Skip to main content
  • Register
  • Help
  • Contact us
  • Log out of your HL account
A A A

Invesco Perpetual UK Smaller Companies Equity Fund research update

Heather Ferguson | Fri 06 March 2015

Investments can go down as well as up so there is always a danger that you could get back less than you invest. Nothing here is personalised advice, if unsure you should seek advice.

Jonathan Brown, manager of the Invesco Perpetual UK Smaller Companies Equity Fund favours high-quality, financially strong businesses. He seeks companies where he believes management can successfully navigate difficult economic conditions, with an emphasis on firms able to generate profit growth by increasing market share and through exposure to niche high-growth areas.

Following three years of strong performance, UK smaller companies have experienced a more subdued period over the past 12 months. Historically, the fund has offered an element of shelter in falling markets and over the past year, the fund has returned 3.2% compared with a loss of 2.6% for the average fund in the sector. Please remember past performance is not a guide to future returns.

Jonathan Brown has been involved with the fund since 2002 and assumed the role of lead manager in March 2011. Under his management, the fund has returned 64.9%* with dividends reinvested, compared with 52.4%* for the IA UK Smaller Companies sector. Please note past performance is not a guide to future returns.

Performance of the Invesco Perpetual UK Smaller Companies Equity Fund over the manager's tenure

Past performance is not a guide to future returns. * Lipper to 02/03/15

Annual percentage growth
Mar 10 -
Mar 11
Mar 11 -
Mar 12
Mar 12 -
Mar 13
Mar 13 -
Mar 14
Mar 14 -
Mar 15
Invesco Perpetual UK Smaller Companies Equity 24.32% 4.34% 19.23% 28.44% 3.16%
IA UK Smaller Companies 33.91% 0.95% 17.81% 31.47% -2.55%

With the timing of a UK interest rate rise unknown and the upcoming general election, the manager feels the uncertain environment could lead to short-term stock market volatility, which could hit smaller companies harder than their larger counterparts. Smaller companies can be more volatile and less liquid than their larger counterparts so they do carry more risk.

Despite this, the manager feels there are a number of reasons to be positive. The recent fall in the oil price should reduce energy and transport costs, keeping inflation low. This could result in interest rates remaining low, providing a supportive environment for share prices. He is particularly positive on economically-sensitive companies which could benefit from increased consumer spending as wages grow.

While the manager broadly views the recent fall in the oil price as a positive, it has caused holdings such as Amerisur Resources and Premier Oil to detract from overall returns. Elsewhere, the fund benefited from the strong performance of CVS Group, the veterinary services provider, as sales grew faster than projected; and Howden Joinery, the kitchen and joinery products provider, which announced higher than expected profits.

Register for free fund research by email

Our view on this fund

Though we feel Jonathan Brown is a capable manager, we do not feel the fund's performance has been strong enough for it to be considered for inclusion on the Wealth 150 list of our favourite funds across the major sectors. We will continue to monitor his progress, and contact investors in the fund if our views change.

Find out more about this fund including how to invest

Please read the key features/key investor information document in addition to the information above.

The value of investments can go down as well as up, this means you could get back less than you invested. Therefore all investments should be regarded with a long term view. No news or research item is a personal recommendation to deal. If you are unsure about the suitability of an investment please contact us for advice.
Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.


You may also be interested in: