Aim: Growth and income by investing in government bonds, corporate bonds and/or cash
Minimum investment: Lump sum £500, monthly £20
Investment split: 100% in government bonds, corporate bonds and/or cash
Isa link: Yes
Charges: Initial 5%, annual 1.25%
Commission: Initial 3%, renewal 0.5%
Tel: 0800 028 2121
Invesco Perpetual¹s tactical bond fund takes a flexible asset allocation approach to fixed interest markets and cash. Its wide investment remit enables fund managers Paul Read and Paul Causer to focus on the best opportunities in cash, government bond and credit markets, while shifting the portfolio as market conditions change.
Looking at the ways in which this product is good for IFAs and their clients, Michael Philips proprietor Michael Both says: “Having Paul Causer and Paul Read as the managers means investors have arguably the strongest team available in this sector. Their track record with the Invesco Perpetual monthly income plus fund proves that, unlike so many of their peers, they really do know their stuff.”
Both points out that Read recently said that he hopes the fund can outperform cash, and outperform government bonds and major credit markets due to the fund’s flexibility and his investment experience combined with Causer’s.
Both notes that the managers can invest in cash when they think they are not being properly rewarded in the markets. This does not mean that cash is seen as a benchmark or that the managers will be content to beat cash by small amounts if more substantial gains are to be had in the marketplace.
Both mentions the fund can have up to 20 per cent foreign exchange exposure and that the managers expect to use that. “One might interpret that to mean we think sterling looks vulnerable and we will try to step out of the way of a falling market by being in cash and buy junk bonds in the hope they repay most of their face value. A great strategy if it works,” says Both.
Turning to the less attractive features of the fund Both says: “I am always wary of funds with such a wide-ranging brief as it is almost impossible to predict just where the manager will allocate his/her weightings or how to diversify a client’s portfolio to complement such an unknowable and changing strategy.” He thinks strategic bond funds from Aegon and Henderson could provide the main competition.
Summing up Both says: ³It is far from clear that such profits will be attainable if rates start climbing and the risk of a double dip recession is not insignificant. One can only hope that the opportunities the two Pauls see turn out to be profitable ones.”
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Average
Overall 8 /10