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Invesco Corporate Bond (UK) Y

Bestinvest LogoTargets income and capital growth by investing primarily in investing grade, sterling-denominated corporate bonds.

PRICE (INC)

185.23p

PRICE (ACC)

241.66p

INITIAL CHARGE

0%

ANNUAL MANAGEMENT CHARGE

0.5%

ONGOING CHARGE

0.5%

YIELD

3.5%

1 YEAR
-9.20%

Prices as at 17 Aug 2022.

Fund commentary last updated 14 Mar 2022.

Past performance is not an indication of future performance.

Capital at risk.

The fund aims to deliver income and capital growth over the medium to long term by investing at least 80% of its assets in investment grade corporate bonds. The bulk of the portfolio is invested in sterling-denominated bonds, mostly from UK issuers. Non-sterling exposure is typically hedged back to sterling. Managers Michael Matthews and Tom Hemmant believe that with government bond yields in many countries at record lows and with equity dividends carrying risk, the importance of corporate bonds in generating income is as strong as ever. In their portfolio they have a relatively low level of interest rate risk compared to the broader sterling investment grade corporate bond market. The highest allocation by sector is to financials with top holdings including banking giants Lloyds and NatWest. The holdings also include supermarket Tesco and property group British Land.

Fund summary

Sector£ Corporate Bond
StructureOEIC
LaunchedMarch 2014
Size£1,882m
Yield3.5%
Charging BasisIncome
Dividends paid30 Jun, 31 Dec

Charges

Standard Initial Charge0%
Initial Charge Via BestInvest0%
Additional Bid/Offer Spread0%
Annual Management Charge0.5%
Ongoing Charges Figure0.5%

Investment Process

The fund has an active investment approach based on the judgement of managers Michael Matthews and Tom Hemmant as well as macroeconomic and credit risk analysis and valuation, ESG is also considered in the same way the managers assess any other risk. They make a qualitative judgement in three areas - whether each risk is material to the overall credit risk profile of an issuer, the potential for that risk to increase or decrease as a factor and whether the risk is sufficiently reflected in the price of the fixed income security. The portfolio has three broad buckets including Liquidity. This comprises cash or short-term sovereign instruments. It is not a return-seeking part of the portfolio and is only used to ensure that the fund is readily able to meet redemptions and/or deploy dry powder. The second bucket is Defensive – it is the core of the portfolio and includes investment grade and covered bonds. It typically accounts for 55% to 65% of the portfolio. The third bucket is Credit risk – these bonds are the highest risk element of the portfolio and typically form around 25% of Net Asset Value. These include a large allocation to subordinated bank debt, where yields are higher, albeit this does add volatility to returns.

The information on this website is not intended to be advice or a recommendation to buy, sell or hold any investment mentioned. The value of investments and the income from them can go down as well as up and you may not get back the amount invested.

Past performance is not a guide to future performance. View full risk warning