Invesco Perpetual UK Focus - a brief update

Kate Marshall | Tue 03 November 2015

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Martin Walker has been a member of Invesco Perpetual's UK Equities team for more than 15 years, managing UK portfolios since 2003. The most recent addition to his range of UK funds is the Invesco Perpetual UK Focus Fund, for which he assumed responsibility in January 2013. This fund recently changed its name from the Invesco Perpetual UK Aggressive Fund, although the investment process and strategy remains unchanged.

Summary

• Martin Walker's search for undervalued companies means he often invests in unfashionable areas of the market. In his search for value he has repositioned the fund throughout the year, increasing exposure to more economically-sensitive industries.
• Exposure to areas such as mining, oil & gas and banks has increased. The fund's largest holdings now include Royal Dutch Shell, BP, Barclays and HSBC. These sectors, however, remain out-of-favour with investors and this positioning has hurt performance over the course of this year. Notable amongst the poor performers are holdings in Glencore and First Quantum.
• Elsewhere, holdings in easyJet and International Consolidated Airlines have recently performed well. According to the manager, these companies are benefiting from consolidation within the airline industry, as well as greater cost controls.

Our view on this fund

Martin Walker's contrarian viewpoint means the fund is currently positioned differently to many of its peers. This positioning has proven painful in the short term and the fund could continue to struggle if the oil, mining and banking sectors remain out of investors' favour. On the other hand, investors could be rewarded for their patience should sentiment swing back in the fund's favour.

This fund performed exceptionally well under Martin Walker's first year of management. However, his longer-term performance, incorporating other funds he currently manages, has been more modest. Investors should also note the concentrated and more aggressive nature of the fund means it has tended to be more volatile than the majority of its peers. The manager also has the flexibility to use derivatives which, if used, adds risk. The fund does not currently feature on the Wealth 150 list of our favourite funds across the major sectors.

Read the key investor information document for the Invesco Perpetual UK Focus Fund.