From macro-driven markets to stock specifics: What Europe’s equities have to offer

Presented by:Jeffrey TaylorHead of European Equities,Invesco Perpetual, Henley

21st and 22nd June 2012

This presentation is for Professional Clients in Continental Europe only and is not for consumer use.

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European Equities: Fear, loathing & opportunities

• Markets have been driven almost entirely by macro worries and ‘tail risks

• Eurozone crisis resolution: slow, chaotic with knock-on effects on the economy

• Greece has unsettled markets again, but sorting out the Eurozone favourably is still the most likely outcome:

- German economic self interest

- LTROs show meaningful policy response is probable

- Significant reform in the periphery

- Not all is bad in the European economy.

• Markets driven by fear reach extremes: ‘safe havens’ become dangerous, ‘risk’ becomes attractive

• Buying under-valued stocks is the best way to make money: time to look at out-of-favour stocks, sectors and countries

2

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3

Markets driven by fear reach extreme conclusions

0

5

10

15

20

1517 1822 1842 1862 1882 1902 1922 1943 1964 1984 2004

Netherlands 10-y ear Gov ernment Bond Yield

Dutch long bond yields at a 500 year low

Source for both charts: BofA Merrill Lynch Global Equity Strategy, Global Financial Data, BloombergLeft hand chart: Annual data prior to 1814, monthly thereafter. No data available during 1577-1599; 1700-1746; 1748-1761; 1763-1797; 1977-1813

'89 '92 '95 '98 '01 '04 '07 '10 '131.8

2.1

2.4

2.7

3.0

3.3

3.6

3.9

4.2

4.5

+3stdev

-3stdev

Eurostoxx 50 relative to S&P 500 (dollar terms)

Eurostoxx 50 is 3 standard deviations ‘oversold’ relative to the US S&P 500

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Markets driven by fear reach extreme conclusions

4

Dec

-92

Dec

-93

Dec

-94

Dec

-95

Dec

-96

Dec

-97

Dec

-98

Dec

-99

Dec

-00

Dec

-01

Dec

-02

Dec

-03

Dec

-04

Dec

-05

Dec

-06

Dec

-07

Dec

-08

Dec

-09

Dec

-10

Dec

-11

60.00

80.00

100.00

120.00

140.00

160.00

180.00

200.00

220.00

240.00

European High vs. Low Quality Relative Performance

Dec

-92

Dec

-93

Dec

-94

Dec

-95

Dec

-96

Dec

-97

Dec

-98

Dec

-99

Dec

-00

Dec

-01

Dec

-02

Dec

-03

Dec

-04

Dec

-05

Dec

-06

Dec

-07

Dec

-08

Dec

-09

Dec

-10

Dec

-11

0.50

0.70

0.90

1.10

1.30

1.50

1.70

1.90

2.10

2.30

2.50

High vs. Low Quality Prospective P/E Relative

Source: BofA Merrill Lynch European Quantitative Strategy as at 15 May 2012. ‘High’ quality and ‘low’ quality refer to baskets of stocks scored on the basis of return on assets, return on capital, return on equity, 5 year return on equity and leverage. All factors are equal-weighted. Charts above show the relative performance and valuation of the top 25 and bottom 25 of the largest 250 stocks in Europe.Past performance is not a guide to future returns.

‘High quality’ stocks typically outperform over the long term, but ‘safety at any price’ has now led to unsustainable extremes of performance and valuation in Europe

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Markets driven by fear reach extreme conclusions

5

3/97

4/98

5/99

6/00

7/01

8/02

9/03

10/0

4

11/0

5

12/0

61/

082/

093/

104/

11

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Shiller PE of Spain / GermanyDAX IBEX

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

28.7%34.6%

35.7% 26.0%

17.9% 26.8%

10.4% 0.2%

7.3%12.4%

Home country Rest of Europe Americas Asia/ Pacific RoW/ Unspecified

Source: Deutsche Bank as at 14 May 2012

Geographical split of 2010 sales of DAX and IBEX constituents

Shiller PE (10 year historic earnings) of the Spanish IBEX relative to the German DAX

Spain vs. Germany: two very international markets, yet two very different valuations. Nationality of listing has distracted the market from other fundamentals.

