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Invesco plugs Woodford gap with new global income fund

Invesco Perpetual launches global version of its popular Distribution fund that former star manager Neil Woodford used to help run.

 
Invesco plugs Woodford gap with new global income fund

Invesco Perpetual has launched an income fund that will invest across the world and mix shares and bonds.

The Invesco Perpetual Global Distribution fund will have a similar structure to the firm's top performing £2.8 billion Distribution fund, which former star income fund manager Neil Woodford used to help run.

Like the existing Distribution fund, which yields an income of 4.6%, the global distribution fund will be partly overseen by the firm's Citywire + rated bond managers Paul Causer and Paul Read. Chief investment officer Nick Mustoe will be in charge of the fund's share holdings.

The key difference will be the new fund's ability to look for income opportunities across the world.

At least 60% of Global Distribution will be invested in cash or traditional fixed income stocks, although Causer and Read will have freedom to hold a wider range of investment grade, high yield and government bonds. 

The pair will also set the level of equity exposure in the fund between 20% and 40%. Mustoe, head of the five-strong Invesco Perpetual Global Equity Income Group, will provide stock selection.  

Mustoe runs a range of global equity portfolios for Invesco, including the firm's Global Equity Income fund, which has returned 46.5% in three years to the end of March versus 27% rise in the FTSE World index.

Causer said: 'A fund that can combine our bond ideas with an income-focused global equity strategy is attractive for us as fund managers.

'It gives us the ability to access income where it appears to be best value at different points in the cycle across a wide investment universe. It also enables us to position the fund for capital appreciation when we see the potential for that.'

The UK version of the fund, which Causer and Read had co-managed with former manager Neil Woodford until his recent departure, has returned 36.1% in the three years to the end of March versus a 17.5% gain in the LCI UK Balanced index. Last October Invesco put Citywire AA-rated Ciaran Mallon in charge of the equity component of the fund.  

1 comment so far. Why not have your say?

William Phillips

May 17, 2014 at 12:02

You can get pretty near 4.6% on a spread of UK higher-yielding blue chips, without going near the highly bubbled-up bond market or incurring extra currency and governance risk in overseas equities.

It sounds something of a dog's breakfast, motivated by the headline return in an income-hungry savings market rather than any internal investment logic. Tail wagging dog?

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  • Paul Read
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  • Nick Mustoe
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  • Neil Woodford
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