Invesco Global Buy and Maintain Credit Strategy
Fixed Income

Introducing the Invesco Global Buy and Maintain Credit Strategy

Investment grade credit strategy seeking long-term sustainable income by investing in high-quality corporate bonds on a hold to maturity basis.

Long-term sustainable income

Insurers, defined benefit pension schemes and other institutional investors need to generate contractual, predictable returns to match their cashflow requirements as they fall due. 

The goal is to deliver a sustainable stream of income over a long investment horizon. Security selection is key to avoiding defaults and reducing turnover costs that can affect future income.

Investing for the long run

Our Buy and Maintain strategy aims to harvest the credit risk premium from investment grade issuers within a well-diversified portfolio. The idea is to invest across a range of geographies, sectors, and issuers, while avoiding defaults and minimising turnover. 

The strategy invests in high-quality corporate bonds on a hold to maturity basis to enhance yield vs. cash or government bonds and target a fixed cashflow profile. 

We look to avoid risk concentration and apply limits to ensure that our clients are not overexposed at the issuer, sector or geographic levels. 

We believe a solid fundamental research process which embeds ESG is critical for successful long-term investment results. Our global credit research team is aligned to the objectives of our Buy and Maintain portfolios. Each bond held is fully underwritten on its issuer’s creditworthiness by an experienced credit research analyst to minimise the risk of defaults.

The strategy is highly diversified in its structure and the credit fundamentals of its holdings are monitored continuously to get ahead of potential risks. 

We aim to minimise both the cost and frequency of portfolio trading. We only sell under predefined circumstances, such as a materially increased risk of default or a rating agency action not yet priced in by the market.

Meet the team

Invesco has been managing Buy and Maintain portfolios since 2014.

The Buy and Maintain strategy is led by Luke Greenwood, who has over 30 years’ experience. Luke is supported by Matthew Henly and the wider team including Michael Booth and Lyndon Man. Together, the portfolio managers bring a combined 75+ years of industry experience.

The team works collaboratively with Invesco Solutions (IS) in the construction of Buy and Maintain portfolios. IS consists of over 70 investment professionals, with an average of 15 years’ experience across the leadership team.

Meet The Fund Managers

Why Invesco?

Our proprietary analytics and portfolio construction engine helps the portfolio managers to screen thousands of bonds and optimize portfolio yield or match a set of cashflows without compromising on quality or diversification.

The key benefits of Invesco Vision are the speed and flexibility in modelling and updating portfolios using real-time market data on a security level. Efficient frontier analysis provides clear visualisation of potential returns vs. a particular constraint, such as solvency capital requirements or carbon emissions intensity. The portfolio managers use this information and apply qualitative, forward-looking judgement to arrive at a final set of positions.

The system also offers optimisation capabilities within a holistic multi-asset framework to achieve client outcomes in the most efficient manner.

Our global footprint spans 12 locations, with a public credit research team of over 50 analysts. They cover over 85% of the global investment grade corporate bond market based on value. The depth and breadth of the team allows us to leverage our local market knowledge and underwrite our positions in Buy and Maintain portfolios with confidence. All of the analysts’ opinions and issuer data are stored on our “Everest” research repository, which in turn is plumbed into the analytics and risk systems. This allows the portfolio managers to leverage the analysts’ work easily and consistently across a diverse suite of portfolios.

Invesco has managed ESG-aware portfolios for more than two decades. Environmental, social and governance considerations are fully integrated into our credit research process. This aligns well with the strategy’s long-term investment horizon. It also allows us to meet clients’ specific sustainability objectives.

In the last few years, we have strongly enhanced our capabilities to manage them with sustainability factors in mind. This has included the adoption of SFDR Article 81 standards and a proprietary net zero protocol on our two flagship pooled funds.

The Invesco Vision system uses real-time market and liquidity data to create real world actionable portfolios and optimize trading baskets in the event of client flows, evolving liabilities, or changes in other portfolio assets.

Alongside our pooled funds, we work collaboratively with clients that require bespoke portfolios, tailoring guidelines such as duration, yield and the treatment of income. We’re able to target a client’s individual cashflow profile and include specific ESG preferences. Invesco’s Solutions team is available for ongoing support on a number of fronts including asset allocation, funding level analysis and risk management overlays. 

Strategy facts

Integrated analytics engine to optimise portfolios for your needs

Managing Buy & Maintain since 2014

Proprietary net zero framework

success failure

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Footnotes

  • 1 Under the Sustainable Finance Disclosure Regulation, Article 8 funds are defined as those which promote environmental and/or social characteristics.

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. 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. Investments in debt instruments which are of lower credit quality may result in large fluctuations in value. Changes in interest rates will result in fluctuations in value. The strategy may invest in contingent convertible bonds which may result in significant risk of capital loss based on certain trigger events.

Important Information

  • Data as at 31 January 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.

    EMEA3362448/2024