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Invesco Perpetual UK Equity Pension - more invested in UK-focused businesses

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.
  • Mark Barnett thinks investors are too negative on the prospects for UK companies
  • Recent investments have focused on businesses that make money in the UK
  • Consumer, financial and property companies look particularly good value

Our View

All fund managers perform poorly sometimes. It's happened to Mark Barnett over the past couple of years. Investments in domestically-focused businesses, and problems at some individual companies, have held back performance of the Invesco Perpetual UK Equity Pension Fund.

He’s a hugely experienced investor though and we think the setback is temporary. The fund is invested quite differently from other UK funds. This means performance will be different, but over the long-term it could help. To perform better than the stock market you must do something different.

This fund is designed for pension investors so can only be held in the HL SIPP or HL Junior SIPP. It doesn’t currently feature on the Wealth 150. Mark Barnett is a good fund manager, but the Wealth 150 is focused on other excellent funds with lower ongoing charges.

How has the fund performed?

The fund rose 2.9%* over the past year. This compares with a rise of 9.2% for the broader UK stock market. Please remember past performance isn’t a guide to the future.

Mark Barnett focuses on unloved, but financially strong companies. He invests when their share prices and valuations are low, then waits patiently for the business to improve or the sector to return to favour. Remember the value of investments can fall as well as rise so investors can get back less than they invest.

He has increased investments in companies that earn money in the UK over the past couple of years. But they’ve remained out of favour and this held back performance.

There were some company-specific issues too. Investments in Provident Financial and Capita lost value after they announced profits would be lower than expected. An investment in healthcare business BTG also performed poorly after the company announced lower sales of its emphysema treatment than many had expected.

Annual percentage growth
July 2013 -
July 2014
July 2014 -
July 2015
July 2015 -
July 2016
July 2016 -
July 2017
July 2017 -
July 2018
Invesco Perpetual UK Equity Pension 8.8% 12.7% 0.8% 5.5% 2.9%
FTSE All-Share 5.6% 5.4% 3.8% 14.9% 9.2%

Past performance is not a guide to the future. Source: *Lipper IM to 31/07/2018.

Manager's outlook

Mark Barnett thinks lots of investors have overlooked the UK because of uncertainty over Brexit. It’s caused the share prices of some companies selling to UK consumers to fall. But he thinks investors are too negative.

There are areas that might struggle, but to tar all domestic companies with the same brush is short sighted. He doesn’t think the low share prices and valuations reflect the long-term potential of some of these companies.

Financial, consumer and real estate companies offer some of the best opportunities. Huge amounts of ‘baby boomers’ are set to retire over the coming years so demand for life insurance could rise, for example, and benefit insurance companies.

He also expects well-run companies, like Next and easyJet, to cope with any challenges posed by Brexit and do well over the long term. Next is improving its online business and overseas sales, while easyJet could benefit from less competition because some of its competitors have gone bankrupt.

Big, international companies haven’t been ignored. There are investments in BP and Shell, for example, as Mark Barnett believes both companies have invested more wisely in recent years. This should mean they'll continue to pay good dividends, which can be invested for future growth, although there are no guarantees.

Please read the Key Features/ Key Investor Information in addition to the information above.

Find out more about this fund including charges

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.

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