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LEI: 549300JZQ39WJPD7U596 
 
Invesco Select Trust plc 
 
Annual Financial Report for the year ended 31 May 2022 
 
The following text is extracted from the Annual Financial Report of the Company 
for the year ended 31 May 2022. All page numbers below refer to the Annual 
Financial Report which will be made available on the Company's website. 
 
Financial Performance 
 
Cumulative Total Returns(1)(3) 
 
To 31 May 2022 
 
                                                        One         Three          Five 
 
UK Equity Share Portfolio                              Year         Years         Years 
 
Net Asset Value                                        6.8%         25.9%         21.1% 
 
Share Price                                            3.0%         13.6%         10.4% 
 
FTSE All-Share Index                                   8.3%         18.4%         22.2% 
 
                                                        One         Three         Five? 
 
Global Equity Income Share Portfolio                   Year         Years         Years 
 
Net Asset Value                                        9.6%         39.0%         47.9% 
 
Share Price                                            4.4%         30.0%         37.3% 
 
MSCI World Index (£)                                   7.4%         43.0%         62.9% 
 
                                                        One         Three         Five? 
 
Balanced Risk Allocation Share Portfolio               Year         Years         Years 
 
Net Asset Value                                        0.3%         21.8%         26.1% 
 
Share Price                                           -5.2%         11.6%         15.7% 
 
Composite Benchmark Index(2)                          -6.1%         11.8%         20.3% 
 
ICE BoA Merrill Lynch 3 month LIBOR plus 5%            5.1%         16.1%         27.3% 
per annum 
 
                                                        One         Three         Five? 
 
Managed Liquidity Share Portfolio                      Year         Years         Years 
 
Net Asset Value                                       -0.3%          4.5%          6.1% 
 
Share Price                                           -4.0%         -2.0%         -2.0% 
 
Year end Net Asset Value, Share Price and Discount 
 
                                                  Net Asset         Share 
 
                                                      Value         Price 
 
Share Class                                         (pence)       (pence)      Discount 
 
UK Equity                                            194.35        175.00       (10.0)% 
 
Global Equity Income                                 249.00        229.00        (8.0)% 
 
Balanced Risk Allocation                             169.87        154.50        (9.0)% 
 
Managed Liquidity                                    106.92         97.00        (9.3)% 
 
(1)   Alternative Performance Measure (APM). See Glossary of Terms and 
Alternative Performance Measures on pages 116 to 119 of the financial report 
for details of the explanation and reconciliations of APMs. 
 
(2)   With effect from 1 June 2021, the benchmark adopted by the Balanced Risk 
Allocation Portfolio is comprised of 50% 30-year UK Gilts Index, 25% GBP hedged 
MSCI World Index (net) and 25% GBP hedged S&P Goldman Sachs Commodity Index. 
Prior to this, the benchmark was ICE BoA Merrill Lynch 3 month LIBOR plus 5% 
per annum. Accordingly, both the new and old benchmark are shown. 
 
(3)   Source: Refinitiv/Bloomberg. 
 
Chairman's Statement 
 
Highlights 
 
- UK Equity Share, Global Equity Income Share and Balanced Risk Allocation 
Share Portfolios delivered positive NAV performance over the period, with the 
Global Equity Income and Balanced Risk Allocation Share Portfolios 
outperforming their respective benchmark indices. 
 
- Dividends rose to 6.70p per UK Equity Share, 7.15p per Global Equity Income 
Share and 1.00p per Managed Liquidity Share. 
 
- Net assets in the Global Equity Income Share Portfolio increased to £62.6m, 
with net conversions into that portfolio. 
 
- Period of consolidation following completion of the business combination with 
Invesco Income Growth Trust in April 2021, one of the results of which are 
lower ongoing charges. 
 
The Company 
 
The Company's investment objective is to provide shareholders with a choice of 
investment strategies and policies, each intended to generate attractive 
risk-adjusted returns. 
 
The Company's share capital comprises four share classes: UK Equity Shares, 
Global Equity Income Shares, Balanced Risk Allocation Shares and Managed 
Liquidity Shares, each of which has its own separate portfolio of assets and 
attributable liabilities. 
 
The investment objectives and policies of each of the portfolios are set out on 
pages 39 to 41. 
 
The Company's structure enables shareholders to adjust asset allocation to 
reflect their views of the prevailing market outlook. As set out on page 2, 
shareholders have the opportunity to convert between share classes, free of 
capital gains tax, every three months. 
 
Performance 
 
It was pleasing to note, given the global macroeconomic backdrop, that three of 
the four portfolios delivered positive NAV performance, with the Global Equity 
Income Share Portfolio and Balanced Risk Allocation Share Portfolio 
outperforming their respective benchmarks over the period. 
 
The UK Equity Share Portfolio has been jointly managed by Ciaran Mallon and 
James Goldstone over the period. The portfolio saw positive NAV total return 
performance during the year, although underperformed the benchmark by 1.5%. The 
NAV total return of the UK Equity Share Portfolio over the year was 6.8%, which 
compares with the total return of 8.3% from the FTSE All-Share Index. The share 
price total return was 3.0%. Market sentiment continued to be dominated by the 
ongoing impact of the pandemic on the economy and inflationary pressures, 
particularly around energy costs, which were then worsened by the war in 
Ukraine. 
 
The Global Equity Income Portfolio, managed by Stephen Anness, also saw 
positive NAV total return performance, outperforming the benchmark total return 
by 2.2%. The NAV total return of the Global Equity Income Share Portfolio over 
the year was 9.6%, which compares with the total return from the MSCI World 
Index (£) of 7.4%. The share price total return was 4.4%. The portfolio's stock 
selection remained strong, particularly in the US and UK, where overweight 
exposure to consumer staples was a positive element to performance. 
 
The Balanced Risk Allocation Portfolio, by its very nature, has a combination 
of equities, bonds and commodities exposures. It is managed by Invesco's Global 
Asset Allocation Team, based in Atlanta. During the period under review, NAV 
total return of the Balanced Risk Allocation Share Portfolio was 0.3%, which 
outperformed the total return from its composite benchmark by 6.4%. The share 
price total return was -5.2%. The positive NAV performance was largely driven 
by the portfolio's exposure to commodity markets, particularly energy 
commodities and industrial metals, due to a combination of strong demand 
twinned with supply constraints. 
 
The NAV total return on the Managed Liquidity Portfolio, managed by Derek 
Steeden, was -0.3%. The portfolio's return has been impacted by the effect of 
rising interest rates to combat increasing inflation. It is important to note 
that although this share class has a lower risk profile than the Company's 
other three share classes, it is not designed to be a cash fund, and as such is 
not without risk to capital. The share price total return was -4.0%. 
 
Balanced Risk Allocation Benchmark Change 
 
As reported in the 2021 Annual Financial Report and effective 1 June 2021, a 
new benchmark has been used. This new comparator benchmark is a composite whose 
components are approximate proxies for the portfolio's holdings and is a blend 
comprising 50% 30-year UK Gilts Index, 25% GBP hedged MSCI World Index (net) 
and 25% GBP hedged S&P Goldman Sachs Commodity Index (all total return). 
 
Gearing and Structure 
 
The UK Equity and Global Equity Income portfolios are able to employ gearing by 
means of a bank loan facility. Your Board has renewed this facility at a level 
of £40 million to allow the Portfolio Managers to employ gearing, if desired, 
across the two equity portfolios. 
 
The Company continues to retain its innovative capital structure, offering 
investors the opportunity to switch (on a quarterly basis) between its UK 
Equity, Global Equity Income, Balanced Risk Allocation and Managed Liquidity 
share classes in order to position their portfolios for changing investment 
conditions. 
 
Dividends 
 
We have continued to apply the dividend policy adopted six years ago, and 
supported by shareholder advisory votes, whereby for both UK Equity and Global 
Equity Income Shares, dividends are paid by way of three equal interim 
dividends declared in July, October and January with a 'wrap-up' fourth interim 
declared in April. For the year under review the first three dividends declared 
for the UK Equity Shares were 1.50p per share and for the Global Equity Income 
Shares 1.55p per share. The fourth interim dividends were 2.20p per share for 
the UK Equity Shares, bringing the total to 6.70p per share for the year (2021: 
6.65p), and 2.50p per share for the Global Equity Income Shares, bringing that 
total to 7.15p (2021: 7.10p) per share for the year. 
 
The Company's dividend policy permits the payment of dividends in the UK 
Equity, Global Equity Income and Managed Liquidity portfolios from capital. 
With total income of the Company increasing to £6.99m (2021: £3.18m) the 
contribution from capital required for the Company's dividends to meet the 
Board's target level was reduced from 2021 levels. For the Global Equity Income 
Shares a contribution from capital of approximately 2.30p per share was 
required to achieve the dividend level (2021: 3.15p per share). For the UK 
Equity Shares a contribution from capital of approximately 0.7p per share was 
required to achieve the dividend level (2021: 2.75p per share). 
 
We intend to continue with the policy of a partial augmentation from capital 
where appropriate and investors are again being given advisory votes on it. 
However, whereas in recent years we have set a target of at least maintaining 
the dividend level from year to year for each of the equity portfolios, we did 
not set dividend targets in 2022 due to the uncertainty of income flows as a 
result of the pandemic. With the current uncertainty of future income flows, 
due in particular to the risk of entering a period of global recession, the 
Directors have not set dividend targets for the year to 31 May 2023. 
 
The first interim dividends declared in respect of the year to May 2023, which 
will be paid on 15 August 2022 to shareholders on the register on 22 July 2022, 
were 1.50p per share for UK Equity Shares, 1.55p per share for Global Equity 
Income Shares. 
 
The Board has also declared an interim dividend for the year ended 31 May 2023, 
payable as noted above, of 1.00p per share for Managed Liquidity Shares. This 
is payable from retained revenue reserves. Given the quantum involved it is 
unlikely that such payments will be more frequent than annually and may indeed 
be less frequent. 
 
It continues to be the case that in order to maximise the capital return on the 
Balanced Risk Allocation Shares, the Directors only intend to declare dividends 
on this share class to the extent required, having taken into account the 
dividends paid on the other Share classes, to maintain the Company's status as 
an investment trust. No dividends have been paid on the Balanced Risk 
Allocation Shares over the period. 
 
Discount Policy 
 
The Company adopted a discount control policy for all four share classes in 
January 2013, whereby the Company offers to issue or buy back shares of all 
classes with a view to maintaining the prices of the shares at close to their 
respective net asset values. Your Board remains committed to its utilisation, 
although it has stepped back at times since the onset of the Ukraine conflict, 
in light of market volatility, and discounts have been somewhat wider than 
before, in line with discounts generally across the investment trust market. 
The ongoing implementation of this policy is dependent upon the Company's 
authority to buy back shares, and the Directors' authority to issue shares for 
cash on a non pre-emptive basis, being renewed at general meetings of the 
Company. 
 
As discussed below, the Company is seeking a class consent from the 
shareholders of the UK Equity and Balanced Risk Allocation share classes to 
cancel their respective share premium accounts. This will give the Company 
ample scope to continue share buybacks. 
 
Share Capital Movements 
 
During the year to 31 May 2022 the Company bought back and placed in treasury 
11,996,500 UK Equity Shares at an average price of 184.1p, 583,000 Global 
Equity Income Shares at an average price of 227.7p, 165,000 Balanced Risk 
Allocation Shares at an average price of 165.5p and 63,000 Managed Liquidity 
Shares at an average price of 104.0p. Other than in connection with the share 
conversion process, no shares were issued during the year. In addition, no 
shares were sold from treasury and no treasury shares were cancelled. Since the 
year-end a further 687,000 UK Equity Shares and 295,000 Global Equity Income 
Shares have been bought back into treasury. The Board intends to use the 
Company's buy back and issuance authorities when this will benefit existing 
shareholders; and to operate the discount control policy mentioned above; and 
will ask shareholders to renew the authorities as and when appropriate. 
 
Share Class Conversions 
 
The Company enables shareholders to adjust their asset allocation to reflect 
their views of future market returns. Shareholders have the opportunity to 
convert their holdings of shares into any other class of Share, without 
incurring any tax charge (under current legislation). The conversion dates for 
the forthcoming year are as follows: 1 August 2022; 1 November 2022; 1 February 
2023; and 2 May 2023. The total number of Share class conversions that have 
occurred over the year's conversion opportunities resulted in net flows of £5.0 
million out of the UK Equity Share Portfolio; of £4.8 million into the Global 
Equity Income Share Portfolio; of £0.5 million into the Balanced Risk 
Allocation Share Portfolio; and £0.3 million out of the Managed Liquidity Share 
Portfolio. Should you wish to convert shares at any of these dates, conversion 
forms, which are available on the Manager's website at www.invesco.co.uk/ 
investmenttrusts, or CREST instructions must be received at least ten days 
before the relevant conversion date. 
 
Cancellation of the UK Equity and Balanced Risk Allocation Share Premium 
Accounts 
 
In addition to the usual business to be conducted at the AGM, the Board is 
recommending that the share premium accounts of the UK Equity Share Class and 
the Balanced Risk Allocation Share Class are cancelled. This will give the 
Company greater flexibility, subject to financial performance, to make 
distributions and/or to make purchases of its own shares. The proposal will be 
implemented by means of a Capital Reduction, which will not involve any 
distribution or repayment of capital and will not reduce the underlying net 
assets of the Company. In addition, due to the provisions of the Articles of 
Association of the Company, the Company will seek a class consent from the 
shareholders of the UK Equity Share Class and the Balanced Risk Allocation 
Share Class in respect of the proposed cancellation of the reserves at class 
meetings to be held immediately prior to the AGM (see below). Full details of 
the proposal can be found on pages 105 to 111 and in my letter to shareholders 
set out in the Appendix on pages 112 to 113. 
 
Annual General Meeting ('AGM') 
 
I am pleased to invite all our shareholders to the Company's AGM which will be 
held in person at 43-45 Portman Square, London, W1H 6LY at 11.30am on 4 October 
2022. 
 
As well as the Company's formal business, there will be a presentation from the 
UK Equity and Global Equity Income Portfolio Managers. Shareholders will have 
the opportunity to put questions to the Directors and UK Equity and Global 
Equity Income Portfolio Managers. Light refreshments will be available. 
Shareholders may bring a guest to these meetings. To register your interest in 
attending, please contact us at investmenttrusts@invesco.com. 
 
For those unable to make it in person, we will be posting video updates from 
all the Portfolio Managers on our website ahead of the AGM. 
 
The business of the AGM is summarised in the Directors' Report on page 60. It 
is recommended that shareholders exercise their votes by means of registering 
them with the Company's registrar ahead of the meeting, online or by completing 
paper proxy forms, and appoint the Chairman of the meeting as their proxy. The 
Board has considered all the resolutions proposed in the Notice of the AGM and 
believe they are in the best interests of shareholders and the Company as a 
whole. Accordingly, the Directors recommend that shareholders vote in favour of 
each resolution, as will the Directors in respect of their own shareholdings. 
 
I look forward to meeting as many of you as possible at the AGM. 
 
Outlook 
 
Many of the challenges that impacted your Company's portfolios over the last 
year continue to make their presence felt. The lack of preparedness for the 
re-opening of the economy post-pandemic has resulted in global supply chain 
issues and contributed to the current inflationary environment. It was hoped 
that higher levels of inflation would be a transitory issue, with a lower peak; 
forecasts are now indicating a 'higher for longer' environment.  Central banks 
were caught somewhat on the back foot and have had to act more quickly, and 
raise rates more strongly, than they might otherwise have done.  The economic 
environment remains uncertain in the short term, with a risk of a global 
recession, and a cost of living crisis which is resulting in industrial action 
being seen in many sectors. 
 
There are a number of geopolitical tensions, both in the UK, with the current 
Conservative leadership contest and Brexit overhang, and on the global stage. 
The horrific conflict in the Ukraine continues and, sadly, a peaceful 
resolution feels further out than originally hoped. The effect of the war is 
having a global impact on energy and food prices. 
 
Market volatility looks to remain heightened for some time as we wait to see 
how the current economic and political uncertainties play out. Your Company's 
UK Equity and Global Equity Income Portfolios continue to be run in a style 
that maintains 'balance'. Your Portfolio Managers continue to see attractive 
investment opportunities and target portfolio returns driven by the performance 
of the individual underlying companies they have selected. Additionally, income 
is an important constituent of the total return of the equity portfolios. Your 
Portfolio Managers have a strong belief in the ability of equities to protect 
the investor from the effects of inflation in the long term. 
 
The Balanced Risk Allocation Portfolio aims to deliver equity-like returns but 
with half the volatility of equity markets; it seeks to give some protection to 
investors from market falls and inflation, with exposures across growth, 
defensive and real return assets.  The Managed Liquidity Portfolio offers a 
higher degree of security for those with a more conservative outlook; its 
investments may be impacted by interest rates as well as other factors. 
 
I believe that the choice and diversification offered by your Company's four 
portfolios provide investors with additional flexibility and thus a level of 
protection against market downsides.  Shareholders are able to position their 
investment into the asset classes where they expect to see the greatest 
returns, or use the Company's share classes as a tool to diversify investment 
exposure. The ability to change allocation to the Company's investment 
portfolios, without crystallising a taxable gain, also provides the option to 
use the Company as a 'lifestyling' investment, as the ratios of exposures to 
the four asset classes can be altered on a quarterly, or far less frequent 
basis, according to risk appetite. 
 
Your Company's structure and portfolios continue to be well positioned to 
negotiate the market challenges and opportunities that lie ahead. 
 
Victoria Muir 
 
Chairman 
 
3 August 2022 
 
UK Equity Share Portfolio Managers' Report 
 
Q How has the portfolio performed in the twelve months to 31 May 2022? 
 
A  The portfolio has underperformed its benchmark over the twelve months to 31 
May 2022, with a net asset value return of +6.8%. Over the same period the FTSE 
All-Share Index rose +8.3% (both total return, in sterling terms). For most of 
the twelve-month period market sentiment continued to be dominated by the 
ongoing effects of the pandemic on the economy. As the period continued 
attention swiftly turned to the ever-increasing inflation figures being 
reported, driven higher by increases in the prices of imported goods and large 
increases in the costs of energy, all of which have been exacerbated by the war 
in Ukraine. Unfilled job vacancies also increased inflationary pressures 
further as wages rose to attract applicants. The combination of these factors 
has increased the cost of living for the end consumer and to try and curb the 
rapidly rising rate of inflation the Bank of England has raised interest rates 
several times since December. 
 
Q What have been the key contributors and detractors to performance over the 
year? 
 
A  Over the period, positive performance relative to the benchmark was seen in 
six out the eleven sectors that the portfolio is invested in and stock 
selection in industrials and consumer staples sectors was generally strong. At 
a sector level the biggest contribution to positive performance versus the FTSE 
All-Share Index over the twelve-month period was the portfolio's overweight to 
the utilities sector. The portfolio's holdings of Drax, National Grid and SSE 
performed strongly and were all in the top five best performing stocks on a 
relative basis versus the FTSE All-Share Index. Drax rose strongly on higher 
electricity prices and recognition from the market following the transition 
from coal fired electricity production to sustainably sourced biomass along 
with the potential for carbon capture and storage technology. Drax is a unique 
UK listed asset with impressive sustainability credentials and an ambition to 
become a carbon negative business by 2030. 
 
National Grid performed strongly largely due to the attractive inflation 
protected revenues in large parts of the company. Additionally, there is an 
added appreciation of the potential growth in the business as a result of the 
increased electrification of the economy and the resultant grid infrastructure 
required. Similarly, SSE was a strong performer as elements of the company's 
revenues are inflation protected and it will also benefit from the 
electrification theme and higher energy prices. 
 
The portfolio's overweight to the industrials sector performed well on a 
relative basis. The holdings of Ultra Electronics, Bunzl and Chemring all 
performed well. UItra Electronics received a bid approach from Cobham in July 
2021. Over the course of the rest of the year the position was reduced before 
exiting fully in March this year. Bunzl the outsourcing specialist and supplier 
of disposable products released its full year results in February. Although the 
company experienced a decline in demand for personal protection equipment, 
which had been strong throughout the depths of the pandemic, this decline was 
offset by a recovery in business activity and success in passing on 
inflationary price increases. The company also made some strategic acquisitions 
as part of its continuing and successful growth strategy. 
 
RELX which has activities in areas such as science journals, risk analytics, 
legal databases and exhibitions continued its recovery from Covid-19 which saw 
the events and exhibition part of the business effectively close due to the 
pandemic and travel restrictions. Results released in February illustrated that 
growth had been seen from all four divisions of its business and selective 
acquisitions had supplemented their organic growth strategy. 
 
The portfolio's underweight to consumer staples was helpful as large 
international branded staples producers Unilever and Reckitt Benckiser, which 
are not held in the portfolio, were weaker over the period as was supermarket 
delivery company Ocado. This was helpful for relative performance versus the 
FTSE All-Share Index. 
 
Naturally there were some weaker performances in the portfolio. The largest 
detractor on a sector basis was healthcare where biotherapeutics company 
PureTech Health was weaker despite good progress in the development of many of 
its products. There has been no negative news but a de-rating of US 
biotechnology companies as technology shares have fallen has been unhelpful. 
The company aims to address significant areas of un-met medical need with novel 
and lower risk route to market products and approaches, along the 
brain-immuno-gut axis and has an encouraging pipeline of treatments. 
 
Apart from RELX, mentioned previously, other consumer discretionary stocks have 
been under pressure due to the rise in the cost of living. Clothing retailer 
Next has been no exception and whilst the company has experienced strong 
trading over the twelve-month period the share price has been weaker and has 
detracted from relative performance. Similarly, JD Sports Fashion had been 
trading well but a sudden management change and general concerns about the 
retail sector have also weighed on the share price. Restaurant Group had some 
modest downgrades earlier in the year and despite some costs being hedged there 
are concerns that some cost inflation will be passed on to the consumer in 
price adjustments. 
 
In the basic materials sector the gold holdings were weaker over the period. 
Historically gold has been a good hedge against inflation and with inflation 
likely to remain at elevated levels for longer than probably anticipated, we 
believe this position will provide some diversification benefits in the months 
to come and have an attractive yield. 
 
The price of crude oil has risen sharply over the twelve months period as 
supply has struggled to keep up with recovering demand post pandemic. The 
portfolio is slightly underweight the energy sector compared to the benchmark 
weighting, and specifically Shell, which performed strongly. Consequently, this 
was a headwind to relative performance. 
 
                                                                              Year end 
 
                                                             Total           Portfolio 
 
Key Contributors                                          Impact %            Weight % 
 
Ultra Electronics                                            +0.98                   - 
 
Drax                                                         +0.97                 2.9 
 
National Grid                                                +0.54                 4.7 
 
SSE                                                          +0.37                 4.4 
 
RELX                                                         +0.36                 4.1 
 
                                                                              Year end 
 
                                                             Total           Portfolio 
 
Key Detractors                                            Impact %            Weight % 
 
Next                                                         -1.26                 4.4 
 
PureTech Health                                              -0.99                 0.7 
 
Shell                                                        -0.79                 5.6 
 
JD Sports Fashion                                            -0.71                 1.2 
 
Restaurant Group                                             -0.70                 0.6 
 
Q How has gearing impacted the performance and what is your strategy going 
forward? 
 
A  The use of gearing in the portfolio over the period enhanced overall 
performance. Net gearing at the start of the twelve-month period was around 6% 
and this was increased to approaching 12% towards the half year mark before 
reducing to just below 11% at the end of the period. This level is below the 
limit of 25% set by the Board. 
 
The level of gearing is under regular review and the strategy used to ascertain 
the appropriate level for the portfolio is unchanged. We are comfortable that 
the current level of gearing provides an opportunity to enhance the portfolio's 
returns relative to the FTSE All-Share Index when considering a wider macro 
view and the opportunities in the portfolio. Looking to the future, our view 
remains that UK companies remain attractively valued compared to other 
developed markets such as the US. 
 
Q How has the portfolio evolved over the period and how is it currently 
positioned? 
 
A  There have been no material adjustments to the positioning of the portfolio 
although there has been some trading to adjust for the level of gearing over 
the period. The holding of Fevertree was reduced and subsequently exited early 
in the period and following the bid for Ultra Electronics the holding was sold 
and the capital redeployed elsewhere in the portfolio. 
 
The holdings of Young & Co's Brewery and CVS the veterinary services group were 
reduced over the period. The opportunity was taken to add to the portfolio's 
existing position in PRS REIT when the company raised money in September 2021 
to acquire pipeline assets comprising six sites with the potential for 670 new 
homes. 
 
Hiscox the insurer was added to the portfolio early in the twelve-month review 
period whilst Cranswick, the pork, poultry, and food products producer, has 
been a very recent new addition. The holding of Essentra, the packaging 
products and specialist component manufacturer, was also added to around the 
same time and performed strongly following a business review that resulted in 
the disposal of its packaging business. An encouraging fourth quarter update 
followed by full year results gave rise to some share price volatility. Post 
the review period end the disposal of the packaging business has been confirmed 
with the stated intention that most of the cash proceeds will to be used to 
strengthen the balance sheet. 
 
On a sectoral basis and relative to the FTSE All-Share Index, we remain 
over-weight consumer discretionary and utilities stocks. The overweight to 
utilities offers an inflation-linked return that in our view continues to 
remain underappreciated. Exposure to the energy sector is slightly reduced from 
twelve months ago but we maintain that these companies continue to stand to 
benefit from elevated oil prices as growth in supply continues to be 
outstripped by demand post pandemic. We remain under-weight consumer staples 
which we see as expensive, and financials in general. 
 
Previously we have spoken to five broad investment themes that the portfolio is 
exposed to. It is best to think of these themes as an outcome of the investment 
process rather than a conscious element of the portfolio construction. Our 
conviction is very much in these key stocks that are spread across "UK 
Domestics" (28% of the value of the portfolio), "International Value" (31%), 
"International Growth" (22%), "Recovery" (7%) and "Transformers" (12%). When 
comparing these weightings to those of twelve months ago the only change is the 
tilt to "International Value" versus "International Growth" which has shifted 
approximately 5% as we favour shorter duration value orientated stocks. 
 
Q What is your outlook for the next twelve months and beyond? Why invest in the 
UK now? 
 
A  Overall, we remain positive on the outlook for UK equities despite the 
current fear of entrenched inflation and higher interest rates which has 
created a significant amount of market volatility. Furthermore, we strongly 
believe in the ability of equities to protect an investor from the effects of 
inflation in the long run. 
 
Short term volatility and uncertainty look set to continue in the months to 
come and consequently a balanced portfolio that can perform in a range of 
economic and market regimes is our continuing objective. This balance is 
expected to reduce the reliance on unpredictable economic or market outcomes 
and leave the performance of the portfolio to be driven by the performance of 
the individual companies we have selected within it. 
 
Since the Brexit vote in 2016 UK shares have underperformed other global 
markets but, many of these UK listed companies are often largely international 
businesses trading at a discount to their international peers. An improvement 
in outlook for UK corporate earnings and for nominal growth should, in an 
undervalued market, boost the outlook for UK listed equities. However, in the 
current environment it is difficult to predict that this will transpire and 
whilst we have seen consumer demand remain strong and company order books 
healthy, concerns are centred around supply challenges. If the economic outlook 
does improve, and we think it will, key beneficiaries will likely include high 
quality, cash generative businesses, which form a significant part of our 
portfolios. 
 
Should the discount to international peers continue there is an increased 
likelihood that interest in UK companies from international buyers might 
materialise through merger and acquisition activity. Relative weakness in 
sterling versus the US dollar also potentially increases the attractiveness of 
UK assets. 
 
We remain confident in the long-term prospects of the companies that we own in 
the UK Equity Portfolio which comprises our highest conviction, best ideas. The 
portfolio is concentrated around high quality, cash generative businesses, with 
strong liquidity that are likely to further enhance their competitive 
positions, and this leaves us feeling conservatively optimistic for the year 
ahead in 2022. 
 
