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Invesco&#39s caution on UK fund seen as bid to avoid Euro growth repeat

Invesco Perpetual is calling on IFAs not to treat its top-performing UK aggressive fund as a core holding in a bid to avoid the problems that beset its giant European growth fund.

The European fund, now on the sell lists of many IFAs, was one of the star performers of the 1990s under Rory Powe, reaching £3bn in 1999. But its high exposure to technology stocks hit it hard when the TMT bubble burst, leaving investors – many of whom had been sold the fund as a core holding – out of pocket. It has now shrunk to £915m in size.

In what IFAs believe is a clear bid to pre-empt another debacle, Invesco is asking advisers to recommend or market the aggressive fund as a non-mainstream holding des-pite the fact that it is still only £21m in size. It says its volatility and concentrated number of stocks preclude it from comprising more than a small percentage of most portfolios.

Chief executive Mike Webb says: “Fund manager Ed Burke goes out of his way to make clear the fund is not a core holding. When it has been performing as well as it has, we are mindful that people understand it is a volatile fund.”

Whitechurch Securities investment director Gavin Haynes says: “Most discount brokers and marketing houses made the European growth fund out to be a core holding. Invesco may have learnt to rein in this sort of thing much earlier.”

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