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Source: BofA Merrill Lynch Global Fund Manager Survey. Data as at 16 May 2012. Past performance is not a guide to future returns.

6

11/5/12

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

-50

-40

-30

-20

-10

0

10

20

30

40

50

60

95

100

105

110

115

120

125

130

135

140

145

150

Net % Oweight EurozoneEurozone Rel. to World(R.H.SCALE)Potentially Overowned

Potentially Underowned

Source: DATASTREAM

Global asset allocators over/underweight positions in Eurozone equities & performance of Eurozone equities –v- global equities

Fear, loathing and investor positioning: global investors have seldom been less interested The engagement by global investors in European equities is already extremely low: a good starting point for the future

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• ECB under Draghi clearly more active as witnessed by 3 year unlimited LTRO operations, greater flexibility on collateral

• QE not allowed for the monetary financing of states, but is allowed as a monetary policy tool

• EFSF, ESM, SMP tools

• Greek € exit would raise spectre of ‘contagion’ in the periphery: expect significant policy response to counter it

7

CountryExports

(€bn)Trade balance

(€bn)% of total trade

balance

France 101.6 35.1 18.3

USA 73.2 25.2 13.1

Netherlands 69.3 -12.9 -6.7

UK 65.3 20.4 10.6

Italy 62.1 13.8 7.2

Austria 57.9 20.2 10.5

China 64.8 -14.4 -7.5

Belgium 47.0 8.7 4.5

Poland 43.5 11.1 5.8

Spain 34.9 12.3 6.4

Czech Rep. 30.6 -2.4 -1.2

Russia 34.4 -6.2 -3.2

Major components of Germany’s €192bn* trade balance in 2011

German economic self interest and recent actions by the ECB suggest it is wrong to underestimate the durability of the Euro

Source: Credit Suisse, Statistisches Bundesamt, 2011 data latest available.*Equivalent of 7.8% of 2011 GDP.

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Policy responses have a habit of coming when the market least expects it

8

2005 2006 2007 2008 2009 2010 2011 2012300

400

500

600

700

800

900

1000

1100

1200

300

400

500

600

700

800

900

1000

1100

1200

Source: Thomson Reuters DataStream, Credit Suisse estimates as at 17 May 2012.

ECB too restrictive under Trichet

3y LTROs under Draghi

ECB lending to euro area credit institutions for monetary policy purposes (EURbn)

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Italy

• Pension reform – retirement at 67 years and linked to life expectancy

• Labour market – reform Article 18 to tackle gap between young and old, small and large companies

• Balanced budget – now voted into law

• Liberalisation – pharmacies, taxis, professional services

• Privatisation/competition – public tendering of contracts for electricity, gas, refuse collection

Spain

• Pension reform – retirement age increased to 67

• Labour market reform – reduced collective bargaining, increased flexibility to adapt to cycle, reduced bureaucracy to start-up businesses

• Budgetary & financial stability law – balanced budget enshrined in constitution, much tighter control over regional govt. finances

• Banking reforms – clean-up of real estate books, recapitalisation, consolidation

• Energy reform – regulatory certainty, decrease reliance on imports, lower prices

Source: Spain – Fidentiis, meetings with Ministry of the Economy, ICO; Italy – meetings with Banca d’Italia, Ministry of Finance. As of 16 May 2012.

9

Actions are being taken to improve the functioning of peripheral economies long term…

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…and meanwhile, Spain is not as hopeless as the media like to suggest

10

Spain: Not just a real estate crisis. Strong export growth (exports at 31% of GDP in Q4 2011), better unit labour cost trends, true unemployment levels well below the official rate of 25%, plus a fast-track programme to pay arrears owed to suppliers by regional governments worth 3% of GDP

Source: Tesoro Público, Eurostat, Fidentiis, ICO as at 4 May 2012.