James Goldstone & Ciaran Mallon 
 
Joint Portfolio Managers 
 
3 August 2022 
 
UK Equity Share Portfolio List of Investments 
 
AT 31 May 2022 
 
Ordinary shares listed in the UK unless stated otherwise 
 
                                                                      Market 
 
                                                                       Value      % of 
 
Company                          Sector?                               £'000 Portfolio 
 
Shell                            Oil, Gas and Coal                     8,871       5.6 
 
National Grid                    Gas, Water and Multi-Utilities        7,520       4.7 
 
SSE                              Electricity                           6,968       4.4 
 
Next                             Retailers                             6,942       4.4 
 
BP                               Oil, Gas and Coal                     6,552       4.1 
 
RELX                             Media                                 6,440       4.1 
 
AstraZeneca                      Pharmaceuticals and Biotechnology     6,035       3.8 
 
Barclays                         Banks                                 5,735       3.6 
 
Barrick Gold - Canadian Listed   Precious Metals and Mining            5,539       3.5 
 
PRS REIT                         Real Estate Investment Trusts         5,057       3.2 
 
Top Ten Holdings                                                      65,659      41.4 
 
Newmont - US Listed              Precious Metals and Mining            4,809       3.0 
 
Drax                             Electricity                           4,623       2.9 
 
British American Tobacco         Tobacco                               4,455       2.8 
 
Bunzl                            General Industrials                   3,954       2.5 
 
Experian                         Industrial Support Services           3,897       2.5 
 
Legal & General                  Life Insurance                        3,873       2.4 
 
Ferguson                         Industrial Support Services           3,411       2.3 
 
Vodafone                         Telecommunications Service            3,295       2.1 
                                 Providers 
 
Tesco                            Personal Care, Drug and Grocery       3,215       2.0 
                                 Stores 
 
Young & Co's Brewery -           Travel and Leisure                    3,044       1.9 
Non-VotingAIM 
 
Top Twenty Holdings                                                  104,235      65.8 
 
United Utilities                 Gas, Water and Multi-Utilities        3,015       1.9 
 
Smith & Nephew                   Medical Equipment and Services        2,851       1.8 
 
Croda International              Chemicals                             2,772       1.8 
 
Chemring                         Aerospace and Defence                 2,701       1.7 
 
Ashtead                          Industrial Transportation             2,432       1.5 
 
Phoenix                          Life Insurance                        2,425       1.5 
 
Coats                            General Industrials                   2,382       1.5 
 
Compass                          Consumer Services                     2,319       1.5 
 
Whitbread                        Travel and Leisure                    2,240       1.4 
 
Barratt Developments             Household Goods and Home              2,135       1.3 
                                 Construction 
 
Top Thirty Holdings                                                  129,507      81.7 
 
Essentra                         Industrial Support Services           2,118       1.3 
 
JTC                              Investment Banking and Brokerage      1,984       1.3 
                                 Services 
 
NicholsAIM                       Beverages                             1,860       1.2 
 
JD Sports Fashion                Retailers                             1,823       1.2 
 
Babcock International            Aerospace and Defence                 1,796       1.1 
 
Future                           Media                                 1,781       1.1 
 
Hiscox                           Non-Life Insurance                    1,643       1.0 
 
Hays                             Industrial Support Services           1,608       1.0 
 
Sirius Real Estate               Real Estate Investment and            1,601       1.0 
                                 Services 
 
Chesnara                         Life Insurance                        1,538       1.0 
 
Top Forty Holdings                                                   147,259      92.9 
 
XPS Pensions                     Investment Banking and Brokerage      1,502       0.9 
                                 Services 
 
Jupiter Fund Management          Investment Banking and Brokerage      1,410       0.9 
                                 Services 
 
CVSAIM                           Consumer Services                     1,359       0.9 
 
Treatt                           Chemicals                             1,225       0.8 
 
DFS Furniture                    Retailers                             1,219       0.8 
 
PureTech Health                  Pharmaceuticals and Biotechnology     1,178       0.7 
 
Johnson ServiceAIM               Industrial Support Services           1,079       0.7 
 
Restaurant Group                 Travel and Leisure                      933       0.6 
 
Lancashire                       Non-Life Insurance                      845       0.5 
 
Sherborne Investors (Guernsey) C Investment Banking and Brokerage        324       0.2 
                                 Services 
 
Top Fifty Holdings                                                   158,333      99.9 
 
Cranswick                        Food Producers                          117       0.1 
 
Total Holdings 51 (2021: 51)                                         158,450     100.0 
 
AIM              Investments quoted on AIM. 
 
?    FTSE Industry Classification Benchmark. 
 
Global Equity Income Share Portfolio Manager's Report 
 
Q How did the portfolio perform in the year under review? 
 
A  The net asset value of the portfolio grew in the year to 31 May, by 9.6%, 
this exceeded the return of the comparator benchmark which increased in value 
by 7.4%, (both total return, in sterling terms). 
 
Through the summer and autumn of 2021 as parts of the world global equity 
markets were strong; most economies around the world continued to rebound from 
the Covid-19 epidemic. Inflation began to pick up due to the continuing 
disruption of supply chains, especially in Asia, and strong consumer demand. 
Both monetary and fiscal policies in the developed economies around the world 
eased as authorities prioritised growth in the wake of the enforced shutdowns 
during 2020. Hopes remained that the pick-up seen in inflation, post pandemic, 
would prove transitory. 
 
However, through the early winter and into 2022 price pressure increased in a 
range of commodities, in particular oil and gas and food. In the US and Europe 
labour was increasingly scarce, in part due to large numbers of older workers 
leaving the labour force post pandemic. Wage inflation also began to increase 
sharply. The response of central banks, particularly the Federal Reserve has 
been to tighten monetary policy. Elsewhere in the world, the continuation of 
China's policy of 'zero covid' has led to a series of rolling lockdowns across 
the country which has seriously impinged on industrial production and exports 
(from ports such as Shanghai for example). A combination of rising inflation 
and interest rates has led to increased fears of recession amongst investors, 
hence global equity markets and especially those stocks trading on very high 
valuations (such as in the technology sector) were particularly weak. 
 
Whilst rumours were rife of a Russian incursion into Ukraine through the early 
part of 2022, most market participants viewed it as unlikely, sadly they (and 
we) were wrong. The onset of all out war in Europe for the first time in 75 
years has further fuelled commodity prices, as well as increasing geopolitical 
uncertainty which has a negative impact on asset values. 
 
Q Given weakness in markets so far this year are you surprised at the positive 
returns achieved? 
 
A  Whilst markets were down (in sterling terms) 6.5% in the first five months 
of 2022, they were up 14.8% in the last seven months of 2021. It really has 
been a year where optimism about the earnings and economic growth prospects has 
been rapidly replaced by pessimism driven by the prospect for rising interest 
rates and inflation, and thus a risk of a global recession. 
 
Another factor to remember is the relative weakness of sterling particularly 
against the US dollar which bolstered the valuation of our US dollar 
denominated assets, and hence supported net asset value in sterling terms. 
 
Q What were the key contributors and detractors to performance? 
 
A  Overall, for the portfolio during the period our stock selection delivered 
outperformance. Stock selection was especially strong in the US and Europe and 
weak in Asia. We maintained an underweight position in the energy sector 
through the period, this was clearly negative given the strong increase in the 
oil and gas price. However, over the medium term we see upside in these 
companies capped by increasingly punitive tax regimes, and a shift toward 
renewable technologies. We are not minded to add to positions now. 
 
Key individual holdings for us included Coca-Cola and PepsiCo which performed 
well as the global economy reopened through 2021, and through the more 
difficult start to 2022 where their strong brand recognition and historic 
strength during periods of weak economic growth were valued by investors. 
Overall, our overweight exposure to consumer staples was a positive for the 
portfolio. 
 
Elsewhere, our insurance holdings, Zurich Financial and Progressive were also 
relatively strong. Once again, their relative insulation from an economic 
recession made their shares attractive, as did very strong balance sheets and 
above average and growing dividend yields. 
 
We started the period with a position in Meta Platforms (formally known as 
Facebook). It performed well, but we grew more concerned around a variety of 
governance and social issues as well as its valuation. We disposed of the 
holding in the autumn of 2021, a few months before it announced some weak user 
datapoints. Such was its weight in the benchmark that not owning through this 
period made it one of our key winners in terms of relative performance. 
 
On the negative side, as we described in the half-year management report, our 
holding in Tencent, the Chinese based social media, gaming and payments 
platform was weak during the late summer of 2021 in response to the tightening 
of regulations relating to privacy and online gaming. We have maintained a 
position, albeit a reduced one, as we continue to believe the company offers 
significant upside. By contrast we disposed of our holding in NetEase, the pure 
play Chinese gaming company, as we saw increased restrictions limiting any 
share price upside. 
 
One of the most frustrating holdings for us over the year has been Verallia. 
Our holding in the French based producer of glass bottlers and containers was 
built up through the fourth quarter of 2021. It is a key player in a highly 
concentrated industry and a leader in recycling and the reduction of CO2 in 
production. Nevertheless, natural gas continues to be essential for production 
and the sharp rise in costs fuelled fears over a squeeze on its margins. The 
share price has therefore been weak. We remain comfortable that cost increases 
can be passed onto customers and the company remains a core holding in the 
portfolio. 
 
As mentioned earlier, despite rising tensions in the early part of 2022, we did 
not expect a Russian invasion of Ukraine, hence we continued to maintain a 
modest position in Sberbank, the leading Russian financial institution. The 
market was steadily pricing in the prospect of a war in Ukraine and 
consequently the value of Sberbank fell dramatically, with a final write-down 
in early March of approximately £35,000 or 6 basis points. As such it was a key 
detractor over the period. 
 
                                                                               Year end 
 
                                                              Total           Portfolio 
 
Key Contributors                                           Impact %            Weight % 
 
Lundin Energy                                                 +1.43                 3.2 
 
Coca Cola                                                     +1.09                 4.7 
 
Progressive                                                   +0.86                 2.5 
 
Standard Chartered                                            +0.73                 3.5 
 
Meta Platforms Inc                                            +0.70                   - 
 
                                                                               Year end 
 
                                                              Total           Portfolio 
 
Key Detractors                                             Impact %            Weight % 
 
Tencent                                                      -1.51%                 2.4 
 
Apple                                                        -1.01%                   - 
 
Sberbank - ADR                                               -0.96%                   - 
 
Verallia                                                     -0.85%                 4.6 
 
NetEase                                                      -0.71%                   - 
 
Q How has the portfolio evolved over the period? 
 
A  The portfolio has evolved steadily over the year. Whilst our holdings in the 
industrial segment of the market have increased somewhat it is primarily due to 
the addition of Kone, a Finnish based elevator and escalator manufacturer whose 
earnings streams are highly predictable due to the large service and 
maintenance component. 
 
We have significantly cut back exposure to the consumer staples sector, 
including some of our strong performers such as Coca-Cola, and sold out of 
Diageo and Colgate Palmolive. Strong relative performance for the sector means 
it now trades at a significant premium to the market. We prefer to deploy 
capital to areas we perceive some positive asymmetry in valuation. 
 
Our exposure to big ecommerce and internet names has reduced as we have sold 
Meta Platforms and significantly reduced our holding in Alphabet (the parent of 
Google). However toward the end of the period we added a position in Universal 
Music, the leading global recoding and rights label which was trading at what 
we believe to be a discount to its intrinsic value, offers an attractive 
dividend and we expect to prove a relatively non-cyclical income stream if we 
head to a recession in 2023. 
 
We remain heavily overweight the financial sector, but not in banks where our 
key positions remain JPMorgan Chase and Standard Chartered. Our key overweight 
remains the insurance sector where we see strong dividend income streams and 
valuations which remain attractive with somewhat less risk than banks. Our 
holding in 3i, the UK based private equity group, is a key position in the 
fund. 3i 's largest holding is a European based discount retailer, Action, 
where we see a strong runway for growth for several years ahead of us. 
 
Q What about the healthcare sector? You remain very underweight. 
 
A  Healthcare is one of our largest sector underweight positions compared to 
benchmark. During the year we disposed of Roche, the Swiss pharmaceutical 
company, but added a modest position in Danaher, the US based medical device 
and equipment company. 
 
Our caution on the sector stems from the operating environment facing the 
sector. Due to patent laws which confer exclusivity on developed medicines for 
typically 10-15 years, large pharmaceutical companies continually need to 
reinvent themselves, as they have become larger, so it becomes more difficult 
to grow as newly developed medicines simply replace those losing patent 
protection. Combine that with ongoing price pressure (especially in the US), 
makes in our view for an unattractive mix where we struggle to find companies 
we want to own. 
 
We do own Novartis, another leading Swiss pharmaceutical company. Whilst its 
earnings growth is likely to be modest in the coming three years, it is in our 
view relatively low risk, it has a very strong balance sheet and is likely to 
pay a growing dividend which is currently worth around 4% per year. 
 
Q How does your analysis of ESG risks impact your stock selection and portfolio 
construction? 
 
A  We view analysing ESG risks as a key part of our investment process. As 
active, fundamental managers we consider every key aspect of a company's true 
worth, including material ESG considerations because we believe that the most 
sustainable way to make money is to buy companies for less than they are worth. 
Establishing an estimated 'fair value' of a company is therefore essential and 
this entails incorporating ESG aspects into our investment methodology. We take 
a holistic approach where a company's ESG credentials are scrutinised alongside 
traditional financial and qualitative aspects to derive a fair value. All 
companies face challenges regarding ESG and therefore we have to consider 
materiality (the impact of ESG factors on fair value), and ESG momentum (the 
potential for ESG improvement over time). Both can influence a stock's 
potential returns and our conviction levels in an investment. As shareholders 
we actively engage with companies to enhance the value of our investments. We 
encourage companies to create sustainable value and mitigate risks in relation 
to their corporate activities. This can include prompting them to improve 
governance structures, make better asset allocation decisions, instilling 
sustainable practices and policies, and providing better disclosure. This 
reinforces our fundamental belief that responsible investing demands a 
long-term view and that a stakeholder-centric culture of ownership and 
stewardship is at the heart. 
 
Further details of the Manager's ESG process, together with examples, are shown 
on page 34 to 38. 
 
Q What is your outlook for equity markets over the coming year? 
 
A  Truly, this is one of the hardest outlooks to call in my career. Peak to 
trough market corrections have ranged from 12-35% over the past 40 years, so 
far in 2022 equity markets are currently down 22% (in US dollar terms) On the 
one hand I look at a market where the correction from highs achieved in late 
December 2021 makes it seem that we are already discounting a mild to moderate 
recession. On the other, we are yet to see material downgrades to earnings 
expectations, and markets were correcting from a high valuation base. 
 
Our most optimistic scenario is that interest rate rises in the US have already 
begun to slow the economy. More will follow in coming months. Mortgage rates 
have risen sharply in recent months which has a relatively quick impact on the 
housing market. Providing energy prices stabilise, and hopefully begin to fall 
by year end, we may be close to a peak in inflation during this cycle. Markets 
may well recover strongly toward year end as the market perceives an end to the 
monetary policy tightening cycle. 
 
However, we must acknowledge that structural changes in the global economy, 
such as a declining availability of labour, together with rising inflationary 
expectations throughout most major markets and ongoing shortages of key 
commodities, will maintain significant inflationary pressure despite rising 
interest rates. Furthermore, we remain concerned that inflationary expectations 
are becoming embedded in the labour market. As a result, central banks may be 
forced to raise interest rates to higher levels than is currently expected and 
create a material slowdown in economic activity to choke off inflationary 
pressure. Equity markets could stay under pressure until well into 2023. 
 
We feel our process is well positioned to cope with either the optimistic or 
pessimistic scenarios, although in the latter we must acknowledge markets may 
have further downside and our objective will be to deliver outperformance 
relative to benchmark. We will continue to focus on our process; seeking to 
identify competitively advantaged businesses, with no obvious ESG risks, who 
generate substantial free cashflow and effectively allocate capital either to 
growing the business or return it to shareholders. We seek to buy these 
companies at a discount to their long-term intrinsic value. 
 
Stephen Anness 
 
Portfolio Manager 
 
3 August 2022 
 
Global Equity Income Share Portfolio List of Investments 
 
AT 31 May 2022 
 
Ordinary shares unless stated otherwise 
 
                                                                             At 
                                                                         Market 
 
                                                                          Value      % of 
 
Company                   Sector?                              Country    £'000 Portfolio 
 
3i                        Diversified Financials                United    3,634       5.4 
                                                               Kingdom 
 
American Tower            Real Estate                           United    3,499       5.2 
                                                                States 
 
Microsoft                 Software and Services                 United    3,425       5.1 
                                                                States 
 
Coca-Cola                 Food, Beverage and Tobacco            United    3,163       4.7 
                                                                States 
 
Verallia                  Materials                             France    3,116       4.6 
 
AIA                       Insurance                          Hong Kong    2,708       4.0 
 
Broadcom                  Semiconductors and                    United    2,568       3.8 
                          Semiconductor Equipment               States 
 
Standard Chartered        Banks                                 United    2,381       3.5 
                                                               Kingdom 
 
Zurich Insurance          Insurance                        Switzerland    2,204       3.3 
 
Lundin Energy             Energy                                Sweden    2,167       3.2 
 
Top Ten Holdings                                                         28,865      42.8 
 
Link REIT                 Real Estate                        Hong Kong    2,130       3.1 
 
Taiwan Semiconductor      Semiconductors and                    Taiwan    1,998       3.0 
Manufacturing             Semiconductor Equipment 
 
KKR & Co                  Diversified Financials                United    1,742       2.6 
                                                                States 
 
Progressive               Insurance                             United    1,695       2.5 
                                                                States 
 
Union Pacific             Transportation                        United    1,681       2.5 
                                                                States 
 
Novartis                  Pharmaceuticals, Biotechnology   Switzerland    1,669       2.5 
                          and Life Sciences 
 
Universal Music           Media and Entertainment          Netherlands    1,661       2.5 
 
TencentR                  Media and Entertainment                China    1,620       2.4 
 
Melrose Industries        Capital Goods                         United    1,584       2.3 
                                                               Kingdom 
 
Herc Holdings             Capital Goods                         United    1,577       2.3 
                                                                States 
 
Top Twenty Holdings                                                      46,222      68.5 
 
RELX                      Commercial and Professional           United    1,574       2.3 
                          Services                             Kingdom 
 
Kone - B Shares           Capital Goods                        Finland    1,555       2.3 
 
PepsiCo                   Food, Beverage and Tobacco            United    1,477       2.2 
                                                                States 
 
JPMorgan Chase            Banks                                 United    1,436       2.1 
                                                                States 
 
The TJX Companies         Retailing                             United    1,318       1.9 
                                                                States 
 
Alphabet                  Media and Entertainment               United    1,250       1.8 
                                                                States 
 
Home Depot                Retailing                             United    1,212       1.8 
                                                                States 
 
Amazon                    Retailing                             United    1,191       1.7 
                                                                States 
 
Installed Building        Consumer Durables and Apparel         United    1,159       1.7 
Products                                                        States 
 
Canadian Pacific Railway  Transportation                        Canada    1,112       1.6 
 
Top Thirty Holdings                                                      59,506      87.9 
 
Texas Instruments         Semiconductors and                    United    1,044       1.5 
                          Semiconductor Equipment               States 
 
Accenture - A Shares      Software and Services                 United      998       1.5 
                                                                States 
 
Nvidia                    Semiconductors and                    United      981       1.5 
                          Semiconductor Equipment               States 
 
Samsung Electronics -     Technology Hardware and          South Korea      981       1.5 
preference shares         Equipment 
 
Rolls-Royce               Capital Goods                         United      817       1.2 
                                                               Kingdom 
 
Berkeley                  Consumer Durables and Apparel         United      749       1.1 
                                                               Kingdom 
 
Danaher                   Pharmaceuticals, Biotechnology        United      728       1.1 
                          and Life Sciences                     States 
 
Volkswagen - preference   Automobiles and Components           Germany      722       1.1 
shares 
 
Ping An InsuranceH        Insurance                              China      698       1.0 
 
Nestlé                    Food, Beverage and Tobacco       Switzerland      406       0.6 
 
Top Forty Holdings                                                       67,630     100.0 
 
SberbankUQ - ADR          Banks                                 Russia        -         - 
 
Total Holdings 41 (2021:                                                 67,630     100.0 
40) 
 
 
UQ     Unquoted due to delisting of Russian securities. 
 
ADR   American Depositary Receipt - are certificates that represent shares in 
the relevant stock and are issued by a US bank. They are denominated and pay 
dividends in US dollars. 
 
H        H-Shares - shares issued by companies incorporated in the People's 
Republic of China ('PRC') and listed on the Hong Kong Stock Exchange. 
 
R        Red Chip Holdings - holdings in companies incorporated outside the 
PRC, listed on the Hong Kong Stock Exchange, and controlled by PRC entities by 
way of direct or indirect shareholding and/or representation on the board. 
 
?        MSCI and Standard & Poor's Global Industry Classification Standard. 
 
Balanced Risk Allocation Share Portfolio Manager's Report 
 
Investment Objective 
 
The investment objective of the Balanced Risk Allocation Share Portfolio is to 
provide shareholders with an attractive total return in differing economic 
environments, and with low to moderate correlation to equity and bond market 
indices by gaining exposure to three asset classes: debt securities, equities, 
and commodities. 
 
Q How has the strategy performed in the year under review? 
 
A  The Balanced Risk Allocation Share Portfolio posted a strong return of 0.3% 
over the fiscal year, outperforming the benchmark by 6.4%. The past twelve 
months to the end of May 2022 were characterized by consumers unleashing 
pent-up demand, fuelled by expiring Covid-19 lockdowns and highly accommodative 
fiscal and monetary policy. The elevated demand coupled with ongoing supply 
chain issues led to the rise of meaningful and persistent inflation across 
developed economies. At the turn of the year, the Russian invasion of Ukraine 
further stoked inflation as persistently high demand was now met with supply 
constraints due to sanctions on Russian energy, metal and fertilizer exports as 
well as fears of poor crop yields on planting delays and adverse weather 
conditions. Central banks were forced to shift their characterisation of 
inflation as transitory and act through a combination of rate increases and 
quantitative tightening efforts to try to catch up to the growing threat. The 
inflationary environment strongly benefitted commodities, particularly energy 
and agriculture which were top contributors while metals generated smaller 
contributions. Equities produced tepid results as early period gains were 
surrendered on geopolitical concerns and fears that central bank tightening 
could lead to slowing growth and potentially recession. Fixed income exposures 
performed poorly as the combination of interest rate hikes and high inflation 
overwhelmed any potential gains from geopolitical concerns. 
 
Q What were the biggest contributors and detractors to performance? 
 
A  Exposure to commodity markets was the lone positive contributor to results. 
Energy commodities delivered the strongest performance due to strong demand, 
followed by agriculture where the largest contributions came from cotton, 
soybean oil and wheat. Industrial metals benefitted from Russia's attack on 
Ukraine as Russian sanctions magnified already existing supply constrains in 
aluminium. Copper prices sold off towards the end of the period, resulting in a 
minor loss, on fears of a slowdown in growth. Precious metals detracted due to 
rising interest rates and a rising US dollar. Silver declined more than gold as 
it traded in sympathy with weakness in China and the broader industrial metals 
complex. 
 
Exposure to equities detracted from results as four of the six markets in which 
the portfolio invests saw prices decline. UK equities were the top contributor 
to results in the period as relatively higher exposures to energy, materials, 
and aerospace and defence names held up well amid the rise in commodity prices 
and the Russian invasion of Ukraine. European shares fell on the Russian 
invasion and concerns that the conflict would at least have a negative impact 
on economic activity and, at worst, could potentially see further spread in the 
region. US small caps saw prices fall as the heightened volatility had 
investors cutting risks in higher-beta exposures. Emerging markets fared poorly 
on fears of China decoupling from the US and renewed Covid-19 lockdowns. 
 
Exposure to government bonds was the largest detractor from performance with 
all six markets producing negative results. Despite ongoing geopolitical 
turmoil and another Covid-19 outbreak in China, there was little demand for 
government bonds as a haven. Rather, the highest inflation in multiple decades 
and soaring commodity prices had fixed income investors fretting over how 
aggressive central banks would be in their efforts to curb inflation. 
 
Q How did the tactical allocation perform? 
 
A  The tactical allocation detracted from results with losses in equities and 
commodities offsetting gains from underweights across bonds. Tactical equity 
disappointed primarily due to ill-timed overweights at the beginning of the 
year. Tactical commodities detracted largely due to underweights across energy 
for most of the period. Tactical bonds contributed due to timely underweights 
towards the end of the period. 
 
Q What is your 30-day outlook? 
 
A  The current period is one of the toughest environments for investors in some 
years. Stocks have experienced their second bear market in just over two years, 
and bonds posted two consecutive negative quarters for the first time in four 
decades. While commodities have offered some diversification benefits this 
year, concerns about central bank efforts to curtail inflation have sparked 
fear of declining economic growth, which has hit prices in economically 
sensitive complexes like energy and industrial metals. Should the growth scare 
materialize alongside evidence of peaking inflation, bonds may be the more 
interesting asset class. 
 
Tactical positioning for July includes underweights in emerging markets, 
Europe, Japan and US equities, while UK equities are overweight. In fixed 
income, the portfolio is overweight Canada, Germany, Japan, the US and 
Australia and neutral in the UK. In commodities, the portfolio is underweight 
all exposures except Brent crude oil and gasoline. 
 
Scott Wolle 
 
Portfolio Manager 
 
3 August 2022 
 
Balanced Risk Allocation Share Portfolio List of Derivative Instruments 
 
AT 31 May 2022 
 
                                                                              Notional 
 
                                                                  Notional    Exposure 
 
                                                                  Exposure     as % of 
 
                                                                     £'000  Net Assets 
 
Government Bond Futures: 
 
  Australia                                                          1,670        23.6 
 
  Germany                                                            1,289        18.2 
 
  Canada                                                               876        12.4 
 
  US                                                                   772        10.9 
 
  Japan                                                                461         6.5 
 
  UK                                                                   232         3.3 
 
Total Bond Futures (6)                                               5,300        74.9 
 
Commodity Futures: 
 
  Energy 
 
    Brent crude                                                        267         3.8 
 
    Gasoline                                                           266         3.8 
 
    WTI crude                                                          264         3.7 
 
    Natural gas                                                        203         2.9 
 
    Low sulphur gasoline                                               190         2.7 
 
    New York Harbor ultra-low sulphur diesel                           136         1.9 
 
  Agriculture 
 
    Soyabean                                                           201         2.8 
 
    Cotton                                                             194         2.7 
 
    Soyabean meal                                                      165         2.3 
 
    Soyabean oil                                                       110         1.6 
 
    Wheat                                                               86         1.2 
 
    Coffee                                                              69         1.0 
 
    Corn                                                                60         0.8 
 
    Sugar                                                               53         0.7 
 
  Precious Metals 
 
    Gold                                                               293         4.1 
 
    Silver                                                              86         1.2 
 
  Industrial Metals 
 
    Copper                                                             189         2.7 
 
    Aluminium                                                          172         2.4 
 
Total Commodity Futures (18)                                         3,004        42.3 
 
Equity Futures: 
 
  UK                                                                   686         9.7 
 
  Japan                                                                588         8.3 
 
  Emerging markets                                                     297         4.2 
 
  Europe                                                               227         3.2 
 
  US small cap                                                         222         3.1 
 
Total Equity Futures (5)                                             2,020        28.5 
 
Total Derivative Instruments (29)                                   10,324       145.7 
 
Target Annualised Risk 
 
The targeted annualised risk (volatility of monthly returns) for the portfolio 
as listed above is analysed as follows: 
 
Asset Class                                                            Risk Contribution 
 
Equities                                                               2.9%        37.1% 
 
Commodities                                                            2.9%        36.6% 
 
Fixed Income                                                           2.1%        26.3% 
 
                                                                       7.9%       100.0% 
 
List of Investments 
 
                                                                     Market          % 
 
                                                           Yield      value         of 
 
                                                               %      £'000  Portfolio 
 
Short Term Investments 
 
  Invesco Liquidity Funds plc - Sterling                    0.96      3,512       56.3 
 
  UK Treasury Bill - 0% 19 Sep 2022                         0.90        747       12.0 
 
  UK Treasury Bill - 0% 07 Nov 2022                         1.33        547        8.8 
 
  UK Treasury Bill - 0% 01 Aug 2022                         0.40        499        8.0 
 
  UK Treasury Bill - 0% 31 Oct 2022                         1.25        448        7.2 
 
  UK Treasury Bill - 0% 15 Aug 2022                         0.90        276        4.4 
 
  UK Treasury Bill - 0% 24 Oct 2022                         1.15        199        3.2 
 
Total Short Term Investments                                          6,228       99.9 
 
Hedge Funds(1) 
 
  Harbinger Streamline Offshore Fund                                      5        0.1 
 
Total Hedge Funds                                                         5        0.1 
 
Total Fixed Asset Investments                                         6,233      100.0 
 
(1)   The hedge fund investments are residual holdings of the previous 
investment strategy, which are awaiting realisation of underlying investments. 
During the year the prior residual holdings (4 classes) were consolidated into 
one holding in a new vehicle. 
 
Derivative instruments held in the Balanced Risk Allocation Share Portfolio are 
shown on the previous page. At the year end all the derivative instruments held 
in the Balanced Risk Allocation Share Portfolio were exchange traded futures 
contracts. Holdings in futures contracts that are not exchange traded are 
permitted as explained in the investment policy on page 40. 
 
Managed Liquidity Share Portfolio Manager's Report 
 
Q  How does the portfolio generate returns? 
 
A  The investment objective of the portfolio is to produce an appropriate level 
of income return combined with a high degree of security. We aim to generate 
returns by investing mainly in sterling-based high quality debt securities and 
similar assets but with the flexibility to invest in assets with a greater 
weighted average maturity than a money market fund. Accordingly the value of 
the Portfolio may rise or fall. 
 
The majority of the portfolio is invested in the iShares £ Ultrashort Bond ETF. 
We reviewed the ETF universe in December 2021 and elected to retain this ETF. 
We also hold a portion of the portfolio in the Sterling Liquidity Portfolio of 
Invesco Liquidity Funds plc. to meet short term payment obligations. 
 
The iShares £ Ultrashort Bond ETF invests in Sterling denominated investment 
grade corporate bonds and quasi-government bonds, aiming to track performance 
of the Markit iBoxx GBP Liquid Investment Grade Ultrashort Index and has a 
weighted average maturity of around one year. 
 
Q  What has the performance of your portfolio been over the last year? 
 
A  The Managed Liquidity Portfolio NAV total return for the year ended 31 May 
2022 was -0.3%. 
 
