Bestinvest says
This fund combines the talents of Invesco Perpetual’s bond managers Paul Causer and Paul Reed with their UK equity income manager Neil Woodford. Causer and Reed are arguably the most established and successful portfolio management partnership in the fixed income retail space, managing the Invesco Perpetual Corporate Bond and Tactical Bond funds, both of which are rated by Bestinvest. Woodford has perhaps an even stronger reputation and is the longtime manager of Invesco Perpetual’s Income and High Income funds, also on Bestinvest’s buylist.
The investment approach is valuation driven and aims to deliver long term outperformance in most market conditions by exploiting inefficiencies in both the fixed interest and equity markets. The fund mainly invests in sterling and euro denominated corporate bonds. All non-sterling fixed interest currency exposure is hedged. Neil Woodford manages the equity portion of the fund, restricted to a maximum of 20% of the portfolio, with an aim to identify companies whose outlook and growth prospects are not reflected in their valuations. The general direction of interest rates and the shape of the yield curve will determine the preferred maturities, yields, sectors and credit risk tolerances of assets. It is normal for the bottom up research to be the main contributor but there will be times in the economic or market cycle where the influence of macroeconomic views will be stronger. The team has the ability to use derivatives including interest rate futures as an investment option with an aim to reduce either risk or cost or to generate additional income or capital.