Portfolio Adviser fund AwArds 2008 CAtegory winner
Fund Awards 2008
WINNER
Invesco Perpetual Monthly Income Fund
“
The key strength
of the fund is probably
that it is not really
a high yield bond fund.
Instead it has about
20% in UK equities,
run by Neil Woodford.
Paul, Paul and Neil
are outstandingly
good managers, and
managers who have had
a great last few years
”
Nick Sketch, PA Fund Awards judge
Invesco Perpetual’s Jason Evans
High yield bonds
The Invesco Perpetual Monthly
Income Fund holds up to 20%
of its assets in equities managed
by Neil Woodford, while
Paul Causer and Paul Read
run the fixed income money.
The two Pauls are responsible
for the overall asset allocation
of the fund.
The fund’s equity holding
– held at 17% for most of 2008
– has been a significant drag
on performance, according to
Standard & Poor’s, costing up
to 1.5%.
In recent months the man-
Annual discrete performance
%
12
8
4
0
-4
-8
IP Monthly Income
Source: Morningstar
Quartile performance: 1 Jul ’05 – 1 Jul ’08
1st q’tile
2nd q’tile
3rd q’tile
4th q’tile
Q3
’05
Q4
’05
Source: Morningstar
Q1
’06
Q2
’06
Q3
’06
16 Portfolio ADViSEr SuPPlEmEnt [www.portfolio-adviser.com] DEcEmbEr 2008
invesco Perpetual Monthly income vs index
% 10
25
20
15
5
0
-5
Jul ’05 Jan ’06
Source: Morningstar
fund facts
agers have turned to banks
and other financials, describ-
Q4
’06
M’star UK Fixed Inc £ High Yield
IP Monthly Income
Year ending Jun ’06
Year ending Jun ’07
Year ending Jun ’08
Jul
Fund name: Invesco Perpetual Monthly Income Managers: Paul Causer,
Paul Read, Neal Woodford Launch date: 6 Feb ’99 Fund size: £2.03bn
Init charge: 5% Ann charge: 1.25% Min init inv: £1,000 M’star rating: HHHH
Q1
’07
Q2
’07
Q3
’07
Q4
’07
Q1
’08
Q2
’08
Jan ’07
M’star UK FI £ High Yield
Jul
ing the turmoil that the
banks are going through
as “a painful yet necessary
process of deleveraging and
balance sheet repair via
capital-raising, the sale of
non-core assets and, in the
extreme, takeovers.”
They see these as all attractive
to bondholders. They also
see the actions of the central
banks globally as helping to
provide opportunities for the
fund over the medium term.
Standard & Poor’s adds
that Read and Causer have
been cautious on credit for
some time, investing much of
the 12% held in cash a year
ago, during the first quarter of
the year.
Nearly 60% of the fund is
held in A through BBB and B
to B-rated bonds.
The fund has a relatively
even weighting of bonds held
(279 in total), with its top ten
holdings making up 12%.
Jan ’08
Jul
To view a Ceros magazine you need to have JavaScript enabled in your browser and have the flash player 8 or higher installed. To install the latest flash player, click the icon above, install the flash plugin and then click here to refresh this page.