Exports of Goods and Services (Index 2005=100)

Nominal Unit Labour Costs(Index 2005=100)

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Q1 Eurozone GDP data came in better than expected at +0.0% q/q (-0.2% expected)

Within this:

- Germany +0.5% (+0.1% est) - Finland +1.3% (+0.2% est) - France +0.0% (+0.0% est) - Italy -0.8% (-0.7% est) - Portugal -0.1% (-1.2% est) - Spain -0.3% (-0.7% est) - N’lands -0.2% (-0.3% est) - Belgium +0.3%

11

Dec

-92

Dec

-93

Dec

-94

Dec

-95

Dec

-96

Dec

-97

Dec

-98

Dec

-99

Dec

-00

Dec

-01

Dec

-02

Dec

-03

Dec

-04

Dec

-05

Dec

-06

Dec

-07

Dec

-08

Dec

-09

Dec

-10

Dec

-11

-6

-4

-2

0

2

4

6

OECD LI 12m change OECD LI 6m change

6m change in the OECD’s European leading indicator is picking up well

Source: Left hand chart, BofA Merrill Lynch European Quantitative Strategy as at 15 May 2012. Right hand data, Barcap, Eurostat as at 15 May 2012.

%

Any reasons to be cheerful? Not all is bad or getting worse in Europe…

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€ crisis cloud has a silver lining: a weaker exchange rate boosts future Eurozone growth

Estimated impact (%) of past changes in the trade-weighted € exchange rate on annual GDP growth, as achieved in the past and as expected in future assuming a € unchanged from the current level

Source: OECD, Credit Suisse as at 8 May 2012. *2012-2014 figures are estimates.

% more/less GDP growth

12

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-1.5

-1.0

-0.5

0.0

0.5

1.0

* * *

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Global & Emerging market earnings revisions ratios

Earnings revisions are recovering more strongly in Europe than elsewhere

13

Dec-8

9

Mar-9

1

Jun-

92

Sep-

93

Dec-9

4

Mar-9

6

Jun-

97

Sep-

98

Dec-9

9

Mar-0

1

Jun-

02

Sep-

03

Dec-0

4

Mar-0

6

Jun-

07

Sep-

08

Dec-0

9

Mar-1

10.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Dec-8

9

Mar-9

1

Jun-

92

Sep-

93

Dec-9

4

Mar-9

6

Jun-

97

Sep-

98

Dec-9

9

Mar-0

1

Jun-

02

Sep-

03

Dec-0

4

Mar-0

6

Jun-

07

Sep-

08

Dec-0

9

Mar-1

10.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Global Emerging Markets

Source: BofA Merrill Lynch European Quantitative Strategy as at 15 May 2012. Earnings revision ratio above 1.0 = net EPS upgrades

European earnings revisions ratio

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Source: Citi as at 8 March 2012. Each square on this chart shows returns over the following decade from a range of cyclically adjusted Pes. The period covered is since 1980 .

Valuation is the key to future returnsStarting point is important...

14

10 15 20 25 30 35 40 45 50-5%

0%

5%

10%

15%

20%

25%

R² = 0.811632328274546

MSCI Europe - Cyclically adjusted PE

10 Y

ear

Annualised N

om

inal R

etu

rn

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15

What are markets assuming? Given austerity and de-leveraging, market implying a decline in ROE going forward…

88 90 92 94 96 98 00 02 04 06 08 101.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2%

4%

6%

8%

10%

12%

14%

16%

18%

Price to Book ratio (X) Return on equity (RHS)

Source: Goldman Sachs as at 21 March 2012.

