Fund Research

Invesco Perpetual Select Trust: Balanced Risk Allocation Shares

Last update 27 February 2018

Aiming to provide an attractive total return in differing economic environments with a low correlation to equities and bonds, the Balanced Risk Allocation shares of the IP Select Trust has met its performance target of LIBOR +5% over almost all periods since 2012, with volatility of around two-thirds of that of equity markets.

In contrast to ‘active’ total return funds (such as Ruffer, Personal Assets etc.) the managers have a systematic process to shift tactically around an otherwise relatively static long-term allocation to three asset classes: debt securities, equities and commodities.

Since 2012, in performance terms the trust is on a par with Capital Gearing Trust in being the best performer of the larger better-known AIC Flexible trusts. IPBR has achieved these returns with the lowest correlation to the MSCI ACWI index of the sub-peer group over five years, at 0.62.

The systematic investment process means that, compared to a more active strategy, investors should be able to have a good understanding of how the strategy will perform in different environments, and could therefore offer an interesting complement to many of the popular balanced, or low equity correlation, total return funds.

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