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Invesco Perpetual Balanced Risk 10 Fund

January 2017 (Content as at 31 December 2016)

Overview

Objective

The Invesco Perpetual Balanced Risk 10 Fund aims to achieve long term capital growth through different economic environments by investing in derivatives and other financially linked instruments to gain exposure to three main asset classes: fixed income, equities and commodities.

The Fund seeks to achieve this objective by (1) balancing the risk contribution from each of these asset classes to build the strategic allocation and (2) adjusting the risk contribution tactically to make the portfolio more adaptive to the near-term environment. The Fund will aim to target 10% average volatility over a full market cycle; however, no assurance can be made that these targets will be met. The investment policy for the Fund is set out in more detail in the most recent prospectus.

Fixed interest roundtable Q&A: where next for bond markets?

Video

15 July 2015

Invesco Perpetual Fixed Interest team

In this live roundtable with fund managers from our Fixed Interest team, they discussed key issues including whether the Greek debt crisis matters for bond markets and the current macroeconomic backdrop.

Market commentary

Without doubt, the most important event in November that captured people’s attention worldwide was the US presidential election, which resulted in a surprise victory for the Republican candidate Donald J. Trump. Developed equities saw gains in aggregate, but under the surface, the range of outcomes was wide. The US small cap equity market led results, possibly reflecting a belief that economic policies under Trump could benefit US-domiciled companies with a largely domestic customer base that are less likely to see negative effects from US dollar strength or tariff wars. Japanese and US large cap equity markets also made gains. In Europe, however, equity markets were flat, while Hong Kong and UK equity markets saw losses. Within government bonds, yields spiked as fears of an interest rate hike by the US Federal Reserve (Fed) increased, while the demand for perceived ‘safe haven’ assets declined. Cyclical commodities, such as industrial metals and energy performed well, while precious metals and agricultural commodity prices fell.

Fund strategy

The fund produced a negative return over the month. Exposure to government bonds represented the sole detractor to returns over the period, as yields rose on the heels of the Trump victory, while calls for an interest rate hike in the US and hints that the European Central Bank may soon begin to taper asset purchases led to a reduction in demand for bonds. Both equity market and commodity exposure proved beneficial for the fund. Moving ahead, we have reduced the fund’s exposure to government bonds. However, German Bunds, which have been absent from the fund for some time, have now re-entered the portfolio as German interest rates climbed markedly over the past few months. In commodities, exposure to agriculture and precious metals has been curtailed.

Key facts
Product type ICVC
Launch date 20 February 2012
Fund size £128.99m
Historic yield 0.41%
Sector IA Specialist NR
Available in an ISA? Yes

Fund manager

Scott E Wolle

Title: Chief Investment Officer
Team: Invesco Global Strategies - Global Asset Allocation
Fund details
Fund currency GBP
Trading frequency Daily
Accounting period ends 31 March
30 September
Share types
SEDOL ISIN
Accumulation B6TQN45 GB00B6TQN454
Accumulation (No Trail) B6SL7R2 GB00B6SL7R28
Y (Acc) BJ04F43 GB00BJ04F430
Z (Acc) B8N44H9 GB00B8N44H95
Investment levels
Minimum lump sum £500

Performance

Charges

One-off charges taken before you invest

Entry charge

The entry charge for the fund is up to 5%. This is the maximum that might be taken out of your money before it is invested. For example, if you invest £1,000, an entry charge of 5% means £950 of your money will be used to buy shares in the fund.

The entry charge covers the costs of setting up your investment.

If you invest through a third party (such as a financial adviser), but do not receive financial advice on your investment, this charge may include payments to that third party. For more details see "What share classes are available for your ICVC funds?".

Exit charge

There is no exit charge for the fund.

Charges taken from the fund over a year

Ongoing charge

The ongoing charge figure is based on a fixed, all-inclusive fee and excludes portfolio transaction costs. The ongoing charge for each share class can be found in the relevant Key Investor Information Document available under 'Literature'. Investors will be provided with advance notice if any increases to this figure occur.

The ongoing charge covers all aspects of operating the fund during the year, including fees paid for investment management, administration and the independent oversight functions.

If you invest through a third party (such as a financial adviser), but do not receive financial advice on your investment, this charge may include payments to that third party. Once invested, your contract note or acknowledgement letter will show the amount of any payment in cash terms. For more details see "What share classes are available for your ICVC funds?".

Charges taken from the fund under specific conditions

Performance fee

No performance fee is charged.

Portfolio transaction costs1

On average, over the last three financial years, the fund incurred broker commissions of 0.01% and transfer taxes of 0.00%, as a necessary part of buying and selling the fund's underlying investments in order to achieve the investment objective. A proportion of these costs are recovered directly from investors joining and leaving the fund.

When the fund buys or sells shares, broker commissions and transfer taxes are paid by the fund on each transaction. In addition, there is a dealing spread between the buying and selling prices of the underlying investments. Unlike shares, other types of investments (such as bonds, money market instruments and derivatives) have no separately identifiable transaction costs; these costs form part of the dealing spread. Dealing spreads vary considerably depending on the transaction value and market sentiment. The estimated average dealing spread for the fund is 0.01% of the transaction value.

