Type: Unit trust.
Aim: Growth by investing in UK equities.
Minimum investment: £1,000.
Investment split: 100 per cent in UK equities.
Isa link: Yes.
Pep transfers: No.
Charges: Initial 5.26 per cent, annual 1.5 per cent.
Commission: Initial 3 per cent, renewal 0.5 per cent.
Tel: 0800 0282121.
Luke Gibbon, Proprietor, Independent Personal Financial
Godfrey Bloom, Investment director, TBO Corporate Benefit
Nick Upton, Consultant, Ian Cooke & Partners
Michael Both, Principal, Michael Philips
Michael Gilbey, Managing director, Atlantean Financial
Suitability to market: 6.8
Investment strategy: 6.4
Past performance: 5.6
Company's reputation: 7.8
Product literature: 6.8
Invesco Perpetual has introduced the UK aggressive fund, a unit
trust concentrating on UK equities.
Looking at how the fund fits into the market Upton says: “Given
the drop in performance of tracker funds, certain clients are looking
for a different approach to investing and that is offered by this fund.”
Both feels the need for such a fund is not immediately obvious.
Gilbey says: “This is a difficult fund to categorise. It is included in the
main UK all companies Autif sector classification but potentially has
more in common with funds in the UK smaller companies sector.”
Bloom feels the fund fits best into the Autif UK all share sector.
Turning to the type of client the fund may be suitable for, Gibbon says:
“It is suitable for clients who are prepared to take a reasonably high
risk on their capital and probably have a spread of investment
Both feels that Invesco Perpetual could almost be accused of
abandoning investors in its smaller companies funds by introducing
a new fund with a new manager, rather than putting the new manager
into its existing funds. He adds they are no more guilty than most
fund managers in doing this.
Gilbey says: “The fund is suitable for a client with a moderate to
adventurous risk profile as the fund will hold a concentrated portfolio
of primarily UK smaller companies. The literature states the
managers will diversify the portfolio, but it is difficult to see significant
diversification from a concentrated fund including smaller companies
that are aggressively managed.”
Bloom agrees that clients interested in the fund will need to be
prepared for high risk, as does Upton.
Moving on to the marketing opportunities the product will provide
Both says: “None specifically.”
Gilbey feels the fund has been launched when the market is at a
low point so, presuming things rebound, there will be a massive
Bloom says: “In current markets I would think the marketing
opportunities are very limited.”
Upton feels it will be an opportunity for investors that want to
move away from the index tracking concept and it is therefore a good
time to introduce the fund.
Gibbon says: “There are so many unit trusts that a new fund does
not present a marketing opportunity in itself. The fund could provide a
useful addition to some clients portfolios to provide diversification.”
Considering the main useful features and strong points of the
product, Upton says: “This fund is more exciting than the majority of
funds in the market with greater potential.”
Bloom points to the fact that Invesco Perpetual is a strong name,
and since the merger feels it has something to prove.
Both says: “As a new fund, it means the fund manager is spared the
embarassment of having to show a past history which will show
investors recently lost money.”
Gibbon feels the fund has the potential to produce excellent
returns, particularly as it is launching at a time when stockmarkets
are generally low.
Gilbey says: “The strong points are primarily the Invesco
Perpetual name and the classification within the main UK all
Casting an eye over the investment strategy of the fund, Bloom says:
“I have spoken with the managers who intend to open the fund with
exposure to small and mid cap stocks with a sector bias to
construction and bio-tech. Thirty to 40 stocks will be the working
Upton calls the strategy admirable, while Gilbey says: “The
investment strategy appears to be clever enough to disguise what is
primarily a smaller companies fund, possibly even a TMT fund, as an
all companies fund. The strategy itself is not very clear.”
Both says: “We continue to be unimpressed by the vacuous,
bland published strategies.” Gibbon says the strategy of investing in
a concentrated portfolio can mean that movements in a limited
number of shares can have a significant impact on the fund.
Looking at the fund's disadvantages, Upton says: “Potentially, by
investing in smaller companies, the onus is on the fund managers to
get it right most of the time.”
Gilbey points to the fact that it is a unit trust and there is no Pep
Bloom says: “Funds that take an aggressive stance with
high-sector weightings in TMT suffer greatly from any downturn.” Both
feels there is not a clear enough explanantion of what the fund is
going to invest in.
The panel is largely in agreement when asked about Invesco
Perpetual's reputation. Bloom says: “Relatively untried since the
merger and Perpetual had started to go off the boil in the run up to
Invesco's takeover. It is currently weak on most funds except its
Upton is more positive, saying that the reputation is very good from
both sides. Gilbey says: “The long term reputation of both Invesco
and Perpetual was and still is excellent among the trade and clients.”
Both says the reputation is generally good, and adds that he is
encouraged by the lack of public defections by lead managers.
Gibbon says: “Invesco Perpetual is a leading investment house in the
UK and I believe has a very good reputation.”
Considering Invesco Perpetual's past performance record, Both
says: “It runs from hero to zero. UK smaller companies is not one on
which it has built its reputation.”
Bloom feels it has not shone hitherto in the aggressive sector. Upton
says: “Rather cheekily by merging it can pick out the strong
performing funds in most if not all sectors.”
Gibbon says that generally it is good, while Gilbey says: “In
general, Invesco and Perpetual have achieved very good past
performance and are above average for many of their funds. The
flagship funds have remained as such, despite some anxious
When asked which funds will provide the main competition, the
panel list those from Aberforth, Lazard, Marlborough, Merrill Lynch,
SLCAM, Artemis, Fidelity, Rathbone, M&G, New Star and other
companies within the same sector.
Turning to whether the charges are fair and reasonable, Bloom
says: “Yes, bog standard.” Gilbey says: “The charges are much in
line with competitors in this sector of the market and as such are
high, but in context they are fair and reasonable.”
Upton says that you usually get what you pay for, while Gibbon
says: “Compared to other unit trusts they are reasonably standard,
but possibly slightly on the high side.” Both says the charges are in
line with the market.
Gilbey, Clinton, Both and Bloom believe the commission is fair
and reasonable. Gibbon feels it is standard for the industry at the
Turning to the product literature, Both and Gibbon call it adequate,
Upton says: “Fine, just enough to do the job.”
Bloom calls it ordinary, while Gilbey says: “The literature is
attractive but bland and nondescript. The marketing message does
not identify a target investor or target market.”
Summing up Gibbon says: “The fund is marketing itself as an
aggressively run fund. However, the fund management team is
joined by fund manager Neil Woodford who took a very conservative
stance during the technology boom in 1999/2000.” Gilbey feels the
fund may be a me-too product proposition.