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Income has been thrown firmly in the spotlight this year with dividend cuts happening across the Financials sector and elsewhere, highlighting the importance of diversifying income sources.

Before the coronavirus pandemic, the scope for traditional policy to respond to the next recession was limited. Interest rates in much of the developed world were close to zero, budget constraints left little room for fiscal expansion and central bank balance sheets had already expanded significantly.

The Invesco Tactical Bond Fund (UK) is our investment philosophy distilled into a single fund. It’s designed to allow us to align risk to reward, both the level and the type, across bond markets as the opportunity set changes. In that way we seek attractive risk-adjusted returns and to achieve income and capital growth over time.

As credit spreads have widened to their highest level in many years, we have been busy adding yield into the fund – building income streams that should benefit the fund in years to come. Paul Causer gives an update on what he has been doing in the Invesco Monthly Income Plus Fund (UK).

In the latest Invesco Podcast Ben Gutteridge, Director of Model Portfolio Services, speaks to Thomas Moore, The lead fund manager on Invesco’s High Yield Bond fund.

In recent years the UK’s fiscal backdrop has been improving, but with both Conservatives and Labour proposing big increases in investment spending, how could this affect the gilt market?

Fed Chairman Powell cites weakening global growth, trade policy developments and below-target inflation as impetus for rate cut.

Bond yields have rallied strongly since Wednesday’s Fed meeting. At the time of writing the 10-year US Treasury yield is testing 2%. We are not adding duration risk at these low levels of yield. In the UK funds, duration stays low. In the Luxembourg based funds we have reduced duration slightly.