Forward CAPEX. Where data is available. The portfolio excludes firms whose market capitalization is less than ¥25 billion at the time of screening in the stock selection process as the strategy does not invest in firms with limited liquidity. Source: Toyo Keizai, Invesco 1.For illustrative purposes. Past composition and performance should not be construed as a guarantee of future composition and performance24
  • 25. Industry WeightingsInvesco Japanese Equity Advantage Fund Data as of 30 April, 2011 (%) (%) Absolute terms Portfolio Relative terms Portfolio Ref. Index Differences Electric Appliances 25.06 Services 14.22 1.69 12.53 Services 14.22 Electric Appliances 25.06 14.72 10.34 Banks 8.39 Wholesale Trade 8.38 5.52 2.85 Wholesale Trade 8.38 Pharmaceutical 7.36 4.70 2.66 Pharmaceutical 7.36 Construction 4.38 2.19 2.19 Machinery 5.89 Precision Instruments 2.31 1.43 0.88 Information & Communication 5.47 Textiles & Apparels 1.40 0.97 0.44 Chemicals 4.62 Machinery 5.89 5.50 0.38 Construction 4.38 Fishery, Agriculture & Forestry 0.00 0.09 -0.09 Retail Trade 3.35 Iron & Steel 2.01 2.22 -0.21 Foods 2.83 Retail Trade 3.35 3.57 -0.22 Land Transportation 2.57 Warehousing & Harbor Trans Svc 0.00 0.23 -0.23 Precision Instruments 2.31 Foods 2.83 3.07 -0.24 Iron & Steel 2.01 Air Transportation 0.00 0.28 -0.28 Real Estate 1.78 Pulp & Paper 0.00 0.34 -0.34 Textiles & Apparels 1.40 Real Estate 1.78 2.29 -0.50 Fishery, Agriculture & Forestry 0.00 Marine Transportation 0.00 0.52 -0.52 Warehousing & Harbor Trans Svc 0.00 Information & Communication 5.47 5.99 -0.52 Air Transportation 0.00 Banks 8.39 9.03 -0.64 Pulp & Paper 0.00 Rubber Products 0.00 0.68 -0.68 Marine Transportation 0.00 Mining 0.00 0.71 -0.71 Rubber Products 0.00 Metal Products 0.00 0.73 -0.73 Mining 0.00 Other Financing Business 0.00 0.77 -0.77 Metal Products 0.00 Land Transportation 2.57 3.35 -0.78 Other Financing Business 0.00 Oil & Coal Products 0.00 0.97 -0.97 Oil & Coal Products 0.00 Securities & Commodity Futures 0.00 1.34 -1.34 Securities & Commodity Futures 0.00 Glass & Ceramics Products 0.00 1.38 -1.38 Glass & Ceramics Products 0.00 Nonferrous Metals 0.00 1.43 -1.43 Nonferrous Metals 0.00 Chemicals 4.62 6.05 -1.43 Other Products 0.00 Other Products 0.00 1.98 -1.98 Insurance 0.00 Insurance 0.00 2.64 -2.64 Electric Power & Gas 0.00 Electric Power & Gas 0.00 3.40 -3.40 Transportation Equipment 0.00 Transportation Equipment 0.00 10.23 -10.23Source: FactSet, InvescoSubject to change daily. Provided for informational purposes only and should not be deemed as a recommendation to buy the securitiesmentioned or securities in the industries shown above.25
  • 26. Stock Selection Process Investment universe: 3,800 Securities * Exclude Market Capitalisation 1,400 Securities less than JPY25 Screenings billion from the 600 Securities universe •Top quartile low capex to sales Fundamentals ratio Research 100 Securities *Including IPOs or Intangible 40 -60 Valuation •Top quartile Fundamentals Assessment Securities operating margin •Brand Comprehensive improvement Portfolio •Customers Research or Construction •Technology •Valuations •Top quartile •Management •Free cash flow operating profit •Location yields1 vs. 10 year growth •Contracts JGB yields •Regulation •History Free Cash Flow ProjectionThe information presented represents how the portfolio management team generally applies their investment processes under normal market conditions. 1. Free cash flow is based on Invesco estimates. Free cash flow = Net income + Depreciation – Net working capital – Capex Free cash flow yield = Forward free cash flow per share ÷ Stock price26
  • 27. Summary: Invesco Japanese Equity Advantage Fund• Strong outperformance over the TOPIX regardless of market cycles since its inception• Differentiated portfolio derived by a unique approach which tries to exploit intangible investment opportunities with robust philosophy and process• Experienced and stable Tokyo-based Japanese equity team• May be suitable for investors looking for a portfolio with a rigorous selection process for quality Japanese companies with strong franchise 27
  • 28. 4. Why Japan now?
