You are currently using Internet Explorer. This website is optimised for Google Chrome, Mozilla Firefox and Microsoft Edge. You can download Chrome here, Firefox here or Microsoft Edge here.
A monthly income-paying fund that invests primarily in fixed income, but can also hold up to 20% in equities. The approach is value-driven, with the managers prepared to express high conviction views where they see the greatest opportunity. Within its sector, the fund features in our 'Income Priority' category.
The fund’s KIID Synthetic Risk and Reward Indicator (SRRI) is 4. This is a regulatory measurement that is, where possible, calculated from the volatility of its weekly performance over a five-year period. A score of 4 means the fund’s historic volatility is between 5% and 10%.
The investment mandate results in significant investments in higher yielding bonds and equities. As such, investors should expect this fund to exhibit higher volatility than the sector in aggregate. Historically, it has experienced larger drawdowns than some of its established peers in the sector. Different share classes could have different SRRI scores.
The fund is co-managed by Rhys Davies and Ciaran Mallon. Mr Davies, working alongside his colleagues in Invesco’s Henley-based Fixed Income team, is responsible for the fund’s bond allocation, as well as for the overall portfolio construction. He is an established member of the team, which is co-headed by Michael Matthews and Thomas Moore. They took on leadership roles after the retirement of Paul Read and Paul Causer in 2021. A portion of the equity allocation is managed by Ciaran Mallon, a long-standing member of the UK Equities team, who joined Invesco in 2005.
The team aims to deliver a high level of income relative to the prevailing market environment, whilst being mindful of capital volatility and overall portfolio risk. In pursuing this objective, they believe that a flexible mandate is important as it enables them to adjust positions according to their assessments of market conditions and valuations. In addition, this flexibility enables them to capitalise upon opportunities that arise because of the investment constraints under which other market participants operate. Above all, their decisions are always underpinned by their assessments of value.
The fixed income component is well diversified and typically has a bias to higher yielding fixed income securities. The equity allocation typically features between 30-40 stocks, as well as the use of index derivatives. Up to 20% may be held in cash, depending upon the managers’ assessments of the opportunity set. A separate Investment Risk and Investment Oversight Team provides regular reviews of the portfolio and reports to senior management.
The team are responsible for the fund’s allocation between fixed income and equities, which is driven by their macro-economic views and their consequent identification of value across markets. At least 80% is invested in fixed income with a maximum of 20% in equities. The fixed income component is managed to provide income with due regard to capital preservation, while the equity portion provides income growth as well as capital growth.
The structure of the fixed income component is driven by the managers’ macro-economic views and their consequent identification of value across the broad bond sectors, including government bonds, investment grade bonds and high yield credit. Their analysis of the economic cycle is designed to predict monetary policy developments and the trends in the pricing of credit. These factors inform the general strategy for the portfolio in terms of duration, credit risk and yield curve positioning. This research is complemented by bottom-up company research.
Mr Mallon manages a portion of the equity allocation, which typically features larger-cap stocks and has a structural value bias. He seeks to provide some income, alongside the steady accumulation of capital growth. Mr Davies can invest directly via index derivatives when broader equity markets are deemed attractive.
Formal documentation, including the fund prospectus and the KIID, should be sought directly from the asset manager. For ease of reference, a link to the ASSET MANAGER WEBSITE can be found above, as well as a link to the ASSET MANAGER FACTSHEET.
At The Adviser Centre, our primary aim is to support financial professionals in their fund selection and suitability work through independently-minded research, borne of decades of industry experience. Our process is framed by the fundamental concepts of “quality”, “value” and “utility”, through which we answer the key questions of why to invest in a fund, how it is likely to behave and how it can be deployed.
The Adviser Centre team members are some of the most experienced in the fund research industry. We can always look forward to robust and constructive discussions and we have great respect for their views and perspectives, which, given the breadth of their fund and market knowledge, come from an extremely well-informed position.
We have known and worked with the team for several years and we value their experience and the insights they provide to our own investment process. The service differentiates itself by its more focused nature and the information on their factsheets is useful in emphasising a fund’s key mandate, exposure and style biases, helping to explain the risk/return journey that our customers can expect.
© The Adviser Centre | All Rights Reserved. The Adviser Centre is a trading name of Embark Investments Limited and is not authorised to carry out regulated activities. Embark Investments Limited is a company registered in England (No. 03383730) and a wholly owned subsidiary of Embark Group Limited, with its registered office at 33 Old Broad Street, London, EC2N 1HZ. Embark Investments Limited is authorised and regulated by the Financial Conduct Authority (Registration No. 628981). This website is provided by The Adviser Centre and is a service for financial professionals only. Information on this website, including data and information from asset managers and third party sources, is deemed to be correct at the time of publication but The Adviser Centre takes no responsibility for its accuracy. Opinions are stated honestly and with careful consideration but they can change at any time and should not be solely relied upon. Information featured on the website does not constitute financial or investment advice.
Your use of this website is subject to the terms of use set out in the website. By continuing to use our website we will assume that you are happy to receive non-privacy intrusive cookies. Please be aware that if you disable cookies some functionality on the site will not work. Read our cookies policy to find out more about our cookie use and how to disable cookies.
Alternatively, if you are not a financial professional and are seeking financial advice, you may wish to visit unbiased.co.uk to search for a financial adviser.