Invesco Perpetual Dual Return Trust plc

Invesco Perpetual has announced that it proposes to launch a new split-capital investment trust, the Invesco Perpetual Dual Return Trust plc (the "Trust") in November 2009.

The Trust will invest predominantly in UK equities and be managed by Martin Walker, who has worked within the UK investment team for 10 years and who currently manages assets of approximately £1.5 billion including the Invesco Perpetual Children's Fund and the Invesco Perpetual UK Growth Fund (since June 2008). The Trust will be launched in November/early December 2009 with the possibility of a second tranche of shares in February/March 2010.

The Trust will have a seven year life, with a simple, straightforward capital structure comprising an equal number of income shares and capital shares, with no bank debt.  It will be available at launch as an issue of units (one of each share class) for 200p, and which may be split into the separate share classes and reassembled at any time.  Invesco Perpetual will operate discount and premium control mechanisms for the Trust.

"The Invesco Perpetual Dual Return Trust plc is reminiscent of the original days of split-capital investment trusts - the 1960s - and is designed to provide a simple, straightforward separation of returns between income and capital for shareholders with differing requirements and tax arrangements," explained Graeme Proudfoot, Head of Specialist Funds at Invesco Perpetual. "Whilst SIPPs and ISAs are designed to protect against both income tax and capital gains tax, it may make sense to consider the inclusion of income shares only in one or both of these wrappers as all returns from these shares over the Trust's 7 year life will be in the form of income. The capital shares could then be held outside of the wrappers so that any capital gains accruing could be mitigated by an investor's annual CGT allowance (£10,100 for 2009/2010).  Alternatively, holding units gives shareholders a conventional, ungeared exposure to our UK equities expertise within an investment trust structure over a 7 year life."

The investment objective is to achieve a total return from a portfolio of predominantly UK equities; whilst the fund manager will have the ability to invest in fixed interest securities, it is expected that the portfolio will be initially 100% invested in equities.  The portfolio is anticipated to generate both capital & dividend growth.  There will be no benchmark constraints but performance will be measured against the FTSE All Share Index.

Commenting on the investment rationale for the Trust, Martin Walker said: "Whilst there has been a rally generally in the stock market, what we believe to be high quality, dividend paying and often defensive stocks have been left behind.  These stocks are now trading at valuations which are at absolute and relative lows.  By exploiting the dual return nature of the Trust's structure, income investors will have an opportunity to lock into good dividend yields whilst those interested in capital growth can focus their investment on a geared exposure to some of what we believe to be the cheapest stocks in the market."

Invesco Perpetual will temporarily fund the launch costs of the new Trust which, in any event, will be capped at 2% and will recoup these launch costs by applying an additional annual charge of 0.4% for the first five years of the Trust's life. It is intended that, as a result, investors will not suffer an immediate NAV reduction reflecting such costs.

Graeme Proudfoot concluded: "The way that we are funding the costs means that they are spread evenly between both classes of shareholders over a 5 year period.  We believe this is the first time launch costs of a traditional investment trust have been funded this way."