Fixed Income ETFs

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This website is intended for use by UK residents only and should be read in conjunction with the investment risks below.

Why consider Fixed Income ETFs?


Fixed Income ETFs had one of the best years in 2019, accounting for half the total ETF inflows in Europe. Amid the volatility seen in markets so far this year, investors are re-examining their fixed income allocation, including considering different types of Fixed Income ETFs. If you’re thinking about adding any sort of bonds to your portfolio, ETFs could offer a simple and transparent way to invest with typically low costs.1

Potential benefits

Important information: 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.

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Use cases

Diversification

Some investors will diversify their income portfolio by investing in a combination of government, corporate and high-yield bond funds. However, it’s possible to achieve even more effective diversification by including other types of Fixed Income securities. Find out how some funds may have higher risks but, when added to those more traditional bond funds, may be able to improve the potential for higher income and even reduce the volatility of the overall portfolio.

Liquidity management

It’s normal for investors to keep some of their portfolio in low-risk funds that are easy to convert into cash, whether for emergency purposes or to provide a cushion against possible declines in the rest of their portfolio. However, with interest rates at such low levels, it is important these readily available securities are working for you. Find out about different types of securities that may be worth considering to meet your shorter-term liquidity needs.

Investing for different strategies

Some funds will be in a portfolio to provide a foundation for long-term performance. As such, you may expect to hold them through all market conditions. Government and corporate bond funds are examples. There are often other funds, however, that are likely to only be in the portfolio during a specific time period or when markets are behaving a certain way. Find out about ETFs that can be used to meet longer-term portfolio needs and those that may help meet shorter-term objectives.

Fixed Income ETFs with Invesco

Why consider Invesco?

Size matters when you're investing in Fixed Income, and Invesco manages over US$ 1.2 trillion across asset classes globally. Our expertise across a wide range of Fixed Income strategies is combined with expertise in constructing and managing ETFs. The result? Some of the lowest-cost exposures to common benchmark indices and more innovative products, all aimed at helping you reach your financial goals. We also have a dedicated team working within capital markets to make buying and selling our ETFs as efficient and effective as possible. 

Source

  • 1 Bloomberg, as at 31 December 2019.
  • * Data: Morningstar, as at 31 December 2019. Average cost of Europe-domiciled ETFs versus passive mutual funds tracking same index.

Investment risks

  • The value of investments, and any income from them, will fluctuate. This may partly be the result of changes in exchange rates. Investors may not get back the full amount invested. Debt instruments are exposed to credit risk which relates to 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 funds.
  • Invesco US Treasury Bond UCITS ETFs: The Funds may be exposed to the risk of the borrower defaulting on its obligation to return the securities at the end of the loan period and of being unable to sell the collateral provided to it if the borrower defaults.
  • Invesco AT1 Capital Bond UCITS ETF: This fund invests in contingent convertible bonds, a type of corporate debt security that may be converted into equity or forced to suffer a write down of principal upon the occurrence of a pre-determined event. If this occurs, the Fund could suffer losses. Other notable risks of these bonds include liquidity and default risk. This fund may hold a significant amount of debt instruments which are of lower credit quality. This may result in large fluctuations of the value of the ETF as well as impacting its liquidity under certain circumstances.
  • Invesco US High Yield Fallen Angels UCITS ETF and Invesco Variable Rate Preferred Shares UCITS ETF: These funds may hold a significant amount of debt instruments which are of lower credit quality. This may result in large fluctuations of the value of the ETFs as well as impacting their liquidity under certain circumstances.
  • Invesco Emerging Markets USD Bond UCITS ETF: As a large portion of this fund is invested in less developed countries, investors should be prepared to accept a higher degree of risk than for an ETF that invests only in developed markets.
  • Invesco GBP Corporate Bond ESG UCITS ETF: The Fund intends to invest in securities of issuers that manage their ESG exposures better relative to their peers. This may affect the Fund’s exposure to certain issuers and cause the Fund to forego certain investment opportunities. The Fund may perform differently to other funds, including underperforming other funds that do not seek to invest in securities of issuers based on their ESG ratings.
  • Invesco GBP Corporate Bond UCITS ETF: The Fund may be exposed to the risk of the borrower defaulting on its obligation to return the securities at the end of the loan period and of being unable to sell the collateral provided to it if the borrower defaults.

Important information

  • All investment decisions must be based only on the most up to date legal offering documents. The legal offering documents (fund and share class specific Key Investor Information Document (KIID), prospectus, annual & semi-annual reports, articles & trustee deed) are available free of charge on our website etf.invesco.com and from the issuers.
  • This website is marketing material and 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.
  • This website should not be considered financial advice. Persons interested in acquiring the product should inform themselves as to (i) the legal requirements in the countries of their nationality, residence, ordinary residence or domicile; (ii) any foreign exchange controls and (iii) any relevant tax consequences.
  • 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.
  • UCITS ETF’s units / shares purchased on the secondary market cannot usually be sold directly back to UCITS ETF. Investors must buy and sell units / shares on a secondary market with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current net asset value when buying units / shares and may receive less than the current net asset value when selling them.