A globally diversified corporate bond fund, delivering income and capital growth opportunities.
See all product detailsThe 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 averaging 18 years in the industry and 12 years with Invesco.
We focus on investment grade corporate bonds, issued by companies that are highly solvent with strong balance sheets. 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.
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.
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.
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.
Our approach to ESG is rooted in a belief that evaluating ESG 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 ESG team, which coordinates engagement activity across the firm and provides additional support, data and analysis.
For complete information on risks, refer to the legal documents. 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. Changes in interest rates will result in fluctuations in the value of the fund. The fund uses derivatives (complex instruments) for investment purposes, which may result in the fund being significantly leveraged and may result in large fluctuations in the value of the fund. The fund may invest in contingent convertible bonds which may result in significant risk of capital loss based on certain trigger events. The fund may invest in certain securities listed in China which can involve significant regulatory constraints that may affect the liquidity and/or the investment performance of the fund. As this fund is invested in a particular sector, you should be prepared to accept greater fluctuations in the value of the fund than for a fund with a broader investment mandate.
Each month, our experts share their views on the emerging market (EM) local debt asset class. Read their outlook and discover which markets they believe are presenting the most attractive 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.
In December, bond markets generally performed poorly, driven by rising government bond yields as economic data showed the US economy's resilience, leading to a more hawkish outlook from the Federal Reserve. 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.
Find out more about our performance and read the latest market commentary.
Lyndon Man and Luke Greenwood have led the management of the fund since 2013, with Michael Booth and Matthew Henly joining in 2016 and 2021 respectively. 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. The platform is made up of over 180 investment professionals, averaging 18 years of industry experience and 12 years with Invesco.
I believe our thematic approach to investing will be key to delivering attractive risk-adjusted returns going forward.
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 portfolio 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 are able to better navigate periods of slowing growth. IG credit investors can benefit from these moves.
Data as at 31.05.2024, unless otherwise stated. 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. For information on our funds and the relevant risks, refer to the Key Information Documents/Key Investor Information Documents (local languages) and Prospectus (English, French, German, Spanish, Italian), and the financial reports, available from www.invesco.eu. A summary of investor rights is available in English from www.invescomanagementcompany.lu. The management company may terminate marketing arrangements. Not all share classes of this fund may be available for public sale in all jurisdictions and not all share classes are the same nor do they necessarily suit every investor.
EMEA3606426/2024
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