Nobody’s making any promises, but if the prospect of strong capital growth over three to five years from some of the UK’s household names appeals, then it might be time for you to think a little more ‘aggressively’…
The Invesco Perpetual UK Aggressive Fund
Occasionally life can be tough on businesses. If they get something wrong they can be dropped from portfolios like hot bricks. And once out of favour, a lot of investors shun them for years. But not everybody completely discounts these unloved enterprises and certainly not the Invesco Perpetual UK Aggressive Fund.
We keep a very careful eye on them. If we detect signs that they are set to bounce back we invest in them – in a big way. And the returns can be quite exceptional.
Do something different, get something different
The Invesco Perpetual UK Aggressive Fund bucks a number of current investment trends. First of all it’s a fund that depends totally on the stockpicking ability of its manager. Or put another way, it does not shadow any type of index, preferring instead to steer its own course. Secondly the fund is prepared to invest anywhere providing the share price is considered to be mispriced. Thirdly the fund has a relatively small number of holdings, typically between 25 and 30 – with each holding accounting for around 4% of the fund. And last but not least is the fund’s performance. Since launch on X. X.XXXX, it has produced a return of XX% compared with an average of – XX% in the UK All Companies sector*.
Wallflowers with prospects
The fund’s strategy is to invest in UK businesses that for one reason or another are being shunned by most other investors. Because these businesses may be subject to negative market opinion, their share prices can sometimes appear undervalued. That’s not to say that these businesses are ‘no hopers’ or completely unknown - quite the opposite in fact. Many of the names in the fund’s portfolio are very familiar: BT, Legal &General, ICI, Rolls Royce typify the quality of the fund’s concentrated portfolio.
Lots of potential, but be prepared…
The fund looks for companies that have the potential to double their value over a three-year period. To meet that goal, the fund is - in every sense of the word – aggressively managed. Therefore on occasions it will behave differently to any specific index it might be compared with. So although there is a reasonable amount of diversification, you should be prepared to live with a higher degree of volatility than a fund with a broader investment mandate might present. If you already have a reasonably diversified portfolio, then this fund most definitely has a role to play.