Invesco launches strategic bond fund
Invesco Perpetual has launched a flexible bond fund that will be managed by fixed interest duo Paul Causer and Paul Read.
The Invesco Perpetual Tactical Bond fund will invest in all types of bonds and cash and will sit in the strategic bond sector.
Given the highly unconstrained nature of the fund, it will not be managed to an income target and is not suitable for investors seeking a consistent level of yield.
Causer and Read bring more than 50 years combined investment experience to the fund.
"Over the long term, because we have the flexibility to move portfolios across the risk spectrum, we would hope that we can outperform cash and indeed the major government and credit markets," says Read.
He adds: "The high-conviction management style means the fund is able to alter its asset allocations quickly which can lead to material changes in the risk profile of the fund."
There is an annual management fee of 1.25% while the initial charge is 5%. However, ISA investors will get a reduced rate of 3% initial charge, until further notice.
The fund launch brings Invesco's tally of bond funds to eight.
Bond funds had a great year in 2009, beating equities in fund sales. From January to November, net sales reached £9.6 billion, which was a not inconsiderable 41% of total net retail sales.
However, over the last few months, equity and property funds have come back into fashion, outselling bond sectors.
The general term for the rate of income from an investment expressed as an annual percentage and based on its current market value. For example, if a corporate bond or gilt originally sold at £100 par value with a coupon of 10% is bought for £100 then the coupon and the yield are the same at 10%, or £10. But if an investor buys the bond for £125, its coupon is still 10% (or £10) and the investor receives £10 but as the investor bought the bond for £125 (not £100) the yield on the investment is 8%.
All investment returns are measured against a benchmark to represent “the market” and an investment that performs better than the benchmark is said to have outperformed the market. An active managed fund will seek to outperform a relevant index through superior selection of investments (unlike a tracker fund which can never outperform the market). Outperform is also an investment analyst’s recommendation, meaning that a specific share is expected to perform better than its peers in the market.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
An interchangeable term for shares (UK) or stocks (US). Holders of equity shares in a company are entitled to the earnings and assets of a company after all the prior charges and demands on the company’s capital (chiefly its debts and liabilities) have been settled. To have equity in any asset is to own a piece of it, so holders of shares in a company effectively own a piece proportionate to the number of shares they hold. (See also Shares).