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Track record of solid long-term performance

Invesco Asia Trust 23 March 2018 Review
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Invesco Asia Trust

Track record of solid long-term performance

Investment trusts

23 March 2018

Price

284.0p

Market cap

£201.4m

AUM

£232.0m

NAV*

320.8p

Discount to NAV

11.0%

NAV**

326.7p

Discount to NAV

13.1%

*Excluding income. **Including income. As at 21 March 2018.

Yield

1.5%

Ordinary shares in issue

70.9m

Code

IAT

Primary exchange

LSE

AIC sector

Asia Pacific ex-Japan

Benchmark

MSCI AC Asia ex-Japan

Share price/discount performance

Three-year performance vs index

52-week high/low

310.5p

251.8p

347.8p

284.9p

**Including income.

Gearing

Gross*

0.0%

Net cash*

0.5%

*As at 28 February 2018.

Analysts

Helena Coles

+44 (0)20 3077 5700

Mel Jenner

+44 (0)20 3077 5720

Invesco Asia Trust is a research client of Edison Investment Research Limited

Invesco Asia Trust (IAT) aims to provide attractive long-term capital growth through investing in a diversified portfolio of Asian and Australasian equities. With few investment constraints, the relatively concentrated portfolio of 50-60 stocks is a reflection of the manager’s highest conviction ideas, driven primarily by bottom-up considerations. IAT has a solid long-term track record and its NAV total return has outperformed the benchmark over three, five and 10 years. Asian equities have performed strongly over the past two years, leaving valuations above the historic average. However, they remain at a meaningful discount to global equities, and the manager continues to find attractive long-term investment ideas.

12 months ending

Share price
(%)

NAV
(%)

Benchmark*
(%)

MSCI World
(%)

FTSE All-Share
(%)

28/02/14

(6.3)

(7.3)

(10.1)

10.8

13.3

28/02/15

25.2

25.5

18.0

17.6

5.6

29/02/16

(7.8)

(9.2)

(13.2)

(0.7)

(7.3)

28/02/17

45.8

51.1

42.1

36.6

22.8

28/02/18

19.4

17.1

19.5

6.6

4.4

Source: Thomson Datastream. Note: All % on a total return basis in GBP. *Benchmark is MSCI AC Asia Pacific ex-Japan until 30 April 2015 and MSCI AC Asia ex-Japan thereafter.

Investment strategy: High conviction, fundamental

IAT has a fundamental approach in seeking quality companies with strong balance sheets, cash flows and management, which are trading at a significant discount to estimated fair value on a three- to five-year investment horizon. A team of six UK-based Asian equity specialists facilitate IAT’s bottom-up process, which involves meeting around 700 companies a year, and conducting in-depth analysis to help build a diversified portfolio of around 50-60 highest conviction stocks. Top-down analysis helps to guide country and sector weights.

Market outlook: Conditions still benign

The MSCI Asia AC ex-Japan index has risen 19.5% in the year to end-February 2018, outperforming both the MSCI World and FTSE All-Share indices. Earnings upgrades have been stronger than expected, lifted by accelerating and synchronous global growth. Looking ahead, although stock markets are now more fairly priced than last year, and earnings surprises could be harder to achieve, the economic backdrop nevertheless remains supportive, while Asian equity valuations, especially relative to global equities, do not appear overstretched.

Valuation: Discount in line with three-year average

IAT currently trades at an 11.0% discount to ex-income NAV, which is in line with its three-year average, with the discount ranging between 6.8% and 14.2% over this period. The board is committed to managing the discount and views a level below 10.0% to be desirable under normal market conditions. A policy review in 2017 now gives the board discretion to repurchase shares, when it deems conditions to be appropriate, and when a repurchase can enhance NAV.

Exhibit 1: Trust at a glance

Investment objective and fund background

Recent developments

IAT’s objective is to provide long-term capital growth by investing in a diversified portfolio of Asian companies. On 1 May 2015 the trust adopted a new benchmark, MSCI AC Asia ex-Japan, in place of the former benchmark, MSCI AC Asia Pacific ex-Japan. While the new benchmark excludes Australasia, the trust may still invest in these markets.