The need to begin to raise interest rates to cool demand began as western 
economies rebounded more sharply than expected from Covid-19 restrictions. The 
inflationary effect of this was expected to be transitory, but was brought into 
much sharper relief by Russia's invasion of Ukraine on 24 February. Sadly, the 
considerable humanitarian crisis may last some time. Disruption to global 
movements of oil, gas and foods could last several years as supply chains 
re-adjust. The impact on prices continues to transmit through markets with UK 
CPI inflation hitting 9.1% in May. Central banks are now catching up with 
substantial interest rate hikes and as a result bond prices have fallen, with 
one year interest rates up 1.5% over the year. 
 
This portfolio has a substantially shorter duration of around 0.2 years and so 
has been protected to a large extent. Nevertheless, a small fall in NAV is 
expected as the impact of rising interest rates more than offset the income 
yield of the portfolio. 
 
Q What's the outlook for returns given high inflation and rising interest 
rates? 
 
A  Higher short term rates have increased the portfolio's yield, with the 
average coupon within the iShares £ Ultrashort Bond ETF standing at 1.8% at the 
end of June, vs UK base rate of 1.25%.  A further six UK central bank interest 
rate rises are priced into markets by the end of 2022 (four in the US and 
Eurozone).  While visibility on price demand and wage growth is weaker than 
usual, there are signs that inflation is peaking and growth slowing, as 
consumers pull back on spending and companies experience higher input costs. 
Should central banks and governments be successful in limiting inflation and/or 
should growth slow more abruptly than expected, we could see rates rise by less 
than is currently priced, which would lift bond prices. 
 
We continue to expect the portfolio to deliver a meaningful pickup over base 
rates while providing ready access to capital with a high degree of security. 
 
Derek Steeden 
 
Portfolio Manager 
 
3 August 2022 
 
Managed Liquidity Share Portfolio List of Investments 
 
AS AT 31 MAY 
 
                                               2022                      2021 
 
                                           Market                    Market 
 
                                            Value         % of        Value         % of 
 
                                            £'000    Portfolio        £'000    Portfolio 
 
Invesco Liquidity Funds plc -                 130          9.0          140          7.7 
Sterling 
 
iShares - Sterling Ultrashort Bond          1,315         91.0        1,669         92.3 
UCITS ETF 
 
                                            1,445        100.0        1,809        100.0 
 
Environmental, Social and Corporate Governance ('ESG') statement from the 
Managers 
 
UK Equity Share Portfolio & Global Equity Income Share Portfolio 
 
Ciaran Mallon 
 
UK Equities Fund Manager 
 
James Goldstone 
 
UK Equities Fund Manager 
 
Stephen Anness 
 
Global Equities Fund Manager 
 
What does ESG mean to us? 
 
.    Investing in stocks which have good Environmental, Social and Governance 
('ESG') momentum behind them can be a positive way for our portfolios to 
potentially generate returns in excess of the benchmark 
 
.    We draw upon ESGintel, Invesco's proprietary tool, which helps us to 
better understand how companies are addressing ESG issues 
 
.    Engaging with companies to understand corporate strategy today in order to 
assess how this could evolve in the future 
 
.    Monitoring how companies are performing from an ESG perspective and if the 
valuations fairly reflect the progress being made 
 
Our focus as active fund managers is always on finding mispriced stocks and ESG 
integration underpins our investment process. 
 
The incorporation of ESG into our investment process considers ESG factors as 
inputs into the wider investment process as part of a holistic consideration of 
the investment risk and opportunity, from valuation through investment process 
to engagement and monitoring. The core aspects of our ESG philosophy include: 
materiality; ESG momentum; and engagement. 
 
.    Materiality refers to the consideration of ESG issues that are financially 
material to the company we are analysing. 
 
.    The concept of ESG Momentum, or improving ESG performance over time, 
indicates the degree of improvement of various ESG metrics and factors and help 
fund managers identify upside in the future. We find that companies which are 
improving in terms of their ESG practices may enjoy favourable financial 
performance in the longer term. 
 
.    Engagement is part of our responsibility as active owners which we take 
very seriously, and we see engagement with companies as an opportunity to 
encourage continual improvement. Dialogue with portfolio companies is a core 
part of the investment process for our investment team. As such, we often 
participate in board level dialogue and are instrumental in giving shareholder 
views on management, corporate strategy, transparency, and capital allocation 
as well as wider ESG aspects. 
 
ESG integration is an ongoing strategic effort to systematically incorporate 
ESG Factors into fundamental analysis. The aim is to provide a 360 degree 
evaluation of financial and non-financial materially relevant considerations 
and to help guide the portfolio strategy. 
 
Our investment process has four stages. In this report we go through in detail 
how ESG is integrated into each stage of our process. 
 
Idea Generation 
 
We believe it is important to spread our nets as wide as possible when trying 
to come up with stock ideas which may find their way into our portfolios. We 
remain open minded as to the type of companies we will consider. This means not 
ruling out companies just because they happen to be unpopular at that time and 
vice versa. ESG can create opportunities too - for example, the benefits of 
moving towards more sustainable sources of energy like wind, solar and 
hydroelectric power generation. This was one of the reasons we became 
interested in some of our utility holdings which are held in the UK portfolio. 
This highlights the importance of opportunities brought about by ESG and not 
just the risks. Investing in stocks which have the right ESG momentum behind 
them - by focussing on fundamentals and the broader investment landscape - can 
be a unique way for our portfolios to potentially generate returns in excess of 
the benchmark as those businesses that have got ESG momentum behind them have 
the potential to be rerated. 
 
Fundamental Research & ESG Analysis 
 
Research is at the core of what we do. Our fundamental analysis covers many 
drivers, for example, corporate strategy, market positioning, competitive 
dynamics, the macroeconomic environment, financials, regulation, valuation, 
and, of course, ESG considerations, which guide our analysis throughout. 
 
We use a variety of tools from different providers to measure ESG factors. In 
addition, at Invesco, we have developed ESGintel, Invesco's proprietary tool 
built by our Global ESG research team in collaboration with our Technology 
Strategy Innovation and Planning (SIP) team. 
 
ESGintel provides fund managers with environmental, social and governance 
insights, metrics, data points and direction of change. In addition, ESGintel 
offers fund managers an internal rating on a company, a rating trend, and a 
rank against sector peers. The approach ensures a targeted focus on the issues 
that matter most for sustainable value creation and risk management. 
 
This provides a holistic view on how a company's value chain is impacted in 
different ways by various ESG topics, such as compensation and alignment, 
health and safety, and low carbon transition/ climate change. 
 
We always try to meet with a company prior to investment. Based on our 
fundamental research, including any ESG findings, we focus on truly 
understanding the key drivers and, most importantly, the path to change. This 
helps us better understand corporate strategy today and how this could evolve 
in the future. Today, the subject of ESG is increasingly part of these 
discussions, led by us. 
 
Portfolio Construction 
 
We aim to create a well-diversified portfolio of active positions that reflect 
our assessment of the potential upside for each stock weighted against our 
assessment of the risks. Sustainability and ESG factors will be assessed 
alongside other fundamental drivers of valuation. The impact of any new 
purchases will need to be considered at a portfolio level. How will it affect 
the shape of the portfolio having regard to objectives, existing positions, 
overall size of the portfolio, liquidity and conviction? 
 
We do not seek out stocks which score well on internal or third party research 
simply to reduce portfolio risk. 
 
Ongoing Monitoring 
 
Our fund managers and analysts continuously monitor how the stocks are 
performing as well as considering possible replacements. Is the company 
performing from an ESG perspective and are the valuations fairly reflecting the 
progress being made or not? 
 
How do we monitor our holdings from an ESG perspective? Again, the same 
resources used during the fundamental stage are available to us. Our regular 
meetings with the management teams of the companies we own provides an ideal 
platform to discuss key ESG issues, which will be researched in advance. We 
draw on our own knowledge as well as relevant analysis from our ESG team and 
data from our previously mentioned proprietary system ESGintel which allows us 
to monitor progress and improvement against sector peers. Outside of company 
management meetings we constantly discuss as a team all relevant ESG issues, 
either stimulated internally or from external sources. 
 
Additional ESG analysis is carried out by the team, when warranted, on 
particular companies. Such cases would be those that are more controversial, 
considered to be higher risk and viewed poorly by ESG providers, resulting in a 
valuation discount. We don't just look at the specific issue considered to be 
higher risk either, for example the environmental risk of an oil company, but 
all areas of ESG. This means undertaking extensive analysis of social and 
governance policies and actions at the same time. 
 
Challenge, Assessing & Monitoring Risk 
 
In addition, there are two more formal ways in which our portfolios are 
monitored: 
 
There is a rigorous semi-annual review process which includes a meeting led by 
the ESG team to assess how our portfolios are performing from an ESG 
perspective. This ensures a circular process for identifying flags and 
monitoring of improvements over time. These meetings are important in capturing 
issues that have developed and evolved whilst we have been shareholders. 
 
There is also the 'CIO challenge', a formal review meeting held between the 
Henley Investment Centre's Chief Investment Officer (CIO) and each fund 
manager. This review includes a full breakdown of the ESG performance using 
Sustainalytics and ISS data, such as the absolute ESG performance of the 
portfolio, relative performance to benchmarks, stocks exposed to severe 
controversies, top and bottom ESG performers, carbon intensity and trends. The 
ESG team review the ESG data and develop stock specific or thematic ESG 
questions. The ESG performance of the portfolio is discussed with the CIO using 
the data and the stock specific questions to analyse the fund manager's level 
of ESG integration. The aim of these meetings is not to prevent a fund manager 
from holding any specific stock: rather, what matters is that the fund manager 
can evidence understanding of ESG issues and show that they have been taken 
into consideration when building the investment case. 
 
Climate Risk 
 
UK Equity Portfolio 
 
A core aspect of our philosophy on ESG issues is the concept of ESG momentum, 
or improving ESG performance over time. We find that companies which are 
improving in terms of their ESG practices may enjoy favourable financial 
performance in the longer term. At first glance it might appear that the 
development of the UK Equity Share Portfolio has been at odds with such aims: 
as indicated by ISS Scope 1 + 2 measures, Carbon intensity has increased 
between by 7% from January 2020 to May 2022 and stands at 171.9, some 9% higher 
than the FTSE All-Share Index. However, looking deeper into the detail of the 
underlying data, tells a very different tale. 
 
.    The carbon intensity of the UK Equity Share Portfolio has over the same 
period increased by substantially less (by +7%) than the FTSE All-share index 
(+23%), as calibration within the energy sector in particular has developed 
over time. It is a reminder that the yardsticks used for measurement and 
comparison are still in their early stages. 
 
.    The biggest single contributor to carbon intensity of the UK Equity Share 
Portfolio (we estimate around 23% of the total ISS defined emissions) derives 
from the position held in Utility company SSE. As a major distributor of 
electrical power in the UK, SSE necessarily at present has significant exposure 
to distribution of power generated from non-renewable sources. However, it is 
in our view at the very forefront of progress as an enabler of transition 
towards net zero: it develops, builds and operates infrastructure needed to 
support the transition, and has set out detailed and specific targets across 
each of scope 1, 2 and 3*. 
 
.    As of 31 May 2022, 28 out of the 51 holdings (55%) in the UK Equity Share 
Portfolio have aligned with, are aligning, or are committed to aligning with 
the net zero objective by 2050. This compares favourably with the FTSE 
All-Share Index of just 133 out of 595 holdings (24%). 
 
We continue to believe that the approach to climate change, and the 
philosophies behind all aspects ESG deserve to be embedded in an investment 
framework which encourages positive change. Coupling this with a focus on 
valuation is, to our minds, the best way to deliver strong investment outcomes 
over the long term for our clients. 
 
Global Equity Income Portfolio 
 
Climate change continues to be a strategic priority for Invesco, with a 
commitment to the Net Zero Asset Managers initiative. Companies' climate 
transition plans were the most common topic of our targeted ESG engagements 
over the last twelve months. As an indication of the progress made in reducing 
carbon emissions (ISS Scope 1+2); the portfolio has reduced carbon intensity by 
16% between January 2020 and May 2022 , compared the MSCI World benchmark which 
reduced emissions by only 9%. Encouragingly, we expect to see more net zero 
commitments from the companies we are invested in, suggesting this trend can 
continue. 
 
We would highlight however that the process may not be smooth. Different 
regions are moving at different speeds, with Europe and the UK in front, Asia 
and Emerging Markets still lagging. Larger companies are leading smaller and 
mid- size companies. 
 
As of 31 May 2022, 30 out of the 43 holdings (70%) in the portfolio have 
aligned with, or are committed to aligning, with the net zero objective by 
2050. All companies in our portfolio produce sustainability reports and we are 
encouraging all companies that we meet to sign up to the net zero initiative, 
whilst in acknowledging for some companies it may not be technically feasible 
yet. 
 
Company Specific Examples In the selection overleaf, we highlight some of the 
recent engagements that we have had with companies to give you a flavour of how 
active engagement can create positive outcomes. 
 
* Scope 1 and 2 are those emissions that are owned or controlled by a company. 
Scope 3 refers to the indirect emissions that occur at different points in the 
full range of activities undertaken in order to create the products or services 
of the reporting company. 
 
UK Equity Portfolio Example 
 
Independent power production and biomass supplier 
 
-  The investment team engaged with the Head of Sustainability to review 
progress on sustainable carbon capture and storage, sustainable forests and 
Biomass. 
 
-  On Carbon Capture and Storage (CCS) we questioned the company on the 
environmental risks of leakage. The company were able to confirm that the 
carbon stays in the ground as part of the geological formation in the same way 
that oil & gas currently stays in the ground. High pressure is used to drive 
the carbon deep underground and over time the CO2 infuses into the rocks. 
 
-  In terms of sustainable forests it was reiterated that they do not cut down 
trees to simply provide wood in order to produce energy. Instead it is the wood 
waste that is used for the production of biomass. The forests are for the 
production of good quality timber for furniture or the lower grade timber that 
is used in pallets. It is the 2-5% of branches, thinnings or hollow trees that 
are used for pellet production. In British Columbia, Canada, forest floor 
residues are also used for biomass and, this is happening to good effect. 
Previously, residues were left to decay or piled up and burnt. In some 
instances they were a fire hazard but they are now being utilised in pellet 
production. The company is adding economic value to a forest by taking the 
waste and creating better environmental outcomes. 
 
-  In order to support sustainable forestry the company traces the source of 
wood for biomass and has created an audit protocol and procurement policy in 
order to do this effectively. It rejects any supply that does not have the 
correct certification and works closely with US based foresters who work with 
suppliers to meet UK based governance standards. Following transactions the 
company returns to the forest to check that the ESG outcomes have been 
delivered. In terms of biomass sustainability the company's policy is compliant 
with current UK and EU law. 100% of woody biomass produced by the company has 
been verified against a number of forest certification programmes. Action: 
position maintained 
 
Savings and retirement provider 
 
-  We engaged with the management team post their FY21 results released in 
March 2022. They have a programme of initiatives for 2022 including their new 
Think Tank. They intend to use research to lead fresh debate, prompt a national 
conversation, and inspire the action needed to make better longer lives a 
reality, for all of us. There is a significant retirement savings gap in the 
UK, which they are committed to help close. They intend to provide customers 
"with the right guidance and products, at the right time, to support the right 
decisions" and promote financial inclusion. 
 
-  The scale of the business has enabled them to invest £1.3bn into sustainable 
assets during 2021, including investing over £500m into affordable housing, 
which helped support some of society's most vulnerable people. In addition over 
£200m has gone into projects with a positive environmental impact, such as the 
provision of renewable electricity, to nearly half a million homes. 
 
-  The company is measuring the carbon footprint of their investments and are 
aligning their portfolio to decarbonisation pathways in line with global 
temperature goals. Their own scope 1 and 2 emissions will be Net Zero by 2025 
(34% reduction per FTE last year) and they are progressing towards their 
commitment to be Net Zero across their investment portfolio by 2050. Examples 
of their own energy efficiency activities include a new photovoltaic glass roof 
in one of their office locations, LED lighting roll out at some office sites 
and an adoption of a travel policy whereby emphasis is on trip avoidance and 
carbon efficiency. Action: position maintained 
 
Travel and leisure 
 
-  Background: In September 2019, the company engaged with the investment team 
to seek shareholder feedback on the possibility of moving from a traditional 
long term incentive plan (LTIP) to a Restricted Share Plan (RSP). We expressed 
our concerns about the quantum of the award and that the discount from moving 
from a LTIP to the RSP should begin at a guide rate of 50%. The initial 
proposal from the company did not achieve this. We further wanted to ensure 
there was an appropriate financial underpin in place to protect shareholders' 
interests. Following further engagement, we became comfortable with the 
rationale and the quantum of the RSP and supported the proposal at the AGM. 
 
   In December 2020, following shareholder approval for the RSP, the impact of 
the Covid-19 pandemic on the business meant that the financial underpins of the 
2020 RSP would not be met. We engaged with the Remuneration Committee to 
discuss reviewing and possibly removing entirely the financial underpins for 
the 2020 RSP. We made clear to the committee that, whilst we were mindful of 
the impact of the pandemic, we would not support the retrospective adjustment 
of this 2020 award. Following this engagement and after considering shareholder 
views carefully, the company decided not to proceed any further with the 
proposal to remove the financial underpins from the 2020 RSP. We regarded our 
engagement as positive from both a governance and stewardship perspective and 
reflective of an active approach to governance engagement. 
 
-  In Q3 2021 the investment team engaged with the Chairman, General Counsel, 
and Investor Relations to discuss governance issues including the material vote 
against the chair (10.2%) and remuneration report (16.8%). The concerns with 
the board were due to potential over-boarding. We discussed attendance and 
furthermore that the chair would relinquish certain other board positions. We 
engaged with the company prior to the AGM on the proposed changes to the RSP 
and made clear that we would not support the plan on its current terms and were 
not supportive of changes to in-flight remuneration plans that were not 
forecast to vest. The company decided to make some changes from their initial 
position and we were of the view that the revised plan warranted support. 
Action: position maintained 
 
Global Equity Income Portfolio Example 
 
A supplier of glass bottles and packaging 
 
Our assessment 
 
-  Glass packaging is essential in the food and beverage sector, as well as in 
a range of healthcare settings. The investment team finds the company 
attractive on a range of valuation measures, believes management is aligned 
with our objectives and regards the company as maintaining a strong position in 
a consolidated market. 
 
-  Although glass has the benefit of being infinitely recyclable, its 
production generates significant CO2. The team have engaged with the company 
extensively to discuss their strategy to lower emissions. The company is 
switching from heavy fuel oil to gas which will lower CO2 output by around 30% 
from 2022 levels by 2030. It is also seeking to increase its usage of cullet 
(crushed recycled glass) from 49% in 2022 to 59% in 2025 which reduces energy 
usage. Overall, the company aims to reduce CO2 emissions by 46% by 2030 from 
the 2020 level. The company see themselves as leaders in the glass packaging 
industry in CO2 reduction and expect this to be a competitive advantage when 
negotiating with customers. 
 
-  We have also engaged with the company on governance issues relating to the 
separation of CEO and Chairman roles which has now been enacted. We note around 
60% of the company's interest expense is linked to meeting CO2 reduction 
targets, we view this as a positive signal. We are also encouraged by the 
enhanced employee share ownership plan which aims for 5% of shares owned by 
employees by 2025, by from 3% in 2020. Action: position maintained 
 
A global producer of soft drinks 
 
Our assessment 
 
-  We have been impressed by the commitment given by the company to the 
science-based target of reducing carbon emissions (scopes 1 2 and 3) by 30% by 
2030, and its ability to encourage its suppliers to respond to the CDP Supply 
chain questionnaire. The company has an ambition to be net zero by 2050 - we 
intend to monitor the approach to achieving this over time. The company has 
made significant progress in improving the sustainability of water resource 
used in its operations. 
 
-  We have actively engaged with the company regarding the use and recycling of 
plastics. The company is already well within reach of its goal of making 100% 
of its packaging recyclable by 2025. The company also aims to have 25% of its 
beverages (by volume) sold in refillable or returnable packaging by 2030. We 
note that the company has already made progress in a number of markets, such as 
in Latin America where refillable bottles were initially introduced as an 
affordable packaging type. The real challenge for the company comes with the 
collection of packaging to reduce the impact of waste on the environment. The 
company targets the collection and recycling of a bottle or can for each one 
that they sell by 2030. This will require collaboration with local governments, 
businesses and societies. We will continue to engage on this issue in our 
regular meetings with the company in future. 
 
-  Regarding sugar, our view is that the company is making good progress in the 
reformulation of its products to reduce the calorific content of its beverages, 
and its work developing and using natural sweeteners. 28% of volumes in 2021 
were low or no calorie. More remains to be done and we will continue to 
question the company on this issue. 
 
-  Regarding disclosure, we note the comprehensive environmental, business, and 
social governance report the company has produced for the past three years and 
believe this is a significant improvement on previous practise. Action: 
position maintained 
 
Voting Policy 
 
We review Annual General Meeting ('AGM') and Extraordinary General Meeting 
('EGM') proposals taking into account our own knowledge of the companies in 
which our portfolios are invested, as well as the comments and recommendations 
of proxy voting analysis providers ISS*, Glass Lewis and IVIS**. In addition, 
Invesco provides proprietary proxy voting recommendations and publishes these 
recommendations via its PROXYintel platform. All voting decisions remain with 
the portfolio manager, however, where a portfolio manager votes against an 
Invesco voting recommendation, the rationale for such decision is recorded and 
available on the platform. There will be times when we will follow the 
recommendations made by proxy research providers but times where we disagree 
with the stance being taken. 
 
Voting in line with management recommendations should not be seen as evidence 
of a lack of engagement or challenge on our part, but rather that we believe 
that the governance of the companies in which we are invested is appropriately 
robust and worthy of support. There may be instances where we vote in support 
of management, but the ESG performance of the company is not perfect and issues 
have been identified. In this situation we would seek to engage with the 
company leading up to the vote and if necessary, would have raised concerns and 
likely given a time horizon or measure for improvement which, if not met, could 
lead to a vote against in the future. In that respect, our approach to 
governance is one of engagement and improvement. 
 
We do not expect companies to change overnight but we do expect continual 
review of governance processes and continued improvement. Further details of 
how the manager has voted on holdings in the portfolio is available on the 
company's webpage at www.invesco.co.uk/selectuk and www.invesco.co.uk/ 
selectglobal. 
 
A recent example of voting engagement, which concerned executive remuneration, 
is shown on page 37, under the Travel and leisure case study. 
 
Conclusion 
 
The regulatory landscape is rapidly evolving, which increasingly compels 
organisations and investors alike to clearly demonstrate their awareness of ESG 
issues in their decisions. Landmark initiatives such as the European Union's 
new Sustainable Finance Disclosure Regulation (SFDR) are at the forefront of 
this shift. 
 
We believe that our approach is fair, coherent and pragmatic. Whilst we 
consider ESG aspects, we are not bound by any specific ESG criteria and have 
the flexibility to invest across the ESG spectrum from best to worst in class, 
but we think that the principles behind ESG deserve to be embedded in an 
investment framework which encourages positive change. Coupling this with a 
focus on valuation is, to our minds, the best way to deliver strong investment 
outcomes for our clients' long term. This reinforces our fundamental belief 
that responsible investing demands a long-term view and that a 
stakeholder-centric culture of ownership and stewardship is at the heart of ESG 
integration. 
 
* ISS - Institutional Shareholder Services . 
 
** IVIS - Institutional Voting Information Service. 
 
Business Review 
 
Purpose, Business Model and Strategy 
 
Invesco Select Trust plc is a UK investment company with four Share classes, 
each of which has separate investment objectives, as set out below, and is 
represented by a separate Portfolio. The Company's purpose is to generate 
sustainable returns for its shareholders by providing a choice of investment 
strategies and the ability to switch between them, free of cost, according to 
shareholders' needs. The underlying strategies are each targeted at achieving 
returns corresponding with specified objectives through a disciplined 
investment process. The strategy the Board follows to achieve its overall 
objective and those of each Share class is to set investment policy and risk 
guidelines, together with investment limits, and to monitor how they are 
applied. These are also set out below. 
 
The business model the Company has adopted to achieve its objective has been to 
contract investment management and administration to appropriate external 
service providers. The Board has oversight of the Company's service providers, 
and monitors them on a formal and regular basis. The Board has a collegiate 
culture and pursues its fiduciary responsibilities with independence, integrity 
and diligence, taking advice and outside views as appropriate and 
constructively challenging and interacting with service providers, including 
the Manager. 
 
The principal service provider is Invesco Fund Managers Limited ('IFML' or the 
'Manager'). In addition to managing the Portfolios in accordance with the 
Board's strategy and under its oversight, the Manager is also responsible for 
providing company secretarial, marketing, accounting and general administration 
services. In practice, many of these services are performed under delegated 
authority by Invesco Asset Management Limited (IAML), a company related to 
IFML. References to the Manager in this Annual Financial Report should 
consequently be considered to include both entities. 
 
All administrative support is provided by third parties under the oversight of 
the Board. In addition to the management and administrative functions of the 
Manager, the Company has contractual arrangements with Link Group to act as 
registrar and The Bank of New York Mellon (International) Limited (BNYMIL) as 
depositary and custodian. 
 
Investment Policy 
 
The Company's and respective Share classes' investment objectives, investment 
policies and risk and investment limits combine to form the 'Investment Policy' 
of the Company. 
 
The Company 
 
Investment Objective and Policy 
 
The Company's investment objective is to provide shareholders with a choice of 
investment strategies and policies, each intended to generate attractive 
risk-adjusted returns. 
 
The Company's share capital comprises four Share classes: UK Equity Shares, 
Global Equity Income Shares, Balanced Risk Allocation Shares and Managed 
Liquidity Shares, each of which has its own separate portfolio of assets and 
attributable liabilities. The investment objectives, policies and risks and 
limits of the Portfolios for these Share classes follow. With the exception of 
borrowings, the limits for the Company and the four Share classes are measured 
at the point of acquisition of investments, unless otherwise stated. 
 
Investment Limits of the Company 
 
The Board has prescribed limits on the Investment Policy of the Company, which 
include the following: 
 
.    no more than 15% of the gross assets of the Company may be invested in a 
single investment; and 
 
.    no more than 10% of the gross assets of the Company may be invested in 
other listed investment companies (excluding property companies structured as 
REITs). 
 
UK Equity Share Portfolio 
 
Investment Objective 
 
The investment objective of the UK Equity Portfolio is to provide shareholders 
with an attractive real long-term total return, with an income that will grow 
over time, by investing primarily in UK quoted equities. 
 
Investment Policy and Risk 
 
The UK Equity Portfolio is invested primarily in UK-quoted equities and may 
also hold equity-related or fixed interest securities of UK companies across 
all market sectors. The Portfolio will not invest in companies which are not 
listed, quoted or traded at the time of investment, although it may have 
exposure to such companies where, following investment, the relevant securities 
cease to be listed, quoted or traded. 
 
The Manager invests the UK Equity Portfolio so as to maximise exposure to the 
most attractive sectors and securities, within a portfolio structure that 
reflects the Manager's view of the macroeconomic environment. The Manager does 
not set out to manage the risk characteristics of the UK Equity Portfolio 
relative to the FTSE All-Share Index (the 'benchmark index') and the investment 
process may result in potentially very significant over or underweight 
positions in individual sectors versus the benchmark. The size of weightings 
will reflect the Manager's view of the attractiveness of a security and the 
degree of conviction held. If a security is not considered to be a good 
investment, it will not be held in the UK Equity Portfolio, irrespective of its 
weight in the benchmark index. 
 
The Manager controls the stock-specific risk of individual securities by 
ensuring that the UK Equity Portfolio is always diversified across market 
sectors. In-depth and continual analysis of the fundamentals of investee 
companies allows the Manager to assess the financial risks associated with any 
particular security. 
 
It is expected that, typically, the Portfolio will hold between 40 and 50 
securities. 
 
The Directors believe that the use of borrowings can enhance returns to 
shareholders and the UK Equity Portfolio will generally use borrowings in 
pursuing its investment objective. 
 
Investment Limits 
 
The Board has prescribed limits on the investment policy of the UK Equity 
Portfolio, which include the following: 
 
.    no more than 12% of the gross assets of the UK Equity Portfolio may be 
held in a single investment; 
 
.    no more than 10% of the gross assets of the UK Equity Portfolio may be 
held in other listed investment companies (excluding REITs); 
 
.    no more than 20% of the gross assets of the UK Equity Portfolio may be 
held in overseas assets; and 
 
.    borrowings may be used to raise equity exposure up to a maximum of 25% of 
the net assets of the UK Equity Portfolio when it is considered appropriate. 
 
Global Equity Income Share Portfolio 
 
Investment Objective 
 
The investment objective of the Global Equity Income Portfolio is to provide an 
attractive and growing level of income return and capital appreciation over the 
long term, predominantly through investment in a diversified portfolio of 
equities worldwide. 
 
Investment Policy and Risk 
 
The Portfolio will be invested predominantly in a portfolio of listed, quoted 
or traded equities worldwide, but may also hold other securities from time to 
time including, inter alia, fixed interest securities, preference shares, 
convertible securities and depositary receipts. Investment may also be made in 
regulated or authorised collective investment schemes. The Portfolio will not 
invest in companies which are not listed, quoted or traded at the time of 
investment, although it may have exposure to such companies where, following 
investment, the relevant securities cease to be listed, quoted or traded. The 
Manager will at all times invest and manage the Portfolio's assets in a manner 
that is consistent with spreading investment risk, but there will be no rigid 
industry, sector, region or country restrictions. 
 
