Star Invesco bond funds endure £471m of outflows

Invesco Perpetual’s three star bond funds have now endured roughly £471m of outflows in the past 12 months, after the fund giant failed to make the top 10 UK retail sales list for the fourth straight quarter.

Of the trio of funds, run by prominent managers Paul Causer and Paul Read, the £5.7bn Invesco Perpetual Corporate Bond fund saw roughly £222m worth of net redemptions in the 12 months to the end of July, according to estimates from data provider FE.

The £3.3bn Monthly Income Plus fund saw net outflows of roughly £112m, and the £253m Tactical Bond fund experienced net outflows redemptions of £135m, FE said.

Fundscape’s Pridham fund sales report last week revealed that bond funds had dominated sales in the second quarter, with M&G Investments leading the net sales charge. Invesco Perpetual was eclipsed by M&G as the UK’s biggest asset manager earlier this year.

Mr Causer and Mr Read have suffered headwinds to performance after backing an ongoing recovery in financial debt, in spite of the ongoing eurozone crisis.

However, the fixed income duo have stuck by their stance in spite of criticism, keeping hold of high levels of bank debt - which the pair believe is undervalued - and, in the case of the Tactical Bond fund, holding one of the highest exposures to Spain of any fund listed in the IMA sectors.

The Corporate Bond fund still ranks in the bottom quartile of the IMA Sterling Corporate Bond sector in terms of its performance in the year to August 16, but the Monthly Income Plus and Tactical Bond funds have both beaten the average return of funds in their IMA Sterling Strategic Bond sector over that period.

“In the UK our fund flows have remained strong as clients continue to look to Invesco Perpetual to meet their investments objectives,” Invesco said in a statement.