14 December 2017: Interim report for six months ending 31 October 2017. NAV TR +14.8% versus benchmark TR +15.5%. Share price TR +13.4%.

11 August 2017: 15% of shares repurchased for cancellation in tender offer at a 2% discount to NAV.

10 August 2017: Neil Rogan appointed as a non-executive director.

28 June 2017: Annual report for 12 months ending 30 April 2017. NAV TR +40.6% versus benchmark TR +37.5%. Share price TR +42.9%.

28 June 2017: Annual dividend of 4.3p declared, +17.8% versus FY16.

Forthcoming

Capital structure

Fund details

AGM

August 2018

Ongoing charges

0.97% (February 2018)

Group

Invesco Asset Management Ltd

Annual results

June 2018

Net cash

1.0%

Manager

Ian Hargreaves

Year end

30 April

Annual mgmt fee

0.75%

Address

125 London Wall
London EC2Y 5AS

Dividend paid

July/August

Performance fee

None

Launch date

July 1995

Trust life

Indefinite

Phone

+44 (0)20 3753 1000

Continuation vote

Three-yearly, next in 2019

Loan facilities

£20m multi-currency

Website

www.invescoperpetual.co.uk

Dividend policy and history (financial years)

Share buyback policy and history (financial years)

Dividends are paid annually in July/August. Income is a by-product of stock selection and there is no yield target.

Renewed annually, the trust has authority to purchase up to 14.99% and allot up to 5% of issued share capital.

Shareholder base (as at 9 March 2018)

Portfolio exposure by sector (as at 28 February 2018, ex-cash)

Top 10 holdings (as at 28 February 2018)

Portfolio weight %

Company

Country

Sector

28 February 2018

28 February 2017*

Samsung Electronics

South Korea

Technology hardware & equipment

5.3

4.3

JD.com (ADR)

China

Retailing

3.7

N/A

TSMC

Taiwan

Semiconductors

3.6

3.6

AIA

Hong Kong

Insurance

3.5

3.1

Baidu (ADR)

China

Software & services

3.4

3.3

HDFC Bank

India

Banks

3.3

3.4

CNOOC

China

Oil & gas

2.9

N/A

Tencent

Hong Kong

Software & services

2.9

N/A

Hyundai Motor (preference shares)

South Korea

Automobiles

2.8

3.1

MediaTek

Taiwan

Semiconductors

2.8

N/A

Top 10

34.2

36.5

Source: Invesco Asia Trust, Edison Investment Research, Bloomberg, Morningstar. Note: *N/A where not in end-February 2017 top 10.

Market outlook: Global growth favourable for Asia

The MSCI AC Asia ex-Japan index has performed strongly over the past year to end-February 2018, rising 19.5%, significantly outperforming the MSCI World (6.6%) and FTSE All-Share (4.4%) indices. Accelerating global growth has been favourable for Asia, and spurred strong earnings momentum for exporters and cyclical sectors, which are significant drivers for the region’s markets. As a result, Asian equities valuations are no longer cheap; however, they are also not overly expensive, comparing favourably with global equities. The right-hand chart in Exhibit 2 shows Asian equities currently trading at a c 15% forward P/E multiple discount to global equities, having previously achieved premium valuations as recently as 2012.

Exhibit 2: Market performance and valuation

Performance of indices (last five years, all in £)

DS Asia ex-Japan vs DS World valuation comparison

Source: Thomson Datastream, Edison Investment Research. Note: Valuation data as at 21 March 2018.

Fund profile: Targeting long-term capital growth

IAT was launched in July 1995. Its objective is to provide attractive long-term capital growth through fundamental investing in a diversified portfolio of Asian and Australasian equities. Since 1 May 2015, the trust has been benchmarked against the MSCI AC Asia ex-Japan index, changing from the MSCI Asia-Pacific ex-Japan index, which more suitably reflects IAT’s habitual significant underweight to Australasia. The trust has the freedom to invest in companies of all sizes across the region with relatively few constraints, notably a maximum exposure of 10% of total assets to any one company, unquoted investments, and investments in warrants and options. Gearing is permitted up to 25% of net assets. The portfolio typically consists of around 50-60 stocks, which represent the manager’s highest conviction investment ideas.

