War, Inflation and Interest Rate Hikes Spook Markets. But there are Reasons for Optimism.

Risk Management

Markets had a very strong run in the wake of the pandemic. However, the current pincer movement of lower demand and higher interest rates has sent them lower.


Is it as gloomy as the newspapers would have you believe? Jonathan Brown thinks not.


In his Q2 video update, Jonathan talks about areas of opportunity amid uncertainty. He also answers the following questions:


  • 00:13: What has happened over the quarter?
  • 00:45: Why have markets been weak?
  • 01:18: Are we heading for a recession?
  • 02: 21: What are companies saying?
  • 03:11: What does this mean for the Invesco Perpetual UK Smaller Companies Investment Trust plc?
  • 04:12: How did the trust perform over the quarter?
  • 06:37: What is the outlook for UK smaller companies?

Investment risks:


The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

When making an investment in an investment trust/company you are buying shares in a company that is listed on a stock exchange. The price of the shares will be determined by supply and demand. Consequently, the share price of an investment trust/company may be higher or lower than the underlying net asset value of the investments in its portfolio and there can be no certainty that there will be liquidity in the shares.

The Invesco Perpetual UK Smaller Companies Investment Trust plc invests in smaller companies which may result in a higher level of risk than a product that invests in larger companies. Securities of smaller companies may be subject to abrupt price movements and may be less liquid, which may mean they are not easy to buy or sell.

The use of borrowings may increase the volatility of the NAV and may reduce returns when asset values fall.

The Invesco Perpetual UK Smaller Companies Investment Trust plc uses derivatives for efficient portfolio management which may result in increased volatility in the NAV. In addition, some companies are suspending, lowering or postponing their dividend payments, which may affect the income received by the product during this period and in the future.


Important information


All information correct as at 8 July 2022 unless otherwise stated.

This is marketing material and not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.

Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.

For more information on our investment trusts, please refer to the relevant Key Information Document (KID), Alternative Investment Fund Managers Directive document (AIFMD), and the latest Annual or Half-Yearly Financial Reports. This information is available on our website.

Further details of the Company’s Investment Policy and Risk and Investment Limits can be found in the Report of the Directors contained within the Company’s Annual Financial Report.

If investors are unsure if this product is suitable for them, they should seek advice from a financial adviser. For details of your nearest financial adviser, please contact IFA Promotion at www.unbiased.co.uk.


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