Audio | 21 April 2020 | Ben Gutteridge, Director of MPS, Invesco Investment Solutions and Thomas Moore, High Yield Bond Fund Manager, Invesco
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.
The conversation covers how the High Yield asset class has reacted to the CoVid-19 pandemic, the collapse in the oil price and the scale of policy support. Tom concludes with a brief summary of where he sees the most interesting opportunities in this space.
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Source: Lipper as at 31 March 2020. The IA £ High Yield Sector is a comparator benchmark. Given its asset allocation the Fund’s performance can be compared against the Benchmark. However, the Fund is actively managed and is not constrained by any benchmark. Fund performance figures are based on the Z (accumulation) share class. As this was launched on 12 November 2012, for the periods prior to this launch date, performance figures are based on the Accumulation share class, without any adjustment for fees. Performance figures for all share classes can be found in the relevant Key Investor Information Document. Fund performance figures are shown in sterling, inclusive of reinvested income and net of the Ongoing Charge and portfolio transaction costs. Sector average performance is calculated on an equivalent basis. *Invesco High Yield Fund (UK) was launched on 14 May 1999. However, as the fund changed sector on 1 March 2009, sector performance figures are only shown since that date.
Investment risks
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. Investments in debt instruments which are of lower credit quality may result in large fluctuations in value. Changes in interest rates will result in fluctuations in value. Past performance is not a guide to future returns. Forecasts are not reliable indicators of future performance.
The value of 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.
As one of the key objectives of the fund is to provide income, the ongoing charge is taken from capital rather than income. This can erode capital and reduce the potential for capital growth.
The fund may invest in contingent convertible bonds which may result in significant risk of capital loss based on certain trigger events.
The fund’s performance may be adversely affected by variations in interest rates.
Important information
This marketing document is exclusively for use by Professional Clients and Financial Advisers in the UK. This document is not for consumer use, please do not redistribute.
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.
This podcast is marketing material and is not intended as a recommendation to invest in 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. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.
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 using the contact details shown.
Telephone calls may be recorded.
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