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Invesco offers key to asset allocation

Invesco Perpetual has added the Invesco Perpetual distribution fund
to its Oeic fund range.

This fund&#39s objective is income and growth by investing in a
combination of at least 60 per cent in fixed interest and the remainder
in equities.

The fund will be managed by Paul Cause, Paul Read and Neil
Woodford, who have worked together at Invesco Perpetual for the last
nine years. They currently manage the Invesco Perpetual monthly
income plus fund. With the new fund, Causer and Read will be
responsible for the fixed interest element, while Woodford will
manage the equity side.

The investment teams use the same investment process as the fund
they already manage. Woodford will assess the value of companies
in the context of what is happening in the economy while the bond
team take a similar approach, subjecting bonds to macro, credit and
value analyses.

The high proportion of fixed interest is partly dictated by changes in
the tax rules from April 6. On this date, the tax credit on dividends will
be abolished so Invesco Perpetual is keen for the fund to be classed
as an interest paying fund, which means it must invest at least 60 per
cent in bonds.

The company says investors will find this fund useful because the
initial asset allocation and rebalancing between bonds and equities
is decided by experienced fund managers. The company also says it
is less expensive than investing in two separate funds with two sets
of charges.

However, the tax implications of increasing the equity content may act
as a constraint on asset allocation despite the company&#39s insistence
that the split could change if the investment benefits outweighed the
tax benefit.

According to Standard & Poor&#39s the Invesco Perpetual monthly
income + fund is ranked 12 out of 31 funds based on £1,000 invested
on a bid-to-bid basis with net income reinvested over three years to
January 20, 2004.

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