Including bonds and equities in a portfolio can help drive income generation across all market conditions. We examine opportunities from across the credit spectrum and combine these with European equities.
After years of low and falling yields, today’s higher interest rates environment means that bond yields are more attractive again. And fixed income is offering some of the best opportunities since the global financial crisis.
But market volatility hasn’t gone away, which means flexibility is as important as ever.
Following years of low interest rates and falling bond yields, inflation is building. This might mean higher interest rates and potential volatility in markets.
Adaptability is required to navigate this investment backdrop whilst finding opportunities to generate a sustainable income.
So whether it’s school fees, buying property, or funding a comfortable retirement, we believe our flexible mixed asset strategies can help achieve your objectives.
Mixed asset strategies combine highly active fixed income and equity allocations, with the aim of producing optimum income levels.
Bonds seek to deliver a steady income stream whilst offsetting equity volatility. Meanwhile, equities can give exposure to the typically higher returns produced by stock markets.
Asset allocation can change depending on market conditions and is critical to the success of the strategies. Without the constraints of benchmarks, we can flex to become more defensive or offensive.
Over 20 years’ experience in mixed asset investing gives us confidence operating across the fixed income and equity spectrum. That means we can decisively make the right calls and adjust the weightings.
When we build our portfolios, we aim to find opportunities that provide a reward for taking calculated risks.
This means hunting for examples of mispricing caused by market inefficiencies. And our research helps unearth bonds with strong balance sheets and predictable potential cashflows.
We don’t have biases and instead operate an unconstrained approach. Not having credit, sector or geographical limitations allows us to go further in the search for yield.
The equity allocation is predominantly focused on companies with the ability to pay strong and sustainable dividends. We target companies with visible revenues and profits that create shareholder value.
This broader remit, including scope to use derivatives as a means of finding additional income, is designed to help deliver strong returns relative to competitors.
By seeking out these fixed income and equity investments, we aim to provide you with the opportunity to benefit from the best of both worlds.
So, as markets enter a new phase of uncertainty, it might be time to take a fresh look at our mixed asset income solutions. Our focus on selecting the best income opportunities could play a key role in achieving your desired outcome.
Explore our flexible strategies now.
For complete information on risks, refer to the legal documents. Debt instruments are exposed to credit risk which is the ability of the borrower to repay the interest and capital on the redemption date. Changes in interest rates will result in fluctuations in the value of the strategy. The strategy uses derivatives (complex instruments) for investment purposes, which may result in the strategy being significantly leveraged and may result in large fluctuations in the value of the strategy. Investments in debt instruments which are of lower credit quality may result in large fluctuations in the value of the strategy. The strategy may invest in distressed securities which carry a significant risk of capital loss. The strategy may invest in contingent convertible bonds which may result in significant risk of capital loss based on certain trigger events. The strategy may invest in a dynamic way across assets/asset classes, which may result in periodic changes in the risk profile, underperformance and/or higher transaction costs.
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Thomas Moore, Co-Fund Manager, Invesco Pan European High Income FundFollowing the sharp increase in interest rates in 2022 and 2023, we now have some of the best opportunities for fixed income investing we’ve seen in the last decade, along with the income and capital growth offered by the European equity market. This is an exciting environment for the management of mixed asset strategies.
Let us know using this form and one of our specialist team will quickly get back to you.
One benefit of the bond portion of a mixed asset portfolio is that it has the potential to deliver a steady income stream while offsetting stock market volatility. Meanwhile, a benefit of the equity component is that it has the potential to deliver higher returns in the long term.
The level of income offered by European bonds is once again attractive, and fundamentals for European companies remain strong in our view.
The disparity between the price-to-earnings ratios in Europe and the US suggests that European companies may be undervalued and European equities therefore present an opportunity for investors seeking equity exposure away from the premium prices of the US market
SFDR stands for Sustainable Finance Disclosure Regulation. This is a European regulation that came into effect in 2021. Its aim is to increase transparency around sustainable investment products and to reduce the risk of greenwashing. Funds are classified as Article 6, Article 8 or Article 9 depending on their ESG approach.
Article 8 applies to funds promoting environmental and social objectives and which take more into account than just sustainability risks as required by article 6. However, article 8 funds don't have ESG objectives or core objectives – as required for becoming labeled an article 9 fund.
Data as at 30.11.2023, 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.
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