The Portfolio may utilise derivative instruments including index-linked notes, 
contracts for differences, covered options and other equity-related derivative 
instruments for efficient portfolio management and investment purposes. Any use 
of derivatives for investment purposes will be made on the basis of the same 
principles of risk spreading and diversification that apply to the Portfolio's 
direct investments, as described above. 
 
It is expected that, typically, the Portfolio will hold between 40 and 55 
securities. 
 
The Directors believe that the use of borrowings can enhance returns to 
shareholders, and the Global Equity Income Portfolio may use borrowings in 
pursuing its investment objective. 
 
The Company's foreign currency investments will not be hedged to sterling as a 
matter of general policy. However, the Manager may employ currency hedging, 
either back to sterling or between currencies (i.e. cross hedging of portfolio 
investments). 
 
Investment Limits 
 
The Board has prescribed the following limits on the investment policy of the 
Global Equity Income Portfolio: 
 
.    no more than 20% of the gross assets of the Global Equity Income Portfolio 
may be invested in fixed interest securities; 
 
.    no more than 10% of the gross assets of the Global Equity Income Portfolio 
may be held in a single investment; 
 
.    no more than 10% of the gross assets of the Global Equity Income Portfolio 
may be held in other listed investment companies (excluding REITs); and 
 
.    borrowings may be used to raise equity exposure up to a maximum of 20% of 
the net assets of the Global Equity Income Portfolio, when it is considered 
appropriate. 
 
Balanced Risk Allocation Share Portfolio 
 
Investment Objective 
 
The investment objective of the Balanced Risk Allocation Portfolio is to 
provide shareholders with an attractive total return in differing economic and 
inflationary environments, and with low correlation to equity and bond market 
indices by gaining exposure to three asset classes: debt securities, equities 
and commodities. 
 
Investment Policy and Risk 
 
The Portfolio utilises two main strategies: the first seeks to balance the risk 
contribution from each of three asset classes (equities, bonds and 
commodities), with the aim of reducing the probability, magnitude and duration 
of capital losses, and the second seeks to shift tactically the allocation 
among the assets with the aim of improving expected returns. 
 
The Portfolio is constructed so as to achieve appropriate diversity and to 
balance risk by asset class (bonds, equities and commodities) and by asset 
within each asset class. Neutral risk weighting is achieved when each asset 
class contributes an equal proportion of the total Portfolio risk and each 
asset contributes an equal proportion of the total risk for its respective 
asset class. The Manager is permitted to actively vary asset class weightings, 
subject to a maximum of 150% and a minimum of 50% of each asset class's neutral 
weight. The Manager is also permitted to actively vary individual asset 
weightings, provided the asset class guidelines are not violated. Asset weights 
may not be less than zero (short) and will not exceed twice the neutral weight. 
For the purposes of the maximum weighting only, commodity exposures are 
aggregated and measured by commodity complex rather than by individual assets. 
 
The Portfolio will be mainly invested directly in highly liquid and 
transparently priced exchange-traded futures contracts, with cash and cash 
equivalents being held as collateral. However, the Portfolio may also be 
invested in equities, equity-related securities and debt securities (including 
floating rate notes). Financial derivative instruments (including but not 
limited to futures and total return swaps) are used only to achieve long 
exposure to the three asset classes. The Portfolio may also use financial 
derivative instruments, including currency futures and forwards, for efficient 
portfolio management, hedging and investment purposes. Financial derivative 
instruments will not be used to create net short positions in any asset class. 
The derivatives portfolio will typically comprise between 20 and 33 investment 
positions. 
 
It is expected that the Portfolio's investments will mainly be denominated in 
sterling. Any non-sterling derivative investments may be hedged back into 
sterling at the discretion of the Manager when it is economic to do so. 
 
Investment Limit 
 
The Board has prescribed the following limits on the investment policy of the 
Balanced Risk Allocation Portfolio: 
 
.    the aggregate notional amount of financial derivative instruments 
positions may not exceed 250% of the net assets of the Balanced Risk Allocation 
Portfolio; and 
 
.    no more than 10% of the gross assets of the Balanced Risk Allocation 
Portfolio may be held in other listed investment companies. 
 
Managed Liquidity Share Portfolio 
 
Investment Objective 
 
The investment objective of the Managed Liquidity Portfolio is to produce an 
appropriate level of income return combined with a high degree of security. 
 
Investment Policy and Risk 
 
The Managed Liquidity Portfolio invests mainly in a range of sterling-based or 
related high quality debt securities and similar assets (which may include 
transferable securities, money market instruments, warrants, collective 
investment schemes and deposits), either directly or indirectly through 
authorised funds investing in such instruments, including funds managed 
by Invesco. 
 
The Managed Liquidity Portfolio generally invests in funds authorised as UCITS 
schemes (Undertakings for Collective Investments in Transferable Securities, 
being open ended retail investment funds), which are required under governing 
regulations to provide a prudent spread of risk. In the event that the Managed 
Liquidity Portfolio is invested directly in securities and instruments, the 
Manager will observe investment restrictions and risk diversification policies 
that are consistent with UCITS regulations. 
 
Investment Limits 
 
The Board has prescribed limits on the investment policy of the Managed 
Liquidity Portfolio, which include the following: 
 
.    no more than 10% of the gross assets of the Managed Liquidity Portfolio 
may be held in a single investment, other than authorised funds or high quality 
sovereign debt securities; and 
 
.    no more than 5% of the gross assets of the Managed Liquidity Portfolio may 
be held in unquoted investments, other than authorised funds. 
 
Investors should note that the Managed Liquidity Shares are not designed to 
replicate the returns or other characteristics of a bank or building society 
deposit or money market fund. In particular, the Portfolio will typically 
contain some assets with a greater residual maturity, and as a whole will have 
greater weighted average maturity, than is prescribed by regulation governing 
money market funds. As such, the Portfolio may be more sensitive to and 
impacted by interest rate movements and other factors. 
 
Key Performance Indicators 
 
The Board reviews the performance of the Company by reference to a number of 
Key Performance Indicators, at either a Company or Portfolio level, which 
include the following: 
 
.      Investment Performance 
 
.      Revenue and Dividends 
 
.      Discount/Premium 
 
.      Ongoing Charges 
 
Investment Performance 
 
To assess investment performance the Board monitors the net asset value (NAV) 
performance of the individual Share classes relative to that of benchmark 
indices it considers to be appropriate. However, given the requirements and 
constraints of the investment objectives and policies followed, no index can be 
expected to fully represent the performance that might reasonably be expected 
from any one or all of the Company's Share classes. 
 
The NAV total return performance of each of the Portfolios over the year to 31 
May 2022 and of relevant benchmark indices were as follows: 
 
UK Equity Portfolio                                    6.8% 
 
FTSE All-Share Index                                   8.3% 
 
Global Equity Income Portfolio                         9.6% 
 
MSCI World Index (£)                                   7.4% 
 
Balanced Risk Allocation Portfolio                     0.3% 
 
Composite Benchmark                                   -6.1% 
 
ICE BoA Merrill Lynch 3 month LIBOR plus 5% per annum  5.1% 
 
Managed Liquidity Portfolio                           -0.3% 
 
Source: Refinitiv. 
 
Other performance periods, together with share price total returns, are shown 
on pages 9, 16, 23 and 29. 
 
Revenue and Dividends 
 
The Directors review revenue estimates and prospective dividend levels at each 
Board meeting. For the equity Share classes the Directors have become more 
focused on total return since sanctioning contributions to dividends from 
capital, but dividends paid continue to be mostly constituted from revenue and 
revenue is an important element of overall Portfolio returns. 
 
UK Equity Shares 
 
Revenue earnings per Share for the UK Equity Share Portfolio was 6.00p (2021: 
3.90p), based on net revenue for the year of £4,697,000 (2021: £1,322,000), 
which included £438,000 (2021: nil) of non-recurring special dividends. 
 
Dividend Policy: 
 
It is the Board's policy that the Directors will declare four dividends in 
respect of each accounting year (with payment in the month following) 
comprising of three equal interim dividends, declared in July, October and 
January, and a 'wrap-up' fourth interim dividend, declared in April. Depending 
on the level of income received in each quarter, and in the year, these four 
dividends may be enhanced with contributions from capital profits to achieve 
the Board's target level. In recent years the Directors have set a target of at 
least maintaining, in the absence of unforeseen circumstances, the level of 
annual UK Equity dividends per share from year to year. The Directors did not 
set dividend targets for the year to 31 May 2022 due to the uncertainty of 
income flows as a result of the impact of Covid-19. Given the ongoing 
uncertainty to income flows, due in particular to the risk of entering a period 
of global recession, the Directors have not set dividend targets for the year 
to 31 May 2023. 
 
Dividends Declared: 
 
The Directors have declared and paid four interim dividends for the year ended 
31 May 2022 totalling 6.70p per UK Equity Share (2021: 6.65p) of which 6.00p 
(2021: 3.90p) was met from revenue earned in the year. The aggregate of 
dividends paid in respect of the year was £5,213,000 (2021: £1,814,000) - the 
large increase reflects the larger number of shares in issue following the 
issue of shares due to the business combination with Invesco Income Growth 
Trust plc in April 2021. 
 
A first interim dividend for the year to 31 May 2023 of 1.50p was declared on 
14 July 2022. In the absence of unforeseen circumstances, and in accordance 
with the dividend policy set out above, the Board intends for this to set the 
level for the next two quarterly dividends. 
 
Global Equity Income Shares 
 
Revenue earnings per Share for the Global Equity Income Share Portfolio was 
4.85p (2021: 3.95p), based on net revenue for the year of £1,197,000 (2021: £ 
1,024,000), which included £149,000 (2021: £192,000) of non-recurring special 
dividends. 
 
Dividend Policy: 
 
It is the Board's policy that the Directors will declare four dividends in 
respect of each accounting year (with payment in the month following) 
comprising of three equal interim dividends, declared in July, October and 
January, and a 'wrap-up' fourth interim dividend, declared in April. Depending 
on the level of income received in each quarter, and in the year, these 
four dividends may be enhanced with contributions from capital profits to 
achieve the Board's target level. In recent years the Directors have set a 
target of at least maintaining, in the absence of unforeseen circumstances, the 
level of annual Global Equity Income dividends per share from year to year. The 
Directors did not set dividend targets for the year to 31 May 2022 due to the 
uncertainty of income flows as a result of the impact of Covid-19. Given the 
ongoing uncertainty to income flows, due in particular to the risk of entering 
a period of global recession, the Directors have not set dividend targets for 
the year to 31 May 2023. 
 
Dividends Declared: 
 
The Directors have declared and paid four interim dividends for the year ended 
31 May 2022 totalling 7.15p (2021: 7.10p) per Global Equity Income Share, of 
which 4.85p (2021: 3.95p) was met from revenue earned in the year. The 
aggregate of dividends paid in respect of the year was £1,757,000 (2021: £ 
1,815,000) - the decrease reflects the reduction of shares in issue following 
conversions and buybacks in the year. 
 
A first interim dividend for the year to 31 May 2023 of 1.55p was declared on 
14 July 2022. In the absence of unforeseen circumstances, and in accordance 
with the dividend policy set out above, the Board intends for this to set the 
level for the next two quarterly dividends. 
 
Balanced Risk Allocation Shares 
 
In order to maximise the capital return on the Balanced Risk Allocation Shares, 
the Directors only intend to declare dividends on the Balanced Risk Allocation 
Shares to the extent required, having taken into account the dividends paid on 
the other Share classes, to maintain the Company's status as an investment 
trust under section 1158 of the Corporation Tax Act 2010. The Portfolio 
recorded a net revenue return of £44,000 in the year (2021: £8,000 net loss). 
 
No dividends are required to be declared or paid for the year to retain 
investment trust status. 
 
Managed Liquidity Shares 
 
The Board intends to declare dividends on the Managed Liquidity Share Portfolio 
when the level of income available allows. The Directors declared and paid one 
interim dividend for the year ended 31 May 2022 totalling 1.00p (2021: nil). 
The Managed Liquidity Portfolio recorded a net revenue loss for the year of £ 
1,000 (2021: profit of £33,000, including a one-off refund of management fees 
of £34,000). 
 
A first interim dividend for the year to 31 May 2023 of 1.00p was declared on 
14 July 2022 and this will be funded from revenue reserves. It is unlikely, 
given the quantum of revenue being earned, that future dividends will be more 
frequent than annual and they could be less frequent. 
 
Discount 
 
The Company has a discount control policy in place for all four Share classes, 
whereby the Company offers to issue or buy back Shares of all classes with a 
view to maintaining the market price of the shares at close to their respective 
net asset values and, by so doing, avoid significant overhangs or shortages in 
the market. It is the Board's policy to buy back shares and to sell shares from 
treasury on terms that do not dilute the net asset value attributable to 
existing shareholders at the time of the transaction. The Board reviews the buy 
back parameters from time to time taking into account current market conditions 
and other factors and instructs the brokers accordingly. 
 
The operation of this policy is dependent upon the authorities to buy back and 
issue shares being renewed by shareholders. Notwithstanding the intended effect 
of this policy, there can be no guarantee that the Company's shares will trade 
at close to their respective net asset values. Shareholders should also be 
aware that there is a risk that this discount policy may lead to a reduction in 
the size of the Company over time. 
 
The Board and the Manager closely monitor movements in the Company's share 
prices and dealings in the Company's shares. Share movements in the year are 
summarised on page 43. At 31 May 2022, the share prices, net asset values 
('NAV') and the discounts of the four Share classes were as follows: 
 
                                     2022                             2021 
 
                        Net Asset      Share             Net Asset      Share 
 
                            Value      Price                 Value      Price 
 
Share Class               (Pence)    (Pence)   Discount    (Pence)    (Pence)   Discount 
 
UK Equity                  194.35     175.00    (10.0)%     188.33     176.00     (6.5)% 
 
Global Equity Income       249.00     229.00     (8.0)%     233.91     226.00     (3.4)% 
 
Balanced Risk              169.87     154.50     (9.0)%     169.33     163.00     (3.7)% 
Allocation 
 
Managed Liquidity          106.92      97.00     (9.3)%     108.11     102.00     (5.7)% 
 
The following charts show the premium/(discount) at which the Shares traded 
over the two years to 31 May 2022. The Shares of all four Portfolios have, 
generally traded in a range of 3% premium to 13% discount. As can be seen below 
and on the following page, since the onset of Covid-19 in March 2020 and the 
more recent conflict in Ukraine, the volatility in markets has led to higher 
levels of discount being seen sporadically throughout the period. 
 
Source: Refinitiv. 
 
Ongoing Charges 
 
The expenses of managing the Company are reviewed by the Board at every 
meeting. The Board aims to minimise the ongoing charges figure which provides a 
guide to the effect on performance of all annual operating costs of the 
Company. The ongoing charges figure is calculated by dividing the annualised 
ongoing charges, including those charged to capital, by the average daily net 
asset value during the year, expressed as a percentage. 
 
At the year end the ongoing charges figure of the Company and that for the 
different Share classes were as follows: 
 
                                                 Global       Balanced 
 
                                       UK        Equity           Risk        Managed 
 
                    Company        Equity        Income     Allocation      Liquidity 
 
2022                  0.76%         0.74%         0.78%          1.09%          0.45% 
 
2021                  0.87%         0.91%         0.81%          1.21%          0.39% 
 
The above excludes rebates received by the Managed Liquidity Portfolio. 
Performance fee arrangements were removed from both the UK Equity and Global 
Equity Income Share Portfolios in 2021, hence a performance fee is no longer 
payable. In addition to inflationary effects, shrinkage from buybacks in 
connection with the discount control policy will tend to cause the ongoing 
charge percentages to gradually increase. 
 
Financial Position 
 
Assets and Liabilities 
 
The Company's balance sheet on page 80 shows the assets and liabilities at the 
year end. Details of the Company's borrowing facility are shown in note 13 of 
the financial statements on page 92, with interest paid (finance costs) in note 
5. 
 
Owing to the readily realisable nature of the Company's assets, cash flow does 
not have the same significance as for an industrial or commercial company. The 
Company's principal cash flows arise from the purchases and sales of 
investments and the income from investments against which must be set the costs 
of borrowing and management expenses. 
 
Borrowing Policy 
 
Borrowing policy is under the control of the Board, which has established 
effective parameters for the portfolios. Borrowing levels are regularly 
reviewed. As part of the Company's Investment Policy, the approved borrowing 
limits are 25% of the net assets of the UK Equity Portfolio and 20% of net 
assets of the Global Equity Income Portfolio. The Balanced Risk Allocation 
Portfolio does not use borrowings, but is geared by means of the derivative 
instruments used to implement its investment policy. The Managed Liquidity 
Portfolio does not use borrowings. 
 
Issued Share Capital 
 
All Share classes have a nominal value of 1 penny per Share. 
 
The following table summarises the Company's share capital at the year end and 
movements during the year. 
 
                                                    Global      Balanced 
 
                                          UK        Equity          Risk       Managed 
 
Number of shares                      Equity        Income    Allocation     Liquidity 
 
Shares held at the year end 
 
- excluding treasury              73,772,657    25,155,784     4,170,938     1,238,254 
 
- held in treasury                34,743,775    16,036,159     6,437,218     9,313,678 
 
Movements during the year: 
 
- increase/(decrease) arising    (2,552,831)     1,967,979       266,843     (306,425) 
from conversions 
 
- shares bought back into       (11,996,500)     (583,000)     (165,000)      (63,000) 
treasury 
 
- average price thereon               184.1p        227.7p        165.5p        104.0p 
 
Since the year end another 687,000 UK Equity Shares and 295,000 Global Equity 
Income Shares have been bought into treasury at average prices of 160.8p and 
219.8p respectively. 
 
Further details on net changes in issued share capital are set out in note 14 
to the financial statements on pages 93 and 94. No treasury shares were 
cancelled during the year. 
 
Current and Future Developments 
 
As part of the Company's overall strategy, the Company seeks to manage its 
affairs so as to maximise returns for shareholders. The Board also has a 
longer-term objective, consistent with the business combination with Invesco 
Income Growth Trust plc in April 2021, to increase the size of the Company in 
the belief that increasing the assets of the Company in this way will make the 
Company's Shares more attractive to investors and improve the liquidity of the 
Shares. 
 
Details of trends and factors likely to affect the future development, 
performance and position of the Company's business can be found in the 
Chairman's Statement and the Portfolio Managers' reports. Further details as to 
the risks affecting the Company are set out under 'Principal Risks and 
Uncertainties' below. 
 
Principal Risks and Uncertainties 
 
The Audit Committee regularly undertakes a robust assessment of the risks the 
Company faces, including those that would threaten its business model, future 
performance, solvency, reputation or liquidity and emerging risks, on behalf of 
the Board (see Audit Committee Report on pages 63 and 64). In carrying out this 
assessment, the Audit Committee together with the Manager, have considered 
emerging risks such as geopolitical risks, evolving cyber threats and climate 
related risks. 
 
The following are considered to be the most significant risks to the Company 
and to shareholders in relation to their investments in the Company. Further 
details of risks and risk management policies as they relate to the financial 
assets and liabilities of the Company are detailed in note 17 to the financial 
statements. 
 
Category and Principal               Mitigating Procedures               Risk trend 
                                                                         during 
 
Risk Description                     and Controls                        the year 
 
Strategic Risk 
 
Investment Objectives and            The Board monitors the share        Unchanged 
Attractiveness to Investors          registers and the performance of 
There is no guarantee that the       the Company and each Portfolio. It 
Investment Policy of the Company and has established a structure 
of each Portfolio will provide the   offering a range of options for 
returns sought by the Company. There investors and has set guidelines to 
can be no guarantee, therefore, that ensure that the Investment Policy 
the Company will achieve its         of the Company and each Portfolio 
investment objectives or that the    is pursued by the Manager. 
Shares will continue to meet 
investors' needs. 
 
Market Movements and Portfolio       The performance of the Manager is   Increased 
Performance                          carefully monitored by the Board 
Individual Portfolio performance is  and the continuation of the 
substantially dependent on the       Manager's mandates is reviewed each 
performance of the securities        year. The Board has established 
(including derivative instruments)   guidelines to ensure that the 
held within the Portfolio. The       investment policies of each class 
prices of these securities are       of Share are pursued by the 
influenced by many factors including Manager. 
the general health of regional and 
worldwide economies; interest rates; For a fuller discussion of the 
inflation; government policies;      economic and market conditions 
industry conditions; political and   facing the Company and the current 
diplomatic events; tax laws;         and future performance of the 
environmental laws; and by the       different Portfolios of the 
demand from investors. The Manager   Company, please see both the 
strives to maximise the total return Chairman's Statement on pages 6 to 
from Portfolios, but the investments 8 and the Portfolio Managers' 
held are influenced by market        reports starting on pages 11 to 31. 
conditions and the Board 
acknowledges the external influences The Company has a nil-valued 
on the performance of each           holding in Sberbank, a Russian bank 
Portfolio. Further risks             but no other direct investments in 
specifically applicable to the       Russia or other holdings with 
Balanced Risk Allocation Shares are  significant links to Russia. 
set out on page 47. 
 
The extreme market volatility 
experienced in February and March 
2020 from the market reaction to 
Covid-19, and the continuing 
effects, exemplify the risks from 
external influences. There is an 
ongoing risk to global economies 
from measures taken in response to 
Covid-19, many companies remain at 
risk from the effects of imposed 
lockdowns or other restrictions on 
their production and revenues and 
this has a consequential effect on 
the availability of investment 
income. 
 
The risk could be triggered by 
unfavourable developments globally 
and/or in one or more regions, a 
contemporary example being the 
market uncertainty in relation to 
the ongoing invasion of Ukraine by 
Russia. 
 
Risks Applicable to the Company's    The Board has adopted a discount    Unchanged 
Shares                               control policy that applies to all 
Shares in the Company are designed   Share classes and the Board and the 
to be held over the long-term and    Manager monitor the market rating 
may not be suitable as short-term    of each Share class. 
investments. There can be no 
guarantee that any appreciation in   While it is the intention of the 
the value of the Company's Shares    Directors to pay dividends to 
will occur and investors may not get holders of the UK Equity, Global 
back the full value of their         Equity Income and Managed Liquidity 
investments. Owing to the potential  Shares, this will be affected by 
difference between the mid-market    the returns achieved by the 
price of the Shares and the prices   respective Portfolios and the 
at which they are sold, there is no  dividend policy adopted by the 
guarantee that their realisable      Board. Accordingly, the amount of 
value will reflect their mid-market  dividends paid to shareholders may 
price.                               fluctuate. Any change in the tax or 
                                     accounting treatment of dividends 
The market value of a Share, as well received or other returns may also 
as being affected by its net asset   affect the level of dividend paid 
value (NAV), is also influenced by   on the Shares in future years. The 
investor demand, its dividend yield, Directors have resolved, in the 
where applicable, and prevailing     absence of unforeseen 
interest rates, amongst other        circumstances, to supplement 
factors. As such, the market value   revenue with capital profits in 
of a Share can fluctuate and may not order to pay equity Portfolio 
reflect its underlying NAV. Shares   dividends at levels set by the 
may therefore trade at discounts to  Board (see pages 41 and 42). 
their NAVs. 
 
Past performance of the Company's 
Shares is not necessarily indicative 
of future performance. 
 
Viability and Compulsory Conversion 
of a Class of Share 
It is possible that through poor 
performance, market sentiment, or 
otherwise, lack of demand for one of 
the Company's Share classes could    The Board monitors share            Unchanged 
result in the relevant Portfolio     conversions and Portfolio sizes and 
becoming too small to be viable.     liaises with the Manager on the 
                                     continued viability of each Share 
The continued listing on the         class. 
Official List of each class of Share 
is dependent on at least 25% of the  If at any time the Board considers 
Shares in that class being held in   that the listing of any class of 
public hands. This means that if     Share on the Official List is 
more than 75% of the Shares of any   likely to be cancelled and the loss 
class were held by, inter alia, the  of such listing would mean that the 
Directors, persons connected with    Company would no longer be able to 
Directors or persons interested in   qualify for approval as an 
5% or more of the relevant Shares,   investment trust under section 1158 
the listing of that class of Share   of the Corporation Tax Act 2010, 
might be suspended or cancelled. The the Board may serve written notice 
Listing Rules state that the FCA may on the holders of the relevant 
allow a reasonable period of time    Shares requiring them to convert 
for the Company to restore the       their Shares into another Share 
appropriate percentage if this rule  class. 
is breached, but in the event that 
the listing of any class of Shares 
were cancelled the Company would 
lose its investment trust status. 
 
 
Liability of a Portfolio for the     The Directors intend that, in the   Unchanged 
Liabilities of Another Portfolio     absence of unforeseen 
                                     circumstances, each Portfolio will 
                                     effectively operate as if it were a 
                                     stand-alone company. However, 
                                     investors should be aware of the 
                                     following factors: 
 
                                       * As a matter of law, the Company 
                                         is a single entity. Therefore, 
                                         in the event that any of the 
                                         Portfolios has insufficient 
                                         funds or assets to meet all of 
                                         its liabilities, on a 
                                         winding-up or otherwise, such a 
                                         shortfall would become a 
                                         liability of the other 
                                         Portfolios and would be payable 
                                         out of the assets of the other 
                                         Portfolios in such proportions 
                                         as the Board may determine; and 
                                       * The Companies Act 2006 
                                         prohibits the Directors from 
                                         declaring dividends in 
                                         circumstances where, following 
                                         the distribution, the Company's 
                                         assets would represent less 
                                         than one and a half times the 
                                         aggregate of its liabilities or 
                                         the amount of net assets would 
                                         be less than the aggregate of 
                                         its share capital and 
                                         undistributable reserves. If 
                                         the Company were to incur 
                                         material liabilities in the 
                                         future, a significant fall in 
                                         the value of the Company's 
                                         assets as a whole may affect 
                                         the Company's ability to pay 
                                         dividends on a particular class 
                                         of Share, even though there are 
                                         distributable profits 
                                         attributable to the relevant 
                                         Portfolio 
 
Gearing                              Gearing levels of the different     Unchanged 
Borrowing will amplify the effect on Portfolios will change from time to 
shareholders' funds of gains and     time in accordance with the 
losses on the underlying securities. respective Portfolio Managers' 
                                     assessments of risk and reward. The 
Whilst the use of borrowings by the  Manager assesses the exposure to 
Company should enhance the total     gearing on a regular basis, 
return on a particular class of      including the level of borrowings 
Share where the return on the        and covenants of the credit 
underlying securities is rising and  facility. 
exceeds the cost of borrowing, it 
will have the opposite effect where  The Balanced Risk Allocation 
the underlying return is falling,    Portfolio may also be geared (by up 
further reducing the total return on to 250%, according to the 
that Share class. Similarly, the use investment policy set out on page 
of gearing by investment companies   40) by means of the derivative 
or funds in which the Company        instruments in which it invests. 
invests increases the volatility of  This is discussed separately below, 
those investments.                   under the heading: Additional Risks 
                                     Applicable to Balanced Risk 
The Company has a £40 million 364    Allocation Shares. 
day multicurrency revolving credit 
facility and there is no guarantee 
that these facilities will be 
renewed at maturity or on terms 
acceptable to the Company. If it 
were not possible to renew these 
facilities or replace them with one 
from another lender, the amounts 
owing by the Company would need to 
be funded by the sale of securities. 
 
Hedging                              The Company may use derivatives to  Unchanged 
Where hedging is used there is a     hedge its exposure to currency or 
risk that the hedge will not be      other risks and for the purpose of 
effective.                           efficient portfolio management. 
                                     There may be a correlation between 
                                     price movements in the underlying 
                                     securities, currency or index, on 
                                     the one hand, and price movements 
                                     in the investments, which are the 
                                     subject of the hedge, on the other 
                                     hand. In addition, an active market 
                                     may not exist for a particular 
                                     hedging derivative instrument at 
                                     any particular time. 
 
Regulatory and Tax Related           The Manager reviews the level of     Unchanged 
The Company is subject to various    compliance with the Corporation Tax 
laws and regulations by virtue of    Act 2010 and other financial 
its status as a public limited       regulatory requirements on a daily 
investment company registered under  basis. All transactions, income and 
the Companies Act 2006, its status   expenditure are reported to the 
as an investment trust and its       Board. The Board regularly 
listing on the London Stock          considers the risks to which the 
Exchange. Loss of investment trust   Company is exposed, the measures in 
status could lead to the Company     place to control them and the 
being subject to UK Capital Gains    potential for other risks to arise. 
Tax on the sale of its investments.  The Board ensures that satisfactory 
A serious breach of other regulatory assurances are received from 
rules could lead to suspension from  service providers. The depositary 
the London Stock Exchange, a fine or and the Manager's compliance and 
a qualified Audit Report. Other      internal audit officers report 
control failures, either by the      regularly to the Company's Audit 
Manager or any other of the          Committee. 
Company's service providers, could 
result in operational or             The risks and risk management 
reputational problems, erroneous     policies and procedures as they 
disclosures or loss of assets        relate to the financial assets and 
through fraud, as well as breaches   liabilities of the Company are also 
of regulations.                      detailed in note 17 to the 
                                     financial statements. 
 