The fund manager: Ian Hargreaves

The manager’s view: Still plenty of attractive investment ideas

Asian equities have performed strongly over the past year, and Hargreaves believes that, at current price levels, the risk-reward ratio is now fairly balanced. Although he now has more confidence in the outlook for global growth, he expects the rate of growth to peak this year. In the US, it is likely that the Institute for Supply Management’s (ISM) leading indicator peaked in October 2017. China’s growth is also slowing, although this is not necessarily evident in reported headline numbers. The manager observes other indicators that point to slowing growth, including sales of property, cars and cement. China’s central government policies to dampen consumer credit growth, which has grown by around 30% pa over the past few years, as well as to curb financial powers of local governments, all point towards tighter credit conditions.

Given Asian exporters’ sensitivity to the US and China’s GDP growth, and the global bias towards raising interest rates, the economic backdrop has become more challenging, but not disastrous, for earnings. Earnings revisions for 2017 have been stronger than expected, and consensus forecasts are looking for an ambitious 18% earnings growth in 2018. Positive surprises should be harder to achieve, while valuations are above average, but not overstretched. In this environment, Hargreaves has reduced the trust’s exposure to cyclical sectors, such as IT hardware, cement and real estate, but cautious optimism is underpinned by his ability to continue to find interesting investment ideas elsewhere.

Asset allocation

Investment process: Bottom-up, valuation discipline

The manager’s investment approach is fundamental, seeking to identify stocks with quality characteristics, which are intrinsically undervalued with a three- to five-year investment horizon. A well-resourced team of six experienced fund managers and analysts each travel to Asia three or four times each year, meeting around 700 company managements. Investment ideas are subject to in-depth analysis, focusing on a company’s competitive position, financial health, understanding the key drivers of earnings growth, and management quality. These assessments help determine a company’s fair value and identify candidates for a shortlist of stocks, which are ranked by expected total annual return over a three-year horizon. Portfolio construction is mainly driven by bottom-up considerations, including the expected return of a stock, conviction level and liquidity. Portfolio risk is managed through in-depth knowledge of investee companies, and rigorous valuation discipline to help protect against capital loss. Diversification is also an important part of risk management, and the team’s top-down economic analysis provides an overlay to help guide the portfolio’s sector and country weightings.

Current portfolio positioning

Over the past year to end-February 2018, the most significant changes to the portfolio are a reduction in information technology (-5.5pp) and increased exposures to financials (+6.6pp) and energy (+3.1pp). Information technology remains the largest sector exposure at 29.0%. The main reductions were to the highly cyclical hardware and semiconductor manufacturing sub-sectors, where Hargreaves believes profitability has peaked. He sold the position in Taiwanese passive component manufacturer Yageo. Tight supply for its components resulted in “meteoric” levels of profitability and gross margins in 2017 increased from 24% to 32% year-on-year. Samsung Electronics Co (SEC) in Korea also benefited from a very tight market for its products (DRAM and NAND semiconductors) and achieved 25-year-high margins. With new semiconductor supply in the region looming, the manager trimmed the SEC position to 5.3% (down from a peak of around 8.0%). It remains the largest holding in the portfolio, however, as the manager believes demand for its products will continue to grow, and the stock is still modestly valued.

The manager added Australian general insurance company, QBE, to IAT’s portfolio. Extremely low interest rates have depressed insurance companies’ profitability for many years. However, the interest cycle has started to reverse, which should be positive for margins. A significant number of catastrophes in 2017 (including hurricanes Harvey, Irma and Maria, and wildfires in California) resulted in hefty write-downs and profit downgrades. A restructuring of the business is underway, while a new CEO is in place. Hargreaves believes QBE has good recovery potential driven by cyclical factors and medium-term benefits from restructuring. The manager also added to the position in Korean Reinsurance, which should share similar cyclical recovery potential. The company is relatively small in market capitalisation terms, and less well-researched, contributing to its modest valuation of 0.6x price-to-book ratio. Hargreaves believes the company, which commands a c 60% share of the Korean reinsurance market, can generate a return on equity of around 10% in normalised conditions, suggesting the shares are meaningfully undervalued.