  • 29. Why Japan now?Favorable Risk/Reward Ratio for Investment in Japanese Equities• Recovery from the great disaster is surprisingly faster than previously expected• BOJ is prepared for more accommodating monetary measures• Currency headwind is moderating• Well-positioned to benefit from strong growth in Asia• Dramatically improved cost structure• Significant piling of free cash flow• Most attractive valuations in more than twenty years• The market still under-owned Forward Looking Statement Disclosure These materials may contain statements that are not purely historical in nature but are ―forward-looking statements.‖ These include, among other things, projections, forecasts, estimates of income, yield or return, future performance targets, sample or pro forma portfolio structures or portfolio composition, scenario analysis, specific investment strategies and proposed or pro forma levels of diversification or sector investment. These forward-looking statements can be identified by the use of forward looking terminology such as ―may,‖ ―will,‖ ―should,‖ ―expect,‖ ―anticipate,‖ ―project,‖ ―estimate,‖ ―intend,‖ ―continue,‖ ―target,‖ ―believe,‖ the negatives thereof, other variations thereon or comparable terminology. Forward looking statements are based upon certain assumptions, some of which are described herein. Actual events are difficult to predict, are beyond Invesco’s control, and may substantially differ from those assumed. All forward- looking statements included herein are based on information available on the date hereof and Invesco assumes no duty to update any forward-looking statement. Accordingly, there can be no assurance that estimated returns or projections can be realized, that forward-looking statements will materialize or that actual returns or results will not be materially lower than those presented. Opinons may change without notice.29
  • 30. Appendix
  • 31. Japanese Equity TeamKunihiko Sugio Daiji Ozawa, CFAChief Investment Officer Chief Portfolio Manager – Japanese Equity ValueChief Portfolio Manager – Japanese EquityValue Daiji is a portfolio manager for our Japanese Equity Value portfolios. He joined InvescoKunihiko is the chief investment officer for Japan in 2010 and has 24 years ofJapan and a portfolio manager for our investment experience. Prior to joining theJapanese Equity Value portfolios. He joined Firm, he was a Japanese Equity ValueInvesco Japan in 2010 and has portfolio manager at Morgan Stanley. Before26 years of investment experience. Prior to that, he was Head of Investment (Equity) atjoining the firm, he was a managing director Western Asset Management (Tokyo), andat Morgan Stanley where he managed the Director and Head of Equity Investments atJapanese Equity Value strategy. Prior to that, Cititrust & Banking Corporation (Citigrouphe was a director and a fund manager at Asset Management). Prior to that, he was aBaring International Investment senior portfolio manager at Tokyo-MitsubishiManagement Company Limited, Tokyo. Asset Management. He began his career as aBefore that, he worked for Okasan Securities banker at the Bank of Tokyo. Daiji received aCompany Limited for eleven years in Tokyo, B.A. in Political Science from WasedaLondon and New York in Japanese equity University. He holds the Chartered Financialresearch and institutional sales. Kunihiko Analyst designation and is a Charteredreceived a B.A. in economics from Member of the Security Analysts AssociationWakayama University. of Japan.31
  • 32. Japanese Equity TeamTadao Minaguchi Taku KasaiChief Portfolio Manager – Japanese Equity Research AnalystAdvantage Taku is a research analyst focusing onTadao is a portfolio manager for our Japanese equities. He joinedJapanese Equity Advantage portfolios. He Invesco Japan in 2010 and has 13 years ofjoined Invesco Japan in 2010 and has 17 investment experience. Prior to joining theyears of investment experience. Prior to firm, he was a research analyst at Morganjoining the firm, he worked at Morgan Stanley. Prior to that, He worked as CPA inStanley where he launched and managed the Deloitte Touche Tomatsu. He was in chargeJapanese Equity Advantage strategy. Before of 30 companies Audit, M&A and IPObeing appointed as a portfolio manager, he consulting. Taku received a B.A. inserved as a research analyst covering non- economics from Aoyama Gakuin Universitymanufacturing sectors such as retails, and is a Chartered Member of the Securityservices and financials and then being Analysts Associationrotated his coverage to manufacturing of Japan.sectors such as automobiles, machinery andelectric appliances. Prior to that, he was amember of the investment bankingdepartment at J.P. Morgan. Tadao receivedhis bachelors and masters degrees in lawfrom Keio University. He is also a CharteredMember of the Security Analysts Association32