Additional Risks Applicable to       The Manager actively seeks the most Unchanged 
Balanced Risk Allocation Shares      liquid means of obtaining the 
The use of financial derivative      required exposures. The financial 
instruments, in particular futures,  derivative instruments used for the 
forms part of the investment policy  strategy are geared instruments and 
and strategy of the Balanced Risk    the aggregate notional exposure 
Allocation Portfolio. The degree of  will usually exceed the net asset 
leverage inherent in futures trading value of the Portfolio. Whilst this 
potentially means that a relatively  could result in greater 
small price movement in a futures    fluctuations in the net asset 
contract may result in an immediate  value, and consequently the share 
and substantial loss to the          price, the use of leverage is 
Portfolio. The Portfolio's ability   normally necessary to achieve the 
to use these instruments may be      target volatility required to meet 
limited by market conditions,        the return objective. The degree of 
regulatory limits and tax            leverage inherent in futures 
considerations.                      trading potentially means that a 
                                     relatively small price movement in 
The absence of a liquid market for   a futures contract may result in an 
any particular instrument at any     immediate and substantial loss and 
particular time may inhibit the      it would be necessary to increase 
ability of the Manager to liquidate  the collateral held at the clearing 
a financial derivative instrument at broker to cover such loss. This is 
an advantageous price.               mitigated by the Company not using 
                                     financial derivative instruments to 
                                     create net short positions in any 
                                     asset class combined with holding 
                                     cash balances sufficient to meet 
                                     collateral requirements. 
 
Third Party Service Providers Risk 
 
Reliance on Third Party Service      Third-party service providers are   Unchanged 
Providers                            subject to ongoing monitoring by 
The Manager may be exposed to        the Manager and the Company. The 
reputational risks. In particular,   Manager reviews the performance of 
the Manager may be exposed to the    all third-party providers regularly 
risk that litigation, misconduct,    through formal and informal 
operational failures, negative       meetings. The Audit Committee 
publicity and press speculation,     reviews regularly the performance 
whether or not it is valid, will     and internal controls of the 
harm its reputation. Any damage to   Manager and all third-party 
the reputation of the Manager could  providers through audited service 
result in potential counterparties   organisation control reports, 
and third parties being unwilling to together with updates on 
deal with the Manager and by         information security, the results 
extension the Company. This could    of which are reported to the Board. 
have an adverse impact on the 
ability of the Company to            The Manager's business continuity 
successfully pursue its Investment   plans are reviewed on an ongoing 
Policy.                              basis and the Directors are 
                                     satisfied that the Manager has in 
The Company has no employees and the place robust plans and 
Board comprises non-executive        infrastructure to minimise the 
directors only. The Company is       impact on its operations so that 
therefore reliant upon the           the Company can continue to trade, 
performance of third-party service   meet regulatory obligations, report 
providers for its executive function and meet shareholder requirements. 
and service provisions. The          The Board receives regular update 
Company's operational structure      reports from the Manager and 
means that all cyber risk            third-party service providers on 
(information and physical security)  business continuity processes and 
arises at its third-party service    has been provided with assurance 
providers, including fraud, sabotage from them all insofar as possible 
or crime against the Company. The    that measures are in place for them 
Company's operational capability     to continue to provide contracted 
relies upon the ability of its       services to the Company. 
third-party service providers to 
continue working throughout the 
disruption caused by a major event 
such as the Covid-19 pandemic. 
Failure by any service provider to 
carry out its obligations to the 
Company in accordance with the terms 
of its appointment could have a 
materially detrimental impact on the 
operation of the Company and could 
affect the ability of the Company to 
successfully pursue its investment 
policy. The Company's main service 
providers, of which the Manager is 
the principal provider, are listed 
on page 115. The Manager may be 
exposed to reputational risks. In 
particular, the Manager may be 
exposed to the risk that litigation, 
misconduct, operational failures, 
negative publicity and press 
speculation, whether or not it is 
valid, will harm its reputation. 
Damage to the reputation of the 
Manager could potentially result in 
counterparties and third parties 
being unwilling to deal with the 
Manager and by extension the 
Company, which carries the Manager's 
name. This could have an adverse 
impact on the ability of the Company 
to pursue its investment policy 
successfully. 
 
Viability Statement 
 
The Company is an investment company which operates as a collective investment 
vehicle, designed and managed for long term investment. The Board considers 
long term for this purpose to be at least three years and so has assessed the 
Company's viability over this period. However, the life of the Company is not 
intended to be limited to that or any other period. 
 
In assessing the viability of the Company the Board considered the principal 
and emerging risks to which it is exposed, as set out on pages 44 to 48, 
together with mitigating factors. The risks of failure to meet the Company's 
and the Portfolios' investment objectives, contributory market and investment 
risks and the challenges of lack of scale have been considered to be of 
particular importance. The Board also took into account the capabilities of the 
Manager and the varying market conditions already experienced by the Company 
since its launch in 2006, including the impact of Covid-19 from March 2020 on 
global economies and the conflict in Ukraine. Despite the disruption to markets 
from these recent events, the Directors remain confident that the Company's 
investment strategies will continue to serve shareholders well over the longer 
term. On the question of scale, the Board has also concluded that if an 
individual Portfolio became too small it should not cause the Company itself to 
be unviable. 
 
In terms of financial risks to viability, materially all of the investments 
comprising the portfolios are readily realisable. The equity portfolios also 
produce a stream of dividend income, which may fluctuate but which the Board 
expects to continue. The Company has no long term liabilities and the total 
value of the portfolios more than covers the value of the Company's short term 
liabilities and annual operating costs. In arriving at this assessment, the 
Board considered stressed scenario-testing for both income and loan covenants; 
borrowing structure; level of gearing; and the liquidity of the portfolios. 
Consequently, there appears little to no prospect of the Company not being able 
to meet its financial obligations as they fall due in the next three years. 
 
Based on the above, the Board has a reasonable expectation that the Company 
will be able to continue in operation and meet its liabilities as they fall due 
over the three-year period of their assessment. 
 
Audit Committee Report 
 
The audit committee report required by the AIC Corporate Governance Code is set 
out on pages 63 and 64. There are no areas of concern in relation to the 
financial statements to bring to the attention of shareholders. 
 
Duty to Promote the Success of the Company (s.172) 
 
The Directors have a statutory duty under section 172 of the Companies Act 2006 
to promote the success of the Company whilst also having regard to certain 
broader matters, including the need to engage with employees, suppliers, 
customers and others, and to have regard to their interests. The Company has no 
employees and no customers in the traditional sense and in accordance with the 
Company's nature as an investment trust, the Board's principal concern has 
been, and continues to be, the interests of the Company's shareholders taken as 
a whole. In doing so, it has due regard to the impact of its actions on other 
stakeholders including the Manager, other third-party service providers and the 
impact of the Company's operations on the community and the environment which 
are all taken into account during all discussions and as part of the Board's 
decision making. 
 
The Board is committed to maintaining open channels of communication and 
engagement with stakeholders in a manner which they find most meaningful. The 
table below sets out how the Board engages with each of its key stakeholders: 
 
Stakeholder      Key considerations and engagement 
 
Shareholders -   Shareholder relations are given high priority by the Board and the 
continued        Manager. The prime means by which the Company communicates with 
shareholder      shareholders are the annual and half-yearly financial reports, which 
support and      aim to provide shareholders with a full understanding of the 
engagement are   Company's activities and its results. This information is 
important to the supplemented by daily publication of the NAVs of the Company's shares 
business and the via the London Stock Exchange, ad hoc regulatory announcements, 
delivery of its  monthly factsheets and other information on the Manager's website 
long-term        www.invesco.co.uk/investmenttrusts, including pre-investment 
strategy.        information, Key Information Document ('KID'), shareholder circulars, 
Further details  Portfolio disclosures, conversion forms and instructions, Stock 
of our strategy  Exchange announcements, schedule of matters reserved for the Board, 
can be found on  terms of reference of Board Committees, Directors' letters of 
pages 39 to 41.  appointment, the Company's share price and proxy voting results. The 
                 Chairman and Directors welcome contact with shareholders. There is a 
                 regular dialogue between the Manager and individual major 
                 shareholders to discuss aspects of investment performance, governance 
                 and strategy and to listen to shareholder views in order to help 
                 develop a balanced understanding of their issues and concerns. The 
                 Company's corporate broker, Investec Bank plc, is also consulted. 
                 General presentations to institutional shareholders and analysts take 
                 place throughout the year. All meetings between the Manager and 
                 institutional shareholders are reported to the Board. It is the 
                 intention of the Board that the annual financial report and the 
                 notice of the AGM be issued to shareholders so as to provide at least 
                 twenty working days' notice of the AGM. Shareholders wishing to lodge 
                 questions in advance of the AGM are invited to do so in writing to 
                 the Company Secretary at the address given on page 115. 
 
The Manager -    The Board engages with the Manager at every Board meeting and reviews 
the Manager's    the Company's relationships with other service providers, such as the 
performance is   registrar, depositary and custodian, at least annually. During the 
critical for the year the most significant engagement was with the Manager and, in 
Company to       particular the individual Portfolio Managers. At every Board meeting 
successfully     the Directors receive an investor relations update from the Manager, 
deliver its      which details any significant changes in the Company's shareholder 
investment       register, shareholder feedback, as well as noti?cations of any 
strategy and     publications or press articles. 
meet its 
objective to     Maintaining a close and constructive working relationship with the 
provide          Manager is crucial as the Board and the Manager both aim to achieve 
shareholders     consistent, long-term returns in line with the Company's investment 
with consistent  strategy. Important components in the collaboration with the Manager, 
long-term        representative of the Company's culture are: 
returns. Further 
details of the     * Encouraging an open discussion with the Manager, allowing time 
Portfolio            and space for original and innovative thinking; 
Managers           * Recognising that the interests of shareholders and the Manager 
investment           are, for the most part, well aligned, adopting a tone of 
approach can be      constructive challenge, balanced with robust negotiation of the 
found in the         Manager's terms of engagement if those interests should not be 
Portfolio            fully united; 
Manager Reports    * The regular review of underlying stratgegic and investment 
on pages 11          objectives; 
to 31.             * Drawing on Directors' individual experience and knowledge to 
                     support and challenge the Manager in its monitoring of portfolio 
                     companies and engagement with its investee companies; and 
                   * Willingness to make the Directors' experience available to 
                     support and challenge the Manager in the sound long-term 
                     development of its business and resources, recognising that the 
                     long-term health of the Manager's business is in the interests of 
                     shareholders in the Company. 
 
Third-party      The Board through the Manager maintains regular contact with its key 
Service          external service providers and receives regular reporting from them, 
Providers - in   both through the Board and committee meetings, as well as outside of 
order to         the regular meeting cycle. Their advice, as well as their needs and 
function as an   views are routinely taken into account. 
investment trust 
with a premium   The Board (through the Management Engagement Committee) formally 
listing on the   assesses the third-party service providers' performance, fees and 
London Stock     continuing appointment annually to ensure that the key service 
Exchange, the    providers continue to function at an acceptable level and are 
Company relies   appropriately remunerated to deliver the expected level of service. 
on a diverse 
range of         The Audit Committee reviews and evaluates the financial reporting 
reputable        control environments in place at each service provider. There have 
advisers for     been no material changes to the level of service provided by the 
support in       Company's third-party suppliers as a result of the Covid-19 pandemic. 
meeting all 
relevant 
obligations. 
 
Investee         On the Company's behalf the Portfolio Managers engage with investee 
Companies - the  companies, particularly in relation to ESG matters and shares held in 
Board recognises the portfolio are voted at general meetings. 
the importance   Examples of Portfolio Managers engagement with investee companies can 
of good          be found on pages 37 to 38. 
stewardship and 
communication 
with investee 
companies in 
meeting the 
Company's 
investment 
objective and 
strategy. 
 
Regulators - the The Company regularly considers how it meets various regulatory and 
Company can only statutory obligations and how any governance decisions it makes can 
operate as an    have an impact on its stakeholders, both in the shorter and in the 
investment trust longer term. The Board receives reports from the Manager and Auditor 
if it conducts   on their respective regulatory compliance and any inspections or 
its affairs in   reviews that are commissioned by regulatory bodies. 
compliance with 
such status.     The Company is a member of the AIC, which looks after the interests 
Interaction with of investment trusts and provides information to the market. 
regulators such  Comprehensive information relating to the Company can be found on the 
as the Financial AIC website, www.aic.co.uk. 
Conduct 
Authority ('FCA) As a member of the AIC, the Company is welcomed to comment on 
' and Financial  consultations and proposal documents on matters affecting the Company 
Reporting        and annually to nominate and vote for future board members. 
Council ('FRC'), 
who have a 
legitimate 
interest in how 
the Company 
operates in the 
market and 
treats its 
shareholders, 
and industry 
bodies such as 
the Association 
of Investment 
Companies, 
remains an area 
of Board focus. 
 
The mechanisms for engaging with stakeholders are kept under review by the 
Directors and will be discussed on a regular basis at Board meetings to ensure 
that they remain effective. Examples of key discussions and considerations of 
the Board made during the year were: 
 
.      to consider the continued impact of Covid-19 and the impact of global 
events such as the situation in Ukraine on the Company and portfolio holdings; 
 
.      to consider and approve the renewal of the Company's loan facility; 
 
.      to consider and approve four quarterly dividend payments (see page 41 
and 42 for further details); 
 
.      to consider and approve four quarterly share conversions (see page 2 for 
further details); and 
 
.      to consider and approve the ongoing use of share buybacks as part of the 
Board's adopted discount policy (see page 42 for further details). 
 
Board Diversity 
 
The Company's policy on diversity is set out on page 57. The Board takes into 
account many factors, including the balance of skills, knowledge, diversity 
(including gender) and experience, amongst other factors when reviewing its 
composition and appointing new directors. The Board has considered the 
recommendations of the Davies and Hampton-Alexander review as well as the 
Parker review, but does not consider it appropriate to establish targets or 
quotas in this regard. There are no set targets in respect of diversity, 
including gender. However, diversity forms part of both the Nomination 
Committee and main Board's deliberations when considering new appointments. The 
Company's success depends on suitably qualified candidates who are willing, and 
have the time, to be a director of the Company. Summary biographical details of 
the Directors are set out on page 54. The Company has no employees. 
 
The Board notes the new FCA rules on diversity and inclusion on company boards 
introduced for accounting periods starting on or after 1 April 2022 and will 
report fully on compliance with those rules in the Company's annual financial 
report for the year ended 31 May 2023. However, in compliance with two of the 
three new FCA rules, at the year end the Board comprised five directors, two of 
whom are women, thereby constituting 40% female representation and both the 
Chairman of the Board and Senior Independent Director appointments are women. 
 
Environment, Social and Governance ('ESG') Matters 
 
In relation to the portfolios, the Company has delegated the management of the 
Company's investments to the Manager, who has an ESG Guiding Framework which 
sets out a number of principles that are considered in the context of its 
responsibility to manage investments in the financial interests of 
shareholders. 
 
The Manager is committed to being a responsible investor and applies, and is a 
signatory to, the United Nations Principles for Responsible Investment ('PRI'), 
which demonstrates its extensive efforts in terms of ESG integration, active 
ownership, investor collaboration and transparency. The Manager achieved a 
global 'A+' rating for its overall approach to responsible investment for the 
last four years as well as achieving an 'A' or 'A+' across all categories in 
the latest available assessment period from PRI for Strategy and Governance. In 
addition, the Manager is an active member of the UK Sustainable Investment and 
Finance Association as well as a supporter of the Task Force for Climate 
Related Financial Disclosure ('TCFD') since 2019. The Manager published its 
Climate Change report in line with the TCFD in November 2021. Although TCFD 
does not apply directly for the Company at present, the Board confirms that it 
will comply with all reporting regulations as they are implemented. 
 
The Manager has also complied with the spirit of the Sustainable Finance 
Disclosure Regulation ('SFDR') which came into effect within the European Union 
on 10 March 2021 and introduces a number of sustainability-related disclosure 
requirements for financial market participants. 
 
The wider Invesco investment team incorporates ESG considerations in its 
investment process as part of the evaluation of new opportunities, with 
identified ESG concerns feeding into the final investment decision and 
assessment of relative value. The Portfolio Managers make their own conclusions 
about the ESG characteristics of each investment held and about the overall ESG 
characteristics of the portfolios, although third party ESG ratings may inform 
their view. Additionally, the Manager's ESG team provides formalised ESG 
portfolio monitoring. This is a rigorous semi-annual process where the 
portfolios are reviewed from an ESG perspective. 
 
Regarding stewardship, the Board considers that the Company has a 
responsibility as a shareholder towards ensuring that high standards of 
corporate governance are maintained in the companies in which it invests. To 
achieve this, the Board does not seek to intervene in daily management 
decisions, but aims to support high standards of governance and, where 
necessary, will take the initiative to ensure those standards are met. The 
principal means of putting shareholder responsibility into practice is through 
the exercise of voting rights. The Company's voting rights are exercised on an 
informed and independent basis. 
 
Further details are shown in the ESG Statement from the Manager on pages 34 to 
38. 
 
The Company's stewardship functions have been delegated to the Manager. The 
Manager has adopted a clear and considered policy towards its responsibility as 
a shareholder on behalf of the Company. As part of this policy, the Manager 
takes steps to satisfy itself about the extent to which the companies in which 
it invests look after shareholders' value and comply with local recommendations 
and practices, such as the UK Corporate Governance Code. The Manager is also a 
Tier 1 signatory of the Financial Reporting Council's Stewardship Code, which 
seeks to improve the quality of engagement between institutional investors and 
companies to help improve long-term returns to shareholders and the efficient 
exercise of governance responsibilities. 
 
A copy of the current Manager's Stewardship Policy can be found at 
www.invesco.co.uk. 
 
A greenhouse gas emissions statement is included in the Directors' Report on 
page 58. 
 
Modern Slavery 
 
As an investment vehicle the Company does not provide goods or services in the 
normal course of business, and does not have customers. Accordingly, the 
Directors consider that the Company is not within the scope of the Modern 
Slavery Act 2015. 
 
This Strategic Report was approved by the Board on 3 August 2022. 
 
Invesco Asset Management Limited 
 
Company Secretary 
 
Statement of Directors' Responsibilities 
 
IN RESPECT OF THE PREPARATION OF THE ANNUAL FINANCIAL REPORT. 
 
The Directors are responsible for preparing the Annual Financial Report in 
accordance with applicable law and regulations. 
 
Company law requires the Directors to prepare financial statements for each 
financial year. Under the law the Directors have elected to prepare financial 
statements in accordance with UK Accounting Standards, including FRS 102 'The 
Financial Reporting Standard applicable in the UK and Republic of Ireland.' 
Under company law, the Directors must not approve the financial statements 
unless they are satisfied that they give a true and fair view of the state of 
affairs of the Company and of the profit or loss of the Company for that 
period. 
 
In preparing these financial statements, the Directors are required to: 
 
.        select suitable accounting policies and then apply them consistently; 
 
.        make judgements and estimates that are reasonable and prudent; 
 
.        state whether applicable accounting standards have been followed, 
subject to any material departures disclosed and explained in the financial 
statements; and 
 
.        prepare the financial statements on the going concern basis unless it 
is inappropriate to presume that the Company will continue in business. 
 
The Directors are responsible for keeping adequate accounting records that are 
sufficient to show and explain the Company's transactions and disclose with 
reasonable accuracy at any time the financial position of the Company and which 
enable them to ensure that the financial statements comply with the Companies 
Act 2006. They have general responsibility for taking such steps as are 
reasonably open to them to safeguard the assets of the Company and to prevent 
and detect fraud and other irregularities. 
 
Under applicable law and regulations, the Directors are also responsible for 
preparing a Strategic Report, a Directors' Report, which includes a Corporate 
Governance Statement, and a Directors' Remuneration Report that comply with 
that law and those regulations. 
 
The Directors confirm that: 
 
.        in so far as they are aware, there is no relevant audit information of 
which the Company's Auditor is unaware; and 
 
.        each Director has taken all the steps that they ought to have taken as 
a Director in order to make themselves aware of any relevant audit information 
and to establish that the Company's Auditor is aware of that information. 
 
The Directors of the Company each confirm to the best of their knowledge that: 
 
.        the financial statements, prepared in accordance with the applicable 
set of accounting standards, give a true and fair view of the assets, 
liabilities, financial position, net return and cash flows of the Company; and 
 
.        this Annual Financial Report includes a fair review of the development 
and performance of the business and the position of the Company together with a 
description of the principal risks and uncertainties that it faces. 
 
The Directors consider that this Annual Financial Report, taken as a whole, is 
fair, balanced and understandable and provides the information necessary for 
shareholders to assess the Company's position and performance, business model 
and strategy. 
 
Signed on behalf of the Board of Directors 
Victoria Muir 
 
Chairman 
 
3 August 2022 
 
Electronic Publication 
 
The Annual Financial Report is published on the Manager's website 
www.invesco.co.uk/investmenttrusts. The Directors are responsible for the 
maintenance and integrity of the corporate and financial information included 
on the Company's website, which is maintained by the Company's Manager. 
Legislation in the UK governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions. 
 
Income Statement 
 
FOR THE YEARED 31 MAY 
 
                                              2022                    2021 
 
                                     Revenue Capital   Total Revenue Capital   Total 
 
                               Notes   £'000   £'000   £'000   £'000   £'000   £'000 
 
Gains on investments held at       9       -   9,824   9,824       -  28,391  28,391 
fair value 
 
Gains/(losses) on derivative      10      72    (32)      40      38   1,701   1,739 
instruments 
 
Gains/(losses) on foreign                  -      43      43       -   (104)   (104) 
exchange 
 
Income                             2   6,988       -   6,988   3,184     539   3,723 
 
Investment management fees         3   (360)   (836) (1,196)   (198)   (454)   (652) 
 
Performance fee waiver             3       -       -       -       -     531     531 
 
Other expenses                     4   (502)     (6)   (508)   (385)    (23)   (408) 
 
Net return before finance              6,198   8,993  15,191   2,639  30,581  33,220 
costs and taxation 
 
Finance costs                      5    (70)   (165)   (235)    (38)    (90)   (128) 
 
Return before taxation                 6,128   8,828  14,956   2,601  30,491  33,092 
 
Tax                                6   (191)       -   (191)   (230)       -   (230) 
 
Return after taxation for              5,937   8,828  14,765   2,371  30,491  32,862 
the financial year 
 
Return per ordinary share          7 
(basic and diluted) 
 
- UK Equity Share Portfolio            6.00p   6.07p  12.07p   3.90p  41.42p  45.32p 
 
- Global Equity Income Share           4.85p  16.66p  21.51p   3.95p  57.28p  61.23p 
Portfolio 
 
- Balanced Risk Allocation             1.05p (0.83)p   0.22p (0.17)p  33.10p  32.93p 
Share Portfolio 
 
- Managed Liquidity Share            (0.07)p (0.28)p (0.35)p   1.35p   0.95p   2.30p 
Portfolio 
 
The total column of this statement represents the Company's Income Statement 
prepared in accordance with UK Accounting Standards. The return after taxation 
is the total comprehensive income and therefore no additional statement of 
other comprehensive income is presented. The supplementary revenue and capital 
columns are presented for information purposes in accordance with the Statement 
of Recommended Practice issued by the Association of Investment Companies. All 
items in the above statement derive from continuing operations of the Company. 
No operations were acquired or discontinued in the current year. Income 
Statements for the different Share classes are shown on pages 15, 22, 28 and 32 
for the UK Equity, Global Equity Income, Balanced Risk Allocation and Managed 
Liquidity Share Portfolios respectively. 
 
The accompanying accounting policies and notes are an integral part of these 
financial statements. 
 
Statement of Changes in Equity 
 
FOR THE year ended 31 May 
 
                                                        Capital 
 
                             Share    Share  Special redemption  Capital  Revenue 
 
                           capital  premium  reserve    reserve  reserve  reserve    Total 
 
                    Notes    £'000    £'000    £'000      £'000    £'000    £'000    £'000 
 
At 31 May 2020               1,050    1,290   55,454        359   49,568     (52)  107,669 
 
Cancellation of                  -        -      (5)          5        -        -        - 
deferred shares 
 
Shares bought back               -        - (28,704)          -        -        - (28,704) 
and held in 
treasury 
 
Share conversions              (1)        -        1          -        -        -        - 
 
Return after                     -        -        -          -   30,491    2,371   32,862 
taxation per the 
income statement 
 
Dividends paid          8        -        -  (1,283)          -        -  (2,346)  (3,629) 
 
Issue of shares on             666  121,859        -          -        -        -  122,525 
business 
combination 
 
Cost of shares                   -    (159)        -          -        -        -    (159) 
issued in respect 
of the business 
combination 
 
At 31 May 2021               1,715  122,990   25,463        364   80,059     (27)  230,564 
 
Cancellation of                  -        -      (8)          8        -        -        - 
deferred shares 
 
Shares bought back     15        -        - (10,438)          - (13,485)        - (23,923) 
and held in 
treasury 
 
Share conversions              (6)        -    4,478          -  (4,472)        -        - 
 
Return after                     -        -        -          -    8,828    5,937   14,765 
taxation per the 
income statement 
 
Dividends paid          8        -        -    (560)          -    (516)  (5,909)  (6,985) 
 
At 31 May 2022               1,709  122,990   18,935        372   70,414        1  214,421 
 
The accompanying accounting policies and notes are an integral part of these 
financial statements. 
 
Balance Sheet 
 
AS AT 31 MAY 2022 
 
                                                       Global   Balanced 
 
                                                   UK  Equity       Risk   Managed  Company 
 
                                               Equity  Income Allocation Liquidity    Total 
 
                                       Notes    £'000   £'000      £'000     £'000    £'000 
 
Fixed assets 
 
Investments held at fair value             9  158,450  67,630      6,233     1,445  233,758 
through profit or loss 
 
Current assets 
 
Derivative assets held at fair value      10        -       -        362         -      362 
through profit or loss 
 
Debtors                                   11      804     351        331         8    1,494 
 
Cash and cash equivalents                         322     215        401         9      947 
 
                                                1,126     566      1,094        17    2,803 
 
Creditors: amounts falling due 
within one year 
 
Derivative liabilities held at fair       10        -       -      (225)         -    (225) 
value through profit or loss 
 
Other creditors                           12    (448)   (206)       (17)     (138)    (809) 
 
Bank facility                             13 (15,754) (5,352)          -         - (21,106) 
 
                                             (16,202) (5,558)      (242)     (138) (22,140) 
 
Net current (liabilities)/assets             (15,076) (4,992)        852     (121) (19,337) 
 
Net assets                                    143,374  62,638      7,085     1,324  214,421 
 
Capital and reserves 
 
Share capital                          14(a)    1,085     412        106       106    1,709 
 
Share premium                             15  121,700       -      1,290         -  122,990 
 
Special reserve                           15        -  17,211      1,000       724   18,935 
 
Capital redemption reserve                15       80      81         27       184      372 
 
Capital reserve                           15   20,509  44,934      4,683       288   70,414 
 
Revenue reserve                           15        -       -       (21)        22        1 
 
Shareholders' funds                           143,374  62,638      7,085     1,324  214,421 
 
Net asset value per ordinary share        16  194.35p 249.00p    169.87p   106.92p 
 
The financial statements were approved and authorised for issue by the Board of 
Directors on 3 August 2022. 
 
Signed on behalf of the Board of Directors 
 
Victoria Muir 
Chairman 
 
The accompanying accounting policies and notes are an integral part of these 
financial statements. 
 
Balance Sheet 
 
AS AT 31 MAY 2021 
 
                                                       Global   Balanced 
 
                                                   UK  Equity       Risk   Managed  Company 
 
                                               Equity  Income Allocation Liquidity    Total 
 
                                       Notes    £'000   £'000      £'000     £'000    £'000 
 
Fixed assets 
 
Investments held at fair value             9  176,434  63,902      5,741     1,809  247,886 
through profit or loss 
 
Current assets 
 
Derivative assets held at fair value      10        -       -        292         -      292 
through profit or loss 
 
Debtors                                   11    1,040     299        190        36    1,565 
 
Cash and cash equivalents                       2,331     137        704        32    3,204 
 
                                                3,371     436      1,186        68    5,061 
 
Creditors: amounts falling due 
within one year 
 
Derivative liabilities held at fair       10        -       -       (18)         -     (18) 
value through profit or loss 
 
Other creditors                           12  (1,627)   (185)       (19)     (139)  (1,970) 
 
Bank facility                             13 (11,844) (8,551)          -         - (20,395) 
 
                                             (13,471) (8,736)       (37)     (139) (22,383) 
 
Net current (liabilities)/assets             (10,100) (8,300)      1,149      (71) (17,322) 
 
Net assets                                    166,334  55,602      6,890     1,738  230,564 
 
Capital and reserves 
 
Share capital                          14(a)    1,111     392        103       109    1,715 
 
Share premium                             15  121,700       -      1,290         -  122,990 
 
Special reserve                           15    9,224  14,305        817     1,117   25,463 
 
Capital redemption reserve                15       74      81         27       182      364 
 
Capital reserve                           15   34,225  40,824      4,718       292   80,059 
 
Revenue reserve                           15        -       -       (65)        38     (27) 
 
Shareholders' funds                           166,334  55,602      6,890     1,738  230,564 
 
Net asset value per ordinary share        16  188.33p 233.91p    169.33p   108.11p 
 
The accompanying accounting policies and notes are an integral part of these 
financial statements. 
 