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16

What are markets assuming? …implying a significant reduction in margins from current levels, assuming more ‘normal’ market conditions…

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 120

2

4

6

8

10

12

Current net profit margin (%) Implied net profit margin in 10 years time (%)

Source: Goldman Sachs as at 21 March 2012. (1) Assuming ERP of 3.5% (the long term historic average), long term real sales growth of 2.5% per annum (compared to historical average of 4% per annum) and 12 month forward inflation expectations.

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What are markets assuming? …despite rising profit margins and ROE recovering strongly since 2008/2009…

80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 100

1

2

3

4

5

6

7

8

9

10

Profit margin (%) Linear (Profit margin, %)

Europe excl. financials: Net profit margin

Source: Goldman Sachs as at 21 March 2012 .

Europe excl. financials: Return on equity

80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 100

2

4

6

8

10

12

14

16

18

20

ROE (%) Linear (ROE, %)

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European dividend yields currently attractive relative to other asset classes

18

Source: UBS as at 31 March 2012.

European div yield

US div yield AA € corp bond yield

German 10 yr Bund yield

US 10yr bond yield

German 3m rates

US 3m rates0

1

2

3

4

5

3.2

2.1

4.3

3.63.8

2.5

1.7

Current (%) 10-year average (%)

Equities Government BondsCorp BondsMoney Markets

(%)

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What do we like? How are our funds positioned?

We are active “long-only” investors, who are driven by underlying valuations of stocks, not by labels like “value” or “growth”. Stock-picking is thus very important, but we also look at macro-economic factors when building portfolios

At present we are positioned for a slow growth environment, but the likely resolution of the Euro crisis means that we do not wish to be too defensively invested: defensive stocks can be too expensive, cyclical/financial stocks can be too cheap

Favoured areas at present include:

Defensives: pharmaceuticals, service industries with steady growth, selected telecoms, motorway stocks – not most consumer staples

Industrials: aerospace, transport, paper – not most capital goods

Financials: insurance, selected banks

Source: Invesco as at 29th May 2012, stocks classified as Industrials by MSCI Europe. For illustrative purposes only.

19

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A defensive sector we likeHealthcare: Cheap, cash flow generative and with more growth than the consensus assumes

Source: Nomura as at 23 April 2012.

MSCI Europe Healthcare – FCF Yield and Dividend Yield (%)

1988

1988

1989

1990

1991

1992

1993

1993

1994

1995

1996

1997

1998

1998

1999

2000

2001

2002

2003

2003

2004

2005

2006

2007

2008

2008

2009

2010

2011

2012

0

1

2

3

4

5

6

7

8

9

10

MS Europe Health Care - FCF Yield (%) MS Europe Health Care - Dividend Yield (%)

20

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Recent market dislocation has produced opportunities

• International energy company headquartered in Spain

• Expropriation of Argentinian subsidiary YPF hit the share this spring, but share price decline has substantially surpassed what would be justified by this alone

• Spanish listing and status as major component of IBEX35 has hit share

• Repsol (ex YPF) offers significantly faster growth than the industry average, yet the share price implies falling returns and no asset growth

• Position increased

21

Jan-

10

Feb-

10

Apr-1

0

May-1

0

Jul-1

0

Sep-

10

Oct-1

0

Dec-1

0

Feb-

11

Mar-1

1

May-1

1

Jul-1

1

Aug-1

1

Oct-1

1

Dec-1

1

Jan-

12

Mar-1

2

Apr-1

212

14

16

18

20

22

24

26

0.15

0.17

0.19

0.21

0.23

0.25

0.27

0.29

0.31

0.33

0.35

Repsol Repsol / MSCI EMU (rhs)€ Index

Repsol

Source: Invesco Perpetual, Datastream as at 15 May 2012 .For illustrative purposes only.