Exhibit 3: Portfolio geographic exposure vs benchmark (% unless stated)

Portfolio end-February 2018

Portfolio end-February 2017

Change (pp)

Benchmark weight

Active weight vs index (pp)

Trust weight/ index weight (x)

Hong Kong & China

42.8

41.0

1.7

46.6

(3.9)

0.9

South Korea

19.2

20.9

(1.7)

16.9

2.3

1.1

India

12.7

14.5

(1.8)

9.5

3.2

1.3

Taiwan

12.6

14.6

(2.0)

13.3

(0.7)

0.9

Japan

3.5

1.1

2.4

0.0

3.5

N/A

Australia

2.3

1.4

1.0

0.0

2.3

N/A

Singapore

2.2

2.1

0.1

4.2

(2.0)

0.5

Thailand

1.5

0.0

1.5

2.9

(1.4)

0.5

Philippines

1.2

1.3

(0.1)

1.2

0.0

1.0

Indonesia

1.2

3.1

(2.0)

2.5

(1.3)

0.5

Malaysia

0.8

0.0

0.8

2.8

(2.0)

0.3

Pakistan

0.0

0.0

0.0

0.1

(0.1)

0.0

100.0

100.0

100.0

Source: Invesco Asia Trust, Edison Investment Research. Note: Rebased for cash/gearing.

Exhibit 4: Portfolio sector exposure vs benchmark (% unless stated)

Portfolio end-February 2018

Portfolio end-February 2017

Change (pp)

Benchmark weight

Active weight vs index (pp)

Trust weight/ index weight (x)

Information technology

29.0

34.5

(5.5)

31.2

(2.2)

0.9

Financials

27.7

21.0

6.6

23.5

4.2

1.2

Consumer discretionary

11.8

13.3

(1.4)

9.1

2.8

1.3

Industrials

9.8

8.7

1.1

7.2

2.5

1.4

Energy

5.3

2.2

3.1

4.2

1.1

1.3

Materials

5.2

5.9

(0.7)

4.7

0.5

1.1

Real estate

3.5

5.2

(1.7)

6.1

(2.6)

0.6

Telecom services

3.2

5.0

(1.8)

4.6

(1.4)

0.7

Utilities

1.6

2.8

(1.2)

3.0

(1.4)

0.5

Consumer staples

1.5

1.4

0.1

4.4

(2.9)

0.3

Healthcare

1.4

0.0

1.4

2.0

(0.6)

0.7

100.0

100.0

100.0

Source: Invesco Asia Trust, Edison Investment Research. Note: Rebased for cash/gearing.

Hargreaves also added to ICICI Bank in India as he gained conviction on India’s credit cycle recovery. A credit boom in the years preceding the global financial crisis left many banks, including ICICI Bank, with a high proportion of non-performing loans. However, little progress was made to recognise these problems until recently. The Modi government has recapitalised the state banking sector and introduced a new bankruptcy code, which is leading to accelerated recognition of impaired assets. ICICI Bank has been implementing these measures, paving the way for balance sheet and profit recoveries over the next 12-18 months. The bank is well capitalised, and its core business is highly profitable. Post recovery, Hargreaves expects the bank to be able to generate a normalised mid- to high-teens return on equity, leading to a potential re-rating of the stock.

