Meet our experts
Invesco Solutions team
With decades of experience managing multi-asset portfolios, our team helps institutions solve highly complex investing challenges.
Vincent de Martel: Hello, my name is Vincent de Martel, and I'm Head of Client Solutions for North America. I'm very excited to be given an opportunity to present our indexing capabilities. I wanted to take a few moments to share with you some key facts about index management at Invesco, and most importantly, what it would be like for you to work with us. Let me start with a quick introduction to our business. Our history really started with ETFs 20 years ago when we started managing the industry's first smart beta indexes. We now have 150 people dedicated to index management, and we manage close to $350 billion across equities, fixed income, and alternative asset classes.
Let me start with analytics, as this is the starting point of our client-centric approach. Any index conversations start with investors' needs and outcomes. We have security-level analytics on over 12,000 indexes to have an informed dialogue with you about investing. We know your organization has unique investment challenges and bespoke investment needs. We can manage custom index strategies, and implement them in a choice of funds and accounts. We have a lot of demand right now for indexing strategies seeking to achieve specific social or environmental goals.
Finally, it's about access to investment experts. Our institutional indexing clients have access to our traders, our portfolio managers, and our researchers across the whole of Invesco. We treat our index clients just like we would treat our active clients. What matters to us is the strength of the relationship and being helpful to our clients. To learn more about our institutional indexing capabilities, please reach out to your Invesco representative. My colleagues and I very much look forward to working with you.
How clients can benefit from Invesco’s outcome-oriented index-based solutions.
Utilizing a variety of replication methodologies, Invesco currently manages $595 billion across 425+ index-based solutions spanning traditional and alternative asset classes, regions, sectors, and factors. We are a recognized industry leader and innovator with leadership positions in factor and ESG index-based solutions. We provide our clients with a wide array of access points, including institutional and retail pooled structures, insurance wrappers, separately managed accounts and exchange traded., and many more. Our offerings are underpinned by strong governance and oversight, with a strong focus on performance, risk controls, process automation, and segregation of duties.
across 425+ index-based solutions.
As of Dec. 31, 2023
in global equity assets across 314 index-based solutions.
dedicated professionals globally.
Learn how institutional investors are meeting their desired investment outcomes with index-based solutions.
Learn how Invesco can help institutional investors combine and rotate factor exposures to help enhance index risk and reward characteristics through changing economic cycles.
Invesco takes an active approach to its passive investments, ensuring our clients have a solid understanding of their benchmark properties, behavior, and drivers of return. In a recent client engagement, we provided a deeper look into two well-known US equity indexes, the Russell 3000 and the S&P 500. While both share a market-cap-weighting methodology and similar long-term performance, differences exist, making the case that investors can benefit from evaluating their index exposure.
Now let's dive into the top similarities and differences between the two indexes. Historically, the performance of both indexes is barely distinguishable. The mid and small-cap securities in the Russell 3000 do not explain much of the index's performance, despite its being an all-cap index. Although both indexes rely on a market-cap-weighting approach, the S&P 500 deploys a subjective committee for security inclusion, whereas the Russell 3000 utilizes a more objective rules-based methodology.
Despite the inclusion of both small and mid caps in the Russell 3000, both indexes have a similar market-cap composition, which is large cap, given the weighting methodology. For investors who value the importance of small-cap securities as a driver of return or diversification, a dedicated small cap mandate may be additive.
Relative to the Russell 3000, the S&P 500 is more concentrated, given its lower number of index constituents. While both the Russell 3000 and the S&P 500 have a comparable index construction methodology and share similarities across the risk and return spectrum, the weighting mechanisms of stocks included in each index may position clients to be overly exposed to large-cap companies. Investors who are looking to diversify their market exposure should seek a more balanced mix of large, mid, and small-cap companies through other index exposures.
Our team can support your organization's efforts to find diversifying, return-enhancing, or risk-reducing strategies to complement your existing passive US large-cap exposure. For more information, please visit invesco.com/institutional-indexing, or speak with your Invesco representative.
Explore similarities and differences between the S&P 500® Index and the Russell 3000® Index.
Paisley Nardini: Hi, I'm Paisley Nardini, Strategist for the client solutions team here at Invesco. In this role, I support both our clients and consultants on all index-related inquiries. In this new era of indexation, we've come to discover that it is no longer a one-size-fits all market. Client portfolios are seeking enhanced ways to achieve their stated objectives, whether it be return enhancement, diversification, or risk reduction. Index exposure can play an active role in all of these objectives.
A theme which is garnering increased focus within indexing is ESG. Many of the ESG discussions we are having can be attributed to our clients not resonating with what is available to them off the shelf. Due to Invesco's scale, ESG-dedicated resources, as well as the ability to develop custom indexes, we can offer solutions to help resolve these outstanding concerns.
I'd like to share some highlights of a recent engagement where Invesco delivered on a client's objective of being able to offer a custom suite of ESG-focused portfolios. These portfolios showcase the unique beliefs and values of our client, something that they were not able to find in the marketplace today. The client is a union-owned bank in the US, who partnered with Invesco to create and implement four indexes spanning [core] ESG as well as several satellite strategies more narrowly focused on environmental and social issues. The solutions team at Invesco partnered with our resident ESG experts to help define the client's desired exposures, while also taking into consideration constraints. What this meant for the client was high-touch service and high level of customization, so that their unique beliefs are being addressed.
One of the more nuanced strategies that was created in this process was a portfolio benchmarked to the Invesco Global Climate Alignment Index. This index provides access to leaders in carbon disclosure and reporting, alongside those companies innovating within the carbon solution space. The creation of this index relied on ESG data inputs from leading providers and incorporated the client's desired constraints. We worked hand in hand with our client in every step of the creation process, ensuring that Invesco is doing the heavy lifting to develop, create, iterate, and implement to the client's desired outcome.
Our mission on the solutions team at Invesco is to help bring our client's investment ideas to life. We would welcome the opportunity to help your organization achieve more efficient, higher level of customization and a deeper level of engagement as it relates to index mandates. Thank you.
Learn how Invesco worked with a large US bank to successfully build a customized ESG indexing portfolio.
Invesco Solutions team
With decades of experience managing multi-asset portfolios, our team helps institutions solve highly complex investing challenges.
Capital market assumptions
Translate portfolio theory into practical solutions with our capital markets forecasts for returns, risk, and correlations.
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The Invesco Solutions (IS) team is part of Invesco Advisers, Inc. (IAI), an investment adviser that provides investment advisory services and does not sell securities.
Invesco Capital Management LLC (ICM) is also an investment adviser. In addition, ICM provides portfolio management and certain portfolio operations support (sub-advisory services) to Invesco affiliates including Invesco Advisers, Inc.
Invesco Indexing LLC is an affiliated index provider. It is a separate entity, not an investment adviser or fiduciary, and makes no representation regarding the advisability of investing in any security or strategy. Invesco Indexing LLC is a self-indexing unit, has its own governance structure and is separate from Invesco’s broader Institutional Indexing effort. Indexes offered by Invesco Indexing LLC are unmanaged and it is not possible to invest directly in an index. Exposure to an asset class or trading strategy represented by an index is only available through investable instruments (if any) based on that index. Invesco Indexing LLC does not issue, sponsor, endorse, market, offer, review or otherwise express any opinion regarding any fund, derivative or other security, financial product or trading strategy that is based on, linked to or seeks to track the performance of any Invesco Indexing LLC index.
Each of these entities is an indirect, wholly owned subsidiary of Invesco Ltd. Please contact your Invesco representative for additional information.
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