Invesco Tactical Bond

Invesco Tactical Bond is the most flexible fund in Invesco’s fixed income range. It is designed to capitalise on all the resources within the team and invest across the whole fixed-income opportunity set. The managers use an active style whereby risk can be continually adjusted according to market conditions and the level of return on offer.

Our opinion

Invesco Tactical Bond provides investors with a truly differentiated approach to most strategic bond funds. It benefits from investing in a very wide opportunity set, and by taking the best ideas from across Invesco’s team, which has helped drive strong performance.

Fund manager

The two lead managers of the Invesco Tactical Bond fund are Stuart Edwards and Julien Eberhardt. Stuart started his investment career in 1997 at Standard & Poor's as an economist, and in 2003 he joined Invesco. He became a fixed income strategist for the company’s Henley fixed interest team in 2006, and he has been a fund manager since 2010. Stuart holds a BSc in Business Economics with Computing from the University of Surrey and an MSc in Finance from Birkbeck College, University of London.

Julien is a senior credit analyst and fund manager. He started his investment career in 2005 as an analyst at Moody's and joined Invesco in 2008 as a credit analyst. Julien became a fund manager in 2014 and manages several credit and total return portfolios. He holds a master’s degree in finance from the University of Montpellier, École Supérieure de Commerce de Montpellier (France), and is a CFA charterholder.

Stuart EdwardsFund manager

Investment process

Invesco Tactical Bond fund has no industry sector or geographic constraints, and the investment strategy focuses on conviction, active management, and total return. The fund can invest in the entire bond universe, diversify risk widely, and combine short-term and long-term investments.

The investment process has five stages. In the first stage, the team analyses key factors that influence the government and corporate bond markets, such as inflation, growth, central bank policy, and political cycles.

In the second stage, the global asset allocation group meets to discuss the macro environment and valuations across asset classes. This group does not make decisions for the fund managers but acts as a forum for discussion.

In the third stage, the team's credit analysts provide detailed analysis of corporate issuers and insights into relative value. Their input is highly valued and has a significant influence on the investment decision.

In the fourth stage, once investment ideas have been considered, the managers decide whether to add to or change the portfolio based on the balance of risk and reward.

In the fifth stage, the fund managers continually monitor the prices of all securities in their funds and overall exposures.

ESG

ESG - Integrated

ESG is built into the credit analysis element of this fund’s investment process. The team uses the data from Invesco’s own in-house platform, ESGIntel, which is available to all Invesco managers, as well as some external inputs for cross-referencing the analysis. This work helps the managers understand how an issuer behaves in absolute terms, as well as compared to its peers. It is useful for the managers to understand how the ESG picture is likely to change for a firm, such as if it has policies to improve its credentials, or whether this is not a focus of the business.

Improving ESG performance over time is of particular interest to Invesco as it believes that companies that do so may enjoy more favourable financial performance in the longer term. The firm takes its responsibility as an active owner seriously, engaging with portfolio companies to encourage continual improvement and often participating in board-level dialogue.

Risk

As the fund follows an unconstrained investment approach, the positioning can differ substantially based on market conditions and the managers’ outlook. There are no limits on sectors or geographies. During the research stage, the investment team assesses key risks to determine if the potential returns justify the risks. The investment oversight team provides monthly risk reports to ensure that the portfolio is being managed in line with the investment philosophy/approach and generating value for clients.

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