Change of name for Invesco High Income fund
23 July 2020 – Following a change of fund manager in May, Invesco has now announced that Invesco High Income fund will be renamed.
From 30 July 2020, the fund will be called Invesco UK Equity High Income. It will also have a new objective and the frequency of its distribution changes will also change from half yearly to quarterly.
New fund objective
The original fund objective was to achieve a high level of income together with capital growth over the long term (5 years plus).
It has now been clarified and the new objective is to achieve a high level of income (greater than the income return of the FTSE All Share Index over a rolling 5 year period) and capital growth over the long term (5 years plus).
New distribution payment dates
Additionally, effective 1 October 2020, the frequency of distribution payments from the fund will change from half-yearly to quarterly. Invesco says this change will provide a more regular income stream, in line with the majority of other UK equity income funds in the UK market.
The original distribution payment dates were 28 February and 31 August.
Future distribution dates will be 28 February, 31 May, 31 August and 30 November.
Four alternative UK equity income funds to consider
The fund retained its generic ‘switch’ rating in the recent Chelsea Fund Review.
Investors considering a switch out of this fund may like to take a closer look at these four options on the Chelsea Core Selection:
1. Man GLG Income (Chelsea Risk Rating: 6.5)
This fund has a value-driven approach. It invests no less than 80% in UK companies of all sizes but can also invest in continental European companies that derive a substantial part of their revenues from the UK and also has the flexibility to invest selectively in corporate bonds.
2. Montanaro UK Income (Chelsea Risk Rating: 7.5)
This fund offers something very different from the standard UK equity income fund, given it focuses on small and medium-sized businesses. Each holding will also offer an attractive dividend yield or the potential for dividend growth. The fund's clear process and focus on research has worked consistently well over a very long period.
3. Rathbone Income (Chelsea Risk Rating: 5)
This fund gives investors exposure to a concentrated portfolio of companies. The manager is unconstrained in terms of sector weightings and is able to fully express his market views with the portfolio positioning. It invests predominantly in UK equities (80% or more), while up to 20% of the total may be held in cash and overseas equities.
4. TB Evenlode Income (Chelsea Risk Rating: 5)
This fund is a highly concentrated in a selection of quality companies. The managers believe the market fundamentally underestimates the value of high quality businesses because of its obsession with short-term factors. As a result, they take a much longer investment view than is typical of most funds today.
About the Chelsea Risk Rating
The Chelsea Risk Rating is simply a generic guide to the relative risk of funds to give you an idea of how risky one fund is versus another. A fund rated five, in the middle spectrum, does not mean it is suitable for medium risk investors, merely that according to historic volatility, and our understanding of the manager’s investment process, we think that it is riskier than a fund rated four, and less risky than a fund rated six. Even funds rated one are subject to risk.