Cash Flow Statement 
 
FOR THE YEARED 31 MAY 
 
                                                                         2022      2021 
 
                                                              Notes     £'000     £'000 
 
Cash flows from operating activities 
 
Net return before finance costs and taxation                           15,191    33,220 
 
Tax on overseas income                                                  (191)     (230) 
 
Adjustments for: 
 
  Purchase of investments                                            (50,081) (111,945) 
 
  Sale of investments                                                  74,109   129,265 
 
  Sale of futures                                                         177     1,715 
 
                                                                       24,205    19,035 
 
Scrip dividends                                                         (676)       (9) 
 
Gains on investments                                                  (9,824)  (28,391) 
 
Gains on derivatives                                                     (40)   (1,739) 
 
(Increase)/decrease in debtors                                          (449)       650 
 
Decrease in creditors                                                   (213)     (460) 
 
Net cash inflow from operating activities                              28,003    22,076 
 
Cash flows from investing activities 
 
Cash acquired following business combination(1)                             -     3,342 
 
Net cash inflow from investing activities                                   -     3,342 
 
Cash flows from financing activities 
 
Interest paid on bank facility                                          (234)     (128) 
 
Increase in bank facility                                                 708    10,612 
 
Costs associated with the issue of shares on business                       -     (159) 
combination(1) 
 
Share buy back costs                                                 (23,749)  (29,357) 
 
Equity dividends paid                                             8   (6,985)   (3,629) 
 
Net cash outflow from financing activities                           (30,260)  (22,661) 
 
Net (decrease)/increase in cash and cash equivalents                  (2,257)     2,757 
 
Cash and cash equivalents at the start of the year                      3,204       447 
 
Cash and cash equivalents at the end of the year                          947     3,204 
 
Reconciliation of cash and cash equivalents to the 
Balance Sheet is as follows: 
 
Cash held at custodian                                                    747     1,114 
 
Invesco Liquidity Funds plc - Sterling, money market fund                 200     2,090 
 
Cash and cash equivalents                                                 947     3,204 
 
Cash flow from operating activities includes: 
 
Interest received                                                         (1)       (1) 
 
Dividends received                                                      5,732     3,107 
 
 
 
                                                                  At              At 
 
                                                              1 June      Cash     31 May 
 
                                                                2021     Flows       2022 
 
                                                               £'000     £'000      £'000 
 
Analysis of changes in net debt: 
 
Cash and cash equivalents                                      3,204   (2,257)        947 
 
Bank facility                                               (20,392)     (708)   (21,100) 
 
Total                                                       (17,188)   (2,965)   (20,153) 
 
 
(1)  For definition of business combination used in this annual financial 
report, refer to Glossary of Terms and Alternative Performance Measures on page 
116. 
 
The accompanying accounting policies and notes are an integral part of these 
financial statements. 
 
Notes to the Financial Statements 
 
1.     Accounting Policies 
 
Accounting policies describe the Company's approach to recognising and 
measuring transactions during the year and the position of the Company at the 
year end. 
 
The principal accounting policies are set out below: 
 
(a)     Basis of Preparation 
 
         (i)      Accounting Standards Applied 
 
The financial statements have been prepared in accordance with applicable 
United Kingdom Accounting Standards, including FRS 102 'the Financial Reporting 
Standard applicable in the UK and Republic of Ireland', and applicable law (UK 
Generally Accepted Accounting Practice (UK GAAP)) and with the Statement of 
Recommended Practice Financial Statements of Investment Trust Companies and 
Venture Capital Trusts, issued by the Association of Investment Companies (AIC) 
in April 2021. The financial statements are issued on a going concern basis as 
disclosed on page 57. 
 
The accounting policies applied to these financial statements are consistent 
with those applied for the preceding year. 
 
         (ii)     Definitions used in the financial statements 
 
'Portfolio'   the UK Equity Share Portfolio, the Global Equity Income Share 
Portfolio, the Balanced Risk Allocation Share Portfolio and/or the Managed 
Liquidity Share Portfolio (as the case may be). Each comprises, or may include, 
an investment portfolio, derivative instruments, cash, loans, debtors and other 
creditors, which together make up the net assets as shown in the balance sheet. 
 
'Share'        UK Equity Share, Global Equity Income Share, Balanced Risk 
Allocation Share, Managed Liquidity Share and/or Deferred Share (as the case 
may be). 
 
The UK Equity, Global Equity Income, Balanced Risk Allocation and Managed 
Liquidity Share Portfolios' income statements and summaries of net assets 
(shown on pages 15, 22, 28, 32 and 33) do not represent statutory accounts, are 
not required under UK Generally Accepted Accounting Practice and the auditor 
does not express an opinion on each individual portfolio. These have been 
disclosed to assist shareholders' understanding of the assets and liabilities, 
and income and expenses of the different Share classes. 
 
In order to better reflect the activities of an investment trust company and in 
accordance with guidance issued by the AIC, supplementary information which 
analyses the income statement between items of a revenue and capital nature has 
been presented alongside the income statement. 
 
         (iii)    Functional and presentational currency 
 
The Company's investments are made in several currencies, however, the 
financial statements are presented in sterling, which is the Company's 
functional currency. In arriving at this conclusion, the Directors considered 
that the Company's shares are listed and traded on the London Stock Exchange, 
the shareholder base is predominantly in the United Kingdom and the Company 
pays dividends and expenses in sterling. 
 
         (iv)    Transactions and balances 
 
Transactions in foreign currency, whether of a revenue or capital nature, are 
translated to sterling at the rates of exchange ruling on the dates of such 
transactions. Foreign currency assets and liabilities are translated to 
sterling at the rates of exchange ruling at the balance sheet date. Any gains 
or losses, whether realised or unrealised, are taken to the capital reserve or 
to the revenue account, depending on whether the gain or loss is of a capital 
or revenue nature. All gains and losses are recognised in the income statement. 
 
         (v)     Significant Accounting Estimates and Judgements 
 
The preparation of the financial statements may require the Directors to make 
estimations where uncertainty exists. It also requires the Directors to make 
judgements, estimates and assumptions, in the process of applying the 
accounting policies. There have been no significant judgements, estimates or 
assumptions for the current or preceding year. 
 
(b)     Financial Instruments 
 
The Company has chosen to apply the provisions of Sections 11 and 12 of FRS 102 
in full in respect of the financial instruments, which is explained below. 
 
         (i)      Recognition of Financial Assets and Financial Liabilities 
 
The Company recognises financial assets and financial liabilities when the 
Company becomes a party to the contractual provisions of the instrument. The 
Company will offset financial assets and financial liabilities if the Company 
has a legally enforceable right to set off the recognised amounts and interests 
and intends to settle on a net basis. 
 
         (ii)     Derecognition of Financial Assets 
 
The Company derecognises a financial asset when the contractual rights to the 
cash flows from the asset expire or it transfers the right to receive the 
contractual cash flows on the financial asset in a transaction in which 
substantially all the risks and rewards of ownership of the financial asset are 
transferred. Any interest in the transferred financial asset that is created or 
retained by the Company is recognised as an asset. 
 
         (iii)    Derecognition of Financial Liabilities 
 
The Company derecognises financial liabilities when its obligations are 
discharged, cancelled or expire. 
 
         (iv)    Trade Date Accounting 
 
Purchases and sales of financial assets are recognised on trade date, being the 
date on which the Company commits to purchase or sell the assets. 
 
         (v)     Classification and measurement of financial assets and 
financial liabilities 
 
Financial assets 
 
The Company's investments, including financial derivative instruments, are 
classified as held at fair value through profit or loss. 
 
Financial assets held at fair value through profit or loss are initially 
recognised at fair value, which is taken to be their cost, with transaction 
costs expensed in the income statement, and are subsequently valued at fair 
value. 
 
Fair value for investments, including financial derivative instruments, that 
are actively traded in organised financial markets is determined by reference 
to stock exchange quoted bid prices at the balance sheet date. For investments 
that are not actively traded or where active stock exchange quoted bid prices 
are not available, fair value is determined by reference to a variety of 
valuation techniques including broker quotes and price modelling. Where there 
is no active market, unlisted/illiquid investments are valued by the Directors 
at fair value with regard to the International Private Equity and Venture 
Capital Valuation Guidelines and on recommendations from Invesco's Pricing 
Committee, both of which use valuation techniques such as earnings multiples, 
recent arm's length transactions and net assets. 
 
Financial liabilities 
 
Financial liabilities, excluding financial derivative instruments but including 
borrowings, are initially measured at fair value, net of transaction costs and 
are subsequently measured at amortised cost using the effective interest 
method. 
 
(c)     Derivatives and hedging 
 
Derivative instruments are valued at fair value in the balance sheet. 
Derivative instruments may be capital or revenue in nature and, accordingly, 
changes in their fair value are recognised in revenue or capital in the income 
statement as appropriate. 
 
Forward currency contracts entered into for hedging purposes are valued at the 
appropriate forward exchange rate ruling at the balance sheet date. Profits or 
losses on the closure or revaluation of positions are included in capital 
reserves. 
 
Futures contracts may be entered into for hedging purposes and any profits and 
losses on the closure or revaluation of positions are included in capital 
reserves. Where futures contracts are used for investment exposure any income 
element arising on bond futures is recognised as a gain on derivative 
instruments in the income statement and shown in revenue. 
 
(d)     Cash and cash equivalents 
 
Cash and cash equivalents may comprise cash (including short term deposits 
which are readily convertible to a known amount of cash and are subject to an 
insignificant risk of change in value) as well as cash equivalents, including 
money market funds. Investments are regarded as cash equivalents if they meet 
all of the following criteria: highly liquid investments held in the Company's 
base currency that are readily convertible to a known amount of cash, are 
subject to an insignificant risk of change in value, have a maturity of less 
than three months at date of origination and provide a return no greater than 
the rate of a three-month high quality government bond. For the Balanced Risk 
Allocation and Managed Liquidity Portfolios, cash and cash equivalents do not 
include investments in Invesco Liquidity Funds plc - Sterling as this forms 
part of those Portfolio's fixed assets. 
 
(e)     Income 
 
Dividend income from investments is recognised when the shareholders' right to 
receive payment has been established, normally the ex-dividend date. UK 
dividends are stated net of related tax credits. Interest income arising from 
cash is recognised on an accruals basis and underwriting commission is 
recognised as earned. Special dividends are taken to revenue unless they arise 
from a return of capital, when they are allocated to capital in the income 
statement. Income from fixed income securities is recognised in the income 
statement using the effective interest method. 
 
(f)     Expenses and finance costs 
 
All expenses are accounted for on an accruals basis. Expenses are charged to 
the income statement and shown in revenue except where expenses are presented 
as capital items when a connection with the maintenance or enhancement of the 
value of the investments held can be demonstrated and thus management fees and 
finance costs are charged to revenue and capital to reflect the Directors' 
expected long-term view of the nature of the investment returns of each 
Portfolio. 
 
Expenses charged to the Company in relation to a specific Portfolio are charged 
directly to that Portfolio. 
 
Expenses charged to the Company that are common to more than one Portfolio are 
allocated between those Portfolios in the same proportions as the net assets of 
each Portfolio at the latest conversion date. 
 
Finance costs are accounted for on an accruals basis using the effective 
interest rate method. 
 
The management fees and finance costs are charged in accordance with the 
Board's expected split of long-term returns, in the form of capital gains and 
income, to the applicable Portfolio as follows: 
 
                                                                 Revenue       Capital 
 
Portfolio                                                        Reserve       Reserve 
 
UK Equity                                                            30%           70% 
 
Global Equity Income                                                 30%           70% 
 
Balanced Risk Allocation                                             30%           70% 
 
Managed Liquidity                                                   100%             - 
 
(g)     Dividends 
 
Dividends are accrued in the financial statements when there is an obligation 
to pay the dividends at the balance sheet date. 
 
(h)     Taxation 
 
Tax expense represents the sum of tax currently payable and deferred tax. Any 
tax payable is based on taxable profit for the period. Taxable profit differs 
from profit before tax as reported in the income statement because it excludes 
items of income or expenses that are taxable or deductible in other years and 
it further excludes items that are never taxable or deductible. The Company's 
liability for current tax is calculated using tax rates that have been enacted 
or substantively enacted by the balance sheet date. 
 
For the Company, any allocation of tax relief to capital is based on the 
marginal basis, such that tax allowable capital expenses are offset against 
taxable income. Where individual Portfolios have extra tax capacity arising 
from unused tax allowable expenses which can be used by a different Portfolio, 
this extra tax capacity is transferred between the Portfolios at a valuation of 
1% of the amount transferred. 
 
Deferred taxation is recognised in respect of all timing differences that have 
originated but not reversed at the balance sheet date where transactions or 
events that result in an obligation to pay more tax or a right to pay less tax 
in the future have occurred. Timing differences are differences between the 
Company's taxable profits and its results as stated in the financial 
statements. Deferred taxation assets are recognised where, in the opinion of 
the Directors, it is more likely than not that these amounts will be realised 
in future periods. 
 
A deferred tax asset has not been recognised in respect of surplus management 
expenses as the Company is unlikely to have sufficient future taxable revenue 
to offset against these. 
 
Investment trusts which have approval under the appropriate tax regulations are 
not liable for taxation on capital gains. 
 
2.     Income 
 
This note shows the income generated from the portfolios (investment assets) of 
the Company and income received from any other source. 
 
                                                 Global   Balanced 
 
                                          UK     Equity       Risk    Managed    Company 
 
                                      Equity     Income Allocation  Liquidity      Total 
 
2022                                   £'000      £'000      £'000      £'000      £'000 
 
Income from investments: 
 
UK dividends: 
 
  - ordinary dividends                 3,694        204          -          -      3,898 
 
  - special dividends                    438         91          -          -        529 
 
  - scrip dividends                      676          -          -          -        676 
 
                                       4,808        295          -          -      5,103 
 
Overseas dividends: 
 
  - ordinary dividends                   561      1,248          8          5      1,822 
 
  - special dividends                      -         58          -          -         58 
 
Interest from Treasury bills               -          -          4          -          4 
 
                                       5,369      1,601         12          5      6,987 
 
Other income: 
 
Rebates of management fee                  -          -          -          1          1 
 
Total income                           5,369      1,601         12          6      6,988 
 
 
 
                                                  Global   Balanced 
 
                                           UK     Equity       Risk    Managed    Company 
 
                                       Equity     Income Allocation  Liquidity      Total 
 
2021                                    £'000      £'000      £'000      £'000      £'000 
 
Income from investments: 
 
UK dividends: 
 
  - ordinary dividends                  1,460        142          -          -      1,602 
 
  - scrip dividends                         9          -          -          -          9 
 
                                        1,469        142          -          -      1,611 
 
Overseas dividends: 
 
  - ordinary dividends                    187      1,147          2          3      1,339 
 
  - special dividends                       -        192          -          -        192 
 
Interest from Treasury bills                -          -          2          -          2 
 
                                        1,656      1,481          4          3      3,144 
 
Other income: 
 
Rebates of management fee                   -          -          -      40(1)         40 
 
Total income                            1,656      1,481          4         43      3,184 
 
(1)    Includes a £34,000 (1.40p per share) refund of unpaid management fees in 
respect of historic overcharges. As reported in the 2017 Half-Year Financial 
Report, it was agreed that the refund would be paid directly to affected 
shareholders and any unpaid amounts would be returned to the Company. 
 
Special dividends recognised as revenue for the year are as shown above. There 
were no special dividends recognised in capital in respect of any of the four 
Portfolios during the year (2021: £539,000 in respect of the UK Equity 
Portfolio). 
 
3.     Investment management and performance fees 
 
This note shows the fees paid to the Manager. These are made up of the 
individual Portfolio investment management fees calculated quarterly on the 
basis of their net asset values and the performance fees of the UK Equity and 
Global Equity Income Portfolios. 
 
                                                  Global   Balanced 
 
                                           UK     Equity       Risk    Managed    Company 
 
                                       Equity     Income Allocation  Liquidity      Total 
 
2022                                    £'000      £'000      £'000      £'000      £'000 
 
Investment management fee: 
 
- charged to revenue                      240        102         16          2        360 
 
- charged to capital                      561        237         38          -        836 
 
Total investment management fee           801        339         54          2      1,196 
 
                                                  Global   Balanced 
 
                                           UK     Equity       Risk    Managed    Company 
 
                                       Equity     Income Allocation  Liquidity      Total 
 
2021                                    £'000      £'000      £'000      £'000      £'000 
 
Investment management fee: 
 
- charged to revenue                       91         88         16          3        198 
 
- charged to capital                      213        204         37          -        454 
 
Total investment management fee           304        292         53          3        652 
 
Details of the investment management agreement are given on pages 57 and 58 in 
the Directors' Report. 
 
During the 2021 financial year, following the issue of shares pursuant to the 
Scheme of Reconstruction of Invesco Income Growth Trust plc ('the business 
combination'), an improved fee structure was proposed for the UK Equity Share 
Portfolio and Global Equity Income Share Portfolio. The management fee payable 
by the Company in respect of these two share portfolios will be reduced to 
0.55% per annum on the net assets of up to £100 million, and 0.50% per annum on 
the net assets of over £100 million. 
 
As a result of the business combination in 2021, the Manager agreed to remove 
the performance fee arrangements which were in place for both the UK Equity and 
Global Equity Income Share Portfolios. Furthermore, the historical performance 
fee accrued on the UK Equity Share Portfolio of £531,000 was also waived by the 
Manager as a benefit towards the costs of the business combination and 
written-back to capital in the Income Statement in the 2021 financial year. 
 
4.     Other Expenses 
 
The other expenses of the Company, including those paid to Directors and the 
auditor, are presented below; those paid to the Directors and the auditor are 
separately identified. 
 
                                                Global   Balanced 
 
                                         UK     Equity       Risk    Managed    Company 
 
                                     Equity     Income Allocation  Liquidity      Total 
 
2022                                  £'000      £'000      £'000      £'000      £'000 
 
Charged to revenue: 
 
Directors' remuneration (i)(ii)         103         38          4          1        146 
 
Auditor's fees (iii): 
 
  - for the audit of the                 34         15          2          1         52 
Company's financial statements 
 
Other expenses (iv)                     200         83         18          3        304 
 
                                        337        136         24          5        502 
 
 
Charged to capital: 
 
Custodian transaction charges             2          2          2          -          6 
 
Total                                   339        138         26          5        508 
 
                                                Global   Balanced 
 
                                         UK     Equity       Risk    Managed    Company 
 
                                     Equity     Income Allocation  Liquidity      Total 
 
2021                                  £'000      £'000      £'000      £'000      £'000 
 
Charged to revenue: 
 
Directors' remuneration (i)(ii)          60         55          8          2        125 
 
Auditor's fees (iii): 
 
  - for the audit of the                 34         11          1          1         47 
Company's financial statements 
 
Other expenses (iv)                     111         73         25          4        213 
 
                                        205        139         34          7        385 
 
Charged to capital: 
 
Custodian transaction charges            17          4          2          -         23 
 
Total                                   222        143         36          7        408 
 
(i)      The Director's Remuneration Report provides information on Directors' 
fees. Included within other expenses is £13,000 (2021: £12,000) of employer's 
national insurance payable on Directors' remuneration. 
 
(ii)     As at 31 May 2022, the amounts outstanding on Directors' fees and 
employer's national insurance was £26,000 (2021: £26,000). 
 
(iii)    The Auditor's fees shown include out of pocket expenses, but exclude 
VAT, which is included in other administrative expenses. In the 2021 financial 
year Grant Thornton UK LLP provided non-audit services related to work on the 
business combination with Invesco Income Growth Trust plc, which amounted to £ 
23,000. This amount was recognised in investment gains and losses as part of 
professional fees in respect of the business combination. 
 
(iv)    Includes fees for depositary, broker and registrar, and also printing, 
postage and listing costs. 
 
5.     Finance Costs 
 
Finance costs arise on any borrowing the Company has utilised in the year. The 
Company has a committed £40 million revolving credit facility (see note 13 for 
further details). 
 
                                                   Global   Balanced 
 
                                              UK   Equity       Risk   Managed  Company 
 
                                          Equity   Income Allocation Liquidity    Total 
 
2022                                       £'000    £'000      £'000     £'000    £'000 
 
Interest payable on borrowings 
repayable within one year as follows: 
 
  - charged to revenue                        50       20          -         -       70 
 
  - charged to capital                       118       47          -         -      165 
 
Total                                        168       67          -         -      235 
 
2021 
 
Interest payable on borrowings 
repayable within one year as follows: 
 
  - charged to revenue                        20       18          -         -       38 
 
  - charged to capital                        48       42          -         -       90 
 
Total                                         68       60          -         -      128 
 
6.     Tax 
 
As an investment trust, the Company pays no tax on capital gains. However, the 
Company suffers tax on certain overseas dividends that is irrecoverable and 
this note shows details of the tax charge. In addition, this note clarifies the 
basis for the Company having no deferred tax asset or liability. 
 
(a)     Tax charge 
 
                                                       Global   Balanced 
 
                                                  UK   Equity       Risk   Managed  Company 
 
                                              Equity   Income Allocation Liquidity    Total 
 
2022                                           £'000    £'000      £'000     £'000    £'000 
 
Overseas tax                                      45      146          -         -      191 
 
2021 
 
Overseas tax                                      18      212          -         -      230 
 
The accounting policy for taxation is disclosed in note 1(h). 
 
(b)     Reconciliation of tax charge 
 
                                                   Global   Balanced 
 
                                             UK    Equity       Risk   Managed   Company 
 
                                         Equity    Income Allocation Liquidity     Total 
 
2022                                      £'000     £'000      £'000     £'000     £'000 
 
Return before taxation                    9,499     5,453          9       (5)    14,956 
 
Theoretical tax at the current 
 
UK Corporation Tax rate of 19.00%         1,805     1,036          2       (1)     2,842 
(2021: 19.00%) 
 
Effect of: 
 
- Non-taxable losses on investments     (1,035)     (832)        (2)         1   (1,868) 
and derivatives 
 
- Non-taxable losses on foreign               2       (3)          -         -       (1) 
exchange 
 
- Non-taxable scrip dividends             (128)         -          -         -     (128) 
 
- Non-taxable UK dividends                (677)      (39)          -         -     (716) 
 
- Non-taxable UK special dividends         (83)      (15)          -         -      (98) 
 
- Non-taxable overseas dividends          (107)     (218)          -         -     (325) 
 
- Non-taxable overseas special                -      (13)          -         -      (13) 
dividends 
 
- Foreign tax expensed                        -       (2)          -         -       (2) 
 
- Overseas tax                               45       146          -         -       191 
 
- Accrued income taxable on receipt           -         6          -         -         6 
 
- Excess of allowable expenses over         223        80          -         -       303 
taxable income 
 
Tax charge for the year                      45       146          -         -       191 
 
2021 
 
Return before taxation                   15,392    16,085      1,559        56    33,092 
 
Theoretical tax at the current 
 
UK Corporation Tax rate of 19.00%         2,924     3,056        296        11     6,287 
(2020: 19.00%) 
 
Effect of: 
 
- Non-taxable gains on investments      (2,521)   (2,871)      (320)       (5)   (5,717) 
and derivatives 
 
- Non-taxable losses on foreign               2         2         15         -        19 
exchange 
 
- Non-taxable scrip dividends               (2)         -          -         -       (2) 
 
- Non-taxable UK dividends                (274)      (27)          -         -     (301) 
 
- Non-taxable overseas dividends           (35)     (216)          -         -     (251) 
 
- Non-taxable special dividends           (102)      (37)          -         -     (139) 
 
- Overseas tax                               18       212          -         -       230 
 
- Disallowable expenses                       3         1          -         -         4 
 
- Accrued income taxable on receipt           -         1          -         -         1 
 
- Excess of allowable expenses over           5        91          9       (6)        99 
taxable income 
 
Tax charge for the year                      18       212          -         -       230 
 
Given the Company's status as an investment trust, and the intention to 
continue meeting the conditions required to retain such status for the 
foreseeable future, the Company has not provided any UK corporation tax on any 
realised or unrealised capital gains or losses arising on investments. 
 
(c)     Factors that may affect future tax charges 
 
The Company has excess management expenses and loan relationship deficits of £ 
16,922,000 (2021: £15,258,000) that are available to offset future taxable 
revenue. A deferred tax asset of £4,230,000 (2021: £3,814,000), measured at the 
standard corporation tax substantively enacted rate of 25% (2021: 25%) has not 
been recognised in respect of these expenses since the Directors believe that 
there will be no taxable profits in the future against which the deferred tax 
assets can be offset. 
 
7.     Return per Ordinary Share 
 
Return per share is the amount of profit (or loss) generated for each share 
class in the financial year divided by the weighted average number of the 
shares in issue. The basic and diluted returns per share are identical as the 
ordinary shares for each of the portfolios are not dilutive. 
 
Revenue, capital and total return per ordinary share is based on each of the 
returns after taxation shown by the income statement for the applicable Share 
class and on the following numbers of Shares being the weighted average number 
of Shares in issue throughout the year for each Share class: 
 
                                                                  Average 
                                                             number of shares 
 
 
   Share                                                         2022             2021 
 
   UK Equity                                               78,338,470       33,926,654 
 
   Global Equity Income                                    24,671,635       25,925,091 
 
   Balanced Risk Allocation                                 4,178,755        4,733,820 
 
   Managed Liquidity                                        1,440,703        2,436,740 
 
8.     Dividends 
 
Dividends are distributions of Portfolio returns to shareholders. These are 
determined by the Directors and paid four times a year. 
 
Dividends paid for each applicable Share class, which represent distributions 
for the purpose of s1159 of the Corporation Tax Act 2010, follows: 
 
                                    2022                              2021 
 
                           Number   Dividend      Total     Number    Dividend      Total 
 
                        of shares       rate      £'000  of shares        rate      £'000 
                                     (pence)                           (pence) 
 
   UK Equity 
 
     First interim     83,711,988       1.50      1,256 30,584,941        1.50        459 
 
     Second interim    78,889,303       1.50      1,183 29,379,249        1.50        440 
 
     Third interim     76,191,115       1.50      1,143 26,871,720        1.50        403 
 
     Fourth interim    74,135,486       2.20      1,631 23,814,892        2.15        512 
 
                                        6.70      5,213                   6.65      1,814 
 
   Global Equity 
   Income 
 
     First interim     23,770,805       1.55        368 27,605,800        1.55        428 
 
     Second interim    24,551,255       1.55        381 26,376,118        1.55        409 
 
     Third interim     24,846,796       1.55        385 25,557,022        1.55        396 
 
     Fourth interim    24,920,131       2.50        623 23,745,988        2.45        582 
 
                                        7.15      1,757                   7.10      1,815 
 
   Managed Liquidity 
 
     First interim      1,544,679       1.00         15          -           -          - 
 
                                        1.00         15                      -          - 
 
   Total paid in the                              6,985                             3,629 
   year 
 
No dividends have been paid to Balanced Risk Allocation shareholders during the 
year (2021: nil) 
 
The Company's dividend policy permits the payment of dividends by the UK 
Equity, Global Equity Income and Managed Liquidity Portfolios from capital. An 
analysis of dividends paid in the year from revenue and capital follows. 
 
                                                       Global 
 
                                              UK       Equity      Managed      Company 
 
                                          Equity       Income    Liquidity        Total 
 
2022                                       £'000        £'000        £'000        £'000 
 
Dividends paid in the year: 
 
From revenue - current year                4,697        1,197            -        5,894 
 
From revenue - reserves brought                -            -           15           15 
forward 
 
From revenue                               4,697        1,197           15        5,909 
 
From capital                                 516          560            -        1,076 
 
                                           5,213        1,757           15        6,985 
 
                                                       Global 
 
                                              UK       Equity      Managed      Company 
 
                                          Equity       Income    Liquidity        Total 
 
2021                                       £'000        £'000        £'000        £'000 
 
Dividends paid in the year: 
 
From revenue                               1,322        1,024            -        2,346 
 
From capital                                 492          791            -        1,283 
 
                                           1,814        1,815            -        3,629 
 
9.     Investments held at fair value 
 
The portfolio is made up of investments which are listed, i.e. traded on a 
regulated stock exchange, and a small proportion of investments which are 
valued by the Directors as they are unlisted or not regularly traded. Gains and 
losses are either: 
 
.        realised, usually arising when investments are sold; or 
 
.        unrealised, being the difference from cost on the investments held at 
the year end. 
 
(a)     Analysis of investments by listing status 
 
                                                                       2022        2021 
 
                                                                      £'000       £'000 
 
    UK listed investments                                           161,557     178,775 
 
    Overseas listed investments(i)                                   72,196      69,106 
 
    Unquoted hedge fund investments                                       5           5 
 
                                                                    233,758     247,886 
 
(i)     Includes the Invesco Liquidity Funds plc - Sterling, money market fund 
positions held by the Balanced Risk Allocation Portfolio of £3,512,000 (2021: £ 
2,359,000) and Managed Liquidity Portfolio of £130,000 (2021: £140,000). 
 
