The fund's truly global approach increases the opportunity set available versus a regionally focused strategy. Based on research, the team seeks to identify structural and tactical themes which drive credit markets to achieve compelling risk-adjusted returns. As well as benefitting from no geographical constraints, we are free to allocate up to 20% of the fund to high yield bonds (no lower than BB at purchase), if the macroeconomic and issuer-specific circumstances look attractive. We typically use this allowance to invest down the capital structure in high yield bonds that are issued by investment grade companies.
The fund offers a globally diversified approach to investment grade corporate bond investing.
Themes drive over- and underweights across regions, sectors and capital structure versus the benchmark.
Invesco Fixed Income is comprised of 180+ investment professionals managing over
US$ 500 bn.
We focus on investment grade corporate bonds, issued by companies that are highly solvent with strong or improving fundamentals. The default risk on these sorts of securities is typically low, with defaults very rare for investment grade issuers.
Within our portfolios, we invest across a broad range of sectors and geographies. This helps ensure good diversification.
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.
Our approach to sustainable investing is rooted in a belief that evaluating the criteria leads to better long-term risk-adjusted returns. Our credit analysts are tasked with understanding the ESG drivers for the companies they cover and conducting ESG-based analysis along with their fundamental financial analysis.
We also work closely with Invesco’s Global Sustainable Investing team, which coordinates engagement activity across the firm and provides additional support, data and analysis.
Access the Invesco Global Investment Grade Corporate Bond Fund product page to view KIDs/KIIDs and factsheets. Any investment decision should take into account all the characteristics of the fund as described in the legal documents. For sustainability related aspects, please refer to www.invescomanagementcompany.lu. The investment concerns the acquisition of units in a fund and not the underlying asset. The fund is actively managed. It is not managed in reference to a benchmark.
Lyndon Man and Luke Greenwood have led the management of the fund since 2013, with Matthew Henly joining in 2021. Lyndon and Luke have a combined 50+ years of industry experience and have navigated a broad range of economic cycles. They draw on the resources of Invesco’s global fixed income platform.
I believe our thematic approach to investing will be key to delivering attractive risk-adjusted returns going forward.”
Lyndon Man
Fund Manager
The term “investment grade credit” is used to describe corporate bonds that have been issued by high quality companies. The three main rating agencies use slightly different definitions. Moody’s defines investment grade securities as having a rating of Baa3 or higher. Meanwhile, Standard & Poor’s and Fitch define it as BBB- or higher.
Investment grade corporate bonds can play an important role as income generators in investor portfolios. This made them popular with investors in the years following the global financial crisis when the world lived through a sustained period of low yields, or even negative yields on government debt.
They can also be good diversifiers. They represent a large portion of the global investment universe, which means they allow investors to gain exposure to a broad range of economic sectors and geographies. Furthermore, they typically exhibit significantly lower price volatility than equities.
When the economy takes a downturn, the risk that companies will be unable to meet their financial obligations increases. However, it is worth noting that defaults have historically been very low for IG credit. Even between 2008 and 2009, the default rate peaked at only 0.3-0.4% of the universe. The threat of credit downgrades is more common but can be mitigated with thorough credit analysis.
When the economy takes a downturn, high quality fixed income assets (government bonds and investment grade credit) tend to outperform more volatile/riskier parts of the market. This is partly because, when markets throw up challenges, many investors prefer relatively “safer” assets, which can better navigate periods of slowing growth. IG credit investors can benefit from these moves.
