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Fixed income

Capitalise on investment grade thinking

Find out what investment grade corporate bonds can bring to your portfolio. Explore the latest outlook, themes and trends in the asset class, and discover how Invesco can help.

$78 billion

We manage $78 billion in global investment grade credit assets.1

18 years

Our portfolio managers average 18 years of experience1

180 team members

Our experience fixed income team is made up of 180 investment professionals across the globe.1    

2024 LSEG Lipper Fund Award - Best Fixed Income Group

Recognised among large U.S. investment managers by LSEG Lipper for outstanding performance.2

Investment grade portfolios built on collaboration

We bring the vast resources of a global asset manager while remaining agile enough to potentially add value through security selection. Dive into our breadth of active, passive, and environmental, social and governance solutions.

Credit’s credentials

We know that you’re busy, and conducting thorough investment research takes time. So, to help make your life easier, we’ve highlighted seven key datapoints we think you should be watching. 

Download our first edition of “Credit’s Credentials”, a fixed income infographic, to get the inside scoop on bond markets at a single glance. 

Download infographic
Credit’s credentials

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. Debt instruments are exposed to credit risk, which is the ability of the borrower to repay the interest and capital on the redemption date. 

What can investment grade credit bring to your portfolio?

Reliable income generators

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 ultra-low yields.

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Less volatile than equities

Despite paying a higher level of income than government bonds, investment grade corporate bonds do not typically expose investors to an excessive level of risk.

They tend to exhibit significantly lower price volatility than equities, for example.

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Low credit risk

History shows us that defaults are very rare for investment grade issuers. 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.

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Good diversifiers

Investment grade corporate bonds represent a large portion of the global investment universe.

This means they can offer strong diversification benefits, allowing investors to gain exposure to a broad range of economic sectors and geographies.

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Related insights

Learn more about the opportunities we see in today’s market.

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Frequently asked questions

Investment grade credit are bonds or other fixed-income securities rated at a certain level of creditworthiness by rating agencies. These securities are considered to have a lower risk of default compared to non-investment grade (also known as “high yield” or “junk”) bonds. The ratings for investment grade credit typically range from BBB- or Baa3 (low) to AAA or Aaa (high).

Investment grade bonds are rated by credit rating agencies like Standard & Poor’s (S&P), Moody's, and Fitch. The ratings are based on the issuer’s financial health, historical performance, and overall economic environment. Ratings range from AAA (highest quality, lowest risk) to BBB- (lower quality, higher risk but still considered investment grade). For example:

AAA/Aaa: Highest credit quality, minimal risk.

AA/Aa: High credit quality, very low risk.

A: Strong credit quality, low risk.

BBB/Baa: Adequate credit quality, moderate risk, but still investment grade.

The credit rating on a bond will be associated with the premium or “spread” demanded for holding it: the higher the risk, the more issuers will have to pay investors.

Bond prices in general work inversely to interest rates. So, when interest rates rise, the price of existing bonds typically falls. When interest rates fall, the price of existing bonds usually increases. The extent of the price change will depend on several factors including the time to maturity of the bond, its coupon level and frequency. The sensitivity to interest rate changes can be worked out mathematically and is known as “duration”. Bonds with longer maturities and lower coupons, which are more frequently found in investment grade, are more sensitive to interest rate changes, something investors should be aware of. But corporate and other investment grade bonds will generally have a lower interest rate sensitivity than equivalent government bonds, thanks to the additional credit premium in the coupon.

  • Footnotes

    1. As of December 31, 2023

    2. Source: LSEG Lipper Fund Awards. © 2024 LSEG Lipper. All The LSEG Lipper Fund Awards, granted annually, highlight funds and fund companies that have excelled in delivering consistently strong risk-adjusted performance relative to their peers. The LSEG Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is an objective, quantitative, risk-adjusted performance measure calculated over 36, 60 and 120 months. The fund with the highest Lipper Leader for Consistent Return (Effective Return) value in each eligible classification wins the LSEG Lipper Fund Award. For more information, see lipperfundawards.com. Although LSEG Lipper makes reasonable efforts to ensure the accuracy and reliability of the data used to calculate the awards, their accuracy is not guaranteed. LSEG Lipper Inc. is a major independent mutual fund tracking organization.

    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.

    Important information

    Views and opinions are based on current market conditions and are subject to change.

    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.

    EMEA 3631472/2024