We have added Invesco UK Opportunities to our Recommended list.

Fund Snapshot

A UK equity fund managed according to a flexible and pragmatic approach where the managers look for stocks that are trading below fair value, whilst also favouring conservative balance sheets.  Within its sector, the fund features in our ‘Value-Biased’ category.

Fund Highlights

• At the helm of this Recommended fund is experienced manager, Martin Walker, Co-Head of UK and European Equities, and he works alongside Deputy Fund Manager, Bethany Shard. Mr Walker has managed UK equity portfolios at Invesco since 2003. The wider team works in a highly collaborative manner and there is a strong sense of collective accountability.
• The team’s central belief is that investors’ behavioural biases repeatedly give rise to market inefficiencies. They work on the basis that a stock’s valuation at the point of purchase is critical and that the best ideas are often non-consensus.  They look to strike a balance between the search for value in unloved areas of the market with a focus on balance sheet strength and an understanding of the risks to future cash flows.
• The managers have a flexible and pragmatic approach. The aim is to be open-minded in stock selection and pro-active in managing portfolio positions.

Key Characteristics and Expected Outcome

• The fund is predominately invested in large-cap companies, and style-wise, it is “core value” in nature. It is also relatively concentrated, featuring 40-50 stocks, and there are no formal constraints in terms of positioning versus the benchmark.
• Valuation analysis is at the heart of the team’s approach. The managers are prepared to be contrarian when initiating positions, investing in unloved parts of the market where the gap between a stock’s price and its fair value is seen to be significant.
• The fund is more likely to fare well in markets when sound fundamentals and attractive valuations are favoured. Momentum-driven and/or highly speculative markets resulting in the rapid re-rating of stock prices tend to be challenging for the strategy.
• The fund is suited to long-term investors who are seeking a pragmatically managed, value-orientated approach. For investors who are concerned about shorter-run returns relative to the benchmark, the fund should be paired with a complementary strategy.