This Article 9 fund offers the opportunity to build resilience for the future, while investing in companies that are decarbonising today.
See all strategy detailsLarge corporates account for nearly one fifth of total global carbon emissions. We believe a large corporate credit strategy like this one is a good place to focus our attention as we look to support Net Zero goals. This fund follows a Net Zero approach based on an investment framework set out by the Paris Aligned Investment Initiative (PAII). It aims to contribute to the achievement of Net Zero by 2050 or sooner, while seeking to deliver income and long-term capital growth.
Our Net Zero assessments cover over two thirds of the market value of the Bloomberg Barclays Global Aggregate Corporate Index.
We are aiming for half of the strategy’s assets to be aligned to Net Zero by 2027.
The team manages $5.3 billion in active global investment grade assets.1
All sectors will need to decarbonise if we’re to achieve Net Zero by 2050. In recognition of this, we allocate to some of the highest emitting sectors with the aim of ensuring progress through commitments to Net Zero. To remain eligible for the fund, companies must demonstrate progress in addressing their emissions in line with the Paris temperature goals. We believe this is the best way to effect real-world change.
Issuers that are ill-prepared for transition, or incompatible with a Net Zero economy, will likely suffer defaults, losses and impairments. We believe that allocating to climate-resilient companies will improve the long-term credit quality of the fund.
We look beyond regional biases for a truly global approach. By examining opportunities from around the world, we look to create portfolios that can provide our clients with consistent income and capital growth.
Unlike traditional corporate bond managers, we don’t just focus on market timing and security selection. Instead, we go further. We identify the big themes driving economies and use this analysis to help drive our issuer selection. These themes could include things like:
We also implement “macro overlays” to manage the overall risk of the fund through the cycle. This involves using derivatives, which help reduce transaction costs compared to trading in and out of corporate bonds.
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.
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 contingent convertible bonds which may result in significant risk of capital loss based on certain trigger events.
As this strategy is invested in a particular sector, you should be prepared to accept greater fluctuations of the value than for a strategy with a broader investment mandate.
Investment in certain securities listed in China can involve significant regulatory constraints that may affect liquidity and/or investment performance.
November was a broadly positive month for bond markets as yields rallied into month end. Read our latest thoughts on how fixed income markets performed during the month and what we think you should be looking out for in the near term.
We believe the case for investing in bonds is the strongest it has been since the GFC. Invesco’s experts from across Fixed Income teams and asset classes share their views on the outlook and opportunities.
In our regularly updated macroeconomic analysis we offer an outlook for interest rates and currencies – and look at which fixed income assets are favoured across a range of market environments.
The lead managers for the fund are Lyndon Man and Luke Greenwood. They have been the lead portfolio managers of global investment grade credit since 2013. Together they have a combined 50+ years of industry experience and have navigated a broad range of economic cycles. They are supported by Michael Booth and Matthew Henly, and draw on the resources of Invesco’s global fixed income platform. The platform is made up of over 180 professionals, averaging 18 years of industry experience and 12 years with Invesco.
Net Zero is only possible if we collaborate. We partner with clients to understand their goals, and engage with investee companies to ensure progress to drive real-world change.
“Net Zero” refers to a state where greenhouse gas (GHG) emissions are balanced by GHG removals from the atmosphere. The “net” in Net Zero is important because it will be difficult to reduce all emissions to zero on the required timescale. As well as deep and widespread cuts in emissions, there will likely be a need to scale up GHG removals. The Paris Agreement underlines the urgency of Net Zero, requiring states to aim to limit global warming to well below 2°C, and preferably to 1.5°C.
The Paris Agreement is a legally binding international treaty on climate change adopted in December 2015. Its goal is to limit global warming to well below 2°C, preferably to 1.5°C, compared to pre-industrial levels.
Net Zero Asset Managers Initiative is a network of asset managers. Invesco joined the initiative in March 2021.
The Paris Aligned Investment Initiative (PAII) provides a common set of recommended actions, metrics and methodologies through which investors can maximise their contribution to achieving global Net Zero global emissions by 2050 or sooner. The PAII was established in May 2019 by the Institutional Investors Group on Climate Change. The PAII’s objective is to ensure investors can decarbonise investment portfolios and increase investment in climate solutions, in a way that is consistent with a 1.5°C Net Zero emissions future.
Footnotes
¹ As at 31 March 2024
Important Information
Data as at 31.05.2024, unless otherwise stated. By accepting this material, you consent to communicate with us in English, unless you inform us otherwise. This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell 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. Views and opinions are based on current market conditions and are subject to change.
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