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INVESCO PERPETUAL HIGH INCOME VERSUS JUPITER INCOME TRUST - IMA SECTOR UK EQUITY INCOME

INVESCO PERPETUAL HIGH INCOME VERSUS JUPITER INCOME TRUST - IMA SECTOR UK EQUITY INCOME. Purpose and Objective. To compare and contrast two funds from the UK Equity Income IMA Sector, to include the following: Objectives and Approach Type of investment vehicle Performance and yield

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INVESCO PERPETUAL HIGH INCOME VERSUS JUPITER INCOME TRUST - IMA SECTOR UK EQUITY INCOME

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  1. INVESCO PERPETUAL HIGH INCOME VERSUS JUPITER INCOME TRUST - IMA SECTOR UK EQUITY INCOME

  2. Purpose and Objective • To compare and contrast two funds from the UK Equity Income IMA Sector, to include the following: • Objectives and Approach • Type of investment vehicle • Performance and yield • Risk and return characteristics • Sector and region weightings • Ratios • Charges

  3. IMA - UK Equity Income • Invesco Perpetual High Income • Invesco Fund Managers Limited • ICVC • Neil Woodford • AAA S&P rating • Jupiter Income Trust • Jupiter Unit Trust Managers Limited • Unit Trust • Anthony Nutt • AAA S&P rating

  4. Objectives and approach • Invesco Perpetual High Income • To achieve a high level of income, together with capital growth • Thematic approach driven by macroeconomic view but blends this with fundamental analysis of companies, which is strongly valuation oriented • Jupiter Income Trust • To produce a high income at least in line with inflation • Targets undervalued high quality companies offering good dividend yield and the prospect of capital appreciation

  5. Type of investment vehicle • Invesco Perpetual High Income • ICVC • Open ended • Shares • Single price (mid market Price) • Jupiter Income trust • Unit Trust • Open ended • Units • Bid Offer (Valued at NAV of fund)

  6. Performance - total return, bid to bid

  7. Performance by calendar year

  8. Yield • Invesco Perpetual High Income • 3.89% (Financial Express, 6/8/08) • Jupiter Income Trust • 4.70% (Financial Express, 6/8/08)

  9. Risk and Return

  10. Risk and return - conclusions • Over the last 10 years: • Invesco Perpetual High Income has generated a higher cumulative return • Invesco Perpetual High Income returns have been more volatile • Invesco Perpetual High Income fund has a higher excess return per unit of total risk i.e. superior risk adjusted performance

  11. Sector Weighting

  12. Asset weighting

  13. Ratios

  14. Charges • Invesco Perpetual High Income • Initial charge 5.00% • AMC 1.50% • TER 1.69% • Jupiter Income Trust • Initial charge 5.00% • AMC 1.50% • B-O spread 6.00% • TER 1.71%%

  15. Summary • Same IMA sector • Same objective i.e. income • Both invest over 90% in UK equities • Different approach - thematic top down versus bottom up stock picking • Different sector weightings • Slight difference in terms of risk adjusted returns

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