Fixed income

Invesco Multi-Sector Credit Strategies

We believe our multi-sector credit strategy provides the dynamic approach necessary to generate returns in the current market landscape. We build a diversified portfolio that can take advantage of market dislocations to aim for high yield-like returns at comparatively lower risk levels.

At a glance

The Invesco Multi Sector Credit strategy applies a discretionary approach across core credit asset classes to pursue attractive strategic beta, tactical beta, and security selection alphas opportunities that can potentially enhance overall income and total returns.

Seamless multi-sector approach

We have specialist portfolio managers in each of the individual credit asset classes and seamlessly combine these collective insights into the strategy.

Active risk management

Our investment process integrates active management our risk positioning with the intention of providing downside protection.

Opportunistic

We can make quick, tactical, cost-efficient adjustments as market conditions change to shift the portfolio’s risk profile across asset class, sector, global duration and individual security holdings.

Objective

The Invesco Multi Sector Credit strategy looks to achieve a favourable total return over a full market cycle. We construct the strategy with the aim of generating a level of return approaching that of the high yield bond market. At the same time, we aim for volatility and a correlation to equities that is lower than that of high yield bonds.

Investment process

Our strategy applies a disciplined, research-intensive process that combines top-down and bottom-up analysis. With changing market conditions, this allows the investment team to actively implement a carefully constructed strategic allocation. This is diversified across four global credit sectors:

  • Global investment grade
  • Emerging market debt
  • Bank loans
  • High yield

This strategic asset allocation forms the strategy‘s foundation, assigning equal amounts of risk to each sector (risk parity).

The investment team also employs well-defined tactical allocation ranges in order to target additional risk-adjusted performance. This allows the team to position the portfolio opportunistically as markets evolve.

We are also able to seek additional returns through fundamentally based security selection. These individual holdings within each sector focus on the team’s highest conviction ideas.

Why Invesco

The Invesco Fixed Income team has been actively investing in fixed income markets since 1971 and has dedicated teams working in Atlanta, Chicago, Hong Kong, London, Louisville, New York and Tokyo. The team benefits from 223 fixed income investment professionals in 14 locations worldwide.

We leverage our robust single sector capabilities, global credit and macro research platforms, and interconnectivity to provide multi-sector solutions to clients worldwide. Through global standards across credit and risk, Invesco's multi-sector team develops an integrated strategy based on market direction, risk positioning and asset allocation.

Our global presence allows us to look for pricing advantages between regions for similar or identical credit risk, advantages which we aim to pass on to our clients through enhanced performance. 

Investment team

Our team believes that a dynamic, multi-sector approach to credit investing is best adapted to capturing potential value and opportunity, especially in today’s complex market landscape.

The multi-sector team has three fund managers supported by an experienced team of four sector portfolio managers (High Yield, Bank Loans, Emerging Markets, Global IG) and Invesco Fixed Income’s extensive team of global research analysts.

Our fund managers have an average working experience of 23 years, while our analysts have an average of 16 years’ industry experience.

Meet the team

Literature

Multi-sector asset allocation outlook - Q2 2023

Investment risks

  • The value of investments and any income will fluctuate (this may partly be the result of exchange-rate fluctuations) and investors may not get back the full amount invested. As a large portion of the strategy is invested in less developed countries, you should be prepared to accept significantly large fluctuations in value. The strategy will invest in derivatives (complex instruments) which will result in leverage and may result in large fluctuations in value. Debt instruments are exposed to credit risk which is the ability of the borrower to repay the interest and capital on the redemption date. Investments in debt instruments which are of lower credit quality may result in large fluctuations in value. Changes in interest rates will result in fluctuations in value. The strategy may invest in distressed securities which carry a significant risk of capital loss. The strategy may hold a large amount of Asset Backed Securities (ABS) (complex instruments) as well as lower quality debt securities which may impact liquidity under certain circumstances. Performance may be adversely affected by variations in the exchange rates between the base currency of a portfolio and the currencies in which the investments are made.

Important Information

  • Data as at September 2019, unless otherwise stated. By accepting this document, you consent to communicate with us in English, unless you inform us otherwise. Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.

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