Introducing the Invesco Euro Corporate Bond Fund

Diversification – Bonds have played an essential role in diversifying investor strategy and helping to mitigate strategy losses during periods of negative equity returns.

Income generation – bonds provide a fixed amount of income at regular intervals in the form of coupon payments.

Corporate bond is debt issued by a company in order for it to raise capital. An investor who buys a corporate bond is effectively lending money to the company in return for a series of interest payments, but these bonds may also actively trade on the secondary market.

A government bond represents debt issued by a government and sold to investors to support spending. Government bonds are considered low-risk investments since the government backs them. Because of their relatively low risk, government bonds typically pay low interest rates.

High-yield bonds tend to have lower credit ratings of below BBB- from Standard & Poor’s and Fitch, or below Baa3 from Moody’s. High-yield bonds are more likely to default and have higher price volatility. They therefore pay higher interest rates than investment-grade bonds.

Duration measures the sensitivity of a bond to changes in interest rates. Time to maturity and a bond’s coupon rate are two factors that affect a bond’s duration. Generally, the higher a bond’s duration is, the more its price will increase when interest rates fall and vice-versa.

A fixed-income strategy’s duration is computed as the weighted average of individual bond durations held in the strategy – strategy duration can therefore be actively managed by strategy managers to reduce or increase strategy risk as they see fit.