
Unlocking the Power of CLOs
How Collateralised Loan Obligations (CLOs) offer portfolio diversification and an attractive potential return profile in today’s evolving financial landscape.
Delivering a range of low-cost government, investment-grade credit and ESG exposures to enhance your fixed income portfolios.
Providing a wide offering of innovative fixed income exposures, across sectors, regions and strategies.
From combining global resources with local expertise, we aim to provide you with the best potential outcomes.
Fixed income ETFs have experienced rapid growth in recent years, with global assets under management reaching US$2.2 trillion in 2024 and growth projected to accelerate in the coming years. Investors are increasingly recognising the benefits of using ETFs in their bond portfolios, such as diversification and exposure to a broad range of bonds, which helps spread risk across different issuers and sectors. Additionally, fixed income ETFs offer liquidity and cost advantages, making them easier to trade and often more efficient than managing individual bonds.
For investors seeking innovative ways to diversify their income portfolio, the highest quality AAA-rated tranche of CLO (Collateralised Loan Obligation) notes can offer a compelling investment proposition. AAA CLO notes offer some of the most attractive yields among high-quality investment grade credit, while featuring low interest rate sensitivity due to their floating rate structure and exhibiting low correlation to traditional asset classes—potentially enhancing portfolio risk-adjusted returns. Learn more about the investment case of adding AAA CLO notes to your portfolio.
We offer two actively managed ETFs that bring full transparency, cost efficiency, and enhanced liquidity to this dynamic asset class. These strategies provide diversified exposure to the broad USD-denominated (with GBP-hedged share classes available for those seeking to mitigate currency risk) and EUR-denominated AAA CLO notes market.
Managed by Invesco Private Credit, the ETFs follow an active approach to manager selection, holding a portfolio of primarily AAA-rated, floating rate, CLO notes with the added flexibility to allocate to certain non-benchmark securities. As one of the world’s largest managers of bank loans and a perennial CLO issuer, we understand the importance of selecting the right CLO managers in our investments and use our 30+ year experience to actively select securities, aiming to deliver returns similar to the benchmark.
This product is intended for professional investors only.
Unlocking the Power of CLOs
How Collateralised Loan Obligations (CLOs) offer portfolio diversification and an attractive potential return profile in today’s evolving financial landscape.
BulletShares are a suite of fixed-term ETFs that enable investors to build customised portfolios with tailored maturity profiles to meet their investment goals. They are designed to combine a final maturity like an individual bond with the diversification and trading benefits of an ETF.
Investing across various BulletShares ETF maturities can enable investors to build a cost-effective, diversified laddered portfolio designed to manage interest rate risk and cash flows. Our BulletShares UCITS ETFs offer targeted exposure to USD (with GBP-hedged share classes available for those seeking to mitigate currency risk), and EUR denominated investment grade corporate bonds, with a choice of maturities ranging from 2026 to 2030.
BulletShares UCITS ETFs
BulletShares® ETFs are a suite of fixed-term exchange-traded funds (ETFs) that enable investors to build customized portfolios tailored to specfic maturity profiles and investment goals.
Backed by the world's strongest and largest economies, developed market government bonds are among the safest and most liquid asset classes. Government bonds tend to perform well in turbulent times and can help diversify risk in multi-asset portfolios. Often viewed as a possible buffer for volatile equity and other riskier markets, government bonds serve as a core allocation for investors.
Our wide range of developed market, low-cost government bond ETFs provide a choice of broad exposure and maturity ranges across US treasuries, UK gilts, and European government bonds. Whether you’re seeking capital preservation through short-dated bonds or positioning for potential interest rate declines with longer maturities, our ETFs provide the flexibility to tailor your interest rate exposure with precision.
Our corporate bond ETF range offers cost-effective exposure to the global credit markets. Whether targeting investment grade or high yield, these ETFs are designed to deliver diversified access to corporate debt with transparency and efficiency. The suite spans core exposures as well as targeted strategies like High Yield Fallen Angels, which focuses on a specific segment of the US high yield market with the potential for capital appreciation alongside a high level of income.
