Investment Week – Market Focus

10 March 2020

This document is for Professional Clients only and is not for

consumer use.

Thomas Moore

Fund Manager, Invesco High Yield Fund (UK)

Opportunities in high yield bonds

Thomas Moore, Fund Manager and Senior Analyst

Thomas joined Invesco in June 2016 as a Senior Credit Analyst before being appointed Fund Manager for the Invesco High Yield Fund (UK) in December 2016.

Thomas began his career in New York in 1999 at Orion Consultants, where he held a number of roles

focused on US and international fixed income markets. In 2004 he moved to Morgan Stanley, where he held senior roles within the fixed income division. In 2011 he became Head of European Credit Analytics

before being promoted to Managing Director in 2012.

Thomas is a graduate of Harvard and Oxford Universities and holds an MBA from Columbia Business

School. He is also a CFA Charterholder.

Thomas Moore, Fund Manager Biography

Source: Invesco.

2

Strong heritage

▪ The team manages £10.9bn in high yield rated bonds

▪ The team has invested in high yield for over 25 years

Strong analytical resource

▪ 10 credit analysts, with further hires planned

Active & flexible approach

Invesco High Yield Fund (UK)Invesco’s strengths in high yield

Source: Invesco as at 31 December 2019.

3

The Invesco Henley Fixed Interest Team

Source: Invesco as at 31 January 2020. Years refers to time in team and () refers to industry experience. Subject to rounding.

4

Fund Manager Fund Manager/

Analyst

Analyst Markets & Risk Product Management

Alex Iv anova

Fund Manager, CFA

5 years (19)

Paul Causer

Team Co-Head

26 years (36)

Asad Bhatti

Fund Manager/

Senior Analyst, CFA

17 years (19)

Edward Craven

Senior Analyst, FCA

9 years (16)

Lewis Aubrey-Johnson

Head of Fixed Income

Products

16 years (23)

Paul Read

Team Co-Head

25 years (34)

Rhys Dav ies

Fund Manager/

Senior Analyst, CFA

16 years (18)

Tom Hemmant

Senior Analyst, ACA

9 years (17)

Dan Dewar

Head Dealer

7 years (26)

Alister Brown

Product Director

9 years (30)

Stuart Edwards

Fund Manager

14 years (23)

Thomas Moore

Fund Manager/

Senior Analyst, CFA

4 years (20)

Fund Management

Assistant

Jack Parker

Deputy Fund

Manager/Senior

Macro Analyst, CFA, 9 years (12)

Mark McDonnell

Macro Analyst

5 years (7)

Oliv ia Finch

Senior Dealer

7 years (9)

Mei Ong

Fund Management

Assistant

19 years (26)

Michael Matthews

Fund Manager

24 years (26)

Julien Eberhardt

Fund Manager/

Senior Analyst, CFA

11 years (14)

Jessica Svantesson

Credit Analyst

5 years (13)

Cathal Dowling

Product Director

6 years (21)

Roddy More

Analyst, CFA

3 years (6)

Samir Patel

Credit Analyst

2 years (13)

Sarah Williams

Credit Analyst

1 year (5)

Jonathan Oakley

Senior Dealer

<1 year (18)

Albert Karavis

Junior Dealer

<1 year (<1 )

Credit analysis

Source: Invesco as at 31 January 2020. Subject to rounding.

5

Asad Bhatti CFA Charterholder 17 years in team 19 years experience Emerging Markets, Metals & Mining

Rhys Davies CFA Charterholder 16 years in team 18 years experienceChemicals, Autos, Gaming, Rental, Construction, Distressed

Julien Eberhardt CFA Charterholder 11 years in team 14 years experience Banks: US, Europe, Japan

Edward Craven Fellowship Chartered Accountant 9 years in team 16 years experience Telecom, Media, Technology, Leisure

Tom Hemmant Associate Chartered Accountant 9 years in team 17 years experienceUtilities, Energy, Infrastructure, Paper & Packaging, Building materials, Construction

Jessica Svantesson MA International Business 5 years in team 13 years experience Infrastructure, Transport, Technology, Services