  • 33. Japanese Equity TeamFumichika Tanemoto Hideki HaradaResearch Analyst Research AnalystFumichika is a research analyst focusing on Hideki is a research analyst focusing onJapanese equities. He joined Invesco Japan Japanese equities. He joined Invesco Japanin 2010 and has 15 years of investment in 2010 and has nine years of investmentexperience. Prior to joining the firm, he was experience. He is a research analyst focusingat Morgan Stanley where he was responsible on Japanese equities. Prior to joining thefor research of Japanese equity Product. Firm, he was at Morgan Stanley where hePrior to that, he served as a venture was responsible for research of Japanesecapitalist with Softbank Investment Corp.where he incubated 15 investments. Prior to equity products. Prior to that, he was athat, he worked as a portfolio manager with Japanese equity research analyst at DaiwaYasuda Mutual Life Insurance where he was SB Investments in the research department.responsible for their asset allocation and Before that, he worked as a portfoliomanaged global equity portfolio, then manager and research analyst at Dai-Ichitransferred to Yasuda Capital Management’s Kangyo Asset Management. Hideki receivedcorporate research department in 2001 a B.S. major in Applied Physics from thewhere he was a research analyst focusing on Tokyo University of Science. He is also athe materials sector. Fumichika received Chartered Member of the Security AnalystsBachelors and Masters degrees in Association of Japan.engineering from Tokyo Institute ofTechnology and an M.B.A. in finance fromthe Wharton school, University ofPennsylvania. He is also a Chartered Memberof the Security Analysts Association of Japan.33
  • 34. Team StructureResearch Cooperative Kunihiko Sugio CIO Value Advantage Kunihiko Sugio – Portfolio Manager Extensive investment Tadao Minaguchi– Portfolio Manager Daiji Ozawa – Portfolio Manager experience Research Domestic Demand Oriented Automobile and Machinery Information Industry Fumichika Tanemoto (15) Communication and Highly stable team based Hideki Harada (9) Taku Kasai (13) Services in Tokyo and covering Daiji Ozawa (24) Fumichika Tanemoto (15) the full spectrum of Technology Tadao Minaguchi (17) Pharmaceutical Taku Kasai (13) investment opportunities Tadao Minaguchi (17) Fumichika Tanemoto (15) Utilities Taku Kasai (13) Kunihiko Sugio (26) Financial Hideki Harada (9) Materials Daiji Ozawa (24) Taku Kasai (13) Hideki Harada (9) Fumichika Tanemoto (15) Assistant Portfolio Manager Emiko Shirakuma Product Specialist Toshiyuki Miwa Trading Tetsuya Wakabayashi Keiko Nogawa Rick Mitsuru Kawamoto Chigusa Ueno Hiroshi Kanazawa(#) Years of investment experience. As of 31 March, 201134
  • 35. Risk ManagementMultiple layers of risk management oversight Risk Management Risk characteristics are defined using BARRA and reviewed on a regular basis Risk Monitor Each portfolio is monitored and reviewed by independent Risk Management Group Performance Analysis Each portfolio is formally reviewed monthly at Investment Risk Management Committee (IRMC) Board of Directors Supervise Report Risk Management Committee (RMC) Monitor Report Risk monitoring Report Sub IRMC Monitoring committee Trading Department Compliance Risk monitoring Report Department Fund Management System Investment Division Check result data Investment Support Department Monitoring, Warning, Alert, Confirm Report of adjustment Investment Division Source: Invesco. For illustrative purposes only.35
  • 36. Important InformationThis document is exclusively for use by professional clients and financial advisors in Continental Europe and is not for consumer use. Dataas at 30/04/11, unless otherwise stated. Please do not redistribute this document.The distribution and the offering of the strategy in certain jurisdictions may be restricted by law. Persons into whose possession this document may comeare required to inform themselves about and to comply with any relevant restrictions. This does not constitute an offer or solicitation by anyone in anyjurisdiction in which such an offer is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. These products arecurrently not available to US Investors. Persons interested in acquiring the strategy should inform themselves as to (i) the legal requirements in thecountries of their nationality, residence, ordinary residence