Invesco Distribution Inclusive - Income (GBP)

Paul Read and Paul Causer have an excellent long-term track record. They've managed this fund since launch in January 2004 and it's done much better than its peers over that time. Ciaran Mallon joined later in October 2013.

The fund hasn't done as well over the past few years though . The managers are cautious in their outlook for bond markets, so the fund's invested in a way that reflects this view. This held back returns though as bond markets have generally done well.

The managers combine their view on the economy with their views on individual companies and invest in shares and bonds with the potential to do well over the long term.

The managers try to predict where we are in the economic cycle and invest in companies with the potential to benefit in that environment. They also have the flexibility to invest in high yield bonds and derivatives, which adds risk.

The bond portfolio is currently invested in a way that means it shouldn't be affected too much if interest rates rise. Rising interest rates are generally bad for bonds, partly because it makes the income paid look less attractive. So some investors sell bonds in search of higher returns, which could push prices down.

Part of the fund is invested in government bonds, short-term bonds and cash. Government bonds are deemed to be relatively safe, because there's less chance of a country going bust than a company. This means they might hold up better than bonds issued by companies when markets fall.

Within the share portfolio, Ciaran Mallon looks for companies in a strong financial position with a sensible management team. He must also believe they have the ability to pay a rising dividend over the long run.

The fund takes charges from capital, which increases the yield but reduces the potential for capital growth.