Depressed yields and suppressed market volatility have crowded out institutional investors looking for income to match their liabilities. The US investment grade credit market offers an attractive combination of investment quality, size, liquidity and, most importantly, higher yields than government bonds.
We believe we can generate attractive risk-adjusted returns by targeting alpha through global thematic ideas. These are implemented within a robust, risk-disciplined framework with the intention of performing well in any market environment.
We identify investment themes, which we believe can perform well in all market conditions. Additional macro overlays are designed to potentially reduce downside.
Our approach provides the flexibility to capture market inefficiencies resulting from severe price action against bonds downgraded from investment grade to sub-investment grade.
Broad opportunity set
Fund managers have 21 years of industry experience on average.
The strategy aims to generate an attractive total return by investing in investment grade corporate bonds. It pursues a theme-based approach designed to identify relative value opportunities in the corporate bond markets of US issuers, which are denominated in USD.
The portfolio managers take a theme-based approach to capturing value opportunities. We combine top down analysis with a bottom up approach to security selection.
The team is also responsible for leveraging the breadth of the Invesco Fixed Income platform to help form their investment opinion.
Macro themes are identified and then we construct the portfolio by selecting the most appropriate securities to represent the view.
At the same time, security selection aims to capture the highest risk-adjusted returns while remaining within the guidelines of the strategy.
We also have the ability to manage credit, interest rate and currency exposure separately (through derivatives).
The investment approach is centred around three core pillars:
- Macro positioning: understanding macro developments to identify macro risk factor positioning and sector allocation.
- Macro and credit investment themes: once identified, the themes are constructed to capture the relative value between different parts of the market.
- Issuer and security selection: identifying primary market opportunities, aiming to identify winners & avoid losers.
- We target alpha through global thematic ideas, which are implemented within a robust risk-disciplined framework with the intention of performing well under any market environment.
- The traditional tenets of portfolio construction are not sufficient to generate alpha. We have added three more stages to our investment process, which refine our investment strategy: thematic, relative value and macro overlays.
- The Invesco Fixed Income team has been actively investing in fixed income markets since 1971 and has dedicated teams working in Atlanta, Chicago, Hong Kong, London, Louisville, New York and Tokyo.
Portfolio management responsibilities rest with the Invesco Fixed Income Global Investment Grade Corporate Bond Management team, reporting to Michael Hyman, Head of Global Investment Grade and Emerging Markets.
The team operates within the interconnected framework of Invesco Fixed Income’s investment platform with daily interaction taking place with investment colleagues globally.
The lead manager(s) would be Michael Hyman, Matt Brill, Todd Schomberg and Jacob Habibi, leveraging the resources of the entire IFI platform. This global platform support gives us the broad and scalable operation necessary to offer clients a credible value proposition.
- 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. The strategy will invest in derivatives (complex instruments) which will result in leverage and may result in large fluctuations in value. 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 value.
- Data as at September 2019, unless otherwise stated. By accepting this document, you consent to communicate with us in English, unless you inform us otherwise. 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.