or domicile; (ii) any foreign exchange controls and (iii) any relevant tax consequences.This marketing document does not form part of any prospectus. Whilst great care has been taken to ensure that the information contained herein isaccurate, no responsibility can be accepted for any errors, mistakes or omissions or for any action taken in reliance thereon. Opinions and forecasts aresubject to change without notice. The value of investments and the income from them can go down as well as up (this may partly be the result of exchangerate fluctuations in investments which have an exposure to foreign currencies) and investors may not get back the amount invested. Past performance is notan indication of future performance, provides no guarantee for the future and is not constant over time. The performance data shown does not take accountof the commissions and costs incurred on the issue and redemption of units. Any reference to a ranking, a rating or an award provides no guarantee forfuture performance results and is not constant over time. There is potential for increased volatility in emerging stock markets, and only a modest proportionof investable wealth should be invested in them. Investing in funds focused on specific themes, particular areas of the market or small capitalisationcompanies may increase the risk associated with them due to the volatility and/or the concentrated nature of these investments. Investors should read thefund simplified and full prospectuses for specific risk factors and further information. This document is not an invitation to subscribe for shares in the fundand is by way of information only. It is not intended to provide specific investment advice including, without limitation, investment, financial, legal,accounting or tax advice, or to make any recommendations about the suitability of the fund(s) for the circumstances of any particular investor. You shouldtake appropriate advice as to any securities, taxation or other legislation affecting you personally prior to investment. Asset management services areprovided by Invesco in accordance with appropriate local legislation and regulations. www.invescoeurope.comForward Looking Statement DisclosureThese materials may contain statements that are not purely historical in nature but are ―forward-looking statements.‖ These include, among other things,projections, forecasts, estimates of income, yield or return, future performance targets, sample or pro forma portfolio structures or portfolio composition,scenario analysis, specific investment strategies and proposed or pro forma levels of diversification or sector investment. These forward-looking statementscan be identified by the use of forward looking terminology such as ―may,‖ ―will,‖ ―should,‖ ―expect,‖ ―anticipate,‖ ―project,‖ ―estimate,‖ ―intend,‖ ―continue,‖―target,‖ ―believe,‖ the negatives thereof, other variations thereon or comparable terminology. Forward looking statements are based upon certainassumptions, some of which are described herein. Actual events are difficult to predict, are beyond Invesco’s control, and may substantially differ from thoseassumed. All forward-looking statements included herein are based on information available on the date hereof and Invesco assumes no duty to update anyforward-looking statement. Accordingly, there can be no assurance that estimated returns or projections can be realized, that forward-looking statementswill materialize or that actual returns or results will not be materially lower than those presented.Additional information for professional clients in Germany, Austria and SwitzerlandThis document is issued in Germany by Invesco Asset Management Deutschland GmbH regulated by Bundesanstalt für Finanzdienstleistungsaufsicht. Thisdocument is issued in Austria by Invesco Asset Management Österreich GmbH and in Switzerland by Invesco Asset Management (Schweiz) AG. Subscriptionsof shares are only accepted on the basis of the current fund prospectus. Swiss investment professionals should consider this document only in connectionwith the relevant monthly fund fact sheet which contains further performance information. Prospectuses and reports are available free of charge at InvescoAsset Management Deutschland GmbH, An der Welle 5, D-60322 Frankfurt/M., Invesco Asset Management Österreich GmbH, Rotenturmstrasse 16-18, A-1010 Vienna, and Invesco Asset Management (Schweiz) AG, Genferstrasse 21, CH-8002 Zurich. Paying agent for the funds registered for sale inSwitzerland: BNP Paribas Securities Services, Paris, Zürich branch, Selnaustrasse 16, CH-8002 Zurich.36

×