Changing times for fixed income

Explore key insights from institutional fixed income specialists from around the world

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Insights for an uncertain future

Institutional investors are expecting more challenging conditions ahead, but also looking through them to the longer term. Learn how they are positioning their portfolios for a complex future.

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Invesco fixed income overview video

Explore the 4 themes of the study

End of the cycle beckons

1

This year's outlook for the global economy has become more uncertain and divergent as they prepare for a "soft landing".

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Chinese fixed income allocations are on the rise

2

Allocations to Chinese fixed income are rising. Barriers still exist with respect to access but broader and more representative inclusion in indicies is underway.

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Liability-driven and cash flow-driven investing

3

The use of cash flow-driven investing strategies to sit alongside the return seeking liability-matching goals of LDI portfolios is gradual but future intent to adopt is high.

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Environmental, social and governance (ESG) fixed income moves into the mainstream

4

ESG integration within fixed income continues to gain traction as investors weave ESG factors into policy statements and portfolios, but figuring out the right approach is still a work-in-progress.

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Invesco fixed income - Rob Waldner

Robert Waldner

Head of Global Macro & Chief Strategist, Invesco Fixed Income

Rob Waldner is Chief Strategist and Head of the Multi-Sector team for Invesco Fixed Income. Mr. Waldner is responsible for facilitating the overall macro investment strategy for the fixed income platform and for oversight of the multi-sector portfolio construction process. He joined Invesco in 2013.

Prior to joining Invesco, Rob was with Franklin Templeton for 17 years. At Franklin Templeton, he was a senior strategist and senior portfolio manager. Previously, Mr. Waldner was a member of the Macro team at Omega Advisors and a portfolio manager with Glaxo (Bermuda) Ltd. He entered the industry in 1986.

Invesco fixed income - Julie Salsbery

Julie Salsbery

Senior Client Portfolio Manager
Multi-Sector Fixed Income

Julie Salsbery is a Senior Client Portfolio Manager with the Multi-Sector team within Invesco Fixed Income. In this role, she is focused on positioning our funds across retail and institutional distribution channels, discussing investment views and products with clients, contributing to thought leadership and marketing initiatives, and managing non-investment aspects of the team.

Ms. Salsbery joined Invesco in 2016. Previously, she was a senior product manager for global fixed income at Pacific Investment Management Company (PIMCO). Before joining PIMCO, she was a senior EM sovereign analyst for T. Rowe Price International, where she focused on analysis, ratings and investment ideas across Eastern Europe, the Middle East and former Soviet Union. Prior to that, she was a US economist and municipal bond trader (also with T. Rowe Price), and she began her career as an investment banker.

Read more from our 2018 Study. Download PDF

Important information

Alpha: Often considered the active return on an investment, alpha gauges the performance of an investment against a market index or benchmark which is considered to represent the market's movement as a whole. The excess return of an investment relative to the return of a benchmark index is the investment alpha.

Past performance is not a guarantee of future results.

Diversification does not guarantee a profit or eliminate the risk of loss.

About risk
Fixed-income investments are subject to credit risk of the issuer and the effects of changing interest rates. Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa. An issuer may be unable to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer's credit rating. The values of junk bonds fluctuate more than those of high quality bonds and can decline significantly over short time periods.

The risks of investing in securities of foreign issuers, including emerging market issuers, can include fluctuations in foreign currencies, political and economic instability, and foreign taxation issues.

The use of environmental and social factors to exclude certain investments for non-financial reasons may limit market opportunities available to funds not using these criteria. Further, information used to evaluate environmental and social factors may not be readily available, complete or accurate, which could negatively impact the ability to apply environmental and social standards.

Alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors considering alternatives should be aware of their unique characteristics and additional risks from the strategies they use. Like all investments, performance will fluctuate. You can lose money. Investments in real estate related instruments may be affected by economic, legal, or environmental factors that affect property values, rents or occupancies of real estate. Real estate companies, including REITs or similar structures, tend to be small and mid-cap companies and their shares may be more volatile and less liquid.

Sample and methodology
The fieldwork for this study was conducted by NMG's strategy consulting practice. Invesco chose to engage a specialist independent firm to ensure high quality objective results. Key components of the methodology include:

  • A focus on the key fixed income decision makers within institutional investors and private banks, conducting interviews using experienced consultants and offering market insights rather than financial incentives.
  • In-depth (typically one hour) face-to-face interviews using a structured questionnaire to ensure quantitative as well as qualitative analytics were collected.
  • Analysis capturing investment preferences as well as actual investment allocations with a bias toward actual allocations over stated preferences Results interpreted by NMG's strategy team with relevant consulting experience in the global asset management sector.

In 2019, we conducted interviews with 145 different insurers, defined benefit and contribution pension funds, sovereign investors and private banks across Asia-Pacific, EMEA and North America. They are responsible for portfolios within asset owners collectively holding a total of US $ 14 trillion AUM (as of June 30, 2019).

Please note that survey participants experiences may not be representative of others, nor does it guarantee the future performance or success of any investment strategy. There may be material differences in the investment objectives/goals, costs and expenses, liquidity needs, guarantees or insurance, fluctuation of principal or return, tax features and investment horizons of individual investors and institutional investors. Investors should consult a financial professional before making any investment decisions if they are uncertain whether an investment is suitable for them. Please obtain and review all financial material carefully before investing.

Invesco is not affiliated with NMG Consulting. The opinions expressed are those of NMG Consulting and are based on current market conditions and are subject to change without notice. These opinions may differ from other Invesco professionals. Invesco sponsored this survey.