Thomas Moore CFA Charterholder 4 years in team 20 years experience Retails, Consumer, Food

Samir Patel CFA Level III Candidate 2 years in team 13 years experienceBanks (UK, Ireland, Nordics, Netherlands, Belgium, Spain, Portugal), Insurance

Sarah Williams CFA Level III Candidate 1 year in team 5 years experience General

A well resourced, highly experienced team

Why invest in high yield?High yield still the highest yielding asset class

Source: Bloomberg, ICE BofAML, 31 December 2019. Yield measure for equities is trailing 12mth dividend yield. JGBs is ICE BofAML Japan Government Index. EUR Govts is ICE

BofAML Euro Government Index. Gilts is ICE BofAML UK Gilt Index. USTs is ICE BofAML US Treasury Index. EUR IG is ICE BofAML Euro Corporate Index. GBP IG is ICE BofAML

Sterling Corporate Index. USD IG is ICE BofAML US Corporate Index. EM LC Sov is ICE BofAML All Maturity Emerging Markets Sovereign Bond Index. EM HC Govt is ICE BofAML

Emerging Markets External Sovereign Index. EUR HY is ICE BofAML Euro High Yield Index. GBP HY is ICE BofAML Sterling High Yield Index. USD HY is ICE BofAML US High Yield

Index. CoCos is ICE BofAML Contingent Capital Index. US equities is S&P500 Index, European equities is BE500 Index, Asian equities is FTSE All World Asia Pacif ic Index.

6

-1

0

1

2

3

4

5

6

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 105 110 115 120

Effe

ctive

yie

ld (

%)

Market value (USD trn)

JGBs EUR Govt

EM HC Gov GBP HY

USD HY

EUR HY

European Equities

US Equities

Asian Equities

USD IG

EM LC Gov

GBP IG

EUR IG

USTs

Gilts

Short treasuries

TIPS

CoCos

Why invest in high yield?Low short-term correlation to government bonds

Past performance is not a guide to future returns.

Source: Macrobond as at 29 February 2020. Fund performance figures are based on the Z (accumulation) share class, shown in sterling, inclusive of reinvested income and net of the

Ongoing Charge and portfolio transaction costs. Index f igures are total return, in sterling. Please note the ICE BofAML European Currency High Yield Index (GBP Hedged) and ICE

BoAML Gilt Index is not a target, constraining or comparator benchmark of the fund. The comparative information shown here is to illustrate the fund manager’s active investment

approach and provide broader market context.

7

High Yield spreads2019 a reversal of 2018

Source: Macrobond, ICE BofAML, 28 February 2020. Spread is Option Adjusted Spread.

8

31 Dec 2018 31 Dec 2019

Spread (bps) Effective Yield (%) Ave Price Spread (bps) Effective Yield (%) Ave Price

European (€/£) 522 5.07 96.15 324 2.92 103.2

European currency high yield corporatesYield and spread

Source: Macrobond, 2 March 2020. Yield is to maturity.

9

ECB and Fed continue to underpin markets

Source: Macrobond, 29 February 2020. All future data points are forecast.

10

Default rate expected to rise modestly

Source: Moody’s Default Trends – Global: December 2019 Default Report, 10 January 2020.

11

0%

2%

4%

6%

8%

10%

12%

14%

Sep 04 Sep 06 Sep 08 Sep 10 Sep 12 Sep 14 Sep 16 Sep 18 Sep 20

Global US Europe Current

Moody’s trailing 12-month high yield default rate with baseline forecast

3.0

3.5

4.0

4.5

5.0

5.5

6.0

Jun 0

4

Jun 0

5

Jun 0

6

Jun 0

7

Jun 0

8

Jun 0

9

Jun 1

0

Jun 1

1

Jun 1

2

Jun 1

3

Jun 1

4

Jun 1

5

Jun 1

6

Jun 1

7

Jun 1

8

Jun 1

9

Net Leverage

Net Leverage (Adj for composition last 4 quarters)

Issuer Net Debt / Leverage

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

Jun 0

4

Jun 0

5

Jun 0

6

Jun 0

7

Jun 0

8

Jun 0

9

Jun 1

0

Jun 1

1

Jun 1

2

Jun 1

3

Jun 1

4

Jun 1

5

Jun 1

6

Jun 1

7

Jun 1

8

Jun 1

9

EBITDA / Interest Expense

Percent of issuers below 2.5x Interest Cover (RHS)

Issuer EBITDA / Interest Expense

European high yield fundamentalsLeverage has risen but interest coverage ratio high

Source: J.P. Morgan, January 2020.

