Invesco Bond Income Plus Limited

Invesco Bond Income Plus (BIPS) aims to provide capital growth and a high income by investing predominantly in high-yielding fixed income securities. The portfolio is well diversified across countries and industries and has maintained a consistently high level of dividends for many years.

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Our Opinion

Backed by the huge fixed income resource at Invesco, this closed-ended vehicle is a strong consideration for investors wanting access to the high yield market. Rhys and his team can invest across the fixed income spectrum, but tend to focus specifically on the high yield market in Europe and the UK. The team have demonstrated their ability to manage risk through diversification, while also paying a consistent level of dividend for a number of years.

Fund Managers

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Fund Managers

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Rhys Davies, Lead Manager Rhys is a fund manager for the IFI Europe team at Invesco, based in the Henley office. He started his investment career with Invesco in 2002 and joined the Henley Fixed Income team in 2003. Rhys became a fund manager in 2014, focusing on high-yield credit portfolios. He holds a BSc (Honours) in Management Science from the University of Manchester Management School and is a CFA charterholder.

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Edward Craven, Deputy Manager Edward is a fund manager for the IFI Europe team at Invesco, based in Henley. He began his career with KPMG in 2003 before moving to The Royal Bank of Scotland in 2008, where he worked in structured finance. Edward joined Invesco in 2011 as a credit analyst and became a fund manager in 2020, managing multi-asset and high-yield funds. He holds a Master's degree in Physics from the University of Bath and is a qualified chartered accountant with the FCA.

Rhys Davies, Lead Manager Rhys is a fund manager for the IFI Europe team at Invesco, based in the Henley office. He started his investment career with Invesco in 2002 and joined the Henley Fixed Income team in 2003. Rhys became a fund manager in 2014, focusing on high-yield credit portfolios. He holds a BSc (Honours) in Management Science from the University of Manchester Management School and is a CFA charterholder.

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Edward Craven, Deputy Manager Edward is a fund manager for the IFI Europe team at Invesco, based in Henley. He began his career with KPMG in 2003 before moving to The Royal Bank of Scotland in 2008, where he worked in structured finance. Edward joined Invesco in 2011 as a credit analyst and became a fund manager in 2020, managing multi-asset and high-yield funds. He holds a Master's degree in Physics from the University of Bath and is a qualified chartered accountant with the FCA.

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Investment process

The portfolio invests across three broad areas of the market. Income generators (bonds issued by non-financial companies that pay a high level of income) form the core of the fund. Alongside this segment are banks and subordinated financials - bonds in this area of the market continue to pay a premium over other areas of the market. The final area is credit-intensive bonds – these are bonds the team feel can turn around performance having come under significant price pressure.

The team’s investment universe has around 780 names; although this does not include a number of subordinated financial instruments, which can take this to over 1,000.

The process starts with Rhys building a macroeconomic overlay for the trust. This allows him to look at the broad areas of the market in which he sees potential opportunities. The main research is around credit analysis, where the 19-strong research team look for credits that have visible cashflows and good fundamentals. The team is happy to look at anything if the price is right – for example, there may be a route out of the trouble a struggling issuer is facing.

The final portfolio holds between 210-260 names.

Risk

The team have a cautious approach and use diversification as a tool to manage risk. As a result, the portfolio is well-diversified from a sector perspective and if there is a sector where they have a strong allocation (such as financials) they will make sure it is across a number of holdings. The portfolio rarely holds a single position beyond 2%.

In addition to this there is an internal risk management process, which the manager undertakes with the rest of the team. The independent risk management team meet with the managers formally on a monthly basis to go across all the portfolios they manage - this feeds up to corporate management. Rhys will also engage with the chief investment officer to analyse the portfolio on a regular basis.

ESG

ESG - Limited

The team do not have an ESG mandate with the board, however it remains a tangible factor in their credit analysis. All the analysts look at these factors and monitor the portfolio on an ESG basis. However, they would happily hold a credit which does not demonstrate the best ESG characteristics, but is willing to improve.

Gearing

The portfolio has an official gearing limit of 30% of net asset value, however it rarely goes above 25% (currently at 10.1% on 31 March 2024).

Discount/Premium

BIPS has traded between a premium of 4.8% and a discount of 21.9% in the past five years to 7 May 2024. The board does not have a discount control mechanism in place.

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