Money Marketing revealed in November that Invesco was considering a strategic bond fund launch.
The group will launch a tactical bond fund for Paul Causer (pictured) and Paul Read, the co-heads of fixed income, on February 1.
The new fund will adopt an unconstrained strategy, allowing it to invest across the whole fixed income spectrum.
The managers will be able to make short-term asset allocation calls, which theoretically could include holding 100 per cent in cash, making the fund’s risk profile subject to sudden change.
Lewis Aubrey-Johnson, a product director at the group, says the fund is the most purely unconstrained of any in Invesco Perpetual’s range.
At launch the portfolio will be skewed towards high yield, Aubrey-Johnson says. “We think it is right to remain invested in credit, pursuing higher yielding opportunities, for example in the financials sector,” he adds. “We remain cautious on government bonds.”
Aubrey-Johnson says: “There may be a degree of overlap with holdings in the group’s popular Corporate Bond fund, which has £5.6bn under management. “At times this product could look like any number of our other funds.”
He adds: “We want to be able to extrapolate the best ideas in those funds.”
The group is unconcerned that this launch comes at a time when investor appetite for bonds seems to be waning.
Aubrey-Johnson says: “The launch of this product is in no way a comment on market conditions. Investors are right to expect more modest returns from bonds this year. We don’t launch funds very often and we like them to be durable – this is not a short-term project.”
The fund aims for a total return and will not have an income target. It will sit in the Investment Management Association £ strategic bond sector.
The initial offer period is from January 25 to February 1. Minimum investment is £500 lump sum.
The initial charge is 5 per cent and the annual management charge is 1.25 per cent.