Invesco Perpetual has added the Invesco Perpetual distribution fund to its Oeic fund range.
This fund's 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's insistence that the split could change if the investment benefits outweighed the tax benefit.
According to Standard & Poor's 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.