12

-20

-10

0

10

20

30

40

50

60

70

80

90

100

110

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Gross issuance Redemptions Net of coupon issuance

European currency corporate high yield: issuance, redemptions and net of coupon issuance (€bn)

European corporate high yield issuance Supply less than ‘reinvestment demand’

Source: J.P. Morgan, 3 January 2020.

13

2019 gross issuance: €87.0bn

2019 redemptions: €69.6bn

2019 coupon payments: €13.9bn

2019 net issuance net of coupon €3.5bn

Source: Barclays, 3 February 2020. For illustrative purposes only.

14

European high yieldLargest issuers in index by amount outstanding

Barclays PEHY Non-Financials by amount outstanding

Issuer # Par O/S

($bn)

MV

(%)

YTW

(%)

OAS

(bps)

Telecom Italia 13 13.3 4.0 1.6 214

Telefonica 9 8.7 2.5 1.9 249

Autostrade Per L'Italia 9 6.3 1.7 2.2 274

SoftBank 8 6.1 1.7 2.6 324

Virgin Media 9 5.8 1.6 3.2 243

ThysenKrupp 5 5.7 1.6 1.2 189

Netflix 4 5.2 1.5 3.0 350

Casino Guichard 7 4.9 1.3 5.2 577

Fiat Chrysler 3 4.0 1.2 0.4 109

Altice 5 3.9 1.1 2.9 320

Barclays PEHY Financials by amount outstanding

Issuer # Par O/S

($bn)

MV

(%)

YTW

(%)

OAS

(bps)

Banco BPM 8 4.3 1.2 1.6 225

Unione di Banche Italiane 7 3.9 1.1 1.9 254

Monte Dei Paschi Di Siena 6 3.8 1.0 4.5 471

Intrum 4 3.6 1.0 2.6 291

Intesa Sanpaolo 3 3.3 1.0 1.4 201

Assicurazioni Generali 3 2.4 0.7 2.5 269

MPT Operating Partnership 4 2.4 0.7 1.6 163

Deutsche Bank 2 2.2 0.6 1.8 246

ADLER Real Estate 5 2.2 0.6 1.0 161

Unipol Gruppo 3 2.0 0.6 1.3 195

Date Issuer Coupon % Maturity Rating Ccy Size m Price 17/02/20

08/01/20 Altice 2.25 15/01/25 B EUR 600 99.4

09/01/20 Cellnex Telecom 1.00 20/04/27 BB+ EUR 450 99.8

13/01/20 EDP (Green hybrid) 1.70 20/07/80 BB EUR 750 100.4

14/01/20 Cyprus 0.625 21/01/30 BB+ EUR 1000 100.9

21/01/20 Monte Dei Paschi Di Siena 2.625 28/04/25 B- EUR 750 104.1

22/01/20 Techem 2.00 15/07/25 B+ EUR 1145 100.5

23/01/20 Altice 2.125 15/02/25 B EUR 500 99.1

30/01/20 Jerrold 4.875 15/01/26 BB- GBP 435 102.5

31/01/20 Frigoglass 6.875 12/02/25 B- EUR 260 100.0

04/02/20 Banijay Entertainment 3.5 + 6.5 01/03/25 / 01/03/26 B+ / CCC+ EUR 575 / 400 103.3 / 106.1

05/02/20 IM Group 6.625 01/03/25 NR EUR 200 102.9

06/02/20 Q-Park 1.50 / 2.00 01/03/25 / 01/03/27 BB- EUR 425 / 630 101.5 / 101.8

12/02/20 Unicredit (AT1) 3.875 Perp (03/27 call) EUR 1250 99.5

European high yieldRecent new issues

Source: Bloomberg, Invesco 17 February 2020. For illustrative purposes only.

