Spear, director of advisory firm Spear Financial, says he is raising his exposure to the £42m fund because its objectives suit his higher appetite for risk. He has been extremely pleased with how the fund has performed since he started buying it two years ago and expects it to continue to deliver – although not to the same extent.
"I’ve got a lot in Invesco Perpetual Global Financial Capital at the moment," he said.
"It has done extremely well recently, but that does make me a bit nervous when one of my investments has performed well. That is the case with all investors though; we want to buy it when it is low and enjoy the ride upwards."
"Too often, however, investors buy after a fund has peaked," he added.
Invesco Perpetual Global Financial Capital was launched in January 2012 and is run by Paul Causer and Paul Read – who head Invesco’s fixed income team – and the group's chief investment officer, Nick Mustoe.
According to FE Analytics, the fund has returned 46.4 per cent since its launch.
Performance of fund vs index since Jan 2012
Source: FE Analytics
It sits in the IMA Specialist sector, making comparisons with other funds difficult, and does not have a specific benchmark. However, as a point of reference the FTSE All World Financials index has returned 31.96 per cent since the fund was launched.
Spear says he is happy with these returns, but adds that investors buying the fund should not expect a repeat performance over the coming months.
"I am slightly concerned, but I think Invesco will be as well. The fund does hold some equities – even though it is primarily a bond fund – and I think those equities are what can still give the fund growth over the coming year."
"However, it still has a yield of nearly 7 per cent. I don’t think the fund can return the likes of 40 per cent or the sort of silly numbers it made last year, but I still think it can deliver relatively high returns – say 15 to 20 per cent – over the coming years."
FE data shows Invesco Perpetual Global Financial Capital is currently yielding 6.83 per cent.
Spear added: "I invest into the fund in chunks, not official pound/cost averaging, but I will have a look at certain points and put £5,000 in every so often."
He says he bought the fund because he thought that parts of the banking sector were unfairly undervalued.
"I have been buying Invesco Perpetual Global Financial Capital for about a year now – well basically since it was launched," he continued,
"The major reason I want it in my portfolio is because it is run by probably the two best bond managers – Paul Read and Paul Causer – who are buying completely out-of-favour banks. They are buying predominantly bonds, which are nowhere near as risky as their equities."
"These banks would have to completely fail so they couldn’t pay back their bond holders and default. Basically, they were focusing on quality financials no-one was looking at," he added.
The majority of the fund’s capital is concentrated in fixed income assets; however it has 13.47 per cent in financial equities.
The fund’s largest asset weighting is in BBB rated bonds – making up 40.53 per cent of the total portfolio. It counts bonds issued by Barclays, Credit Suisse and Lloyds in its top-10 holdings.
Although Spear admits it is not a fund that every investor will warm to, he says he likes to take a bit of risk with his own money.
"When managers are investing in areas of the market that no-one is looking at, that interests me," he said.
"I am always on the lookout for quality undervalued assets, I haven’t made my mind up on tech but commodities have had a really tough time recently."
"I bought Aggreko – the mining company – for my SIPP recently after their share price plummeted by 25 per cent or so. I checked it recently and it is now up 15 per cent."
"I do like that sort of thing for myself. It’s not for everyone, I appreciate that, but I am willing to take a bit of risk," he added.
Invesco Perpetual Global Financial Capital has a total expense ratio (TER) of 1.57 per cent. The fund requires a minimum investment of £500 and a minimum top up of £100.