Invesco Perpetual targets advisers with low-cost multi-asset range

Invesco Perpetual has launched a low-cost multi-asset range aimed at advisers following ongoing pressure on fees from cheaper alternatives.

The Summit Growth range is designed to help UK financial advisers match the risk profiles of their clients using “the breadth of Invesco’s diverse investment capabilities”.

The range will consist of five funds, which are managed around progressively higher risk targets.

Ongoing charges figures for the funds will range between 60bps and 80bps. The range will have a minimum investment of £500.

Explaining the rationale behind the launch, Invesco Perpetual said it wanted to deliver a product that would pair “high quality investment solutions” with “robust reporting” to save advisers time and energy.

It noted that as the financial services industry evolves, many advisers are now seeking lower-cost solutions that cater to a variety of client risk tolerances and financial goals.

Under pressure

Traditional funds-of-funds groups have increasingly faced intense fee pressure from giant passive players like Vanguard and managed portfolio services (MPS) that offer multi-asset solutions for a fraction of the cost.

Vanguard’s £9.6bn Lifestrategy range dominated multi-asset flows for 2017. Funds in its five-strong range have an AMC of 22bps and OCF of 22bps.

Long-standing multi-manager range Jupiter Merlin by comparison has charges ranging from 97bps for its Conservative portfolio to 186bps for the Worldwide portfolio, not including an annual management charge ranging from 50bps to 75bps.

Invesco’s largest existing multi-asset fund, the £12.6bn Global Targeted Return fund, is available in four different accumulation share classes. Investors purchasing the normal share class are charged 157bps.

Advisers can also opt for a “no trail” share class with a 1% annual charge and OCF of 107bps. Invesco introduced the share class in 2009 to cater to advisers post-RDR who had moved from a commission to a fees-based model.

For Z and Y share classes purchased via platforms, the fund has charges of 87bps and 82bps respectively.

Broader universe

The Summit Growth funds will be managed by the fund group’s CIO Nick Mustoe (pictured) with help from the Invesco Global Solutions team, who will carry out strategic allocations for the funds on a quarterly basis.

Mustoe said a key difference between the low-cost multi-asset funds and its other funds-of-funds is that Summit has a broader investment universe.

The funds can choose from active, factor-based and passive strategies from around the world.

They can also invest in derivatives though Invesco cautioned this may result in funds being leveraged and cause “large fluctuations” in the value of the funds.

Mustoe said: ” Invesco Perpetual’s Henley investment centre is renowned for its rich and successful heritage in equities, fixed interest and multi asset investing, and, as part of the global Invesco organisation, we are fortunate to be able to leverage the resources of the Global Solutions team to build our strategic asset allocations in-house.

“From an investment perspective, it is exciting to be able to take advantage of one of our key strengths as an organisation – our diversity of thought. For us, it’s a key differentiator that has real-world investment applications. It means that we can bring together very different investment approaches and styles that aim to deliver truly diversified sources of return for the benefit of our clients”.

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