Article

Strategy – Thematic Approach

April 8, 2021
Lyndon Man
Lyndon Man
Fund Manager
Invesco Global Investment Grade Corporate Bond Strategy
Invesco Global Investment Grade Corporate Bond Strategy

The strategy is actively managed and focuses on delivering attractive risk-adjusted returns through the implementation of strategic investment themes. Portfolio managers have the output of the IFI platform at their disposal in order to help them identify the most appropriate investment themes. These themes are designed to isolate relative value opportunities within corporate bond markets globally through recognising what are believed to be the key drivers of credit markets going forward. Themes are populated using security selection in order to best represent the view and capture the highest risk-adjusted returns within the guidelines of the Strategy.

Predominantly the investment themes drive positioning across the following thematic risk factors versus the benchmark:

  • Regions
  • Sectors
  • Currency of the bonds
  • Credit Curve Term Structure
  • Capital structure

 

The themes are long term in nature, and whilst herding behavior in markets can result in bouts of volatility during periods of uncertainty, often these have little to no influence on our long-term views. The team state they must not allow short-term uncertainty to cloud their long-term judgement unless there is a fundamental change to their view. 

Related insights

  • 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.

    Debt instruments are exposed to credit risk which is the ability of the borrower to repay the interest and capital on the redemption date. The strategy may use derivatives (complex instruments) in an attempt to reduce the overall risk of its investments, reduce the costs of investing and/or generate additional capital or income, although this may not be achieved. The use of such complex instruments may result in greater fluctuations of the value of a portfolio. The Manager, however, will ensure that the use of derivatives does not materially alter the overall risk profile of the strategy. Investments in debt instruments which are of lower credit quality may result in large fluctuations in value.

    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.

    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.

    Investment in certain securities listed in China can involve significant regulatory constraints that may affect liquidity and/or investment performance.

  • 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.

    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.