Invesco Perpetual Sees Total Return Slow But Still Ahead Of Benchmark

LONDON (Alliance News) - Invesco Perpetual Enhanced Income Ltd on Thursday its net asset value ...

Alliance News 7 December, 2017 | 12:11PM
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LONDON (Alliance News) - Invesco Perpetual Enhanced Income Ltd on Thursday its net asset value grew over the last financial year, but said its shareholder returns slowed compared to the previous year.

Invesco said its NAV at the end of September stood at 77.5 pence compared to 74.5 pence the year before, with an NAV return of 10.7% compared to 15.7% the year before. Notably, 0.4% of the NAV growth in the year came from issuing new shares at a premium.

The NAV total return was favourable compared to the return from ICE BofAML European Currency High Yield Bond index (Sterling Hedged) of 8.9%; the Sterling Investment Grade Bond Index return of 0.1%; and United Kingdom Gilts returning minus 3.7%.

Gross income in the year rose to GBP7.5 million from GBP6.7 million. Revenue return per share was flat at 4.5 pence while capital return dropped significantly to 3.1 pence from 6.3 pence - resulting in lower total returns of 7.6 pence versus 10.8 pence.

The dividend for the year was flat at 5.0 pence, with 1.25p quarterly dividends being paid throughout the period.

"2017 has proven to be a year of mixed fortunes in the bond markets. In this context, the company has performed strongly. The market overall still remains sensitive to price fluctuations and it is during these periods that your portfolio managers can seek to lock in attractive yields for bonds they like whilst being careful to avoid taking undue risk," said Invesco Chairman Donald Adamson.

"Low yields in the high yield bond markets and central banks shifting toward normalising monetary policy provide a challenging backdrop for next year. The impact of duration on a bond portfolio is a factor that the portfolio managers must contend with. However, it should be noted that the company is predominately invested in bonds from parts of the bond market with relatively low sensitivities to interest rate changes, such as the high yield bond market," he added.

"Nonetheless, with the Bank of England raising UK interest rates and the European Central Bank considering tapering its asset purchase programme, a period in which monetary policy is tightened is an important factor for the portfolio managers to consider in 2018," said Adamson.

Invesco shares were up 0.5% on Thursday at 81.12 pence.

By Joshua Warner;

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Invesco Perpetual Enhanced Income Ltd 70.87 GBX -0.18
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