In the energy sector, the manager increased the holding in China-listed oil and gas company, CNOOC. Following a meeting with the company’s CEO in the second half of 2017, Hargreaves gained conviction on the quality of the company’s assets and management capability. The market perceives the company as low growth and inefficiently managed, typical of state-owned enterprises in China. The team’s in-depth research concluded otherwise, and is confident CNOOC can continue to generate good growth and profitability, benefiting from one of the lowest lifting costs among its global peers. The manager also bought a new position in Japan-listed Inpex, which has a large LNG project based in Australia due to come on-stream imminently. This project could transform the profitability of the company, with the prospect of generating a free cash flow yield of c 10% over the next two years. The manager believes the LNG market could be undersupplied by the end of the decade as China is switching from coal to gas usage more quickly than originally envisaged.

Performance: Good investment track record

As shown in Exhibits 5 and 6, IAT has a strong medium- and long-term track record; its price and NAV total returns have outperformed the benchmark over three, five and 10 years. Over one year, IAT’s NAV has modestly lagged the benchmark, although its share price performance is in line. IAT’s NAV total return relative performance is even stronger when measured against the FTSE All-Share index, outperforming over all periods shown.

Exhibit 5: Investment trust performance to 28 February 2018

Price, NAV and benchmark total return performance, one-year rebased

Price, NAV and benchmark total return performance (%)

Source: Thomson Datastream, Edison Investment Research. Note: Three-, five- and 10-year performance figures annualised. Benchmark is MSCI AC Asia Pacific ex-Japan until 30 April 2015 and MSCI AC Asia ex-Japan thereafter.

Exhibit 6: Share price and NAV total return performance, relative to indices (%)

 

One month

Three months

Six months

One year

Three years

Five years

10 years

Price relative to benchmark

(2.1)

(3.8)

(1.2)

0.0

9.0

20.5

35.7

NAV relative to benchmark

(0.5)

(2.7)

(1.1)

(2.0)

9.1

19.6

32.5

Price relative to FTSE All Share

(0.7)

(0.2)

3.1

14.4

35.1

32.5

70.1

NAV relative to FTSE All Share

0.9

1.1

3.2

12.1

35.2

31.5

66.1

Source: Thomson Datastream, Edison Investment Research. Note: Data to end-February 2018. Geometric calculation.

Exhibit 7: NAV total return performance relative to benchmark over three years

Source: Thomson Datastream, Edison Investment Research

Discount: New approach to discount management

IAT currently trades at an 11.0% discount to ex-income NAV, which is in line with its three-year average, with the discount ranging between 6.8% and 14.2% over this period. Previously, the board proposed a tender offer if the trust’s shares traded over any financial year at an average discount of more than 10.0% to ex-income NAV. In 2017, the board reconsidered the appropriateness of tender provisions with a specific discount trigger, and concluded the practice to be against shareholders’ long-term interests, potentially shrinking the size of the trust, leading to higher ongoing charges and lower liquidity. Tender offers have therefore been discontinued. Managing the trust’s share price discount continues to be an important focus for the board, aiming for a share price discount of less than 10% of ex-income NAV in normal market conditions. The board has shareholder approval, renewed annually, to buy back up to 14.99% of its shares, and will use this facility at its discretion, when repurchases can enhance the NAV, taking into consideration factors such as market conditions and the discounts of comparable peers.

Exhibit 8: Share price premium/discount to NAV (excluding income) over three years (%)

Source: Thomson Datastream, Edison Investment Research

Capital structure and fees

IAT is a conventional investment trust with one class of share. Following a tender offer for 15% of ordinary shares at a 2% discount to NAV, on 10 August 2017, there are currently 70.9m ordinary shares in issue. The trust is subject to a continuation vote every three years; the next is at the August 2019 AGM. Gearing is permitted, of up to 25% of net assets and IAT has an unsecured 364-day, multi-currency revolving credit facility for £20m with Bank of New York Mellon. In practice, the trust uses leverage conservatively; as at end-February 2018, IAT had no gearing and a net cash position of 0.5%. Invesco Fund Managers is paid an annual management fee of 0.75% of net assets on a quarterly basis. The fee is paid out of revenue and capital income, split 25% and 75% respectively. There is no performance fee. In FY17, IAT’s ongoing charge at end-February 2018 was 0.97%.

