Invesco Enhanced Income Limited

As at 29 February 2020
www.invesco.co.uk/enhancedincome

The name of the investment company changed from Invesco Perpetual Enhanced
Income Limited on 4 March 2019.

Investment objective
The Company’s principal objective is to provide shareholders with a high level of income
whilst seeking to maximise total return through investing in a diversified portfolio of high
yielding corporate and government bonds. The Company may also invest in equities and
other instruments that the Manager considers appropriate.
The Company seeks to balance the attraction of high yield securities with the need
for protection of capital and to manage volatility. The Company generally employs
gearing in its Investment Policy.
Further details of the Company’s Investment Policy and Risk and Investment Limits
can be found in the Directors' Report contained within the Company’s Annual Financial
Portfolio Managers: Rhys Davies (pictured),
Report.
Paul Read and Paul Causer
Market and economic review
Coronavirus Covid-19 was the dominant influence on financial market returns during
Key facts February. As the virus spread across more countries, concerns about its impact on global
Launched October 19991 economic growth intensified. Core government bonds (for example US Treasuries and
UK Gilts) were the main beneficiaries of the deterioration in sentiment with government
Ticker IPE.L
bond yields (which move inversely to the price) across several countries reaching new
Total Assets £150.8m lows. By contrast high yield bonds, which are sensistive to the economic cycle came
Ordinary shares under pressure. European high yield credit spreads (the premium over government
Share Price 72.4p bonds that companies need to pay to borrow) had increased 74 basis points (bps) to end
Cum-Income NAV (debt at fair 74.0p the month at 422bps.
value)
Portfolio review
Discount 2.1% The portfolio holds a core of non-financial high yield corporate bonds, focused on
Total Dividend2 5p seasoned issuers that we consider have a low likelihood of default. Alongside these core
positions the portfolio also has a smaller allocation to more speculative positions. The
Dividend Yield3 6.9% expectation with these bonds is that the return will come from both capital appreciation
Borrowing5 13.6% and income. In addition, to the corporate high yield bond allocation, the portfolio has
significant exposure to the financial sector through both subordinated bank bonds and
Fees and expenses
subordinated insurance bonds. As at the end of February, gross borrowing was 18% of
Ongoing charge (incl AMF) 1.04% the Net Asset Value (NAV).
Annual Management Fee (AMF) 4

On first £80m 0.8%

Ordinary share price and NAV cumulative % growth
Next £70m 0.7%
performance
Thereafter 0.6%
6 months 1 Year 3 Years 5 Years 10 Years
Shares in issue
Share Price 0.8 8.4 12.8 31.6 173.4
Ordinary shares 173,619,855
Net Asset Value 3.8 12.1 19.5 39.4 154.3
Gearing
The Company participates in repo financing Standardised rolling 12-month performance % growth
up to a maximum of 50% of shareholders'
funds. 31.12.14 31.12.15 31.12.16 31.12.17 31.12.18
31.12.15 31.12.16 31.12.17 31.12.18 31.12.19

Ordinary Share Price 0.0 20.1 11.4 -7.3 15.8

Net Asset Value 1.9 16.0 10.0 -4.2 16.2
Past performance is not a guide to future returns. Ordinary share price performance
figures have been calculated using daily closing prices with dividends reinvested.
NAV performance figures have been calculated using daily NAV with dividends
reinvested. The NAV used includes current period revenue and values debt at fair.
All performance figures are in sterling as at 29 February 2020 except where
otherwise stated. Standardised past performance figures are updated on a quarterly
basis.
Source: Morningstar.

