beyond our borders why investors should consider international markets iic-whyintl-ppt-1p 10/14...

Beyond Our BordersWhy investors should consider international markets

IIC-WHYINTL-PPT-1P 10/14 Invesco Distributors , Inc.

2

Important information

Before investing, investors should carefully read the prospectus and/or summary prospectus and carefully consider the investment objectives, risks and charges and expenses. For this and other information about the fund(s), investors should ask their advisors for a prospectus/summary prospectus or visit invesco.com/fundprospectus.

Note: Not all products, materials and services available at all firms. Advisors, please contact your home office.

IIC-WHYINTL-PPT-1P 10/14

3


The risks of investing in securities of foreign issuers, including emerging market issuers, can include fluctuations in foreign currencies, political and economic instability, and foreign taxation issues.

The performance of an investment concentrated in issuers of a certain region or country is expected to be closely tied to conditions within that region and to be more volatile than more geographically diversified investments.


4


The opinions expressed are those of the authors, are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals.

All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. This is not to be construed as an offer to buy or sell any financial instruments and should not be relied upon as the sole factor in an investment-making decision.

Past performance cannot guarantee comparable future results.

Diversification does not guarantee a profit or eliminate the risk of loss.


5

61% of mutual fund owners do not own a non-US or global fund.

Source: ICI Research Report: “Profile of Mutual Fund Shareholders, 2013” February 2014


6

Three reasons to invest internationally


1 Opportunity and Demographics

Global populations — and economies — are growing rapidly as a generation of more affluent consumers is emerging

2 Performance International markets have attractive historical performance

3 Familiarity Many international companies have popular US brands

7

1. Opportunity and Demographics


8

More than half the world’s stock market is outside the US.

As of June 30, 2014. Source: Based on The MSCI All Country World Index, an index considered representative of stock markets of developed and emerging markets. An investment cannot be made directly into an index.


9

Developed (ex US)41%

Emerging11%

US48%

52%of the world’s market cap is

outside the US

95%of the world’s Population comes

from outside the US

US5%

Developed (ex US)

10%

Emerging85%

Population1 Breakdown 2014

A growing majority of the world’s population, gross domestic products (GDP) and market capitalization is outside the US

1 GDP and population figures are projections and are as of Apr. 2014.2 Market cap figures are based on MSCI AC World Index and are as of June 30, 2014.Sources: MSCI Inc., International Monetary Fund, World Economic Outlook Database, Apr. 2014. The MSCI All Country World Index is an index considered representative of stock markets of developed and emerging markets. An investment cannot be made directly into an index.

Developed (ex US)

38%

Emerging39%

US23%

77%of the world’s GDP

comes from outside the US

GDP1 Breakdown in 2014 Market Cap2 in 2014


10

Emerging markets are more than just Brazil, Russia, India and China (the BRICs)


Source: MSCI as of March 31, 2014. For illustrative purposes only. BRICS are Brazil, Russia, India, China. Qatar and United Arab Emirates will be reclassified as Emerging Markets from Frontier Markets in May 2014. The MSCI Emerging Market ND Index is an unmanaged index considered representative of developing countries. An investment cannot be made directly in an index. For complete MSCI disclosure , see slide 26.

Today, emerging markets, as represented by the MSCI Emerging Markets Index, covers over 800 securities across 23 markets, representing approximately 11% of world market cap.

Americas Brazil, Chile, Colombia, Mexico, Peru

Europe, MiddleEast & Africa

Czech Republic, Egypt, Greece, Hungary, Poland, Qatar, Russia, South Africa, Turkey, United Arab Emirates

Asia China, India, Indonesia, Korea, Malaysia, Philippines, Taiwan, Thailand

11

The global middle class* is expected to more than double by 2030.

* Global Middle Class defined as households with daily expenditures between US$ 10 and US$ 100 per personSource: Kharas, H. (2010), “The Emerging Middle Class in Developing Countries”, Wolfensohn center for Development at the Brookings Institution, March 15, 2010. Actual results may differ from current expectations.


12

Bra

zil

Chile

Chin

a

Colo

mbia

Cze

ch R

epublic

Gre

ece

Hungary

Mala

ysi

a

Mexic

o

Peru

Pola

nd

Russ

ia

Saudi A

rabia

South

Kore

a

Taiw

an

Thailand

Turk

ey

$0

$4,000

$8,000

$12,000

$16,000

$20,000

$24,000

$28,000

$32,000

$36,000

Projected 2014 Real Per Capita GDP Projected 2030 Real Per Capita GDP

Real P

er

Capit

a G

DP

Many Emerging Market Populations May See Their Annual Incomes Rise Meaningfully Over the Next 16 Years

Emerging markets may account for a large part of the global middle class in 2030


Source: United States Department of Agriculture: Economic Research Service. Estimates as of Dec 2013. Real per capita gross domestic product (GDP) is the measure of a country’s total GDP divided by number of people in the country. Baseline figures are in 2005 dollars. Purchasing Power Parity is an economic theory that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency's purchasing power.

