Invesco Perpetual Income Fund
September 2015 (Content as at 31 August 2015)
On 30 June 2014, the fund moved from the IA UK Equity Income Sector into the IA UK All Companies Sector.
The Invesco Perpetual Income Fund aims to achieve a reasonable level of income, together with capital growth. The fund intends to invest primarily in UK companies, with the balance invested internationally. In pursuing this objective, the fund managers may include investments that they consider appropriate which include transferable securities, unlisted securities, money market instruments, warrants, collective investment schemes, deposits and other permitted investments and transactions as detailed in Appendix 2 of the most recent Prospectus.
August saw the UK equity market react to heightened concern over China’s economic health and the manner in which its economic issues are being addressed by the Chinese authorities. The FTSE All-Share index fell by 5.3% (total return; £) over the month, exhibiting high levels of volatility. Overseas macro-economic factors, such as falling commodity and oil prices, and the timing of a US interest rate rise appeared to outweigh any positive UK economic and company specific news. Among the strongest contributors to the fund’s performance in share price terms was Card Factory, which bucked the negative market trend. The company released an upbeat trading update in which it reported strong sales growth, and expressed confidence in delivering another year of opening circa 50 new stores. Among the detractors to fund performance was the share price performance of BP which reacted to the fall in the price of oil. Also weighing on performance was the share price of British American Tobacco – after posting a solid set of half-year results in July in which it reported a 4% increase in dividend, profit taking ensued in August as concerns of slowing Chinese demand grew.
The fund strategy remains unchanged from the recent past. The fund manager favours companies in the market which offer visibility of revenues, profits and cash-flows and which are managed for the primary purpose of delivering shareholder value in the form of a sustainable and growing dividend. We continue to believe that well managed companies which seek to deliver sustainable dividend growth provide the best long term investment opportunities.
|Launch date||16 June 1979|
|Sector||IA UK All Companies Sector|
|Available in an ISA?||Yes|
|Title:||Head of UK Equities|
|Team:||Invesco Perpetual - UK Equities|
|Accounting period ends||
|Accumulation (No Trail)||B1W7HK4||GB00B1W7HK49|
|Income (No Trail)||B1W7HL5||GB00B1W7HL55|
|Minimum lump sum||£500|
|Minimum additional lump sum||£100|
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 0.06% and transfer taxes of 0.05%, 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 is 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 0.53% 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
Stamp duty reserve tax (SDRT)1
SDRT is payable by funds which invest wholly or in part in UK equities.
During the last financial year the fund incurred stamp duty reserve tax of 0.0% as a result of investors joining and leaving the fund.
Schedule 19 SDRT was abolished on 30 March 2014 with the final payment being made in April 2014. We will continue to reflect SDRT as a charge to the fund (if applicable) where this payment occurs within the last financial year ending after 31 March 2014. Thereafter no charge will be shown.
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, including any dealing spreads, broker commissions and transfer taxes.
Typical adjustments to the fund's price are to increase it by 0.67% for net inflows or decrease it by 0.34% 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 2015. Figures in these sections are as at 31 March 2015.
Top 10 holdings (%)
|British American Tobacco||5|
Top 10 overweights (%)
Top 10 underweights (%)
Top 10 equity holdings (%)
|British American Tobacco||5||1.68||3.31|
Breakdown by country of investment
Breakdown by market cap
|£25 - 49.99bn||16.60|
|£10 - 24.99bn||31.55|
|£5 - 9.99bn||3.36|
|£2 - 4.99bn||5.39|
|£1 - 1.99bn||6.54|
|£500 - 999m||1.73|
|£250 - 499m||3.09|
|£100 - 249m||2.92|
|£50 - 99m||1.93|
|£0 - 49m||1.36|
Breakdown by sector
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 may use derivatives (complex instruments) in an attempt to reduce the overall risk of its investments, reduce the costs of investing and/or generate additional capital or income, although this may not be achieved. The use of such complex instruments may result in greater fluctuations of the value of the fund. The Manager, however, will ensure that the use of derivatives within the fund does not materially alter the overall risk profile of the fund.
Yield and performance figures are based on the income share class.
All fund portfolio figures are as at date shown (source: Invesco Perpetual).
Performance figures are shown in sterling on a mid-to-mid basis, inclusive of net 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. Sector average performance is calculated on an equivalent basis (source: Lipper). In August 2015, Lipper made an improvement to their methodology in calculating sector performance. This may result in a slight variance in performance in comparison with previous historic performance sector data stated.
The Historic Yield reflects distributions declared over the past twelve months as a percentage of the mid-market price of the fund, as at the date shown. It does not include any entry charge and investors may be subject to tax on their distributions. The fund’s ongoing charge is charged to capital. This has the effect of increasing the distributions for the year by the amount of the ongoing charge and constraining the fund’s capital performance to an equivalent extent.
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.