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• International banking and insurance group active in Europe, the Americas and Asia

• Split of the bank and insurance underway, continuing disposals of major parts of the group to come (Asia)

• Core Benelux banking franchise is well-capitalised and well-funded with a relatively conservative asset mix

• Share has suffered disproportionately due to some exposure to peripheral bonds and ’risk off’ market mood

• Share price implies only a low single-digit PE on bank, P/TB of 0.4x

• Position increased

22

Recent market dislocation has produced opportunities

Jan-

10

Feb-

10

Apr-1

0

Jun-

10

Jul-1

0

Sep-

10

Nov-1

0

Dec-1

0

Feb-

11

Apr-1

1

May-1

1

Jul-1

1

Sep-

11

Oct-1

1

Dec-1

1

Feb-

12

Mar-1

24

5

6

7

8

9

10

0.06

0.065

0.07

0.075

0.08

0.085

0.09

0.095

0.1

ING ING / MSCI EMU (rhs)

ING

Index

Source: Invesco Perpetual, Datastream as at 15 May 2012 .For illustrative purposes only.

€

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What do we like? UK consumer selectively becoming more interesting

N Brown plc

• Mail order/internet retailer of ‘outsize’ clothing

• Leading position in a growth market

• Large family holding results in prudent long term management

• Should benefit from pressure easing on UK households into 2012

• …and also from lower cotton prices

• Attractive valuation for a company with growth opportunities (PE 10x Yield 5%)

23

Source: Datastream as at 20 March 2012. For illustrative purposes only .

N Brown – Absolute & relative to MSCI Europe

Jan-1

0Fe

b-1

0M

ar-

10

Apr-

10

May-1

0Ju

n-1

0Ju

l-10

Sep-1

0O

ct-1

0N

ov-1

0D

ec-

10

Jan-1

1Fe

b-1

1A

pr-

11

May-1

1Ju

n-1

1Ju

l-11

Aug-1

1Sep-1

1O

ct-1

1D

ec-

11

Jan-1

2Fe

b-1

2M

ar-

12

200

220

240

260

280

300

320

2.3

2.5

2.7

2.9

3.1

3.3

3.5

3.7

N Brown N Brown/MSCI Europe (RHS)

Share

pri

ce (

p)

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What are we avoiding ?Expensive defensives – eg. most consumer staples

24

Nestlé: market prices in ever higher returns

Novartis: share price would need an improbable collapse of returns to be justified

Source: HOLT ValueSearch Credit Suisse as at 16 May 2012.For illustrative purposes only.

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What are we avoiding?Businesses facing challenges

Source: Nomura as at 23 April 2012.

25

European Utilities: Net debt to EBITDA and FCF to dividend cover (x)

88 88 89 90 91 92 93 93 94 95 96 97 98 98 99 00 01 02 03 03 04 05 06 07 08 08 09 10 11 120.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

-2

-1

0

1

2

3

4

5

6

FW Europe Gas Water & Utiliti - Debt/EBITDA (x) FW Europe Gas Water & Utiliti - FCF/Dividend Cover (X) RHS

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What are we avoiding? Cyclicals with margin and multiple risk

• Certain cyclical companies do not discount a downturn

• Relative performance at all time highs, growth expectations too ambitious and peak margins expected to remain

• We are zero weighted in names like LVMH and Atlas Copco

Atlas Copco & LVMH relative to MSCI Europe

Source: Datastream 16 May 2012. Rebased to 100 as at January 2007. For illustrative purposes only .

26

Jan-

07

May-0

7

Sep-

07

Jan-

08

May-0

8

Sep-

08

Jan-

09

May-0

9

Sep-

09

Jan-

10

May-1

0

Sep-

10

Jan-

11

May-1

1

Sep-

11

Jan-

12

May-1

20.03

0.05

0.07

0.09

0.11

0.13

0.15LVMH / MSCI Europe Atlas Copco / MSCI Europe

Portfolio data

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Invesco Pan European Equity Fund Top 10 holdings

28

Source: Invesco Perpetual as at 30 April 2012. There is no guarantee that the securities mentioned will be held by this fund in the future. Portfolio characteristics are subject to change and are not buy/sell recommendations.

