Marty Flanagan. President and CEO of Invesco Ltd.Responsible Investing is fast becoming mainstream, and asset managers are rapidly putting new processes in place to keep up with the demand. At Invesco, we believe ESG should be regarded not as a separate objective, but as an integral component of the investment management process.
In keeping with this philosophy, we’ve complemented our successful strategies with a third and innovative element to take account of our clients’ evolving needs: Responsible Asset Allocation (RAA). Developed by our multi-asset team in Henley as a new component of the asset allocation process, RAA stands alongside the well-known concepts of Strategic Asset Allocation (SAA) and Tactical Asset Allocation (TAA) to help us deliver investment results while mitigating the impact on society and the environment.
Keeping with the topic of Responsible Investing (RI), another article highlights Invesco’s holistic approach that merges low volatility and ESG investing. By combining important RI principles and factor investing, we show how to optimize strategies for results that meet all of the criteria investors value.
We’ve also included an article on climate change and its consequences for impact strategies and municipal bond investing, as well as a summary of this year’s – virtual – Advancing the Frontiers of Factor Investing conference at the Lancaster University Management School, which we co-hosted.
Turning from Responsible Investing to another key theme at Invesco – innovation – another article sets out how we convert immense volumes of unstructured financial data into a useful form for asset management. The raw data can be evaluated systematically using powerful computers and tools like natural language processing. Read this article to learn about the most effective methods and how we apply them.
We hope you enjoy this latest edition of Risk & Reward.
Responsible Asset Allocation: A pioneering approach to multi asset investing
Our multi asset team in Henley developed Responsible Asset Allocation (RAA) as a new element of the asset allocation process. RAA focuses on the non-financial outcomes of our investment decisions.
Machine learning: Building factors from unstructured data
Asset managers typically use structured data, characterized by a low signal-tonoise ratio and the constant risk of overfitting. An alternative is unstructured data, which must first be given a structure.
How climate change is changing the US – and what it means for municipal bonds
Climate change is an undeniable reality, leading to devastating events for people and economies. But what are the lessons for municipal bond issuers?
Low volatility and ESG investing combined: Invesco’s holistic approach
Low volatility investing is now mainstream – and so is ESG. Since Invesco is a pioneer in both fields, it is only natural for us to combine the two.
Shifting the frontiers of factor investing
Invesco Quantitative Strategies co-hosted the Frontiers of Factor Investing Conference held virtually at the Lancaster University Management School in January 2021.
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.
Data as at 31 May 2020, unless otherwise stated.
This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.
Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals, they are subject to change without notice and are not to be construed as investment advice.