15

Invesco High Yield Fund (UK) Rating and currency breakdown compared to index

Source: Invesco as at 31 January 2020. Figures may not sum due to rounding. *Index is ICE BoAML European Currency Index.

16

Rating % of fund Index*

Cash 2.34 0.00

BBB 5.96 0.00

BB 34.74 69.33

B 34.59 24.62

CCC 10.67 5.98

CC 0.60 0.05

C 0.00 0.02

D 0.00 0.00

NR 9.06 0.00

Equity 2.03 0.00

Total 100.00 100.00

Pre hedge currency breakdown % of fund Index*

GBP 39.40 11.33

USD 27.59 0.00

EUR 33.01 88.67

Total 100.00 100.00

Post hedge currency breakdown % of fund

GBP 99.31

USD 0.44

EUR 0.25

Total 100.00

Invesco High Yield Fund (UK) & European high yield by rating

Past performance is not a guide to future returns.

Source: Macrobond, ICE BofAML European Currency Index, 2 March 2020. Data rebased to 31/12/2016. Fund performance figures are based on the Z (accumulation)share class.

Performance figures for all share classes can be found in the relevant Key Investor Information Document. Fund performance figures are shown in sterling, inclusive of reinvested income

and net of the Ongoing Charge and portfolio transaction costs. Please note the ICE BofAML European Currency High Yield Index (GBP Hedged) is not a target, constraining or comparator

benchmark of the fund.

17

Invesco High Yield Fund (UK) and European currency high yield – cumulative total return (% GBP hedged)

-90%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

HY non-financial 2018 price return

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

Cumulative contribution to HY 2018 price return

Importance of single name credit analysisDispersion and contribution of 2018 returns

Source: Morgan Stanley Research, Markit iBoxx, 28 December 2018.

18

The positive price return

of the 9 best HY bonds...

...is offset by the negative performance of the 272 worst HY Bonds

Best Performers Worst Performers Best Performers Worst Performers

-80%

-30%

20%

70%

HY non-financial 2019 price return

0%

2%

4%

6%

8%

10%

Cumulative contribution to HY 2019 price return

High yield corporatesDispersion and contribution of 2019 returns

Source: Morgan Stanley Research, Markit iBoxx, 30 December 2019.

19

The positive price return

of the 267 best HY bonds...

...is partially offset by the

negative performance of the

38 worst HY Bonds

Best Performers Worst Performers Best Performers Worst Performers

Source: Morgan Stanley Research, Markit iBoxx, 30 December 2019. *Bloomberg composite as at 17 February 2020.

20

Winners and losersBest and worst index constituents: 2019 price %

Bond Rating* YTD % change

Aldesa 7.25% 2021 CCC+ 88.5

Douglas 8.75% 2023 CCC 47.6

Salini Impregilo 1.75% 2024 NR 44.4

Takko 5.375% 2023 B- 37.4

Douglas 6.25% 2022 B- 37.3

Takko 5.375% 2023 (144a) B- 36.8

DIA 1% 2021 CC+ 34.2

Altice 6.25% 2025 CCC+ 31.2

OHL 4.75% 2022 CCC+ 27.4

OHL 5.5% 2023 CCC+ 27.3

Bond Rating YTD % change

Safari Verwaltungs 5.375% 2022 CCC+ -13.1

Moby 7.75% 2023 DDD+ -14.7

Intralot 6.75% 2021 CCC -17.1

Eagle Intermediate 5.375% 2023 NR -17.7

Naviera Armas 6.5% 2023 B+ -21.1

Naviera Armas 4.25% 2024 B+ -23.4

Intralot 5.25% 2024 CCC -30.7

Pro-Gest 3.25% 2024 CCC+ -33.1

Hema 8.5% 2023 CC+ -34.0

Officine Maccaferri 5.75% 2021 C+ -44.9

Excludes bonds entering or exiting index, e.g. Thomas Cook 6.25% 2022 -92.2%

Index Current OAS (bps) Current effective yield (%) YTD Total Return (%) 2019 Total Return (%) 2018 Total Return (%)

