Although he acknowledges that European stocks have lagged their US counterparts since the financial crisis, he notes that Europe looks much more attractively valued. In his opinion, European stocks with economic sensitivity offer the best value, particularly banks.
Mustoe notes that tobacco stocks have defied expectations in recent years, with a particularly strong performance from Phillip Morris International. However, as the stock reached a price-to-earnings multiple of 20 times earnings, the fund manager decided to take profits.
Mustoe also explains why auto stock Hyundai has been added to the portfolio.
Over the past five years, shareholders in the Invesco Perpetual Select Global Equity Income trust have enjoyed a 129.9% rise, which is far ahead of an 85% gain by the average trust in the AIC's global equity income sector.
The trust currently trades at a 1.3% discount to net asset value, which compares to an average 1.2% premium in the sector.