Middle class defined as people with an annual income threshold of between $4,000 and $17,000, which in fact, hews closely to the $10 per day benchmark at the low end of the income range. (All the benchmarks are adjusted for U.S. prices using an economic leveler known as purchasing power parity , or PPP.)

Middle Class Threshold

13

2009 2020 Projected 2030 Projected0

20

40

60

80

100

120

140

160

180

200

% c

hange

The Global Middle Class is Expected to Grow Exponentially Over the Next 20 Years

Global consumers are growing by the billions

Source: Kharas, H. (2010), “The Emerging Middle Class in Developing Countries”, Wolfensohn center for Development at the Brookings Institution, March 15, 2010. Actual results may differ from current expectations.

Potentially there may be

3 billionmore global consumers in the world by 2030.

1.8Bpeople

3.2Bpeople

4.9Bpeople


14

In 2030, Asia is projected to have the largest middle classApproximately 10x larger than the US

Each figure represents 0.1 billion people.Source: Kharas, H. (2010), “The Emerging Middle Class in Developing Countries”, Wolfensohn center for Development at the Brookings Institution, March 15, 2010. Actual results may differ from current expectations.

North America0.38Bpeople

Europe0.68Bpeople

Asia3.20Bpeople

Projected Size of Middle Class by 2030 — by Region


15

2. Performance


16

Over the last 10 years, the US has never been the world’s top equity market.

Source: Lipper Inc. Index performance is not illustrative of performance from any Invesco fund. Past performance cannot guarantee comparable future results. Each country is represented by its respective MSCI index. An investment cannot be made directly in an index. For complete MSCI disclosure, see slide 28.


17

Despite conventional wisdom, US performance has not dominated


Data as of June 30, 2014.Source: Lipper Inc. Index performance is not illustrative of performance from any Invesco fund. Past performance cannot guarantee comparable future results. Each country is represented by its respective MSCI index. An investment cannot be made directly in an index. For complete MSCI disclosure , see slide 26.

In the Past 10 Years, the US has Ranked as a Top 10 Country Only Four TimesBased on annual returns for top developed countries over the past 10 years

Canada

7 times

US4 times

Norway

8 timesDenmark

8 times

Israel5 times

Singapore

7 timesAustralia

9 times New Zealand

6 times

18

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

Q2 20

14-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

International Underperformed International Outperformed

Rela

tive P

erf

orm

ance

International Market Returns Relative to Domestic Market ReturnsRepresented by MSCI EAFE and S&P 500, 12/31/1975–06/30/2014

Which will outperform next?


Data as of June 30, 2014.Source: Source: Lipper Inc. Index performance is not illustrative of performance from any Invesco fund. Past performance cannot guarantee comparable future results. International Markets are represented by the MSCI EAFE and the US market is represented by the S&P 500. The MSCI EAFE® Index is an unmanaged index considered representative of stocks of Europe, Australasia and the Far East. Results assume reinvestment of dividends. The S&P 500 Index is an unmanaged index considered representative of the US stock market. An investment cannot be made directly in an index. For complete MSCI disclosure , see slide 26.

The US has outperformed international markets in recent years meaning a reversion may be coming soon

19

Additional InformationActual Calendar Year Index Returns


Year S&P 500 MSCI EAFE1976 23.93 2.541977 -7.16 0.181978 6.58 32.621979 18.60 4.751980 32.50 22.581981 -4.92 -2.281982 21.55 -1.861983 22.56 23.691984 6.27 7.381985 31.73 56.161986 18.66 69.441987 5.25 24.631988 16.56 28.271989 31.63 10.541990 -3.11 -23.451991 30.40 12.131992 7.61 -12.171993 10.06 32.561994 1.31 7.78

Data as of June 30, 2014.Source: Source: Lipper Inc. Index performance is not illustrative of performance from any Invesco fund. Past performance cannot guarantee comparable future results. International Markets are represented by the MSCI EAFE and the US market is represented by the S&P 500. The MSCI EAFE® Index is an unmanaged index considered representative of stocks of Europe, Australasia and the Far East. Results assume reinvestment of dividends. The S&P 500 Index is an unmanaged index considered representative of the US stock market. An investment cannot be made directly in an index. For complete MSCI disclosure , see slide 25.

