Invesco Corporate Bond (UK)

Invests primarily in UK investment grade corporate bonds.

  • 94.74p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 223.87p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 5.00% 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 1.16%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 1.16%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 2.20%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 21 September 2020, fund data last updated 27 February 2012

The fund invests primarily in sterling denominated, investment grade, corporate bonds. The portfolio may also include some exposure to high yield bonds and non sterling issues to increase diversification and improve overall returns. Where their convictions are high, the managers are prepared to aggressively manage the interest rate sensitivity and credit exposure of the fund. Bonds issued by major governments and companies will be more stable than those issued by emerging markets or smaller corporate issuers; in the event of an issuer experiencing financial difficulty, there may be a risk to some or all of the capital invested. Any historical or current yields quoted should not be considered reliable indicators of future performance.

Fund summary

Sector £ Corporate Bond
Structure OEIC
Launched July, 1995
Size £3,377m
Yield 2.20%
Charging basis Income
Dividends paid 30 Jun, 31 Dec

Charges

Standard initial charge 5.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.16%
Ongoing charges figure 1.16%

Allocation

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Investment process

The fund aims to achieve total returns with relative security of capital, by investing mainly in investment grade fixed interest securities, sometimes combined with some exposure to high yield issues. Generally more than half the portfolio is invested at the lower rated end of investment grade bonds which tend to offer more attractive yields. The managers also look to exploit interest rate anomalies by evaluating the macro economic and monetary environment. This is combined with in-depth analysis of the individual issuers and evaluation of external research. As the latter is an important source of information, the managers maintain close links with preferred City dealers. The managers are believers in duration management; historically they have successfully used financial derivatives to manage the interest rate sensitivity of the fund.

The fund's co-manager structure is one of the longest running and most successful portfolio management partnerships in the industry. Historically where their convictions are high, the managers have been prepared to aggressively manage the interest rate sensitivity and the credit exposure of the fund. Whilst this has resulted in periods of under performance, subsequent returns have more than compensated for this.

Manager research

Average monthly relative returns

  • 15/16 -0.65%
  • 16/17 0.16%
  • 17/18 0.10%
  • 18/19 -0.28%
  • 19/20 0.08%

Bestinvest MRI

  • 3 years -0.03%
  • 5 years -0.12%
  • Career -0.10%
  • 3 years 57.50%
  • 5 years 31.60%
  • Career 36.30%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Paul Causer / Michael Matthews / Paul Read

•Causer is an Economics graduate from the LSE who began his career in 1983 in research and credit analysis with Asahi Bank. He moved on to their Treasury department trading securities and derivatives and then managed multi-currency portfolios from 1990. He joined Perpetual in 1994 and is now co-head of fixed interest. • Matthews is an Associate Member of the Institute of Investment Management and Research. Matthews joined Perpetual in 1994 and is part of their UK fixed interest team based in Henley. •Read graduated from the University of Toronto with an Economics & History degree and gained an MBA from INSEAD. He began his career with UBS in 1985, moving to Merrill Lynch in 1986 where he was a director of fixed income trading in Tokyo from 1991 and in Paris from 1993. He joined Perpetual in 1995 and is now co-head of fixed interest.

Track record

Paul Causer / Michael Matthews / Paul Read has 7.4 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.1%. During the worst period of relative performance (from December 2013 - January 2020) there was a decline of 12% relative to the index. The worst absolute loss has been 5%.

Periods of worst performance

Absolute -5.00% (February 2020 - March 2020)
Relative -12.00% (December 2013 - January 2020)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

Allocation

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Top 10 holdings

Data accurate as at 31 July 2020

4.4533% Invesco Liquidity Funds Plc Sterling Liquidity Ptf Agency
1.9193% United States Of Amer Treas Bills 0.25% Tb 15/07/29 Usd100
1.6528% At&T Inc 2.9% Nts 04/12/26 Gbp100000
1.3403% Orange Sa 5.875% Undated Bds Gbp100000
1.2734% Natwest Group Plc Fxd To Fxd Rt Nts 19/09/26 Gbp100000
1.2403% Lloyds Bank Plc 13% Step-Up Perp Cap Secs Gbp100000
1.2379% Sp Distribution Plc 5.875% Nts 17/07/26 Gbp100000
1.1722% Bat Capital Corp 2.125% Gtd Nts 15/08/25 Gbp100000
1.1368% Lloyds Bank Plc 7.625% Nts 22/04/25 Gbp1000
1.0931% Heathrow Funding Ltd Cls`A`5.225% Unwrp Bds 15/02/25gbp`Regs`
Source: Trustnet

Sector breakdown

Banks 25.00%
Utilities 15.00%
Telecommunications 10.00%
Insurance 9.00%
Money Market 6.00%
Automobiles 5.00%
Foods 4.00%
Property 3.00%
Oil & Gas 3.00%
Transport 3.00%

Portfolio

The portfolio is well diversified with over 200 holdings. The main area of currency exposure is sterling (approximately 75%) with the balance is in US dollars and euros - all non-sterling exposure is hedged. Duration has historically been more actively managed relative to peer group funds: +/- 2yrs relative to peer group average.

Constraints

Minimum 50% in UK & Europe. Max 50% in the US or 25% in any other country. Max 20% in sub-investment grade.

Key Investor Information - Income

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Key Investor Information - Accumulation

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