(b)     Analysis of investment gains 
 
                                                                      2022        2021 
 
                                                                     £'000       £'000 
 
   Opening valuation                                               247,886     116,928 
 
   Movements in year: 
 
     Purchases at cost                                              49,637     230,052 
 
     Sales proceeds                                               (73,589)   (127,485) 
 
     Gains on investments in the year                                9,824      28,391 
 
   Closing valuation                                               233,758     247,886 
 
   Closing book cost                                               215,092     226,927 
 
   Closing investment holding gains                                 18,666      20,959 
 
   Closing valuation                                               233,758     247,886 
 
The Company received £73,589,000 (2021: £127,485,000) from investments sold in 
the year. The book cost of these investments when they were purchased was £ 
61,472,000 (2021: £125,833,000) realising a profit of £12,117,000 (2021: profit 
£1,652,000). These investments have been revalued over time and until they were 
sold any unrealised profits/losses were included in the fair value of the 
investments. 
 
(c)     Transaction costs 
 
Transaction costs were £71,000 (2021: £257,000) on purchases and £36,000 (2021: 
£64,000) on sales and are included in investment gains and losses. Transaction 
costs in relation to the 2021 financial year investments acquired from the 
business combination are shown in 9(d) below. 
 
(d)     Purchases at cost 
 
During the 2021 financial year £118,144,000 of investments were acquired in 
respect of the business combination. Stamp duty of £475,000 plus professional 
costs of £512,000 less cash benefits of £534,000 were incurred and recognised 
in investment gains and losses. 
 
10.   Derivative instruments 
 
Derivative instruments are contracts whose price is derived from the value of 
other securities or indices. The Balanced Risk Allocation Portfolio uses 
futures, which represent agreements to buy or sell commodities or financial 
instruments at a pre-determined price in the future. 
 
Excluding forward currency contracts used for currency hedging purposes. 
 
                                                                        2022       2021 
 
                                                                       £'000      £'000 
 
   Opening derivative assets held at fair value through profit or        292        401 
   loss 
 
   Opening derivative liabilities held at fair value through            (18)      (151) 
   profit or loss 
 
   Opening net derivative assets held at fair value as shown in          274        250 
   balance sheet 
 
   Closing derivative assets held at fair value through profit or        362        292 
   loss 
 
   Closing derivative liabilities held at fair value through           (225)       (18) 
   profit or loss 
 
   Closing net derivative assets held at fair value shown in             137        274 
   balance sheet 
 
   Movement in derivative holding (liabilities)/assets                 (137)         24 
 
   Net realised gains on derivative instruments                          105      1,677 
 
   Net capital (losses)/gains on derivative instruments as shown        (32)      1,701 
   in the income statement 
 
   Net income arising on derivatives                                      72         38 
 
   Total gains on derivative instruments                                  40      1,739 
 
The derivative assets/(liabilities) shown in the balance sheet are the 
unrealised gains/(losses) arising from the revaluation to fair value of futures 
contracts held in the Balanced Risk Allocation Share Portfolio, as shown on 
page 26. 
 
11.   Debtors 
 
Debtors are amounts due to the Company, such as monies due from brokers for 
investments sold and income which has been earned (accrued) but not yet 
received. 
 
                                                                         2022      2021 
 
                                                                        £'000     £'000 
 
   Amounts due from brokers                                                 -       520 
 
   Collateral pledged for futures contracts                               321       187 
 
   Tax recoverable                                                        234       204 
 
   Prepayments and accrued income                                         939       654 
 
                                                                        1,494     1,565 
 
12.   Other creditors 
 
Creditors are amounts owed by the Company and include amounts due to brokers 
for the purchase of investments and amounts owed to suppliers, such as the 
Manager and auditor. 
 
                                                                         2022      2021 
 
                                                                        £'000     £'000 
 
   Shares bought back                                                     174         - 
 
   Tax payable                                                            137       137 
 
   Amounts due to brokers                                                  85     1,205 
 
   Accruals                                                               413       628 
 
   Other payables                                                         809     1,970 
 
Interest payable on the bank facility is included within the amounts 
outstanding on the bank facility as shown on the balance sheet. 
 
13.   Bank facility and overdraft 
 
At the year end the Company had a £40 million (2021: £40 million) committed 364 
day multicurrency revolving credit facility, which is due for renewal on 25 
April 2023 (2021: 26 April 2022). In addition, an overdraft facility for the 
purpose of short term settlement is also available. Both facilities are with 
The Bank of New York Mellon. The interest payable on the credit facility is 
based on the Adjusted Reference Rate (principally SONIA, SOFR and ?STR 
respectively in respect of loans drawn in GBP, USD and Euro) plus a margin for 
amounts drawn. 
 
Under the bank facility's covenants, the Company's total indebtedness must not 
exceed 30% of total assets (excluding any Balanced Risk Allocation Portfolio 
assets) and the total assets must not be less than £120 million (2021: £120 
million). The Company was in compliance with the covenants throughout the year 
and at year end. 
 
At the year end, the interest payable on the bank facility was £6,000 (2021: £ 
3,000). 
 
14.   Share Capital and Reserves 
 
Share capital represents the total number of shares in issue, including 
treasury shares. 
 
All shares have a nominal value of 1 pence. 
 
(a)     Movements in Share Capital during the Year 
 
Issued and fully paid: 
 
                                                Global    Balanced                    Total 
 
                                        UK      Equity        Risk     Managed        Share 
 
                                    Equity      Income  Allocation   Liquidity      Capital 
 
Ordinary Shares (number) 
 
At 31 May 2021                  88,321,988  23,770,805   4,069,095   1,607,679  117,769,567 
 
Shares bought back into       (11,996,500)   (583,000)   (165,000)    (63,000) (12,807,500) 
treasury 
 
Arising on share conversion: 
 
 - August 2021                 (1,176,185)     890,450     110,924   (109,971)    (284,782) 
 
 - November 2021                 (578,188)     375,541      83,750      57,345     (61,552) 
 
 - February 2022                 (635,629)     466,335     155,457   (144,944)    (158,781) 
 
 - May 2022                      (162,829)     235,653    (83,288)   (108,855)    (119,319) 
 
At 31 May 2022                  73,772,657  25,155,784   4,170,938   1,238,254  104,337,633 
 
Treasury Shares (number) 
 
At 31 May 2021                  22,747,275  15,453,159   6,272,218   9,250,678   53,723,330 
 
Shares bought back into         11,996,500     583,000     165,000      63,000   12,807,500 
treasury 
 
At 31 May 2022                  34,743,775  16,036,159   6,437,218   9,313,678   66,530,830 
 
Ordinary Shares of 1 penny 
each (£'000) 
 
At 31 May 2021                         883         238          40          16        1,177 
 
Shares bought back into              (119)         (6)         (2)         (1)        (128) 
treasury 
 
 - August 2021                        (12)           9           1         (1)          (3) 
 
 - November 2021                       (6)           4           1           -          (1) 
 
 - February 2022                       (6)           5           2         (1)            - 
 
 - May 2022                            (2)           2         (1)         (1)          (2) 
 
At 31 May 2022                         738         252          41          12        1,043 
 
Treasury Shares of 1 penny 
each (£'000) 
 
At 31 May 2021                         228         154          63          93          538 
 
Shares bought back into                119           6           2           1          128 
treasury 
 
At 31 May 2022                         347         160          65          94          666 
 
Total Share Capital (£'000) 
 
Ordinary share capital                 738         252          41          12        1,043 
 
Treasury share capital                 347         160          65          94          666 
 
At 31 May 2022                       1,085         412         106         106        1,709 
 
Average buy back price              184.1p      227.7p      165.5p      104.0p 
 
The total cost of share buy backs was £23,923,000 (2021: £28,704,000). As part 
of the conversion process 815,900 (2021: 457,600) deferred shares of 1p each 
were created and subsequently cancelled during the year. No deferred shares 
were in issue at the start or end of the year. 
 
No ordinary shares were issued from treasury during the year (2021: nil). 
 
(b)     Movements in Share Capital after the Year End 
 
Since the year end, UK Equity and Global Equity Income Portfolios bought back 
687,000 and 295,000 shares respectively to be held in treasury. 
 
(c)     Voting Rights 
 
Rights attaching to the Shares are described in the Directors' Report on page 
58. 
 
(d)     Deferred Shares 
 
The Deferred shares do not carry any rights to participate in the Company's 
profits, do not entitle the holder to any repayment of capital on a return of 
assets (except for the sum of 1p) and do not carry any right to receive notice 
of or attend or vote at any general meeting of the Company. Any Deferred shares 
that arise as a result of conversions of Shares are cancelled in the same 
reporting period. 
 
(e)     Future Convertibility of the Shares 
 
Shares are convertible at the option of the holder into any other class of 
Share. Further conversion details are given on page 2 and in the Shareholder 
Information on page 114. 
 
15.   Reserves 
 
This note explains the different reserves attributable to shareholders. The 
aggregate of the reserves and share capital (see previous note) make up total 
shareholders' funds. 
 
The share premium comprises the net proceeds received by the Company following 
the issue of new shares, after deduction of the nominal amount of 1 penny and 
any applicable costs. 
 
The special reserve arose from the cancellation of the share premium account, 
in January 2007, and is available as distributable profits to be used for all 
purposes under the Companies Act 2006, including buy back of shares and payment 
of dividends. 
 
During the year the special reserve in relation to the UK Equity Portfolio was 
fully utilised to fund share buy backs and subsequent share buy backs were 
funded from the capital reserve. 
 
The capital redemption reserve arises from the nominal value of shares bought 
back and cancelled; this and the share premium are non-distributable. 
 
Capital investment gains and losses are shown in note 9(b), and form part of 
the capital reserve. The revenue reserve shows the net revenue retained after 
payments of any dividends. The capital and revenue reserves are distributable. 
 
16.   Net Asset Value per Share 
 
The net assets (total assets less total liabilities) attributable to a share 
class are often termed shareholders' funds and are converted into net asset 
value per share by dividing by the number of shares in issue. 
 
The net asset value per Share and the net assets attributable at the year end 
were as follows: 
 
Ordinary Shares                           2022                        2021 
 
                                   Net Asset                   Net Asset 
 
                                   Value Per    Net Assets     Value Per    Net Assets 
 
                                       Share  Attributable         Share  Attributable 
 
                                       Pence         £'000         Pence         £'000 
 
UK Equity                             194.35       143,374        188.33       166,334 
 
Global Equity Income                  249.00        62,638        233.91        55,602 
 
Balanced Risk Allocation              169.87         7,085        169.33         6,890 
 
Managed Liquidity                     106.92         1,324        108.11         1,738 
 
Net asset value per Share is based on net assets at the year end and on the 
number of Shares in issue (excluding Treasury Shares) for each Share class at 
the year end. 
 
17.   Financial Instruments 
 
This note summarises the risks deriving from the financial instruments that 
comprise the Company's assets and liabilities. 
 
The Company's financial instruments comprise the following: 
 
.        investments in equities, fixed interest securities and liquidity funds 
which are held in accordance with the Company's investment objectives and the 
investment objectives of the four Portfolios; 
 
.        short-term debtors, creditors and cash arising directly from 
operations; 
 
.        short-term forward foreign currency and futures contracts; and 
 
.        bank facility and short-term overdrafts, used to finance operations. 
 
The financial instruments held in each of the four investment portfolios are 
shown on pages 13 and 14; 20 and 21; 26 and 27; and 32. 
 
The accounting policies in note 1 include criteria for the recognition and the 
basis of measurement applied for these financial instruments. Note 1 also 
includes the basis on which income and expenses arising from financial assets 
and liabilities are recognised and measured. 
 
The Company's principal risks and uncertainties are outlined in the Strategic 
Report on pages 44 to 48. This note expands on risk areas in relation to the 
Company's financial instruments. The Portfolios are managed in accordance with 
the Company's investment policies and objectives, which are set out on pages 39 
to 41. The management process is subject to risk controls, which the Audit 
Committee reviews on behalf of the Board, as described on page 64. 
 
The principal risks that an investment company faces in its portfolio 
management activities are set out below: 
 
Market risk - arising from fluctuations in the fair value or future cash flows 
of a financial instrument because of changes in market prices. Market risk 
comprises three types of risk: currency risk, interest rate risk and other 
price risk: 
 
Currency risk - arising from fluctuations in the fair value or future cash 
flows of a financial instrument because of changes in foreign exchange rates; 
 
Interest rate risk - arising from fluctuations in the fair value or future cash 
flows of a financial instrument because of changes in market interest rates; 
and 
 
Other price risk - arising from fluctuations in the fair value or future cash 
flows of a financial instrument for reasons other than changes in foreign 
exchange rates or market interest rates, whether those changes are caused by 
factors specific to the individual financial instrument or its issuer, or 
factors affecting all similar financial instruments traded in the market. 
 
Liquidity risk - arising from any difficulty in meeting obligations associated 
with financial liabilities. 
 
Credit risk incorporating counterparty risk - arising from financial loss for a 
company where the other party to a financial instrument fails to discharge an 
obligation. 
 
Risk Management Policies and Procedures 
 
As an investment trust the Company invests in equities and other investments 
for the long-term in accordance with its investment policies so as to meet its 
investment objectives. In pursuing its objectives, the Company is exposed to a 
variety of risks that could result in a reduction in the Company's net assets 
or a reduction of the profits available for dividends. The risks applicable to 
the Company and the Directors' policies for managing these risks follow. These 
have not changed from those applying in the previous year. 
 
The Directors have delegated to the Manager the responsibility for the 
day-to-day investment activities of the Company as more fully described in the 
Directors' Report. 
 
The main risk that the Company faces arising from its financial instruments is 
market risk - this risk is reviewed in detail below. Since the Company mainly 
invests in quoted investments and derivative instruments traded on recognised 
exchanges, liquidity risk and credit risk are significantly mitigated. 
 
17.1   Market Risk 
 
Market risk arises from changes in the fair value of future cash flows of a 
financial instrument because of movements in market prices. Market risk 
comprises three types of risk: currency risk (17.1.1), interest rate risk 
(17.1.2) and other price risk (17.1.3). 
 
The Company's Portfolio Managers assess the individual investment portfolio 
exposures when making each investment decision for their Portfolios, and 
monitor the overall level of market risk on the whole of their investment 
portfolio on an ongoing basis. The Board meets at least quarterly to assess 
risk and review investment performance for the four Portfolios and the Company, 
as disclosed in the Board Responsibilities section of the Directors' Report on 
page 55. Borrowings can be used by the UK Equity and Global Equity Income 
Portfolios, which will increase the Company's exposure to market risk and 
volatility. The borrowing limits for these Portfolios are 25% and 20% of 
attributable net assets, respectively. 
 
         17.1.1  Currency Risk 
 
A majority of the Global Equity Income Portfolio, derivative instruments in the 
Balanced Risk Allocation Portfolio and a small proportion of the UK Equity 
Portfolio consist of assets, liabilities and income denominated in currencies 
other than sterling. As a result, movements in exchange rates will affect the 
sterling value of those items. 
 
Management of the currency risk 
 
The Portfolio Managers monitor the separate Portfolios' exposure to foreign 
currencies on a daily basis and report to the Board on a regular basis. Forward 
foreign currency contracts can be used to limit the Company's exposure to 
anticipated future changes in exchange rates and to achieve portfolio 
characteristics that assist the Company in meeting its investment objectives in 
line with its investment policies. All contracts are limited to currencies and 
amounts commensurate with the exposure to those currencies. No such contracts 
were in place at the current or preceding year end. Income denominated in 
foreign currencies is converted to sterling on receipt. The Company does not 
use financial instruments to mitigate the currency exposure in the period 
between the time that income is accrued and its receipt. 
 
Foreign Currency Exposure 
 
The fair values of the Company's monetary items that have currency exposure at 
31 May are shown below. Where the Company's investments (which are not monetary 
items) are priced in a foreign currency they have been included separately in 
the analysis so as to show the overall level of exposure. 
 
UK Equity Portfolio: 
 
Year ended 31 May 2022 
 
                                                          Investments 
 
                                                  Foreign     at fair 
                                                                value 
 
                                                 currency     through 
 
                            Debtors              exposure   profit or 
 
                          (due from                on net        loss  Total net 
 
                          brokers &       Cash   monetary    that are    foreign 
 
                         dividends)    at bank      items    equities   currency 
                                  * 
 
Currency                      £'000      £'000      £'000       £'000      £'000 
 
Canadian Dollar                   -          -          -       5,539      5,539 
 
Euro                              1          -          1           -          1 
 
US Dollar                       169          -        169       4,809      4,978 
 
                                170          -        170      10,348     10,518 
 
Year ended 31 May 2021 
 
Canadian Dollar                  40          -         40       6,818      6,858 
 
Euro                              2          -          2           -          2 
 
US Dollar                       161          -        161       5,342      5,503 
 
                                203          -        203      12,160     12,363 
 
Global Equity Income Portfolio: 
 
Year ended 31 May 2022 
 
                                                          Investments 
 
                                                  Foreign     at fair 
                                                                value 
 
                                                 currency     through 
 
                            Debtors              exposure   profit or 
 
                          (due from                on net        loss  Total net 
 
                          brokers &       Cash   monetary    that are    foreign 
 
                         dividends)    at bank      items    equities   currency 
                                  * 
 
Currency                      £'000      £'000      £'000       £'000      £'000 
 
Canadian Dollar                   -          -          -       1,112      1,112 
 
Euro                             83        127        210       7,054      7,264 
 
Hong Kong Dollar                 43          -         43       7,156      7,199 
 
Norwegian Krone                   6          -          6           -          6 
 
South Korean Won                  -          -          -         981        981 
 
Swedish Krona                    14          -         14       2,167      2,181 
 
Swiss Franc                     134          8        142       4,279      4,421 
 
Taiwanese Dollar                  -          -          -       1,998      1,998 
 
US Dollar                        27          -         27      32,144     32,171 
 
                                307        135        442      56,891     57,333 
 
 
 
Year ended 31 May 2021 
 
Canadian Dollar                   -          -          -       1,356      1,356 
 
Euro                             63          2         65       2,642      2,707 
 
Hong Kong Dollar                 20          -         20       4,462      4,482 
 
Norwegian Krone                   6          -          6           -          6 
 
South Korean Won                  -          -          -       1,944      1,944 
 
Swedish Krona                     8          -          8       1,612      1,620 
 
Swiss Franc                     124          -        124       7,317      7,441 
 
Taiwanese Dollar                  -          -          -       2,977      2,977 
 
US Dollar                        45          -         45      30,468     30,513 
 
                                266          2        268      52,778     53,046 
 
Balanced Risk Allocation Portfolio: 
 
Year ended 31 May 2022 
 
           Derivative                  Derivative          Investments 
 
               assets                 liabilities  Foreign     at fair 
                 held                                            value 
 
              at fair                     held at currency     through 
                                             fair 
 
                value    Debtors            value exposure   profit or 
 
              through  (due from          through   on net        loss    Total 
                                                                            net 
 
               profit  brokers & Cash      profit monetary    that are  foreign 
 
              or loss dividends)   at     or loss    items    equities currency 
                               * bank 
 
Currency        £'000      £'000    £       £'000    £'000       £'000    £'000 
                                 '000 
 
Australian          -        114   14        (88)       40           -       40 
Dollar 
 
Canadian            -         20    5         (7)       18           -       18 
Dollar 
 
Euro                7         96   13        (57)       59           -       59 
 
Japanese           46       (10)    7         (3)       40           -       40 
Yen 
 
US Dollar         272         92   76        (65)      375           5      380 
 
                  325        312  115       (220)      532           5      537 
 
Year ended 
31 May 
2021 
 
Australian         15          6   24           -       45           -       45 
Dollar 
 
Canadian            -         23   18         (5)       36           -       36 
Dollar 
 
Euro               28          5   43           -       76           -       76 
 
Japanese           14         20   21           -       55           -       55 
Yen 
 
US Dollar         209         84   77        (13)      357           5      362 
 
                  266        138  183        (18)      569           5      574 
 
* Debtors includes collateral pledged for futures contracts. 
 
Foreign Currency sensitivity 
 
The preceding exposure analysis is based on the Company's monetary foreign 
currency financial instruments held at each balance sheet date and takes 
account of forward foreign exchange contracts, if used, that offset the effects 
of changes in currency exchange rates. 
 
The effect of strengthening or weakening of sterling against other currencies 
to which the Company is exposed is calculated by reference to the volatility of 
exchange rates during the year using the standard deviation of currency 
fluctuations against the mean, giving the following exchange rate fluctuations: 
 
                                                             2022          2021 
 
£/Australian Dollar                                      +/- 2.6%      +/- 1.2% 
 
£/Canadian Dollar                                        +/- 2.5%      +/- 1.2% 
 
£/Euro                                                   +/- 1.1%      +/- 2.2% 
 
£/Hong Kong Dollar                                       +/- 2.9%      +/- 3.9% 
 
£/Japanese Yen                                           +/- 2.5%      +/- 4.7% 
 
£/Norwegian Krone                                        +/- 2.0%      +/- 1.5% 
 
£/South Korean Won                                       +/- 1.3%      +/- 2.6% 
 
£/Swedish Krona                                          +/- 2.6%      +/- 1.8% 
 
£/Swiss Franc                                            +/- 1.7%      +/- 3.3% 
 
£/Taiwan Dollar                                          +/- 1.8%      +/- 2.2% 
 
£/US Dollar                                              +/- 3.2%      +/- 3.8% 
 
The tables that follow illustrate the exchange rate sensitivity of revenue and 
capital returns arising from the Company's financial non-sterling assets and 
liabilities for the year for the UK Equity, Global Equity Income and Balanced 
Risk Allocation Portfolios using the exchange rate fluctuations shown above. 
 
If sterling had strengthened against other currencies by the exchange rate 
fluctuations shown in the table above, this would have had the following after 
tax effect: 
 
                    UK Equity Portfolio: 
 
                                        2022                       2021 
 
                              Revenue  Capital    Total  Revenue  Capital    Total 
                                                   loss 
 
                               return   return    after   return   return   return 
                                                    tax 
 
                                £'000    £'000    £'000    £'000    £'000    £'000 
 
Canadian Dollar                     -    (138)    (138)        -     (82)     (82) 
 
Euro                              (3)        -      (3)      (2)        -      (2) 
 
US Dollar                        (32)    (154)    (186)     (19)    (203)    (222) 
 
                                 (35)    (292)    (327)     (21)    (285)    (306) 
 
Global Equity Income 
Portfolio: 
 
                                          2022     2021 
 
                              Revenue  Capital    Total  Revenue  Capital    Total 
 
                               return   return   return   return   return   return 
 
                                £'000    £'000    £'000    £'000    £'000    £'000 
 
Canadian Dollar                     -     (28)     (28)        -     (16)     (16) 
 
Euro                              (3)     (79)     (82)      (1)     (58)     (59) 
 
Hong Kong Dollar                  (3)    (208)    (211)      (1)    (174)    (175) 
 
South Korean Won                    -     (13)     (13)      (3)     (51)     (54) 
 
Swedish Krona                     (2)     (56)     (58)      (1)     (29)     (30) 
 
Swiss Franc                       (3)     (73)     (76)      (8)    (241)    (249) 
 
Taiwan Dollar                     (1)     (36)     (37)      (1)     (65)     (66) 
 
US Dollar                        (16)  (1,029)  (1,045)     (22)  (1,158)  (1,180) 
 
                                 (28)  (1,522)  (1,550)     (37)  (1,792)  (1,829) 
 
Balanced Risk Allocation 
Portfolio: 
 
                                          2022     2021 
 
                              Revenue  Capital    Total  Revenue  Capital    Total 
 
                               return   return   return   return   return   return 
 
                                £'000    £'000    £'000    £'000    £'000    £'000 
 
Australian Dollar                   -      (1)      (1)        -      (1)      (1) 
 
Euro                                -      (1)      (1)        -      (2)      (2) 
 
Japanese Yen                        -      (1)      (1)        -      (3)      (3) 
 
US Dollar                           -     (12)     (12)        -     (14)     (14) 
 
                                    -     (15)     (15)        -     (20)     (20) 
 
If sterling had weakened by the same amounts, the effect would have been the 
converse. 
 
         17.1.2  Interest Rate Risk 
 
Interest rate movements may affect: 
 
.        the fair value of the investments in fixed interest rate securities; 
 
.        the level of income receivable on cash deposits; and 
 
.        the interest payable on variable rate borrowings. 
 
Management of interest rate risk 
 
The possible effects on fair value and cash flows that could arise as a result 
of changes in interest rates are taken into account as part of the portfolio 
management and borrowings processes of the Portfolio Managers. The Board 
reviews on a regular basis the investment portfolio and borrowings. This 
encompasses the valuation of fixed-interest and floating rate securities and 
gearing levels. 
 
When the Company has cash balances, they are held in variable rate bank 
accounts yielding rates of interest dependent on the base rate of the custodian 
or deposit taker. The Company has a £40 million (2021: £40 million), 364 day 
multicurrency revolving credit facility which is due for renewal on 25 April 
2023. The Company uses the facility when required at levels approved and 
monitored by the Board. 
 
Interest rate exposure 
 
The Company also has available an uncommitted overdraft facility for settlement 
purposes and interest is dependent on the base rate determined by the 
custodian. 
 
At 31 May the exposure of financial assets and financial liabilities to 
interest rate risk is shown by reference to: 
 
.        floating interest rates (giving cash flow interest rate risk) - when 
the interest rate is due to be reset; and 
 
.        fixed interest rates (giving fair value interest rate risk) - when the 
financial instrument is due for repayment. 
 
The following table sets out the financial assets and financial liabilities 
exposure at the year end: 
 
                                               Global   Balanced 
 
                                          UK   Equity       Risk   Managed  Company 
 
                                      Equity   Income Allocation Liquidity    Total 
 
2022                                   £'000    £'000      £'000     £'000    £'000 
 
Exposure to floating interest 
rates: 
 
Investments held at fair value             -        -      3,512       130    3,642 
through profit or loss(1) 
 
Cash and short term deposits             322      215        401         9      947 
 
Bank Loans                          (15,750)  (5,350)          -         - (21,100) 
 
                                    (15,428)  (5,135)      3,913       139 (16,511) 
 
Exposure to fixed interest rates: 
 
Investments held at fair value             -        -      2,716         -    2,716 
through profit or loss including UK 
Treasury Bills 
 
Net exposure to interest rates      (15,428)  (5,135)      6,629       139 (13,795) 
 
                                               Global   Balanced 
 
                                          UK   Equity       Risk   Managed  Company 
 
                                      Equity   Income Allocation Liquidity    Total 
 
2021                                   £'000    £'000      £'000     £'000    £'000 
 
Exposure to floating interest 
rates: 
 
Investments held at fair value             -        -      2,359       140    2,499 
through profit or loss(1) 
 
Cash and cash equivalents              2,331      137        704        32    3,204 
 
Bank facility                       (11,842)  (8,550)          -         - (20,392) 
 
                                     (9,511)  (8,413)      3,063       172 (14,689) 
 
Exposure to fixed interest rates: 
 
Investments held at fair value             -        -      3,377         -    3,377 
through profit or loss including UK 
Treasury Bills 
 
Net exposure to interest rates       (9,511)  (8,413)      6,440       172 (11,312) 
 
(1) Comprises holdings in the Invesco Liquidity Funds plc - Sterling. 
 
The income on the iShares - Sterling Ultrashort Bond UCITS ETF and Invesco 
Liquidity Funds plc - Sterling investments are affected by interbank lending 
rates; the principal amount should normally remain stable regardless of 
interest rate movements. 
 
Interest rate sensitivity 
 
At the maximum possible borrowing level of £40 million (2021: £40 million), the 
maximum effect over one year of a 0.5% movement in interest rates would be a £ 
200,000 (2021: £200,000) movement in the Company's income and net assets. 
 
The effect of a 1% movement in the interest rates on investments held at fair 
value through profit and loss would result in a £7,000 (2021: £12,000) maximum 
movement in the Company's income statement and net assets. 
 
The above exposure and sensitivity analysis are not representative of the year 
as a whole, since the level of exposure changes frequently throughout the year. 
 
Other price risks (i.e. changes in market prices other than those arising from 
interest rate risk or currency risk) may affect the value of the equity 
investments, but it is the role of the Portfolio Managers to manage the 
Portfolios to achieve the best returns they can. 
 
         17.1.3  Other Price Risk 
 
Management of other price risk 
 
The Directors monitor the market price risks inherent in the investment 
portfolios by meeting regularly to review performance. 
 
The Company's investment portfolios are the product of the Manager's investment 
processes and the application of the Portfolios' investment policies. Their 
value will move according to the performance of the shares held within them. 
However, the Portfolios do not replicate their respective benchmarks or the 
markets in which the Portfolios invest, so their performance may not correlate 
with them. 
 
Notwithstanding the issue of correlation, if the fixed asset value of an 
investment portfolio moved by 10% at the balance sheet date, the profit after 
tax and net assets for the year would increase/decrease by the following 
amounts: 
 
                                                 Global   Balanced 
 
                                                 Equity       Risk    Managed 
 
                                   UK Equity     Income Allocation  Liquidity 
 
                                       £'000      £'000      £'000      £'000 
 
2022 
 
Profit after tax increase/            15,845      6,763        623        145 
decrease due to rise/fall of 10% 
 
2021 
 
Profit after tax increase/            17,643      6,390        574        181 
decrease due to rise/fall of 10% 
 
17.2   Liquidity Risk 
 
Management of liquidity risk 
 
Liquidity risk is mitigated by the investments held by the Company's four 
portfolios being diversified and the majority being readily realisable 
securities which can be sold to meet funding commitments. If required, the 
Company's borrowing facilities provide additional long-term and short-term 
flexibility. 
 
