AAA-rated Invesco trio head-up Distribution fund

Investment in cautious managed funds has proved popular again this year, with sector inflows topping the IMA tables during the second quarter, which continued into the latter part of the year. Testament that investors remain risk averse, but it's also true that they remain on the look-out for reliable alternative income sources. Perpetual Distribution, which was launched in January 2004, is an ideal vehicle to strike this kind of balance. Over the past five years it has achieved a 31.2 per cent return on a 6.12 per cent yield.

The fund aims to achieve a mix of capital and income growth through a portfolio that is composed primarily of UK equities and fixed interest securities; the latter of which are expected to form at least 60 per cent of investments according to the managers' discretion. Currently, the fund is favouring high-yield investment grade bonds from a fixed interest perspective, while identifying banking and financial stocks as desirable in terms of the equity component - 30.7 per cent of the portfolio is currently allocated to equities, with 47 per cent given over to high-yield bonds with low-risk characteristics. The inherent flexibility afforded through this mix of assets also provides an element of diversification.

This fund employs the talents of Invesco Perpetual's fixed interest team, comprising Paul Causer and Paul Read, together with Neil Woodford covering UK equities.

Source: Invesco Perpetual & *FT Funds

Top ten holdings (as at 30 September 2010)

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