£ HY 525 5.59 -0.42 13.37 -1.65

£ BB 329 3.63 0.29 13.35 -1.31

£ B 628 6.60 -1.12 14.48 -1.47

£ CCC & lower 1804 18.38 -3.26 4.85 -4.02

€ HY 409 3.35 -1.64 11.29 -3.63

€ BB 303 2.29 -1.45 10.84 -2.83

€ B 597 5.22 -2.51 10.43 -4.33

€ CCC & lower 920 8.55 -0.56 20.01 -12.57

$ HY 506 6.07 -1.54 14.41 -2.27

$ BB 333 4.37 -1.06 15.73 -2.46

$ B 534 6.32 -1.76 14.36 -1.54

$ CCC & lower 1182 12.81 -2.80 9.11 -4.15

High Yield returns

Source: Invesco, Bloomberg, 29 February 2020. Indices are BoAML. Return data in local currency.

21

▪ Primary factor behind spread moves in 2019 is the shift in central bank support of risk assets

▪ COVID-19 has reversed spread tightening of H2 2019

▪ Alert to default risk – although this remains manageable at the broad market level

▪ Market-wide re-pricing could lead to opportunities at single name level; central banks’ support

should limit volatility in the medium term

▪ At a broad level, high yield remains the highest yielding asset class

Current views

Source: Invesco, 28 February 2020.

22

Invesco High Yield Fund (UK)

▪ Fund launched 14 May 1999, managed by the Invesco Henley Fixed Interest Team

since June 2001

▪ New track record from March 2009*

▪ Managed by Thomas Moore

▪ IA £ High Yield sector

▪ Low correlation to government bonds

Invesco High Yield Fund (UK)Key features

Source: Invesco. Data as at 31 December 2019. *The fund w as previously in the IA Global Bond sector which permitted FX risk; a f lexibility which the fund used. On transferto the new IA

£ High Yield sector, the fund was obliged to re-start its performance track record as its FX exposure had previously been higher than the maximum 20% permitted in the new sector. These

key features may be a mixture of internal, sector and prospectus guidelines. For the full objectives and investment policy please consult the current prospectus.

24

Jan 19 Feb 19 Mar 19 Apr 19 May 19 Jun 19 Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20

Liquidity 6.0 6.7 5.3 6.0 2.4 6.0 5.2 4.5 2.3 6.6 7.5 7.5 4.9

Cash 1.5 2.0 0.3 0.5 -2.8 0.4 -0.6 1.1 0.0 4.4 5.3 5.2 2.3

Bonds maturing within 1 year* 4.5 4.7 5.0 5.5 5.2 5.6 5.8 3.4 2.3 2.2 2.2 2.4 2.5

Government** 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Defensive 1.9 2.0 2.1 2.1 3.4 3.4 3.5 3.6 3.5 3.5 3.4 3.3 3.4

Investment grade & Senior banks 1.9 2.0 2.1 2.1 3.4 3.5 3.5 3.6 3.6 3.5 3.4 3.3 3.4

Credit risk 89.6 88.7 90.2 89.6 91.9 88.1 89.1 89.6 92.0 87.7 86.9 87.0 89.7

Peripheral government 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Subordinated banks 19.4 20.5 20.8 22.0 22.4 23.0 23.5 23.6 25.8 25.4 25.5 24.4 25.6

Subordinated insurers 3.8 3.9 3.4 2.9 2.8 2.7 2.7 2.7 2.7 2.6 2.6 2.5 2.5

Corporate high yield 60.3 58.2 59.6 58.3 59.9 55.8 56.5 56.7 57.9 54.8 53.3 54.6 56.1

Hybrids & convertibles 2.9 2.8 2.8 2.8 2.9 2.9 2.9 3.1 2.0 2.0 2.7 2.7 2.7

EM 3.2 3.4 3.5 3.5 3.9 3.7 3.5 3.5 3.7 2.9 2.9 2.8 2.9

Equities 2.5 2.6 2.5 2.4 2.4 2.4 2.2 2.2 2.2 2.3 2.2 2.2 2.0

Invesco High Yield Fund (UK)Current investment themes (%)

Source: Invesco as at 31 January 2020. Excludes derivatives and therefore may add to more or less than 100%. *Bonds with less than a year to maturity are excluded from other categories

to prevent double counting. **Government includes agency & supranational. Figures may not sum due to rounding.