Stock % in fund

Novartis 4.61

Roche 3.59

BT 2.79

Safran 2.55

UBS 2.50

Michelin 2.38

Daimler 2.30

GlaxoSmithKline 2.29

UPM-Kymmene 2.27

Obrascon Huarte Lain 2.21

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Invesco Pan European Equity FundTop 10 active holdings1

29

Source: Invesco Perpetual as at 30 April 2012. 1Relative to MSCI Europe ND. There is no guarantee that the securities mentioned will be held by this fund in the future. Portfolio characteristics are subject to change and are not buy/sell recommendations

Stock % overweight

Novartis 2.64

Safran 2.45

BT 2.39

Obrascon Huarte Lain 2.21

Michelin 2.18

UPM-Kymmene 2.17

Reed Elsevier 1.98

Deutsche Boerse 1.93

SBM Offshore 1.85

EADS 1.83

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Invesco Pan European Equity Fund Active sector weightings (%)1

30

Source: Invesco as at 30 April 2012. 1 Relative to MSCI Europe ND.Portfolio characteristics are subject to change.

Consumer Staples

Utilities

Energy

Materials

Telecommunication Services

Information Technology

Health Care

Financials

Consumer Discretionary

Industrials

-8 -6 -4 -2 0 2 4 6 8 10 12

-6.03

-4.61

-3.81

-3.24

-0.89

0.48

1.44

1.68

3.75

10.02

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Invesco Pan European Equity Fund Active country weightings (%)1

31

Source: Invesco as at 30 April 2012. 1 Relative to MSCI Europe ND.Portfolio characteristics are subject to change.

GermanyFrance

United KingdomSwitzerland

ItalySweden

DenmarkBelgiumAustriaGreeceNorway

PortugalIrelandFinland

SpainNetherlands

-6 -4 -2 0 2 4 6 8 10

-4.06-3.69

-3.09-2.60

-2.13-1.88-1.84

-1.26-0.39

-0.13

0.791.42

2.282.61

4.897.90

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Invesco Pan European Equity FundGross performance (%)

32

Past performance is not a guide to future returns.

Calendar year returns (€) 2004 2005 2006 2007 2008 2009 2010 2011

Invesco Pan European Equity Fund 18.46 28.32 25.38 0.21 -41.08 36.80 17.00 -6.77

MSCI Europe (NRI) 12.18 26.09 19.61 2.69 -43.65 31.60 11.10 -8.08

Out/underperformance +6.28 +2.23 +5.77 -2.48 +2.57 +5.20 +5.90 +1.31

Annualised returns (€) YTD 1 year 3 years 5 years

Invesco Pan European Equity Fund 8.32 -4.67 17.15 -2.25

MSCI Europe (NRI) 6.05 -6.24 11.75 -5.04

Out/underperformance +2.27 +1.57 +5.4 +2.79

Source: Invesco Perpetual as at 30 April 2012. Fund performance figures are shown in euros on a mid-to-mid basis, inclusive of reinvested income and gross of the annual management charge and all other fund expenses. The figures do not reflect the entry charge paid by individual investors. Benchmark figures are total return, in euros.John Surplice and Martin Walker took over management of this fund in July 2003.

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Invesco Pan European Equity FundNet performance (%)

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Calendar year returns (€) 2004 2005 2006 2007 2008 2009 2010 2011

Invesco Pan European Equity Fund (A-Acc)

16.15 25.84 22.93 -1.80 -42.26 34.08 14.68 -8.59

Mstar GIF OS Europe Large Cap Blend Equity

9.97 25.11 18.50 0.56 -43.69 29.50 11.58 -11.20

Quartile 1 2 1 4 2 1 2 2

Cumulative returns (€) YTD 1 year 3 years 5 years

Invesco Pan European Equity Fund (A-Acc) 7.61 -6.53 51.46 -19.25

Mstar GIF OS Europe Large Cap Blend Equity 7.72 -6.77 34.35 -26.68

Quartile 3 3 1 2

Past performance is not a guide to future returns

Source: Morningstar © 2012 as at 30 April 2012.Fund and sector performance figures are shown in euros on a mid-to-mid basis, inclusive of gross reinvested income and net of the annual management charge and all other fund expenses. The figures do not reflect the entry charge paid by individual investors.John Surplice and Martin Walker took over management of this fund in July 2003.

