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Investec Diversified Income

A defensive return fund for today’s unpredictable markets

“The impact of structural market ​changes since the GFC is evident in the increased frequency and severity of ‘flash crashes’”

John Stopford

John Stopford

Co-Portfolio Manager

Jason Borbora

Jason Borbora-Sheen

Co-Portfolio Manager

Focus on defensive total returns, with capital preservation, over the long-term

Seeks to generate returns primarily from income – targeting 4-6% yield p.a. (payable monthly)

Aims for volatility of less than 50% of UK equities1

Delivering outcomes

As well as seeking to protect the downside, the managers' active investment approach enables them to participate in upside capture when markets allow. This has resulted in an attractive positive 'skew' - better upside capture than downside capture - since inception.*

In these short videos, Jason Borbora explains three aspects of the managers’ active approach that have helped the Fund successfully navigate challenging market conditions to deliver the outcomes it seeks.

Individual security selection Income as an engine Achieving a positive skew 2018 Returns

A tried and tested defensive return strategy for challenging markets

Launched in September 2012*, with a focus on capturing returns while minimising drawdowns, the Fund has a track record of protecting the downside and minimising losses during episodes of market volatility.

Protecting the downside during volatility

Source: Morningstar, 31.07.19. Performance for I Acc share class, net of fees (NAV based, including ongoing charges), gross income reinvested (net of UK basic rate tax pre 5 April 2016), in GBP. Calendar year % returns for the Fund, IA Targeted Absolute Return Sector Average and FTSE All Share respectively 2018: 0.41, -2.91, -9.47; 2017: 4.82, 3.75, 13.10; 2016: 5.92, 2.09, 16.75; 2015: 1.97, 2.35, 0.98; 2014: 5.32, 3.41, 1.18.

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Fund facts

Sector: IA Mixed Investment 0-35% Shares
Launch Date: 3 September 2012*

Quick links

*Fund inception: 03.09.12. Prior to this date the Fund was known as the Managed Distribution Fund and was managed to a different investment objective

Suitability and uses:

  • A potential alternative

    Investec Diversified Income Fund

    Could be used as an alternative to:

    • Absolute return funds, many of which have provided disappointing returns for investors in recent years, by failing both to protect on the downside and generate any meaningful upside
    • Strategic bond funds
    • Multi-asset income funds
  • Suitability

    Investec Diversified Income Fund

    Could be suitable for a range of investors looking for lower volatility income:

    • A defensive anchor within an overall portfolio
    • Investors looking to de-risk their portfolios in current uncertain markets
    • Cautious investors, perhaps entering investing for the first time, concerned about investing in financial markets.
    • Investors approaching retirement wishing to consolidate their wealth.
    • A core component within an overall retirement drawdown plan.
  • Fund ratings and risk profiles

    Investec Diversified Income Fund

    Fits into advisors’ ratings and risk profiling processes

1UK Equities defined as FTSE All Share TR

General risks

The value of investments, and any income generated from them, can fall as well as rise. Where charges are taken from capital, this may constrain future growth.

Past performance is not a reliable indicator of future results. If any currency differs from the investor's home currency, returns may increase or decrease as a result of currency fluctuations.

Investment objectives and performance targets are subject to change and may not necessarily be achieved, losses may be made.

Specific Risks:

Currency exchange: Changes in the relative values of different currencies may adversely affect the value of investments and any related income.

Default: There is a risk that the issuers of fixed income investments (e.g. bonds) may not be able to meet interest payments nor repay the money they have borrowed. The worse the credit quality of the issuer, the greater the risk of default and therefore investment loss.

Derivatives: The use of derivatives may increase overall risk by magnifying the effect of both gains and losses leading to large changes in value and potentially large financial loss. A counterparty to a derivative transaction may fail to meet its obligations which may also lead to a financial loss.

Emerging market: These markets carry a higher risk of financial loss than more developed markets as they may have less developed legal, political, economic or other systems.

Equity investment: The value of equities (e.g. shares) and equity-related investments may vary according to company profits and future prospects as well as more general market factors. In the event of a company default (e.g. insolvency), the owners of their equity rank last in terms of any financial payment from that company.

Interest rate: The value of fixed income investments (e.g. bonds) tends to decrease when interest rates rise.

Government securities exposure: The Fund may invest more than 35% of its assets in securities issued or guaranteed by a permitted sovereign entity, as defined in the definitions section of the Fund’s prospectus.


Important Information

All information is as at 30.09.19 unless otherwise stated.
Indices are shown for illustrative purposes only, are unmanaged and do not take into account market conditions or the costs associated with investing. Further, the manager’s strategy may deploy investment techniques and instruments not used to generate Index performance. For this reason, the performance of the manager and the Indices are not directly comparable.
If applicable FTSE data is sourced from FTSE International Limited (‘FTSE’) © FTSE 2019. Please note a disclaimer applies to FTSE data and can be found at
Fund ratings may be provided by independent rating agencies based on a range of investment criteria, and do not constitute investment advice by Investec Asset Management. For a full description of the ratings please see
Dynamic Planner® is a registered trademark of Distribution Technology. The Elite Rating™ system is proprietary to FundCalibre Ltd., but should not be taken as a recommendation.