The Directors' policy is that in normal market conditions short-term borrowings 
be used to manage short term liabilities and working capital requirements 
rather than realising investments. 
 
Liquidity risk 
 
The contractual maturities of financial liabilities at the year end, based on 
the earliest date on which payment can be required, are as follows: 
 
                                Global     Balanced Risk 
 
                                Equity                          Managed 
 
                  UK Equity     Income      Allocation        Liquidity 
 
                   3 months   3 months   3 months  More than   3 months    Company 
 
                    or less    or less    or less   3 months    or less      Total 
 
2022                  £'000      £'000      £'000      £'000      £'000      £'000 
 
Bank facility(1)     15,754      5,352          -          -          -     21,106 
 
Amount due to             -         85          -          -          -         85 
brokers 
 
Other creditors         448        121         17          -          1        587 
and accruals 
 
Derivative                -          -        200         25          -        225 
financial 
instruments 
 
                     16,202      5,558        217         25          1     22,003 
 
                                Global     Balanced Risk 
                                            Allocation 
                                Equity                          Managed 
 
                  UK Equity     Income                        Liquidity 
 
                   3 months   3 months   3 months  More than   3 months    Company 
 
                    or less    or less    or less   3 months    or less      Total 
 
2021                  £'000      £'000      £'000      £'000      £'000      £'000 
 
Bank facility(1)     11,844      8,551          -          -          -     20,395 
 
Amount due to         1,139          -          -          -          -      1,139 
brokers 
 
Other creditors         488        185         19          -          2        694 
and accruals 
 
Derivative                -          -         18          -          -         18 
financial 
instruments 
 
                     13,471      8,736         37          -          2     22,246 
 
(1) Interest due on the bank facility at the year end was £6,000 (2021: £ 
3,000). 
 
17.3   Credit Risk 
 
Credit risk is that the failure of the counterparty in a transaction to 
discharge its obligations under that transaction could result in the Company 
suffering a loss. 
 
This risk is managed as follows: 
 
.        investment transactions are carried out with a selection of brokers, 
approved by the Manager and settled on a delivery versus payment basis. 
Brokers' credit ratings are regularly reviewed by the Manager, so as to 
minimise the risk of default to the Company; 
 
.        the derivative financial instruments are all exchange traded and the 
exchange guarantees their settlement; 
 
.        the risk of counterparty exposure due to failed trades causing a loss 
to the Company is mitigated by the daily review of failed trade reports and the 
use of daily stock and cash reconciliations. Only approved counterparties are 
used; 
 
.        the Company's ability to operate in the short-term may be adversely 
affected if the Company's Manager, other outsource service providers, or their 
delegates suffer insolvency or other financial difficulties. The Board reviews 
annual controls reports from major service providers; 
 
.        where an investment is made in a bond, corporate or otherwise, the 
credit rating of the issuer is taken into account so as to minimise the risk to 
the Company of default; and 
 
.        cash balances are limited to a maximum of £5 million for each of the 
UK Equity and Global Equity Income Portfolios and £2.5 million for each of the 
Balanced Risk Allocation and Managed Liquidity Portfolios, with any one deposit 
taker (other than cash collateral on derivative instruments). Only deposit 
takers approved by the Manager are used. Cash held at brokers includes any cash 
collateral on futures contracts and during the year only one futures clearing 
broker, Merrill Lynch, was used. 
 
The following table sets out the maximum credit risk exposure at the year end: 
 
                                               Global   Balanced 
 
                                         UK    Equity       Risk   Managed   Company 
 
                                     Equity    Income Allocation Liquidity     Total 
 
2022                                  £'000     £'000      £'000     £'000     £'000 
 
Bonds (UK Treasury bills)                 -         -      2,716         -     2,716 
 
Cash held as short-term                   -         -      3,512       130     3,642 
investment(1) 
 
Unquoted Securities                       -         -          5         -         5 
 
Derivative financial Instruments          -         -        137         -       137 
 
Debtors(2)                                -         -        321         -       321 
 
Cash and short-term deposits            322       215        401         9       947 
 
                                        322       215      7,092       139     7,768 
 
                                               Global   Balanced 
 
                                         UK    Equity       Risk   Managed   Company 
 
                                     Equity    Income Allocation Liquidity     Total 
 
2021                                  £'000     £'000      £'000     £'000     £'000 
 
Bonds (UK Treasury bills)                 -         -      3,377         -     3,377 
 
Cash held as short-term                   -         -      2,359       140     2,499 
investment(1) 
 
Unquoted securities                       -         -          5         -         5 
 
Derivative financial Instruments          -         -        274         -       274 
 
Debtors(2)                              520         -        187         -       707 
 
Cash and cash equivalents             2,331       137        704        32     3,204 
 
                                      2,851       137      6,906       172    10,066 
 
(1)    Invesco Liquidity Funds plc, money market fund. 
 
(2)    Cash collateral pledged for futures contracts of £321,000 is included in 
debtors (2021: £187,000) and excludes tax recoverable and prepayments and 
accrued income. 
 
18.   Fair Values of Financial Assets and Financial Liabilities 
 
'Fair value' in accounting terms is the amount at which an asset can be bought 
or sold in a transaction between willing parties, i.e. a market-based, 
independent measure of value. This note sets out the fair value hierarchy 
comprising three 'levels' and the aggregate amount of investments in each 
level. 
 
The financial assets and financial liabilities are either carried in the 
balance sheet at their fair value (investments and derivative instruments), or 
the balance sheet amount is a reasonable approximation of fair value. 
 
FRS 102 as amended for fair value hierarchy disclosures sets out three fair 
value levels. These are: 
 
Level 1 - fair value based on quoted prices in active markets for identical 
assets. 
 
Level 2 - fair values based on valuation techniques using observable inputs 
other than quoted prices within level 1. 
 
Level 3 - fair values based on valuation techniques using inputs that are not 
based on observable market data. 
 
Categorisation within the hierarchy is determined on the basis of the lowest 
level input that is significant to the fair value measurement of each relevant 
asset/liability. 
 
The valuation techniques used by the Company are explained in the accounting 
policies note. The majority of the Company's investments are quoted equity 
investments and Treasury bills which are deemed to be Level 1. Level 2 
comprises all other quoted fixed income investments, derivative instruments and 
liquidity funds held in the Balanced Risk Allocation and Managed Liquidity 
Portfolios. Level 3 investments comprise any unquoted securities and the 
remaining hedge fund investments of the Balanced Risk Allocation Portfolio. 
 
                                                       Global   Balanced 
 
                                                 UK    Equity       Risk   Managed   Company 
 
                                             Equity    Income Allocation Liquidity     Total 
 
2022                                          £'000     £'000      £'000     £'000     £'000 
 
Financial assets designated at fair value 
through profit or loss: 
 
Level 1                                     158,450    67,630      2,716     1,315   230,111 
 
Level 2                                           -         -      3,874       130     4,004 
 
Level 3                                           -         -          5         -         5 
 
Total for financial assets                  158,450    67,630      6,595     1,445   234,120 
 
Financial liabilities: 
 
Level 2 - derivatives liabilities held at         -         -        225         -       225 
fair value 
 
                                                       Global   Balanced 
 
                                                 UK    Equity       Risk   Managed   Company 
 
                                             Equity    Income Allocation Liquidity     Total 
 
2021                                          £'000     £'000      £'000     £'000     £'000 
 
Financial assets designated at fair value 
through profit or loss: 
 
Level 1                                     176,434    63,902      3,377     1,669   245,382 
 
Level 2                                           -         -      2,651       140     2,791 
 
Level 3                                           -         -          5         -         5 
 
Total for financial assets                  176,434    63,902      6,033     1,809   248,178 
 
Financial liabilities: 
 
Level 2 - derivatives liabilities held at         -         -         18         -        18 
fair value 
 
19.   Capital Management 
 
This note is designed to set out the Company's objectives, policies and 
processes for managing its capital. The capital is funded from monies invested 
in the Company by shareholders (both initial investment and any retained 
amounts) and any borrowings by the Company. 
 
The Company's total capital employed at 31 May 2022 was £235,521,000 (2021: £ 
250,956,000) comprising borrowings of £21,100,000 (2021: £20,392,000) and 
equity share capital and other reserves of £214,421,000 (2021: £230,564,000). 
 
The Company's total capital employed is managed to achieve the Company's 
investment objective and policy as set out on pages 39 to 41, including that 
borrowings may be used to raise equity exposure up to a maximum of 25% of net 
assets. At the balance sheet date, maximum gross gearing was 9.8% (2021: 
17.3%). The Company's policies and processes for managing capital are unchanged 
from the preceding year. 
 
The main risks to the Company's investments are shown in the Directors' Report 
under the 'Principal Risks and Uncertainties' section on pages 44 to 48. These 
also explain that the Company has borrowing facilities which can be used in 
accordance with each Portfolio's investment objectivity and policy and that 
this will amplify the effect on equity of changes in the value of each 
applicable portfolio. 
 
The Board can also manage the capital structure directly since it has taken the 
powers, which it is seeking to renew, to issue and buy back shares and it also 
determines dividend payments. 
 
The Company is subject to externally imposed capital requirements with respect 
to the obligation and ability to pay dividends by Corporation Tax Act 2010 and 
by the Companies Act 2006, respectively, and with respect to the availability 
of the overdraft facility, by the terms imposed by the lender. The Board 
regularly monitors, and has complied with, the externally imposed capital 
requirements. This is unchanged from the prior year. 
 
Borrowings comprise any drawings on the credit and/or overdraft facilities, 
details of which are given in note 13. 
 
20.   Contingencies, guarantees and financial commitments 
 
Any liabilities the Company is committed to honour but which are dependent on a 
future circumstance or event occurring would be disclosed in this note if any 
existed. 
 
There were no contingencies, guarantees or financial commitments of the Company 
at the year end (2021: £nil). 
 
21.   Related party transactions and transactions with the Manager 
 
A related party is a company or individual who has direct or indirect control 
or who has significant influence over the Company. Under accounting standards, 
the Manager is not a related party. 
 
Under UK GAAP, the Company has identified the Directors as related parties. The 
Directors' remuneration and interests have been disclosed on pages 65 to 67 
with additional disclosure in note 4. No other related parties have been 
identified. 
 
Details of the Manager's services and fees are disclosed in the Director's 
Report on pages 57 and 58 and note 3. 
 
22.   Post Balance Sheet Events 
 
Any significant events that occurred after the Company's financial year end but 
before the signing of the balance sheet will be shown here. 
 
         There are no significant events after the end of the reporting period 
requiring disclosure. 
 
The figures and financial information for the year ended 31 May 2022 are 
extracted from the Company's annual financial statements for that year and do 
not constitute statutory accounts. The Company's annual financial statements 
for the year to 31 May 2022 have been audited but have not yet been delivered 
to the Registrar of Companies. The Auditor's report on the 2022 annual 
financial statements was (i) unqualified, (ii) did not include a reference to 
any matters to which the auditor drew attention by way of emphasis without 
qualifying their report and (iii) did not contain a statement under section 498 
(2) or (3) of the Companies Act 2006. 
 
The figures and financial information for the year ended 31 May 2021 are 
compiled from an extract of the published accounts for that year and do not 
constitute statutory accounts.  Those accounts have been delivered to the 
Registrar of Companies. The Auditor's report on the 2021 annual financial 
statements was (i) unqualified, (ii) did not include a reference to any matters 
to which the auditor drew attention by way of emphasis without qualifying their 
report and (iii) did not contain a statement under section 498 (2) or (3) of 
the Companies Act 2006. 
 
The audited annual financial report will be posted to shareholders during 
August 2022, and will be delivered to the Registrar of Companies, shortly. 
Copies may be obtained during normal business hours from the Company's 
Registered Office, from its correspondence address, 43-45 Portman Square, 
London W1H 6LY, and via the web pages of all of the Share classes on the 
Manager's website at www.invesco.co.uk/investmenttrusts. 
 
A copy of the annual financial report will be submitted shortly to the National 
Storage Mechanism ("NSM") and will be available for inspection at the NSM, 
which is situated at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. 
 
The separate General Meeting of the Shareholders of the UK Equity Share Class, 
the separate General Meeting of the Shareholders of the Balanced Risk 
Allocation Share Class and the Annual General Meeting will be held on 4 October 
2022 from 11.00am at 43-45 Portman Square, London W1H 6LY. 
 
By order of the Board 
Invesco Asset Management Limited 
3 August 2022 
 
Notice of separate General Meeting of the shareholders of the UK Equity Share 
Class 
 
THIS Notice of a separate General Meeting of the shareholders of the UK Equity 
Share Class IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in 
any doubt as to what action to take, you should consult your stockbroker, 
solicitor, accountant or other appropriate independent professional adviser 
authorised under the Financial Services and Markets Act 2000. If you have sold 
or otherwise transferred all your Shares in the UK Equity Share Class of 
Invesco Select Trust plc, please forward this document and the accompanying 
Form of Proxy to the person through whom the sale or transfer was effected, for 
transmission to the purchaser or transferee. 
 
NOTICE IS GIVEN that the general meeting of the UK Equity Share Class of 
Invesco Select Trust plc will be held at 43-45 Portman Square, London W1H 6LY 
at 11.00am on 4 October 2022 for the following purposes: 
 
To consider, and if though fit, pass the following resolution as a special 
resolution: 
 
Special resolution 
 
1.      That, in accordance with section 630 of the Companies Act and articles 
5.6.2 and 8 of the articles of association of the Company, this separate 
general meeting of the holders of the UK Equity shares of 1 penny each in the 
capital of the Company hereby irrevocably consents to and sanctions the passing 
of the resolution numbered 17 set out in the notice of the annual general 
meeting of the Company to be held on 4 October 2022 and every variation, 
modification or abrogation of the rights, privileges and restrictions attaching 
to the UK Equity shares of 1 penny each in the capital of the Company as a 
class of shares that will or may be effected thereby. 
 
Dated 3 August 2022 
 
By order of the Board 
 
Invesco Asset Management Limited 
 
Company Secretary 
 
Notice of separate General Meeting of the shareholders of the Balanced Risk 
Allocation Share Class 
 
THIS Notice of a separate General Meeting of the shareholders of the Balanced 
Risk Allocation Share Class IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. 
If you are in any doubt as to what action to take, you should consult your 
stockbroker, solicitor, accountant or other appropriate independent 
professional adviser authorised under the Financial Services and Markets Act 
2000. If you have sold or otherwise transferred all your Shares in the Balanced 
Risk Share Class of Invesco Select Trust plc, please forward this document and 
the accompanying Form of Proxy to the person through whom the sale or transfer 
was effected, for transmission to the purchaser or transferee. 
 
NOTICE IS GIVEN that the general meeting of the Balanced Risk Allocation Share 
Class of Invesco Select Trust plc will be held at 43-45 Portman Square, London 
W1H 6LY at 11.15am on 4 October 2022 for the following purposes: 
 
To consider, and if though fit, pass the following resolution as a special 
resolution: 
 
Special resolution 
 
1.      That, in accordance with section 630 of the Companies Act and articles 
5.6.2 and 8 of the articles of association of the Company, this separate 
general meeting of the holders of the Balanced Risk Allocation shares of 1 
penny each in the capital of the Company hereby irrevocably consents to and 
sanctions the passing of the resolution numbered 17 set out in the notice of 
the annual general meeting of the Company to be held on 4 October 2022 and 
every variation, modification or abrogation of the rights, privileges and 
restrictions attaching to the Balanced Risk Allocation shares of 1 penny each 
in the capital of the Company as a class of shares that will or may be effected 
thereby. 
 
Dated 3 August 2022 
 
By order of the Board 
 
Invesco Asset Management Limited 
 
Company Secretary 
 
Notice of Annual General Meeting 
 
THIS Notice of Annual General Meeting IS IMPORTANT AND REQUIRES YOUR IMMEDIATE 
ATTENTION. If you are in any doubt as to what action to take, you should 
consult your stockbroker, solicitor, accountant or other appropriate 
independent professional adviser authorised under the Financial Services and 
Markets Act 2000. If you have sold or otherwise transferred all your Shares in 
Invesco Select Trust plc, please forward this document and the accompanying 
Form of Proxy to the person through whom the sale or transfer was effected, for 
transmission to the purchaser or transferee. 
 
NOTICE IS GIVEN that the Annual General Meeting (AGM) of Invesco Select Trust 
plc will be held at 43-45 Portman Square, London W1H 6LY at 11.30am on 
4 October 2022 for the following purposes: 
 
Ordinary Business of the Company 
 
To consider and, if thought fit, to pass the following resolutions which will 
be proposed as an Ordinary Resolutions: 
 
1.      To receive the Annual Financial Report for the year ended 31 May 2022. 
 
2.      To approve the Directors' Remuneration Policy. 
 
3.      To approve the Annual Statement and Report on Remuneration. 
 
4.      To re-elect Craig Cleland as a Director of the Company. 
 
5.      To re-elect Davina Curling as a Director of the Company. 
 
6.      To re-elect Mark Dampier as a Director of the Company. 
 
7.      To re-elect Victoria Muir as a Director of the Company. 
 
8.      To re-elect Tim Woodhead as a Director of the Company. 
 
9.      To re-appoint Grant Thornton UK LLP as Auditor to the Company. 
 
10.    To authorise the Audit Committee to determine the Auditor's 
remuneration. 
 
Ordinary Business of the UK Equity Share Class 
 
Only holders of UK Equity Shares may vote on this resolution, which will be 
proposed as an Ordinary Resolution: 
 
11.    To approve the UK Equity Share Class Portfolio dividend payment policy 
as set out on page 41 of the 2022 Annual Financial Report. 
 
Ordinary Business of the Global Equity Income Share Class 
 
Only holders of Global Equity Income Shares may vote on this resolution, which 
will be proposed as an Ordinary Resolution: 
 
12.    To approve the Global Equity Income Share Class Portfolio dividend 
payment policy as set out on page 41 of the 2022 Annual Financial Report. 
 
Special Business of the Company 
 
To consider and, if thought fit, to pass the following resolution which will be 
proposed as an Ordinary Resolutions: 
 
13.    That: 
 
the Directors be and they are hereby generally and unconditionally authorised, 
for the purpose of section 551 of the Companies Act 2006 as amended from time 
to time prior to the date of passing this resolution ('2006 Act') to exercise 
all the powers of the Company to allot relevant securities (as defined in 
sections 551(3) and (6) of the 2006 Act) up to an aggregate nominal amount 
equal to £1,000,000 of UK Equity Shares, £1,000,000 of Global Equity Income 
Shares, £1,000,000 of Balanced Risk Allocation Shares and £1,000,000 of Managed 
Liquidity Shares, provided that this authority shall expire at the conclusion 
of the next AGM of the Company or the date falling 15 months after the passing 
of this resolution, whichever is the earlier, but so that such authority shall 
allow the Company to make offers or agreements before the expiry of this 
authority which would or might require relevant securities to be allotted after 
such expiry and the Directors may allot relevant securities in pursuance of 
such offers or agreements as if the power conferred hereby had not expired. 
 
To consider and, if thought fit, to pass the following resolutions which will 
be proposed as Special Resolutions: 
 
14.    That: 
 
the Directors be and they are hereby empowered, in accordance with sections 570 
and 573 of the Companies Act 2006 as amended from time to time prior to the 
date of the passing of this resolution ('2006 Act') to allot Shares in each 
class (UK Equity, Global Equity Income, Balanced Risk Allocation and Managed 
Liquidity) for cash, either pursuant to the authority given by resolution 13 or 
(if such allotment constitutes the sale of relevant Shares which, immediately 
before the sale, were held by the Company as treasury shares) otherwise, as if 
section 561 of the 2006 Act did not apply to any such allotment, provided that 
this power shall be limited: 
 
(a)     to the allotment of Shares in connection with a rights issue in favour 
of all holders of a class of Share where the Shares attributable respectively 
to the interests of all holders of Shares of such class are either 
proportionate (as nearly as may be) to the respective numbers of relevant 
Shares held by them or are otherwise allotted in accordance with the rights 
attaching to such Shares (subject in either case to such exclusions or other 
arrangements as the Directors may deem necessary or expedient in relation to 
fractional entitlements or legal or practical problems under the laws of, or 
the requirements of, any regulatory body or any stock exchange in any territory 
or otherwise); 
 
(b)     to the allotment (otherwise than pursuant to a rights issue) of equity 
securities up to an aggregate nominal amount of £72,923 of UK Equity Shares, £ 
24,946 of Global Equity Income Shares, £4,215 of Balanced Risk Allocation 
Shares and £1,257 of Managed Liquidity Shares; and 
 
(c)     to the allotment of equity securities at a price of not less than the 
net asset value per Share as close as practicable to the allotment or sale 
 
and this power shall expire at the conclusion of the next AGM of the Company or 
the date 15 months after the passing of this resolution, whichever is the 
earlier, but so that this power shall allow the Company to make offers or 
agreements before the expiry of this power which would or might require equity 
securities to be allotted after such expiry as if the power conferred by this 
resolution had not expired; and so that words and expressions defined in or for 
the purposes of Part 17 of the 2006 Act shall bear the same meanings in this 
resolution. 
 
15.    That: 
 
the Company be generally and subject as hereinafter appears unconditionally 
authorised in accordance with section 701 of the Companies Act 2006 as amended 
from time to time prior to the date of passing this resolution ('2006 Act') to 
make market purchases (within the meaning of section 693(4) of the 2006 Act) of 
its issued Shares in each Share class (UK Equity, Global Equity Income, 
Balanced Risk Allocation and Managed Liquidity). 
 
PROVIDED ALWAYS THAT: 
 
(i)      the maximum number of Shares hereby authorised to be purchased shall 
be 14.99% of each class of the Company's share capital as at the date of the 
AGM; 
 
(ii)     the minimum price which may be paid for a Share shall be 1p; 
 
(iii)    the maximum price which may be paid for a Share in each Share class 
must not be more than the higher of: (a) 5% above the average of the mid-market 
values of the Shares for the five business days before the purchase is made; 
and (b) the higher of the price of the last independent trade in the Shares and 
the highest then current independent bid for the Shares on the London Stock 
Exchange; 
 
(iv)    any purchase of Shares will be made in the market for cash at prices 
below the prevailing net asset value per Share (as determined by the 
Directors); 
 
(v)     the authority hereby conferred shall expire at the conclusion of the 
next AGM of the Company or, if earlier, on the expiry of 15 months from the 
passing of this resolution unless the authority is renewed at any other general 
meeting prior to such time; and 
 
(vi)    the Company may make a contract to purchase Shares under the authority 
hereby conferred prior to the expiry of such authority which will be executed 
wholly or partly after the expiration of such authority and may make a purchase 
of Shares pursuant to any such contract. 
 
16.    That: 
 
the period of notice required for general meetings of the Company (other than 
Annual General Meetings) shall be not less than 14 days. 
 
17.    That: 
 
the share premium accounts of each of (i) the class of UK Equity shares of 1 
penny each in the capital of the Company; and (ii) the class of Balanced Risk 
Allocation shares of 1 penny each in the capital of the Company, be cancelled 
and the amount of the share premium of each share class so cancelled be 
credited to a reserve in respect of each the respective share classes. 
 
Dated 3 August 2022 
 
By order of the Board 
 
Invesco Asset Management Limited 
 
Company Secretary 
 
Appendix 
 
Proposed cancellation of the UK Equity and Balanced Risk Allocation Share 
Premium Accounts 
 
DEFINITIONS 
 
"Act"                                  Companies Act 2006 (as amended from time 
to time) 
 
"Capital Reduction"            the proposal recommended by the Board that, 
subject to the approval of the Court, (i) the sum of £121,700,000 being the 
entire amount standing to the credit of the UK Equity Share Class share premium 
account; and (ii) the sum of £1,290,000 being the entire amount standing to the 
credit of the Balanced Risk Allocation Share Class share premium  account, be 
cancelled and credited to a reserve; 
 
"Court"                               the High Court of Justice in England and 
Wales 
 
"Latest Practicable Date"    2 August 2022 (being the latest practicable date 
prior to the publication of this document) 
 
TIMETABLE 
 
Expected date of initial directions hearing of the Court                     18 
October 2022 
 
Expected date of Court hearing to confirm the Capital Reduction       8 
November 2022 
 
Expected effective date for the Capital reduction 
on or around 21 November 2022 
 
Note The expected dates for the confirmation of the Capital Reduction by the 
Court and the Capital Reduction becoming effective are based on provisions 
dates that have been obtained for the required Court hearings of the Company's 
application. These provisional hearing dates are subject to change and 
dependent on the Court's timetable. 
 
LETTER FROM CHAIRMAN 
 
Capital Reduction 
 
In addition to the usual business to be conducted at the AGM, I am writing in 
connection with the Capital Reduction; to provide you with information about 
the reasons for the Capital Reduction, to explain why the Board considers it to 
be in the best interests of the Company and its shareholders as a whole, and to 
explain why the Board unanimously recommends that you vote in favour of it. 
 
The two share premium accounts have built up over time. The UK Equity Share 
Class account in particular grew significantly following the merger with 
Invesco Income Growth Trust plc in 2021. The Balanced Risk Allocation Share 
Class account has grown due to historic share issuance. The Capital Reduction 
will have the effect of creating distributable reserves in respect of each of 
the relevant share classes and which will provide the Company with flexibility: 
 
(a)          Subject to the financial performance of the Company, to make 
future distributions; and/or 
 
(b)          to make purchases of its own shares as permitted by the Act and in 
accordance with resolution 15 to be proposed at the AGM. 
 
The Directors will only exercise the authority to purchase the Company's shares 
if, in light of market conditions prevailing at the time, they consider that 
the purchase of such shares can be expected to result in an increase in 
earnings or net assets per share and is in the best interest of the Company's 
shareholders (and other stakeholders) generally. 
 
The Capital Reduction will not involve any distribution or repayment of capital 
or share premium by the Company and will not reduce the underlying net assets 
of the Company. There will be no change to the number of ordinary shares in 
issue (or their nominal value) following implementation of the Capital 
Reduction and no new share certificates will be issued as a result of the 
Capital Reduction. 
 
Share premium account 
 
The Act requires that if a company issues shares at a premium to the nominal 
value of those shares, whether for cash or otherwise, a sum equal to the 
aggregate amount of value of the premiums must be transferred to the company's 
share premium account. A share premium account can only be used in limited 
circumstances. Due to the structure of the Company each of the share classes 
has its own share premium account. The Board is recommending that the share 
premium accounts of UK Equity Share Class and Balanced Risk Allocation Share 
Class be cancelled. As at the Last Practicable Date the amount standing to the 
credit of the UK Equity Share Class's share premium account was £121,700,000 
and the amount standing to the credit of the Balanced Risk Allocation Share 
Class's share premium account was £1,290,000. Following the implementation of 
the Capital Reduction the entire share premium account of each of the UK Equity 
Share Class and Balanced Risk Allocation Share Class will be cancelled. 
 
Approval of the shareholders and class consent 
 
Section 641 of the Act provides that any reduction of the share premium account 
must be approved by the Company's shareholders by a special resolution. In 
addition, in accordance with the provisions of the articles of association of 
the Company, the Company will seek a class consent from the shareholders of the 
UK Equity Share Class and the Balanced Risk Allocation Share Class in respect 
of the proposed cancellation of the reserves. 
 
Court approval 
 
In addition to the approval of the shareholders, the Capital Reduction requires 
the approval of the Court. Accordingly, following approval of the Capital 
Reduction by shareholders at the AGM, an application will be made to the Court 
in order to confirm and approve the Capital Reduction. 
 
Creditor protection 
 
In providing its approval, the Court may require protection for the creditors 
of the Company (if any) whose debts remain outstanding on the relevant date, 
except in the case of creditors (including contingent creditors) that have 
consented to the Capital Reduction. Any such creditor protection may include 
seeking the consent of the Company's creditors to the Capital Reduction or the 
provision by the Company to the Court of an undertaking to deposit a sum of 
money into a blocked account created for the purpose of discharging, in due 
course, any amounts owing to the non-consenting creditors of the Company. 
 
Court hearing 
 
It is anticipated that the initial directions hearing in relation to the 
Capital Reduction will take place on 18 October 2022, with the final hearing by 
the Court to confirm the Capital Reduction taking place on 8 November 2022 and 
the Capital Reduction becoming effective as soon as practicable thereafter, 
following the necessary registration of, amongst other things, the order of the 
Court (Court Order) confirming the Capital Reduction at Companies House. 
 
Right to abandon 
 
The Board reserves the right to abandon or to discontinue (in whole or in part) 
the application to the Court in the event that the Board considers that the 
terms on which the Capital Reduction would be (or would be likely to be) 
confirmed by the Court, would not be in the best interests of the Company and/ 
or the shareholders as a whole. The Board has undertaken a thorough review of 
the Company's liabilities (including contingent liabilities) and considers that 
the Company will be able to satisfy the Court that, as at the date on which the 
Court Order relating to the Capital Reduction and the statement of capital in 
respect of the Capital Reduction are registered by the Registrar of Companies 
at Companies House and the Capital Reduction therefore becomes effective, the 
Company's creditors will either have consent to the Capital Reduction or be 
sufficiently protected. 
 
Victoria Muir 
 
3 August 2022 
 
 
 
END 
 
 

(END) Dow Jones Newswires

August 04, 2022 02:00 ET (06:00 GMT)

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