25

Portfolio weight1 (%) Average yield2 (%)

Corporates High yield3

Hybrids

Emerging Markets

54.7

2.7

2.9

6.7

3.7

10.3

Financials Bank subordinated debt

Insurance subordinated debt

Legacy Tier 1

AT1 and T2 Cocos

5.1

16.6

2.5

4.0

4.5

3.0

Invesco High Yield Fund (UK)Sources of yield

Source: Invesco as at 31 January 2020. 1Excludes bonds with less than one year to maturity or three months to call. 2Weighted average yield. 3High yield corporate bonds, excluding

emerging markets and distressed bonds.

26

▪ Shop Direct £ 7.75% 2022

(B, price 97.8, yield 8.6%, spread 814bps

–Concerns around PPI claim funding have abated, yet bonds still trade at a discount

▪ Pinewood £ 3.25% 2025 (BB+, price 102.2, yield 2.8%, spread 213bps)

–Low yield but guaranteed income stream from Netflix & Disney minimises risk

▪ Matalan £ 6.75% 2023 (B, price 90.9, yield

10.4%, spread 930bps) and 9.5% 2024 (CCC, price 86.8, yield 13.9%, spread 1256bps)

– Business has performed well, but concerns around retail sector have kept spreads wide

▪ Commerzbank $ 8.151% 2029 (call)

(BB, price 137.5, yield 3.5%, spread 198bps)

– Subordinated bond trades at a meaningful discount to senior debt

Invesco High Yield Fund (UK)Examples of holdings

Source: Invesco, Bloomberg, as at 31 January 2020. Spread is YAS OAS Spread. For illustrative purposes only.

27

Top 10 issues % of fund

Commerzbank 8.151% 2031 2.54

Shop Direct 7.75% 2022 2.40

Dutch Lion 11.25% 2020 2.07

Olympic Entertainment 8% 2023 2.02

Lloyds 13% perp 1.65

PureGym 6.375% 2025 1.63

Burger King France 8% 2022 1.57

Unicredit 8% perp 1.55

TeamSystem FRN 2023 1.53

Matalan 9.5% 2024 1.31

Total of top 10 issues 18.27

Top 10 issuers % of fund

Lloyds 2.68

Commerzbank 2.54

Co-Op 2.46

Matalan 2.41

Shop Direct 2.40

Premier Food 2.10

Dutch Lion 2.07

Olympic Entertainment 2.02

Barclays 1.73

TDC 1.64

Total of top 10 issuers 22.04

Source: Invesco as at 31 January 2020. Figures may not sum due to rounding.

28

Invesco High Yield Fund (UK)Issue and issuer exposure

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

Jan 1

3

Ma

r 13

Ma

y 13

Jul 13

Sep

13

Nov 1

3

Jan 1

4

Ma

r 14

Ma

y 14

Jul 14

Sep

14

Nov 1

4

Jan 1

5

Ma

r 15

Ma

y 15

Jul 15

Sep

15

Nov 1

5

Jan 1

6

Ma

r 16

Ma

y 16

Jul 16

Sep

16

Nov 1

6

Jan 1

7

Ma

r 17

Ma

y 17

Jul 17

Sep

17

Nov 1

7

Jan 1

8

Ma

r 18

Ma

y 18

Jul 18

Sep

18

Nov 1

8

Jan 1

9

Ma

r 19

Ma

y 19

Jul 19

Sep

19

Nov 1

9

Jan 2

0

Invesco High Yield Fund (UK) Sterling Investment Grade European High Yield

Underlying yield of Invesco High Yield Fund (UK) versus market yields (%)

