Invesco High Income

Primrose

Can somebody please explain whether i should be concerned about my historical long term ISA holding in Invesco High Income.

I have read that there is concern about the high number of unlisted stocks it holds and that some investors are withdrawing money from the fund. Is there any other fund with a similar profile Into which i could switch or is this a glitch which should correct itself as a result of the economy now hopefully being able to move forward with more certainty following Brexit?

StellaN

I think that’s the Mark Barnett fund that has had a lot of withdrawals but I don’t personally know if it’s anything to worry about.

bostonerimus

I know nothing of this UK fund, but “high income” suggests either risky stocks or risky bonds to me and if it is underperforming then it’s easy for panic to set in. Everyone that buys an investment should do so because it fills a fundamental function within a portfolio and also have a plan of what to do with it in both good and bad times. Without such a plan they end up in the OP’s situation and would probably have been better buying a multi-asset fund or a few index trackers. I cannot answer the OP’s question sensibly as I decided I don’t have the knowledge or courage to buy such funds a long time ago.

talexuser

Investors are withdrawing money because it is one of the (if not the) worst performing funds in its sector the past years and many other funds in the same sector have done better.

Over the last 3 years to end of 2019 it has lost 0.5% in value compared to a gain of 24% for the average all companies sector fund.

Primrose

Which rather begs the question, how quickly does one ditch a fund that is not performing well? After one year, or is that too soon or is a fund manager allowed to have a bad year if they've invested in companies which are temporarily out of fashion but they've otherwise had a good investment record.

How quickly do you all cut and run?

bostonerimus

Primrose wrote: »

Which rather begs the question, how quickly does one ditch a fund that is not performing well? After one year, or is that too soon or is a fund manager allowed to have a bad year if they've invested in companies which are temporarily out of fashion but they've otherwise had a good investment record.

How quickly do you all cut and run?

If you use a momentum strategy you should be selling the losers and buying the winners. I have no idea of the criteria; maybe a certain percentage less than the league leaders or below some benchmark. If you are rebalancing then short term poor performance might be seen as an buying opportunity. I really have no idea, which is one reason why I like to use index trackers as they pretty much match their benchmark and so I don't have any tactical buying and selling choices to make.

Malthusian

Which rather begs the question, how quickly does one ditch a fund that is not performing well?

When you have lost faith in it. When the fear of losing even more of your money outweighs the fear of losing your pride if it bounces back up and proves you wrong. When the reasons you use to justify holding on are backward-looking ("It used to do well for me") rather than forward-looking ("I have faith that the manager's strategy of holding small and unlisted companies will outperform over the market cycle").

Actively managed funds should underperform their indices from time to time, otherwise they're closet trackers and you may as well just switch to a proper cheap tracker.

What percentage of your portfolio does it form? Do you have faith in the manager's strategy of high allocations to small and micro cap equities or was it just a "name" purchase?

Joe9090

Didn't Woodford manage Invesco High Income?

Primrose

Yes he did before he left Invesco to set up his own fund

SonOf

Primrose wrote: »

Which rather begs the question, how quickly does one ditch a fund that is not performing well? After one year, or is that too soon or is a fund manager allowed to have a bad year if they've invested in companies which are temporarily out of fashion but they've otherwise had a good investment record.

How quickly do you all cut and run?

Equity income funds will suffer during a part of the economic cycle. That is to be expected. However, you may well feel that this fund has gone beyond that. It fell off our list at the end of 2015.

A good idea is to ask yourself if you would invest in that fund if you had the cash today. If yes, then keep. If no, then sell.

[Deleted User]

Investors in the Invesco High Income fund(s) are among the most patient and passive in the industry. A good proportion are those who didn't jump ship with Woodford. Many have their holdings wrapped up in ISAs too.