Invesco Perpetual has implemented a dilution adjustment to the price of Neil Woodford's Income and High Income funds, moving to bid pricing on both portfolios after a recent surge in outflows.
The group confirmed, following redemptions, it has switched to a bid price for sellers of the funds, in order to protect existing investors. The switch to bid price is only implemented under certain circumstances when a fund has seen a set level of redemptions - usually around 5% - which could impact existing shareholders. However Invesco and other fund managers can use their discretion to implement a change even if the 5% level has not been reached. In a letter to investors it said: "Under certain circumstances, a dilution adjustment is applied to the price of Invesco Perpetual's ICV...
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