Invesco Bond Income Plus (BIPS)

Invesco Bond Income Plus (BIPS) is managed by Rhys Davies who aims to deliver a significant yield pick up over gilts and cash without taking imprudent risks. Rhys invests in the high yield bond space, and will delve into subordinated bank debt and other corners of the market, but always with a keen eye on valuation to ensure he isn’t taking excessive credit risk to deliver the income. BIPS yields 7.1% at the time of writing, and has raised its dividend for five consecutive years despite the manager being cautiously positioned for most of this period (see Dividend).

Rhys continues to view the market overall as quite expensive, leading to the continued defensive positioning. He has a relatively high proportion of the fund in investment-grade debt rather than high yield, and has let Gearing fall to slightly below the usual 10-15% range. Nonetheless, the dividend target for 2026 has been held at the same level as last year. The trust has healthy revenue reserves, and Rhys is confident of hitting this target from current year income anyway, despite his defensive positioning.

BIPS has continued to see strong demand for its shares, even during the volatility surrounding the outbreak of war in the Gulf. It has traded on a premium for most of the past three years, and issued large amounts of new shares, including a placing and retail offer in February. At the time of writing, the premium was 1.8%. BIPS is the largest trust in the AIC Debt – Loans & Bonds sector, and this helps it offer the lowest charges by some distance.