Comparing portfolio transaction costs for a range of funds may give a false impression of the relative costs of investing in them, for the following reasons:

  • Transaction costs do not necessarily reduce returns. The net impact of dealing is the combination of the effectiveness of the manager's investment decisions in improving returns and the associate costs of investment
  • Historic transaction costs are not an effective indicator of the future impact on performance
  • Transaction costs for buying and selling investments due to other investors joining or leaving the fund may be recovered from those investors. For further information see Pricing policy note below
  • Transaction costs vary from country to country
  • Transaction costs vary depending on the types of investment in which a fund invests
  • As the manager's investment decisions are not predictable, transaction costs are also not predictable

Pricing policy note1

We operate a single pricing methodology for this fund and reserve the right to adjust the fund's price to protect your investment from the costs of buying and selling investments that result from other investors joining or leaving the fund. The amount of any such adjustment is calculated by reference to the estimated costs of dealing in the underlying investments.

Typical adjustments to the fund's price are to increase it by 0.01% for net inflows or decrease it by 0.01% for net outflows.

We usually adjust the price to the maximum extent possible when the value of net contributions or withdrawals is significant, which helps to protect your investment from the costs of the resultant transactions.

1The fund's financial year end is 31 March 2016. Figures in these sections are as at 31 March 2016.

Holdings

 

Literature

Factsheets

Invesco Perpetual Balanced Risk 10 Fund Factsheet  (111 KB)

KIIDs

Invesco Perpetual Balanced Risk 10 Fund KIID acc  (209 KB)

Invesco Perpetual Balanced Risk 10 Fund KIID acc (No trail)  (210 KB)

Invesco Perpetual Balanced Risk 10 Fund KIID acc (Y)  (209 KB)

Invesco Perpetual Balanced Risk 10 Fund KIID acc (Z)  (209 KB)

Application form

ICVC & ISA Application booklet 16/17  (235 KB)

Product & fund information

ICVC Supplementary Information Document (SID)  (4 MB)

ICVC ISA Key Features and Terms and Conditions  (1 MB)

Financial reports

Invesco Perpetual Diversified Balanced Risk Investment Series Interim Report 2013 (Short Report)  (159 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Interim Report 2013 (Long Form)  (297 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Interim Report 2014 (Short Report)  (204 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Interim Report 2012 (Short Report)  (136 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Interim Report 2012 (Long Form)  (236 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Interim Report 2014 (Long Form)  (399 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Annual Report 2014 (Long Form)  (663 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Annual Report 2013 (Long Form)  (329 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Annual Report 2013 (Short Report)  (166 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Annual Report 2014 (Short Report)  (174 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Annual Report 2016 (Short Report)  (213 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Annual Report 2015 (Short Report)  (210 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Annual Report 2015 (Long Report)  (650 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Interim Report 2015 (Short Report)  (231 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Annual Report 2016 (Long Form)  (612 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Interim Report 2015 (Long Form)  (374 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Interim Report 2016 (Long Report)  (451 KB)

Invesco Perpetual Diversified Balanced Risk Investment Series Interim Report 2016 (Short Report)  (254 KB)

Forms

ISA Additional Permitted Subscription application form  (90 KB)

Prospectus

Invesco Perpetual Balanced Risk Prospectus  (817 KB)

Monthly Market Roundup - covering July 2016

Article

03 August 2016

Invesco Perpetual

We review global market developments in July, highlighting the best and worst performing sectors globally.

Monthly Market Roundup – covering September 2016

Article

05 October 2016

Invesco Perpetual

We review global market developments in September, highlighting the best and worst performing sectors globally.

Monthly Market Roundup – covering August 2016

Article

05 September 2016

Invesco Perpetual

We review global market developments in August, highlighting the best and worst performing sectors globally.

 

Investment risks

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Past performance is not a guide to future returns.

The fund will make significant use of financial derivatives (complex instruments) which will result in the fund being leveraged and may result in large fluctuations in the value of the fund. Leverage on certain types of transactions including derivatives may impair the funds’ liquidity, cause it to liquidate positions at unfavourable times or otherwise cause the fund not to achieve its intended objective. Leverage occurs when the economic exposure created by the use of derivatives is greater than the amount invested resulting in the fund being exposed to a greater loss than the initial investment. The fund will gain exposure to commodities which are generally considered to be high risk investments and may result in large fluctuations in the value of the fund. Fixed income securities to which the fund is exposed are open to credit risk which may result in issuers not always making interest and/or other payments nor is the solvency of the issuers guaranteed.

Important information

Yield and performance figures are based on the z (accumulation) share class. As this was launched on 12 November 2012, for the periods prior to this launch date, performance figures are based on the accumulation share class, without any adjustment for fees. Performance figures for all share classes can be found in the relevant Key Investor Information Document.

All fund portfolio figures are as at date shown (source: Invesco Perpetual).

Performance figures are shown in sterling, inclusive of reinvested income and net of the ongoing charge and portfolio transaction costs to date shown. The figures do not reflect the entry charge paid by individual investors (source: Lipper).

The Invesco Global Asset Allocation Team comprises CIO Scott Wolle*, Portfolio Managers Mark Ahnrud, Chris Devine, Scott Hixon, Dr Bernhard Pfaff and Christian Ulrich. *Shown in picture.

Where Invesco Perpetual has expressed views and opinions, these may change. Where securities are mentioned they do not necessarily represent a specific portfolio holding and do not constitute a recommendation to purchase, hold or sell.

For the most up to date information on our funds, please refer to the relevant fund and share class-specific Key Investor Information Documents, the Supplementary Information Document, the Annual or Interim Short Reports and the Prospectus, which are available using the contact details shown.