Invesco Distribution (UK) Y

An income fund with 60-80% bond exposure, and the balance in UK equities.

  • 198.69p
    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.

  • 266.04p
    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!

  • 0.77%
    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).

  • 0.77%
    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.

  • 4.10%
    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 19 January 2021, fund data last updated 11 February 2016

The fund’s aim is to achieve a combination of income and capital growth over the medium to long term by investing in a combination of bonds and UK equities. Fixed interest exposure will always be at least 60% of the fund, and will consist of both quality and high yield bonds issued by both governments and corporates. The fund is run by bond fund managers Paul Causer and Paul Read and UK equity manager Ciaron Mallon (Invesco Perpetual Income & Growth) – each selects from amongst the best ideas of their other funds.

Fund summary

Sector Mixed Investment 20-60% Shares
Structure OEIC
Launched March, 2014
Size £1,975m
Yield 4.10%
Charging basis Capital
Dividends paid Last day of each month

Charges

Standard initial charge 5.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.77%
Ongoing charges figure 0.77%

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Investment process

The fund aims to achieve a balance of income and capital growth through a portfolio of primarily UK equity & fixed interest securities. Asset allocation is decided by Paul Causer and Paul Read, though at all times fixed interest will account for at least 60% of the portfolio. Otherwise the managers are free to pursue a flexible and active approach to asset class weightings depending on economic conditions. Fund holdings are a collection of the best ideas from the managers' existing funds. Within fixed interest there are no formal constraints on the allocation between investment grade and high yield bonds. Bonds are primarily sterling-denominated; any non-sterling bonds are hedged back to sterling. Futures may be used for duration management. The UK equity exposure is selected by Ciaron Mallon, manager of the Income & Growth equity fund.

This fund provides an actively managed combination of bonds and equities, removing the need for investors to manage this themselves though as always they should be mindful of their overall asset allocation. It also pays an attractive yield. The fund benefits from being run by highly experienced managers with proven track records. In terms of asset allocation it sits between Invesco Perpetual's Income / High Income funds, which invest only in UK equities, and Monthly Income Plus funds, which has a higher bond allocation. Keeping the bond allocation above 60% provides a small tax benefit.

Manager research

Average monthly relative returns

  • 16/17 -0.03%
  • 17/18 0.29%
  • 18/19 -0.15%
  • 19/20 0.16%
  • 20/21 0.14%

Bestinvest MRI

  • 3 years 0.05%
  • 5 years 0.08%
  • Career 0.08%
  • 3 years 74.20%
  • 5 years 88.10%
  • Career 94.30%

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

Ciaran Mallon/ Paul Causer/ Paul Read

Mallon graduated from Oxford University with a Chemistry degree in 1993. He also holds the CFA, the Securities Institute Diploma and is an Associate of the Society of Investment Professionals. He joined United Friendly Asset Management in 1999 as a UK equity analyst, following 5 years at Midland Private Banking. In 2000 he became a fund manager for Royal London Asset Management in the team specialising in life funds and unit trusts. He joined Invesco Perpetual in January 2005 and works on their UK Equities desk in Henley. 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. 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

Ciaran Mallon/ Paul Causer/ Paul Read has 7.2 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.08%. During the worst period of relative performance (from April 2018 - March 2020) there was a decline of 5% relative to the index. The worst absolute loss has been 12%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 94%.

Periods of worst performance

Absolute -12.00% (January 2020 - March 2020)
Relative -5.00% (April 2018 - March 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

3.288% United States Of Amer Treas Bills 0.25% Tb 15/07/29 Usd100
2.2634% Nationwide Building Society
2.1283% United States Of Amer Treas Bonds 2% Bds 15/08/25 Usd100
1.922% Experian Plc
1.6674% Unicredit Spa Var Undated Nts Usd200000
1.6047% Pennon Group
1.5827% Smith & Nephew Plc
1.5433% Croda International Plc
1.5367% Relx Plc
1.3478% Glaxosmithkline
Source: Trustnet

Sector breakdown

Banks 28.00%
Government Bonds 12.00%
Industrials 7.00%
Utilities 5.00%
Foods 4.00%
Financials 4.00%
Health Care 4.00%
Consumer Discretionary 3.00%
Telecommunications 3.00%
Insurance 3.00%

Portfolio

300-400 securities including around 40 equities. Fixed income holdings may cover investment grade and high yield.

Constraints

Fixed income exposure 60-80%, equity exposure 20-40%. Up to 20% cash.

Key Investor Information - Income

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Key Investor Information - Accumulation

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