With a growing focus on sustainability, many of our strategies integrate ESG considerations—helping investors align their fixed income exposure with long-term environmental, social, and governance goals. Invesco’s passive corporate bond ETFs offer a comprehensive and responsible toolkit for building resilient credit portfolios.
For investors seeking targeted exposure to higher-yielding segments of the fixed income market, our subordinated bond ETFs could be a solution. The Invesco AT1 Capital Bond and Invesco Euro Corporate Hybrid ETFs focus on Additional Tier 1 (AT1) contingent convertible bonds and European corporate hybrid debt, respectively; two areas that are known for their income potential and structural complexity. These ETFs are designed to provide diversified access to instruments that sit lower in the capital structure.
AT1s are a type of hybrid debt instrument primarily issued by European banks as regulatory capital. They sit just below senior debt within the capital structure, and it is this subordination that drives their higher yield rather than the riskiness of the issuer.
Corporate hybrid bonds are similar to AT1s in many ways, including often being issued by companies with strong balance sheets and investment-grade credit ratings. The most obvious difference is that AT1s are only issued by financial institutions whereas corporate hybrids are issued by utilities, telecoms and companies in other non-financial sectors. Corporate hybrids can be appealing for the issuing company because credit rating agencies treat them as part debt/part equity, meaning they can support the issuer’s credit metrics.
In collaboration with our Invesco Quantitative Strategies (IQS) team, we offer three actively managed fixed income ESG ETFs. Leveraging advanced technologies and data-driven insights, the IQS team designs systematic, multi-factor strategies that blend the strengths of factor investing with robust ESG integration. With 40+ team members across the globe, the team has extensive experience in rule-based investments.
For EUR-denominated investment grade credit, we provide two solutions: one covering the full curve and another focused-on bonds under five years. Both use a smart multi-factor approach to help mitigate the biases ESG can introduce into corporate bond indices.
Our third active ETF targets the European government bond market, investing in a portfolio of government and government-related bonds. This strategy incorporates ESG criteria and maximises exposure to Green Bonds, while considering liquidity and market exposure.
Systematic equities
Discover Invesco's systematic equity strategies, using data-driven insights, multi-factor investing, and ESG integration to deliver tailored solutions.
Exploring the key features of AAA-rated CLO notes
Explore the benefits of incorporating AAA-rated CLO notes may provide to an investment strategy including consistent income potential and possible hedge against interest-rate volatility.
Unlocking the Power of CLOs
How Collateralised Loan Obligations (CLOs) offer portfolio diversification and an attractive potential return profile in today’s evolving financial landscape.
Global Fixed Income Strategy Monthly Report | July 2025
We speak with IFI portfolio managers about the factors driving US investment grade and how they are navigating the current fixed income environment.
Fixed income ETFs give investors access to bonds and other fixed income securities, such as US Treasuries, corporate debt, and municipal bonds. Some potential benefits of fixed income ETFs include liquidity, portfolio transparency, and diversification.
Fixed income ETFs give investors access to bonds and other fixed income securities, such as US Treasuries, corporate debt, and municipal bonds. Some potential benefits of fixed income ETFs include liquidity, portfolio transparency, and diversification.
As their name suggests, many investors use fixed income ETFs to generate income. Some of the bond asset classes that fixed income ETFs hold are traditionally used to seek overall portfolio stability as when market uncertainty leads to disruption in the equity markets, bonds may provide some diversification. Investors can also use specialized fixed income ETFs to help diversify their sources of income as well as help tailor their exposure to credit and duration risk.
AAA CLOs are investment grade securities. A CLO is a special purpose vehicle (SPV) securitized by a pool of assets, including senior secured leveraged loans and bonds. Distributions from the pool are paid out to the CLO’s obligations based on a cashflow waterfall, with first flow to the highest debt tranche of the CLO and continue to the lowest debt tranche followed by the equity. AAA CLO notes are the highest rated tranche of the CLO structure.
Many investors are attracted to fixed income ETFs for their benefits, including diversification, cost effectiveness, transparency, and liquidity.
Floating rate loans typically pay yields based on a spread above a reference base rate (SOFR for USD bonds, and EURIBOR for EUR bonds), and as such yields can decrease or decrease as the reference base rates change.
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