Causer and Read: Holding banks has hit our performance

Invesco Perpetual's Paul Causer and Paul Read have admitted banking exposure has hurt the performance of their £334m Tactical Bond fund, but are sticking with the positions.

In a monthly update, the duo said banks - to which over 44% of the fund is exposed - and high yield bonds have hurt recent performance. However, the managers believe "there are significant investment opportunities in both these areas, with attractive yields to be captured". The Tactical Bond fund is the second-worst performing fund in the Strategic Bond sector over the past year, posting a loss of 6.7%. This compares to the sector average return of 2.6%. The managers said data from Merrill Lynch showed sterling tier 1 subordinated bank debt returned -7.4% last month while European ...