As financial advisors continue to look for ways to diversify client portfolios to reach savings goals, Invesco has announced the launch of three new mutual funds – Invesco Global Infrastructure Fund, Invesco Strategic Income Fund and Invesco Strategic Real Return Fund.
“We are always looking for ways to leverage the depth and breadth of our investment management capabilities to meet client needs,” said Gary Wendler, Head of Product Development & Investment Measurement/Risk. “These funds give our clients additional tools and a fresh approach to build portfolios that seek to address two very important needs in light of the current and potentially future market backdrop.”
Invesco Global Infrastructure Fund is the newest addition to Invesco’s suite of alternative mutual funds that seeks to provide total return through growth of capital and current income. It may also provide investors with a hedge against potential inflation and an opportunity for portfolio diversification. The fund will invest in equity securities of companies with infrastructure assets in the US and abroad, including up to 20% in master limited partnerships, and be managed by the Invesco Real Estate team, which oversees approximately $60 billion in real assets (physical/tangible assets that have intrinsic value like real estate investment trusts and direct property).
The team is bolstered by its global presence with 18 offices in 12 different countries. With the Invesco Global Infrastructure Fund the management team will attempt to maximize predictability and consistency of investment returns and minimize risk through strict attention to portfolio design.
“Our comprehensive approach to stringent research and our global reach helps us identify investment value. We believe compelling long-term performance can be achieved by investing in infrastructure companies with highly visible cash flows, strong balance sheets and dependable demand characteristics,” said Joe Rodriguez, lead portfolio manager for Invesco Global Infrastructure Fund and Head of Global Real Estate Securities for Invesco Real Estate. “Our team’s investment focus has always been on utilizing local market expertise to best evaluate the cash flows derived from tangible, long-lived assets.”
Invesco Strategic Income Fund and Invesco Strategic Real Return Fund offer a new approach to the fixed income markets for those looking to potentially capture additional income or even growth. Both funds will draw from the experience of Invesco Fixed Income, which manages more than $230 billion in fixed income assets.
“Given the potential for rising interest rates, which can put more traditional bond strategies under pressure, now may be the time for investors to consider new tactics to generate income and provide growth in their portfolios,” said Rob Waldner, Head of Global Macro and Chief Strategist for Invesco Fixed Income and portfolio manager of the Invesco Strategic Income Fund.
Invesco Strategic Income Fund will look to provide current income, and secondarily long-term growth of capital, by investing primarily in US and foreign debt securities, including emerging market debt securities. The team will broadly pursue income across such global fixed income sectors as high yield and investment grade credit, emerging markets, bank loans, and foreign and US government securities.
The management team will use a top-down analysis of macroeconomic trends along with bottom-up fundamental analysis of market sub-sectors and individual issuers from more than 70 specialized research analysts to identify investable information advantages. The dynamic balancing of the top-down and bottom-up investment views is designed to help the team identify and take advantage of opportunities in any market environment or geographic region. The investment process is underpinned by a strategic allocation across fixed income markets that allows for tactical adjustments in an effort to capitalize on relative value and forward looking expectations.
Invesco Strategic Real Return Fund will seek to mitigate the effects of unanticipated inflation and to provide current income. The fund will employ a diversified approach to managing inflation risk by using different fixed income asset classes, including Treasury Inflation Protected Securities (TIPS), high yield bonds and bank loans, which have the potential to perform well in inflationary environments while still offering competitive yield. The management team will use a top-down analysis of macroeconomic trends along with bottom-up fundamental analysis of market sub-sectors and individual issuers from more than 70 specialized research analysts to identify investable information advantages throughout a market cycle. A risk-parity approach will be employed to determine initial asset allocation of fund holdings and then input from Invesco Fixed Income’s Investment Strategy Team will be used for ongoing allocation decisions.
“With yields so low and credit spreads tight, we believe some investors are going to have to broaden their search for opportunities in the bond markets,” Mr. Waldner said. “We are transitioning to a new investing environment and it will be important to be prepared with a well-defined macro investment strategy. These new products offer a more active approach to asset allocation and security selection, which we believe benefits investors as opportunities shift between market/sector rotation and security selection.”