Invesco Unconstrained Tactical Allocation SMA

Invesco Unconstrained Tactical Allocation SMA

Asset allocation

At a glance

Objective

Seeks positive absolute return over a complete economic and market cycle


Universe
  • Exchange-traded funds and notes
  • Developed and emerging markets
  • Bond exposure in developed markets
  • Commodities focus on energy, precious metals, industrial metals and agriculture/livestock

Team
  • Manages over $23 billion in assets
  • Average of 21 years investment experience
  • Focused discipline: Concentration on the things that work well in current market conditions
  • Team-based approach: Experienced, long-tenured team believes in the power of strong collaboration

Philosophy

Our philosophy is based on the idea that understanding, managing and allocating risk is fundamental to a properly constructed portfolio. The team uses an absolute return strategy, investing in equities, bonds and commodities, to help meet the objective of positive absolute return over a complete economic cycle.

Process

The investment team selects the appropriate assets for the strategy, allocates them based on their proprietary risk management and portfolio construction techniques and then applies a process of active positioning in an effort to improve expected returns.

Step 1: Strategic allocation
  • Assets selected with low correlations reflecting differing behavior through economic cycle
  • Risk balanced within and across asset classes to construct the strategic allocation
Step 2: Tactical signal generation

Markets analyzed considering the following factors: Valuation, economic environment and investor positioning

  • Valuation seeks to determine if assets are attractively priced relative to fundamentals
  • Economic environment assessment measures impact of environment on asset prices
  • Investor positioning takes advantage of behavioral biases shown in shortand long-term price changes
Step 3: Portfolio construction
  • Attempts to control the frequency, depth, and duration of portfolio losses
  • Seeks to balance the risk contribution from various markets using signal generation results