A global corporate bond strategy with a dual objective. To generate income and growth while supporting the transition to a low carbon economy.
Reducing carbon emissions will take political will, new technology, and changes in lifestyle and behaviour. Not to mention a huge amount of finance. The risks and opportunities are unprecedented.
You recycle.
You drive an electric car.
You care about energy efficiency at home.
But what are you doing with your investments?
Now more than ever, investors are thinking about how they can align their portfolios with their values. But they also need healthy returns.
ECO Bond is our first strategy with a dual objective, aiming to provide income and growth while supporting the transition to a low carbon economy.
It finances businesses with strong climate characteristics – adaptable or innovative companies well-suited to a world in transition.
Several key themes are shaping the transition story and our portfolio. One of these is green energy.
As well as investing in renewable power generation companies, we finance those that are upgrading the transmission and distribution networks that deliver green power.
The International Energy Agency has estimated that spending on clean energy needs to more than triple by 2030 if we’re to meet global sustainability goals.
We’re looking for companies that are acting today, to position themselves as tomorrow’s winners.
Electric vehicles are another key area of focus.
We’re already seeing more of them on the roads. And the shift is only in its infancy.
Many car manufacturers are aiming to move half their global production to electric vehicles by 2030.
We look for those that are going further than their peers.
But it’s not just about cherry-picking today’s heroes. We take a long-term approach. Which is why we are more than just a carbon avoidance strategy.
We finance companies in carbon intense sectors, if we believe they’re going a step further in their efforts to reduce emissions.
Because the best way to support transition is by investing in companies that are committed to improving, as well as those that are already there.
As we move towards a net-zero world, winners and losers will emerge as some businesses flourish and others fail to adapt.
We actively select companies with strong climate credentials that are well positioned for the transition.
Not all sustainable companies issue green bonds. That's why we don't restrict ourselves to green bonds only. Instead, we form our own judgement on a company’s financial and green credentials. For example, if a company we like issues green and non-green bonds, we can choose which is the best value.
We invest in companies in carbon intense sectors, if they are going a step further in their efforts to reduce emissions. We believe that this is the best way to support transition.
We favour companies which:
We invest in renewable power and provide finance to companies that are upgrading the transmission and distribution networks that deliver green power. The electric utility companies in the fund produce electricity at half the CO² of the global average for the sector.
We also have exposure to electric vehicles – an industry that is experiencing huge growth. The car manufacturers in the fund plan to have nearly two thirds of their total production dedicated to electric vehicles or hybrids within five years.
View the Invesco Environmental Climate Opportunities Bond Fund (UK) product page for KIIDs and factsheets.
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.
Catch up on monthly fixed income insights from our emerging market local debt team.
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.
Tom HemmantWe believe in a blended approach to climate investing. That’s why we focus on issuers with strong climate characteristics in both low CO2 sectors and high CO2 transition sectors
The portfolio managers for this strategy have a combined 50 years of industry experience. They are supported by the rest of Invesco’s Fixed Interest Team and draw on the expertise of ESG specialists.
Let us know using this form and one of our specialist team will quickly get back to you.
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. The securities that the Fund invests in may not always make interest and other payments nor is the solvency of the issuers guaranteed. Market conditions, such as a decrease in market liquidity for the securities in which the Fund invests, may mean that the Fund may not be able to sell those securities at their true value. These risks increase where the Fund invests in high yield or lower credit quality bonds. The fund has the ability to make use of financial derivatives (complex instruments) which may result in the fund being leveraged and can result in large fluctuations in the value of the fund. Leverage on certain types of transactions including derivatives may impair the fund’s liquidity, cause it to liquidate positions at unfavourable times or otherwise cause the fund not to achieve its intended objective. Leverage occurs when the economic exposure created by the use of derivatives is greater than the amount invested resulting in the fund being exposed to a greater loss than the initial investment. The fund may be exposed to counterparty risk should an entity with which the fund does business become insolvent resulting in financial loss. The fund’s performance may be adversely affected by variations in interest rates. The use of ESG criteria may affect the product’s investment performance and therefore may perform differently compared to similar products that do not screen investment opportunities against ESG criteria.
Data as at 31.12.2023, unless otherwise stated. This is marketing material and 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.
Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. For the most up to date information on our funds, please refer to the relevant fund and share class-specific Key Investor Information Documents, the Supplementary Information Document, the Annual or Interim Reports and the Prospectus, which are available on our website.
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