Fund Manager Julien Eberhardt
MFin, CFA
Introducing the Invesco Euro Corporate Bond Fund
The fund managers primarily invest in investment grade bonds denominated in Euros. Without benchmark or duration constraints, they are free to adapt to changing market conditions.
See all product detailsThe opportunity for investors
Better-quality corporate bonds still offer a relatively attractive yield, despite having declined as interest rates have begun to be cut. Although credit spreads (the additional yield over government bonds) are narrow, we believe the backdrop for better-quality fixed interest remains supportive. Further interest rate cuts should also act as a positive tailwind.
Up to 30% in government and high yield bonds
This is an investment grade credit portfolio, but we have the flexibility to allocate up to 30% to high yield securities and government bonds.
Active duration management
Without duration restrictions, we can mitigate risk or take advantage of opportunities.
Little or no currency risk
With the majority of portfolio holdings denominated in EUR, there is little or no currency risk for EUR-based investors.
Why this fund?
We carry out thorough credit analysis, combining internal and external research, to find good quality companies with attractively valued bonds. The aim is to maximise returns through acceptable and well-understood credit risk exposure.
We consider the risk/return profile of any bond relative to cash, core government bonds and the rest of the fixed income universe. We only take risks that we feel will be adequately rewarded.
Our approach is flexible, pragmatic and market driven. We focus on absolute risk and return and are not constrained by an index. This allows us to take on more risk when the opportunities look attractive, or reduce risk in periods where we don’t feel it is justified.
Investment risks
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For complete information on risks, please refer to the legal documents. The value of investments and any income will fluctuate (this may partly be the result of exchange-rate fluctuations) and investors may not get back the full amount invested. 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 fund. The fund uses derivatives (complex instruments) for investment purposes, which may result in the fund being significantly leveraged and may result in large fluctuations in the value of the fund. The fund may invest in distressed securities which carry a significant risk of capital loss. The fund may invest in contingent convertible bonds which may result in significant risk of capital loss based on certain trigger events.
Meet the team
Julien Eberhardt and Tom Hemmant are responsible for managing the fund, supported by the rest of Invesco’s Fixed Income Team. Together, the two fund managers have a combined 38 years of industry experience.
Because of the flexibility we have in our mandate and the credit research resources in the team, we believe the fund can deliver attractive risk-adjusted returns from this vital income asset class.
Frequently asked questions
Diversification – Bonds have played an essential role in diversifying investor portfolios and helping to mitigate portfolio 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 portfolio’s duration is computed as the weighted average of individual bond durations held in the portfolio – portfolio duration can therefore be actively managed by fund managers to reduce or increase portfolio risk as they see fit.
Explore the team's latest insights
Fixed Income Monthly fixed income ETF update
Bond markets generally struggled in October as the market reevaluated the interest rate outlook, following a strong rally leading up to the Federal Reserve’s first rate cut. Read our latest thoughts on how fixed income markets performed during the month and what we think you should be looking out for in the near term.
November 8, 2024
Fixed Income Emerging market local debt | Monthly macro insights
Catch up on monthly fixed income insights from our emerging market local debt team.
November 7, 2024
Fixed Income Global Fixed Income Strategy Monthly Report
In our regularly updated macroeconomic analysis we offer an outlook for interest rates and currencies – and look at which fixed income assets are favoured across a range of market environments.
November 5, 2024
Important information
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Data as at 31.10.2024, 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. For information on our funds and the relevant risks, refer to the Key Information Documents/Key Investor Information Documents (local languages) and Prospectus (English, French, German, Spanish, Italian), and the financial reports, available from www.invesco.eu. A summary of investor rights is available in English from www.invescomanagementcompany.lu. The management company may terminate marketing arrangements. Not all share classes of this fund may be available for public sale in all jurisdictions and not all share classes are the same nor do they necessarily suit every investor.
EMEA3991580/2024
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