Dividend policy and record

IAT’s primary objective is to generate long-term capital growth, rather than dividend income. Since FY01, dividends have either increased or been maintained, and in FY17 the annual payment of 4.30p per share represented an 18% increase compared to FY16. This reflects robust revenue per share of 4.74p from strong earnings generated by investee companies, and the weakness of sterling following the EU referendum result. The current dividend yield of 1.5% compares relatively favourably to peers, ranking fourth among a group of 12 funds (Exhibit 9).

Peer group comparison

IAT is a member of the AIC Asia Pacific ex-Japan sector. Exhibit 9 shows an adjusted sector peer group, with the removal of three trusts with an income mandate, and a small trust with a shorter performance track record. IAT’s NAV total return compares favourably versus the peers over the longer term, ranking fifth, second and fourth over three, five and 10 years respectively. Over each of these periods, the NAV total return was significantly above the peer group average. IAT’s dividend yield ranks fourth, although the discount to (ex-par) NAV is wider than the average, ranking seventh. It is one of the smaller funds in the group.

Exhibit 9: Selected peer group as at 21 March 2018*

% unless stated

Market cap £m

NAV TR
1 year

NAV TR
3 year

NAV TR
5 year

NAV TR
10 year

Discount (ex-par)

Ongoing charge

Perf.
fee

Net
gearing

Dividend yield (%)

Invesco Asia Trust

201.4

10.1

53.6

90.0

252.8

(11.0)

1.0

No

99.0

1.5

Aberdeen Asian Smaller

357.9

0.7

25.9

28.7

308.8

(11.9)

1.2

No

111

1.1

Aberdeen New Dawn

266.2

10.9

35.1

42.3

183.3

(13.3)

0.9

No

109

1.7

Edinburgh Dragon

721.1

11.4

36.6

43.6

195.4

(12.2)

1.0

No

100

0.9

Fidelity Asian Values

268.5

0.5

42.3

80.2

223.4

(1.6)

1.3

No

101

1.1

JPMorgan Asian

334.0

19.8

57.2

84.4

159.7

(11.9)

0.7

No

100

3.9

Martin Currie Asia Unconstrained

142.7

7.0

36.0

45.3

108.5

(10.5)

1.1

No

101

2.0

Pacific Assets

300.9

2.6

27.0

66.1

152.5

(2.7)

1.3

No

100

1.0

Pacific Horizon

197.5

38.6

68.7

102.3

181.9

(2.2)

1.1

No

107

0.0

Schroder Asia Pacific

770.8

20.1

61.7

86.6

262.4

(10.7)

1.0

No

106

1.2

Schroder Asian TR Inv. Company

307.8

21.2

62.3

77.4

210.4

3.9

1.0

Yes

104

1.2

Scottish Oriental Smaller Cos

300.8

(0.6)

25.6

37.3

318.6

(13.2)

1.2

Yes

100

1.2

Weighted average

12.3

45.0

64.6

221.7

(8.9)

1.1

103

1.4

Trust rank in sector (12)

10

7

5

2

4

7

9

12

4

Source: Morningstar, Edison Investment Research. Note: *Performance data to 20 March 2018. TR = total return. Net gearing is total assets less cash and equivalents as a percentage of net assets (100 = ungeared).

The board

IAT’s board has five independent, non-executive directors. Chairman, Carol Ferguson, joined in March 2009 and assumed her current role in August 2013. Tom Maier was appointed in March 2009, Owen Jonathan in March 2013 and Fleur Meijs in December 2016. Following the retirement of James Robinson in August 2017, after over 10 years’ service, the board appointed Neil Rogan, with effect from 1 September 2017. He brings considerable investment management experience and was formerly head of international equities at both Gartmore and Henderson. Rogan is also chairman of Murray Income Trust.

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Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Invesco Asia Trust and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable; however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA rules, this document has not been prepared in accordance with the legal require
ments designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority (Financial Conduct Authority). Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Invesco Asia Trust and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable; however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA rules, this document has not been prepared in accordance with the legal require
ments designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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