Invesco High Yield Fund (UK)Underlying yield (%)

Source: Invesco, Bloomberg as at 31 January 2020. The yield of the Invesco High Yield Fund (UK) is the underlying yield. Share class in 2012 is Acc (trail). Share class in 2013-2018 is

Z (Acc). Sterling investment grade yield is yield to maturity of ICE BofAML Sterling Corporate Index. European high yield is yield to maturity of ICE BofAML European Currency High Yield

Index. Please note the ICE BofAML European Currency High Yield Index (GBP Hedged) and ICE BofAML Gilt Index is not a target, constraining or comparator benchmark of the fund. The

comparative information shown here is to illustrate the fund manager’s active investment approach and provide broader market context.

29

Invesco High Yield Fund (UK)Performance

Past performance is not a guide to future returns. The IA £ High Yield Sector is a comparator benchmark. Given its asset allocation the Fund’s performance can be compared against

the Benchmark. How ever, the Fund is actively managed and is not constrained by any benchmark. Source: Lipper as at 31 January 2020. Fund performance figures are based on the

Z (accumulation) share class. As this was launched on 12 November 2012, for the periods prior to this launch date, performanc e figures are based on the Accumulation share class,

w ithout any adjustment for fees. Performance figures for all share classes can be found in the relevant Key Investor Information Document. Fund performance figures are shown in sterling,

inclusive of reinvested income and net of the Ongoing Charge and portfolio transaction costs. Sector average performance is calculated on an equivalent basis. *Invesco High Yield Fund (UK) w as launched on 14 May 1999. How ever, as the fund changed sector on 1 March 2009, sector performance figures are only shown since that date.

30

Cumulative returns, % YTD 1 year 3 years 5 years Since 2 Mar 2009*

Invesco High Yield Fund (UK) 0.49 12.93 20.18 27.20 249.07

IA £ High Yield NR 0.31 8.86 13.66 24.51 154.69

Rank 9/29 1/28 1/28 6/26 1/17

Quartile 2 1 1 1 1

Annualised returns, %

Invesco High Yield Fund (UK) n/a n/a 6.32 4.93 12.12

IA £ High Yield NR n/a n/a 4.36 4.48 8.94

Rolling 12-month returns, %31/01/2015

31/01/2016

31/01/2016

31/01/2017

31/01/2017

31/01/2018

31/01/2018

31/01/2019

31/01/2019

31/01/2020

Invesco High Yield Fund (UK) -3.94 10.17 10.69 -3.85 12.93

IA £ High Yield NR -2.64 12.51 5.75 -1.27 8.86

Calendar year returns, % 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Invesco High Yield Fund (UK) 15.28 -4.41 35.80 9.97 3.09 -1.25 7.80 9.39 -4.56 14.87

IA £ High Yield NR 12.03 -3.93 19.61 7.03 1.25 -0.61 9.95 6.14 -3.44 11.46

Quartile 1 3 1 1 2 2 4 1 4 1

Fund Running

yield (%)

Distribution

yield (%)

Underlying

yield (%)

Redemption

yield (%)

Modified

duration

Invesco High Yield Fund (UK) 5.81 5.83 5.08 4.95 3.72

Fund yields & duration

Source: Invesco as at 31 January 2020. Yields quoted are for the Z Accumulation share class, yields on other share classes may differ. Please see ‘Important information’ for the yields

disclosure.

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Annual capital return, income and total return, based on an initial investment of £10,000 on 31 December 2009

Capital performance

(income paid out)

Income paid out

(annual total)

Total return

(with income reinvested)

Value at

end of year

Invesco

High Yield

Fund (UK)1

IA £

High Yield

sector average1

Invesco

High Yield

Fund (UK)

