UK smaller companies: Reasons for optimism amidst uncertainty
- 05 mins 39 secs
Robin West, Fund Manager
Markets started 2023 with improved confidence but that all changed in March with the unexpected failure of Silicon Valley Bank in the US and the rescue of Credit Suisse by UBS in Europe.
While investor sentiment was impacted by these events, there were still reasons for optimism; energy prices were significantly below the inflated levels post the Ukraine invasion of a year ago, politics in the UK was calmer and China ended its zero covid policy at the end of 2022.
So, although there were challenges, we believe sentiment could quickly turn if the market gains confidence that inflation is on a sustained downward trajectory and interest rates have peaked.
In his latest video update, Robin reflects on the quarter and answers the following questions:
00:19 - What were the key events driving the market during the quarter?
02:13 - How did the investment trust perform over the quarter?
03:40 - What changes were made to the portfolio over the quarter?
04:17 - How do you see the economy and the market progressing as we start to move through 2023?
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
The Invesco Perpetual UK Smaller Companies Investment Trust plc invests in smaller companies which may result in a higher level of risk than a product that invests in larger companies. Securities of smaller companies may be subject to abrupt price movements and may be less liquid, which may mean they are not easy to buy or sell.
The use of borrowings may increase the volatility of the NAV and may reduce returns when asset values fall.
The Invesco Perpetual UK Smaller Companies Investment Trust plc uses derivatives for efficient portfolio management which may result in increased volatility in the NAV. In addition, some companies are suspending, lowering or postponing their dividend payments, which may affect the income received by the product during this period and in the future.
All information correct as at 19 April 2023 unless otherwise stated.
This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.
Views and opinions are based on current market conditions and are subject to change.
For more information on our products, please refer to the relevant Key Information Document (KID), Alternative Investment Fund Managers Directive document (AIFMD), and the latest Annual or Half-Yearly Financial Reports. This information is available on the website www.invesco.com/uk/en/investment-trusts.html.
Further details of the Company’s Investment Policy and Risk and Investment Limits can be found in the Report of the Directors contained within the Company’s Annual Financial Report.
Issued by Invesco Fund Managers Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK. Authorised and regulated by the Financial Conduct Authority.