Year S&P 500 MSCI EAFE1995 37.53 11.211996 22.95 6.051997 33.35 1.781998 28.60 20.001999 21.03 26.962000 -9.10 -14.172001 -11.88 -21.442002 -22.09 -15.942003 28.67 38.592004 10.87 20.252005 4.91 13.542006 15.78 26.342007 5.49 11.172008 -36.99 -43.382009 26.47 31.782010 15.08 7.752011 2.09 -12.142012 15.99 17.322013 32.39 22.78June 30, 2014 7.14 4.78

20

International stocks are currently trading at a 35% discount to US stocks.1

1 Excluding Emerging MarketsSource: Invesco, Compustat and Factset, as of June 30, 2014. Past performance is not a guarantee of future results. An investment cannot be made directly in an index.


21

Jan-75 Jan-80 Jan-85 Jan-90 Jan-95 Jan-00 Jan-05 Jan-10

-60

-40

-20

0

20

40

60

80

MSCI EAFE Index Price-to-Book Relative to MSCI US Index Price-to-Book

%

Based on Price-to-Book Ratios, International Markets Have BeenInexpensive Relative to Domestic Markets

International stocks continue to trade at a discount


Source: Invesco, Compustat and MSCI, as of June 30, 2014. The MSCI EAFE® Index is an unmanaged index considered representative of stocks of Europe, Australasia and the Far East. The MSCI USA Index ND is an unmanaged index considered representative of U.S. stocks. The index is computed using the net return, which withholds applicable taxes for non-resident investors. Results assume reinvestment of dividends. For complete MSCI disclosure , see slide 30. Past performance is not a guarantee of future results. An investment cannot be made directly in an index. The price-to-book (P/B) ratio also know as the price-equity ratio, is a measure of how expensive a stock is. It is equal to a stocks current price divided by the latest quarter’s book value per share.

International stocks are currently trading at an approximate

35% discount to the US

International trading at a premium to the US

-34.62%International trading at a discount to the USJun-14

Avg International/US Line

22

3. Familiarity


In 2013 international companies made up 74% of the Fortune Global 500.1

1 Based on 2013 Fortune Global 500 (Rankings are based on Revenue)Sources: Fortune.com, 2013 Global 500, July 2013

24

Several of the world’s largest companies and well-known brands are outside the US


8 of the 10 Largest Companies in the World are Headquartered Outside the US.

Industry Groups Largest Company in Industry Group

6 of the 10 largest electronic companies in the world are headquartered outside the US. Samsung

Electronics

8 of the 10 largest automakers are headquartered outside the US. Toyota Motors

7 of the 10 largest energy companies are headquartered outside the US.

Royal Dutch Shell

Based on 2013 Fortune Global 500 (Rankings are based on revenue)Sources: Fortune.com, 2013 Global 500, July 2013

25

Many brands you use every day are produced by non-US companies1

1 As of September 2014These sample brands are not all inclusive. The companies mentioned are for illustrative purposes, do not necessarily represent specific fund holdings and should not be considered recommendations to purchase or sell a particular security.


Company Country

L’Oréal France

adidas AG Germany

Sony Japan

Royal Philips Electronics

Netherlands

Samsung South Korea

Nestlé Switzerland

GlaxoSmithKline United Kingdom

26

48%52%

US MarketInternational Market

Global Stock Market Capitalization 20141

83%

17%

US AUM International AUM

Mutual Fund Assets Broken-out by Asset Class

Reality checkAlthough more than half of the world’s stock market is outside the US, only 16% of stock mutual fund assets are invested in international equities.2


1 Market capitalization figures based on MSCI All Country World Index as of June 30, 2014.2 Source: SI Simfund MF, as of June 30, 2014. Includes long-term open-end mutual fund assets only (excludes

fund of funds) as of June 30, 2014.

27

Beyond our bordersWhy investors should consider international markets for long-term wealth creation


1 Opportunity and Demographics

More than half of the worlds stock market is outside the US.1 The global middle class is growing exponentially and could be a key driver of future global growth.2

2 Performance The US has never been ranked the best performing developed market in the past 10 years.3

3 Familiarity Many US household brands come from international companies.

1 Market capitalization figures based on MSCI All Country World Index as of June 30, 2014.2 Source: Kharas, H. (2010), “The Emerging Middle Class in Developing Countries”, Wolfensohn center for Development at Brookings Institution, March 15, 2010. Actual results may differ from current expectations.3 Source: Lipper Inc. Index performance is not illustrative of performance from any Invesco fund. Past performance cannot guarantee comparable future results.

28


Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.


29 IIC-WHYINTL-PPT-1P 10/14

30

Thank you

This material is for educational purposes only and does not contend to address the financial objectives, situation or specific needs of any individual investor. It is not a solicitation or an offer to buy or sell any security or investment product

Invesco.com/us

For US use only

13792Invesco Distributors, Inc. IIC-WHYINTL-PPT-1P 10/14

beyond our borders why investors should consider international markets iic-whyintl-ppt-1p 10/14...

Documents

demographics iicwhyintl

us companies

global fund

emerging markets

investment objectives

emerging market issuers

mutual fund owners

mutual funds