A huge 82.4 per cent equity bias has helped the Invesco Perpetual Managed Income Fund consistently outperform its sector, returning 36.5 per cent in the past three years, according to FE.
This is despite fears over US and global equity markets. With concern over China’s economic slowdown, uncertainty over Federal Reserve policy and questions about corporate earnings, global and US equities were heading for their worse showing since 2011, according to S&P Dow Jones Indices analyst Howard Silverblatt.
The £298m fund, which sits 10th in the Investment Association’s Mixed Investment 40-85 per cent share sector, has a diversified growth strategy and aims to achieve both growth and a higher than average level of income.
With a fettered portfolio primarily of qualifying funds, fund manager Nick Mustoe can also turn to transferable securities, money market instruments, warrants, collective investment schemes, deposits and other permitted investments.
In his fund’s latest factsheet, Mr Mustoe said earnings yields, dividend yields and balance sheets in global markets in general still looked attractive, but acknowledged that global equity markets were hit by “deepening gloom over global economic growth and across emerging markets.”
The portfolio’s top holdings are IP Income Fund, at 15.8 per cent; IP UK Strategic Income Fund, at 15.75 per cent; and the IP US Equity Fund, at 14.9 per cent.
The fund’s minimum investment is £500, and its ongoing charge is 1.83 per cent.
In the same peer group, the L&G Mixed Investment 40-85 per cent fund has marginally underperformed in the past few years, but returned 17.86 per cent in the past three, according to FE, placing it 101st in the sector.
The objective of the £548m portfolio is to provide income and long-term growth by investing in a diversified portfolio of UK and global equities, a range of fixed interest securities, such as government and corporate bonds, and other assets generally through collective schemes but also by investing directly in the assets.
Managed by Bruce White, Justin Onuekwusi and Martin Dietz, the portfolio also invests in commercial property and cash.
The portfolio also has a strong equity bias, with a 71.3 per cent exposure, including 4 per cent in property shares, according to its latest factsheet.
Remaining holdings are in bonds – 18.1 per cent corporate and global, and 2.5 per cent in gilts and developed market government. The fund has an 8 per cent cash holding.
The portfolio’s top holdings are HSBC Holdings, at 1.2 per cent; BP, at 0.8 per cent; and British American Tobacco, at 0.75 per cent.
The minimum investment is £500 and the ongoing charge is 1.78 per cent.
|Invesco Perpetual Managed Income Fund||L&G Mixed Investment 40-85 per cent Fund|
|TOP HOLDINGS||TOP HOLDINGS|
|IP Income Fund 15.8%||HSBC Holdings 1.2%|
|IP UK Strategic Income Fund 15.75%||BP 0.8%|
|IP US Equity Fund 14.9%||British American Tobacco 0.75%|
|IP Corporate Bond 13.45%||GlaxoSmithKline 0.7%|
|IP European Equity Income 12.8%||Vodaphone Group 0.7%|
Gordon Bowden, director of Buckinghamshire-based Quainton Hills Financial Planning, said: “The L&G fund suffers from an over-reliance on L&Gs own individual funds. That most of these are index tracker funds but with an overall annual fund charge of over 1% means that the fund is almost certain to continue its record of underperformance within its sector. There is no indication to show an increased possibility of better future performance.