Invesco Perpetual Balanced Risk 8 Fund
July 2017 (Content as at 30 June 2017)
The Invesco Perpetual Balanced Risk 8 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 8% 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.
The 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. We seek to balance the risk contribution from each of these asset classes to build a strategic allocation, which is then adjusted tactically to make the portfolio more adaptive to the near-term environment. The fund will aim to target 8% average volatility over a full market cycle.
Most developed equity markets continued to push higher in May. However, equity markets outside the US enjoyed a performance edge. In the US, a divergence in equity market performance has become evident: the performance of large capitalisation equity market indices, for example, were driven by fewer stocks, while the small capitalisation equity market has begun to wither following its initial rally on the heels of Trump’s victory last year. Within government bonds, most developed markets were able to post gains, with Japan having been the lone exception. Australian government bonds particularly gained traction, largely due to China import and export data having come in weaker than expected. This had a direct impact on major commodity exporter Australia and resulted in lower yields. Within commodities, prices generally fell. Agriculture suffered from oversupply relative to demand, whilst energy commodities endured a tumultuous month due to reports of increased oil rig counts and OPEC’s initial hesitation to commit to an extension to production cuts.
|Launch date||20 February 2012|
|Sector||IA Volatility Managed sector|
|Available in an ISA?||Yes|
|Title:||Chief Investment Officer|
|Team:||Invesco Global Strategies - Global Asset Allocation|
|Accounting period ends||
|Accumulation (No Trail)||B3W8QH1||GB00B3W8QH14|
|Minimum lump sum||£500|
One-off charges taken before you invest
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?".
There is no exit charge for the fund.
Charges taken from the fund over a year
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
No performance fee is charged.
Portfolio transaction costs1
On average, over the last three financial years, the fund incurred broker commissions of 0.00% 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 2017. Figures in these sections are as at 31 March 2017.
Product & fund information
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.
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. This marketing material is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.
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.