Invesco Perpetual unveils Tactical Bond fund

Invesco Perpetual has launched a new unconstrained bond fund for highly-regarded duo Paul Causer and Paul Read, which focuses on total returns rather than an income target.

The Invesco Perpetual Tactical Bond fund, the most flexible of the group's fixed interest range, will utilise the entire fixed income spectrum to help deliver returns in a variety of market conditions.

Invesco Perpetual says the Tactical Bond fund's unique go-anywhere approach, combined with the total return objective, differentiates the product from its IMA £ Strategic Bond sector peers.

Causer and Read already run a fund in the strategic bond sector, the £2.8bn Invesco Perpetual Monthly Income Plus vehicle. However, this product is run with an income target and also utilises equity opportunities identified by the group's head of investments Neil Woodford.

Causer and Read, who have over 50 years combined investment experience, also run a number of other funds at the Henley-based group, including the £5.8bn Corporate Bond offering ­ one of the most popular products for UK investors last year.

While Tactical Bond is not suitable for investors seeking a consistent level of yield, the new fund will still be run with the managers' proven investment process.

"The fund's objective is to achieve an attractive total return over the long term by exploiting opportunities wherever we perceive them to be across the full range of government and credit markets including cash," Read says.

"Over the long term because we have the flexibility to move portfolios across the risk spectrum we would expect to significantly outperform cash and indeed the major government and credit markets.

"We think the market has reached a point where it has embraced total-return products and bond funds which can have a wide risk remit."

This high-conviction management style means the fund is able to quickly alter its asset allocation, potentially having periods fully invested in cash and near cash instruments should Causer and Read see no attractive opportunities in fixed interest markets.

Read says Tactical Bond is able to hold 20% foreign-exchange exposure, an element he fully expects to take advantage of.

"The fund will be relatively low-duration at launch," he says.

"It will also have a relatively high cash balance, because there will be some interesting opportunities. I can see them developing already in government-bond and credit markets this year.

"The more high-conviction investments that we will be making from relatively early on will be particularly in financials, such as Tier one banks, parts of high-yield and some parts of investment-grade. They will also be more concentrated than you would find in our other funds."

Invesco Perpetual head of distribution Ian Trevers says the group has taken its time to launch what it believes to be a unique product in the fixed income space.

"We are very confident what we are launching here will be a durable addition to our range and one which will be as relevant in five and ten years time as it is now," he says.

"Fixed income investing is an increasingly important component of UK retail investor portfolios, and Paul Causer and Paul Read are two of the best bond managers in the UK.

"They will manage this fund with a dynamic and opportunistic mindset, investing across the broad spectrum of fixed interest instruments."

The initial offer period for the Invesco Perpetual Tactical Bond fund is 25 January to 1 February 2010. Minimum investment on the fund is £500 lump sum, with the group currently offering a discount of 2% on the 5% initial charge for Isa investments, including Isa transfers, and 1.75% for direct ICVC investment.