IA £

High Yield

sector average

Invesco

High Yield

Fund (UK)1

IA £

High Yield

sector average1

2010 £10,992 £10,569 £515 £553 £11,528 £11,366

2011 £10,001 £9,576 £542 £507 £11,019 £11,080

2012 £12,868 £10,835 £613 £531 £14,964 £13,434

2013 £13,536 £11,040 £585 £454 £16,455 £14,552

2014 £13,477 £10,694 £475 £446 £16,964 £14,894

2015 £12,773 £10,175 £554 £390 £16,753 £14,964

2016 £13,105 £10,670 £630 £439 £18,060 £16,841

2017 £13,556 £10,780 £754 £456 £19,756 £17,815

2018 £12,173 £9,937 £807 £489 £18,855 £17,192

2019 £13,104 £10,587 £823 £520 £21,659 £19,164

Invesco High Yield Fund (UK)

Past performance is not a guide to future returns.

The IA £ High Yield Sector is a comparator benchmark. Given its asset allocation the Fund’s performance can be compared against the Benchmark. However, the Fund is actively

managed and is not constrained by any benchmark. Source: Lipper, 31 December 2019. 1Capital return f igures (Z accumulation share class) are measured in sterling, with income

paid out and net of the Ongoing Charge and portfolio transaction costs. Total return f igures (Z accumulation share class) are measured in sterling, with income reinvested and net of the

Ongoing Charge and portfolio transaction costs. As the Z accumulation share class was launched on 12 November 2012, for the periods prior to this launch date, performance figures are based on the Accumulation share class, without any adjustment for fees. Performance figures for all share classes can be found in the relevant Key Investor Information Document. Sector

average performance is calculated on an equivalent basis.

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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.

The securities that the fund invests in may not always make interest and other payments nor is the solvency of the issuers guaranteed. Market conditions, such as a decrease in market liquidity for the securities in which the fund invests, may mean that the fund may not be able to sell those securities at their true value. These risks increase where the fund invests in high yield or

lower credit quality bonds.

The fund has the ability to make use of financial derivatives (complex

instruments) which may result in the fund being leveraged and can result in large fluctuations in the value of the fund. Leverage on certain types of transactions including derivatives may impair the funds’ liquidity, cause them to liquidate positions at unfavourable times or otherwise cause the fund not to achieve its intended objectives. Leverage occurs when the economic

exposure created by the use of derivatives is greater than the amount invested resulting in the fund being exposed to a greater loss than the initial investment.

The fund may be exposed to counterparty risk should an entity with

which the fund does business becomes insolvent resulting in financial loss.

The fund may invest in contingent convertible bonds which may result

in significant risk of capital loss based on certain trigger events.

As one of the key objectives of the fund is to provide income, the ongoing

charge is taken from capital rather than income. This can erode capital and reduce the potential for capital growth.

The funds performance may be adversely affected by variations in interest rates.

Investment risks

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This document is for Professional Clients only and is not for consumer

use.

This document is marketing material and is not intended as a

recommendation to invest in 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. The information provided is for illustrative purposes only, it should not be relied upon as recommendations

to buy or sell securities.

Data as at 31.01.2020, unless otherwise stated.

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.

The distribution yield estimates the cash distribution to the shareholders: in addition to expected cash income, it includes the amortised annual value of unrealised capital gains/losses of current bond holdings, calculated with reference to their historic purchase price and expected redemption value (known as ‘effective yield from purchase price’ method). The distribution

yield for this fund is gross of the ongoing charge, which is charged to capital.

The underlying yield is calculated in the same way as the distribution yield,

but is always net of the ongoing charge. The underlying yield for this fund is, therefore, lower than the distribution yield by the amount of the ongoing charge.

The running yield estimates expected cash income into the fund from coupons of current bond holdings and, where applicable, dividends from current equity holdings. The running yield for this fund is gross of the ongoing charge, which is charged to capital.

The redemption yield estimates the annualised total return: in addition to expected cash income, it includes the amortised annual value of unrealised

capital gains/losses of current bond holdings, calculated with reference to their current market price and expected redemption value. The redemption yield is net of the ongoing charge.

For the most up to date information on our funds, please refer to the relevant fund and share class-specific Key Investor Information Documents, the Supplementary Information Document, the Annual or Interim Reports and

the Prospectus, which are available using the contact details shown.

Important information

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.

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