1 The Company was launched on 15 October 1999, originally as Invesco Leveraged High Yield Fund Limited; its name and investment policy
were changed with the approval of shareholders on 11 November 2013.
2 Total dividend is made up of the previous financial year’s dividends declared by the Company.
3 Dividend yield is the total dividend divided by the current share price.
4 With effect from 1 January 2018, the annual management fee will be calculated at an annual rate of 0.8% on the first £80 million of the
Company’s net asset value, 0.7% on the next £70m and at a rate of 0.6% thereafter. In addition, the performance fee has been removed.
5 Reflects the amount of net borrowings invested, i.e borrowings less cash. It is based on net borrowings as a percentage of shareholders’
funds. The Board has prescribed that borrowings may be used to raise exposure to bonds and equities and that net borrowings may not
exceed an amount equal to 50% of shareholders funds.
Top 10 issuers % portfolio
Invesco Enhanced Income Limited
Barclays 2.75% FRN Perpetual, 8% FRN Perpetual, 2.5
7.125% FRN Perpetual, 6.375% FRN Perpetual, As at 29 February 2020
7.875% FRN Perpetual
Virgin Media Finance 5.75% 15 Apr 2023 (SNR), 6.25% 28 Mar 2029 2.5 Investment risks
Koninklijke KPN 6.875% FRN 14 Mar 2073 2.3
The value of investments and any income will
Telecom Italia 5.25% 17 Mar 2055, 5.303% 30 May 2024 2.3 fluctuate (this may partly be as a result of
Stonegate 4.875% 15 Mar 2022 (SNR), FRN 15 Mar 2022 2.2 exchange rate fluctuations) and investors may
(SNR), 7% FRN 15 Mar 2022 (SNR) not get back the full amount invested.
When making an investment in an investment
Vodafone Group 4.875% 03 Oct 2078, 6.25% 03 Oct 2078, 1.5% 2.2 company you are buying shares in a company
Cnv 12 Mar 2022, 7% FRN 04 Apr 2079 that is listed on a stock exchange. The price of
Teva Pharmaceutical Finance 6.75% 01 Mar 2028 (SNR), 7.125% 31 Jan 2.2 the shares will be determined by supply and
III 2025 (SUB), 6% 31 Jan 2025 (SNR) demand. Consequently, the share price of an
investment company may be higher or lower
Altice 7.5% 15 May 2026, SFR 7.375% 01 May 2026 2.2 than the underlying net asset value of the
Royal Bank of Scotland 7.64% FRN Perpetual, 8.625% FRN Perpetual, 2.1 investments in its portfolio and there can be no
7.5% Cnv FRN Perpetual, 8% Cnv FRN Perpetual certainty that there will be liquidity in the
shares.
Enel 7.75% 10 Sep 2075, 6.625% 15 Sep 2076 1.9 The portfolio has a significant proportion of
Total 22.4 high-yielding bonds, which are of lower credit
quality and may result in large fluctuations in the
Credit rating breakdown % portfolio NAV of the product.
The product uses derivatives for efficient
BBB 19.8 Equity 0.4 portfolio management which may result in
BB 34.9 Not Rated 8.0 increased volatility in the NAV.
The use of borrowings may increase the
B 29.1 Cash 3.2 volatility of the NAV and may reduce returns
CCC 4.6 when asset values fall.
The product may invest in contingent
Total 100.0 convertible bonds which may result in significant
risk of capital loss based on certain trigger
10 year dividend payment history (pence/share) Dividend events.

Pence/Share Important information

6 This document is marketing material and is not

5 5 5 5 5 5 5 5 5 5
intended as a recommendation to invest in any
3 particular asset class, security or strategy.
Regulatory requirements that require
0 impartiality of investment/investment strategy
10 11 12 13 14 15 16 17 18 19 recommendations are therefore not applicable
Financial Years Ending 30 September nor are any prohibitions to trade before
publication. The information provided is for
Source: Morningstar. Please note that this chart may include dividends declared but not illustrative purposes only, it should not be relied
yet paid. Past performance is not a guide to future returns upon as recommendations to buy or sell
securities.
Financial calendar and dividend information Where individuals or the business have
expressed opinions, they are based on current
Year End 30 September market conditions, they may differ from those
Annual Financial Report published December of other investment professionals and are
subject to change without notice.
Half-Yearly Financial Report published May Invesco Enhanced Income Limited is regulated
Dividend payment dates January, April, July and October by the Jersey Financial Services Commission.
For more information on our products, please
Annual General Meeting February
refer to the relevant Key Information Document
(KID), Alternative Investment Fund Managers
General information Directive document (AIFMD), and the latest
The ordinary shares of the Company are listed on the London Stock Exchange. On an Annual or Half-Yearly Financial Reports. This
annual basis, shareholder approval is sought to authorise the buy back and issue of information is available using the contact details
shares. This enables the Company to respond to an excess of supply or demand for the shown.
Company’s shares in the market.

Continuation vote
A further resolution for the continuation of the Company as a closed ended Company is
required every 5 years-this was passed at the 2019 AGM, with the next one due in 2024.

Further information
Client Services
Telephone 0800 085 8677
Email enquiry@invesco.com
Telephone calls may be recorded.
www.invesco.co.uk/enhancedincome
Issued by Invesco Fund Managers
Limited, Perpetual Park, Perpetual Park
Drive, Henley-on-Thames, Oxfordshire
RG9 1HH, UK
Authorised and regulated by the Financial
Conduct Authority