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Invesco Perpetual Monthly Income Plus - managers remain relatively cautious

Investments can go down as well as up so there is always a danger that you could get back less than you invest. Nothing here is personalised advice, if unsure you should seek advice.
  • Paul Read and Paul Causer, managers of the fund’s bond investments, continue to find value in bonds issued by European Banks
  • Performance has been strong over the past year and the fund has outperformed over five years
  • The fund’s sensitivity to an interest rate rise remains lower than that of the wider bond market

Our view

The Invesco Perpetual Monthly Income Plus Fund benefits from the experience of both the Fixed Interest and UK Equity teams at Invesco Perpetual. We have high conviction in Paul Read and Paul Causer to manage the bond portion of the fund, but we currently prefer to access their expertise through other funds they manage. We are not currently considering the Invesco Perpetual Monthly Income Plus Fund for inclusion in the Wealth 150+ list of our favourite funds across the major sectors.


Recent months have proven a challenge for sterling denominated bonds. Theresa May’s snap election was initially positive for bond markets, but the ensuing political uncertainty weighed on prices and caused the UK’s currency to weaken. The fund navigated this period well and it has outperformed the IA Strategic Bond sector over the past year. The managers’ bias to bonds issued by financial companies was particularly helpful over this time, as were the fund’s equity investments, which currently account for around 16% of the portfolio.

Longer term performance has also been good with the fund returning 39.2% compared with 27.1%* for the sector over the past five years. Please remember past performance is not a guide to future returns.

Annual Percentage Growth
July 12 -
July 13
July 13 -
July 14
July 14 -
July 15
July 15 -
July 16
July 16 -
July 17
Invesco Perpetual Monthly Income Plus 15.95 6.28 3.26 0.17 9.24
IA £ Strategic Bond 6.44 5.77 3.00 4.81 4.60

Past performance is not a guide to future returns. Source: Lipper IM *to 31/07/17


A persistent environment of low interest rates, low inflation, and moderate economic growth has driven bond yields to historic lows (and therefore prices higher). The managers are therefore selective in terms of the areas in which they chose to invest. The financial sector, particularly the debt of European banks, currently remains the managers’ preferred area of the corporate bond market, although they have also started to see opportunities in other sectors, such as telecoms, utilities and insurance.

Relative to the fund’s history, the managers hold a high proportion of cash and government bonds (which can be sold quickly if necessary), which could offer an element of shelter if bond prices fall and provides the managers with the flexibility to pounce on opportunities thrown up by any sell-off. The fund’s duration (its sensitivity to interest rate movements) is lower than that of the wider bond market, which could also mean the fund is less negatively affected by a rise in interest rates.

Elsewhere, in the equity portion of the fund, Ciaran Mallon continues to favour companies with predictable earnings, which are managed for the primary purpose of delivering shareholder value in the form of a sustainable and growing dividend. The manager feels the tobacco industry currently provides the opportunity to invest in companies with these characteristics. The fund’s two largest equity investments are British American Tobacco and Imperial Tobacco.

The managers can invest in higher-risk high yield bonds and have the flexibility to invest in derivatives, which, if used, adds risk.

Find out more about this fund including how to invest

Please read the key features/key investor information document in addition to the information above.

Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.

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