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Invesco Pan European FundAttribution summary 2011

• EADS• Roche• Rhodia• Imperial Tobacco• BT Group• Novartis• Resolution• G4S• ASML Holding• Lloyds Banking Group*

• Royal Dutch Shell*• Intl Cons Airline• Deutsche Boerse• Thyssenkrupp• Rentokil Initial• Nestle*• Stora Enso• Societe Generale• Husqvarna• Sanofi*

10 largest positive attributors 10 largest negative attributors

Main positive sectors:Industrials, Financials, Materials, Telecoms, Healthcare

Main negative sectors: Consumer discretionary, Energy

Source : Invesco Perpetual as at 31 December 2011. * indicate stocks not owned.

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Invesco Pan European FundAttribution summary ytd to end April

• Rentokil Initial• Safran• EADS• Daimler• Michelin• C&C Group• UPM-Kymmene• Deutsche Boerse• Henkel• Intl Cons Airline

• BBVA• SBM Offshore• Santander• Storebrand• HSBC*• Novartis• Mediaset• Post NL• Novo-Nordisk*• Carphone Warehouse

10 largest positive attributors 10 largest negative attributors

Main positive sectors:Industrials, Telecoms, Consumer staples, Utilities*,Consumer discretionary

Main negative sectors: Financials, Healthcare

Source : Invesco Perpetual as at 30 April 2012. * indicate sectors/stocks not owned.

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Invesco Pan European Equity Fund3 year ex post tracking error history

Jun 06 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Dec 110

1

2

3

4

5

6

7

Invesco Pan European Equity Fund

Invesco Pan European Equity Fund rolling 3 year annualised TE vs MSCI Europe (€)

Source: Invesco Perpetual 29 February 2012.

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Invesco Pan European Equity FundRisk and return characteristics

37

Source: Mercer MPA databases from 1 July 2003 to 31 December 2011. Performance figures are for the Invesco Pan European Equity Fund, A share class, and are shown in Euros on a total return basis, and gross of the annual management charge and all other fund expenses. The figures do not reflect the entry charge paid by individual investors.

Past performance is not a guide to future returns.

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Important Information

This marketing document is exclusively for use by Professional Clients and financial advisors in Continental Europe and is not for consumer use. Data as at 30. April 2012, unless otherwise stated. Please do not redistribute this document.

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may get back the full amount invested. Opinions and forecasts are subject to change without notice. For more information on our funds, please refer to the most up to date relevant fund and share class-specific Key Investor Information Documents, the latest Annual or Semi Annual Reports and the latest Prospectus, Articles and Trust Deeds. This information is available using the contact details of the issuer and is without charge. The information is also available from our website ww.invescoeurope.com

Whilst great care has been taken to ensure that the information contained herein is accurate, no responsibility can be accepted for any errors, mistakes or omissions or for any action taken in reliance thereon. This document is not an invitation to subscribe for shares in the fund and is by way of information only.

Germany, Austria and Switzerland: This document is issued in Germany by Invesco Asset Management Deutschland GmbH, An der Welle 5, D-60322 Frankfurt, regulated by Bundesanstalt für Finanzdienstleistungsaufsicht. This document is issued in Austria by Invesco Asset Management Österreich GmbH, Rothenturmstr. 16-18, A-1010 Vienna and in Switzerland by Invesco Asset Management (Schweiz) AG, Stockerstr. 14, CH-8002 Zurich. Subscriptions of shares are only accepted on the basis of the most up to date legal offering documents. Swiss professional clients should consider this document only in connection with the relevant monthly fund fact sheet which contains further performance information.