Invesco Euro Corporate Bond Fund

Transcription

1 Invesco Euro Corporate Bond Fund A-Acc shares May 2018 This marketing document is exclusively for use by Professional Clients and Financial Advisers in Continental Europe (as defined in the important information) and Ireland, Qualified Investors in Switzerland and Professional Clients in Cyprus, Dubai, Jersey, Guernsey, Isle of Man, Malta and the UK. This document may also be used by financial intermediaries in the United States as defined in the important information. This document is not for consumer use, please do not redistribute.

2 Contents Invesco Euro Corporate Bond Fund Investment philosophy and process Portfolio performance and positioning 2

3 Invesco Euro Corporate Bond Fund

4 Invesco Euro Corporate Bond Fund Key fund features 1 An investment approach with proven success Having invested through a variety of market conditions, the fund management team is very experienced in finding opportunities that offer the best potential for long-term returns. The fund managers combine security picking with economic and sector analysis. This way they can identify opportunities that the market has not factored in 2 A core asset class Europe s corporate bond markets are a large component of the global credit universe, with a total market value of over 2 trillion. 1 This provides a deep pool of capital for corporations across the world and a diversified universe of investments for the fund 1 Source: BoFAML as at 30 June Investment Grade and High Yield bonds. Based on European Currency High Yield Index and Euro Corporate bond index data. 4

5 Paul Read & Julien Eberhardt Fund managers Paul Read Julien Eberhardt With many sovereign bonds offering very low yields, corporate bonds can be a relatively attractive source of income. Paul Read, Fund manager 5

6 19801/SR/Fixed Interest/Mar18 EMEA 2018 The Invesco Perpetual Fixed Interest Team Stable team, hiring and promoting Fund Manager Fund Manager/ Analyst Analyst Markets & Risk Product Management Paul Causer Team Co-Head 24 years (34) Asad Bhatti Fund Manager/ Senior Analyst, CFA 15 years (17) Edward Craven Senior Analyst, FCA 7 years (14) Dominic de Ban Head of Markets & Risk 7 years (29) Lewis Aubrey-Johnson Head of Fixed Income Products 14 years (21) Paul Read Team Co-Head 23 years (32) Rhys Davies Fund Manager/ Senior Analyst, CFA 14 years (15) Tom Hemmant Senior Analyst, ACA 7 years (15) Dan Dewar Senior Dealer 5 years (24) Alister Brown Product Director 7 years (28) Michael Matthews Fund Manager 22 years (24) Julien Eberhardt Fund Manager/ Senior Analyst, CFA 9 years (12) Jessica Svantesson Credit Analyst 3 years (11) Gareth Dunsmore Senior Dealer 3 years (15) Cathal Dowling Product Director 3 years (19) Stuart Edwards Fund Manager 12 years (21) Thomas Moore Fund Manager/ Senior Analyst, CFA 2 years (18) Herin Shah Credit Analyst, ACA 2 years (17) Olivia Finch Dealer 5 years (7) Fund Management Assistant Alex Ivanova Fund Manager, CFA 2 years (17) Jack Parker Deputy Fund Manager/ Senior Macro Analyst, CFA, 7 years (10) Mark McDonnell Macro Analyst 3 years (5) Simon Cheng Desk Analyst/ Dealer 10 years (14) Mei Ong Fund Management Assistant 17 years (24) Peter Jones Senior Analyst <1 year (14) Roddy More Analyst <1 year (4) Source: Invesco Perpetual as at 31 March Years refers to time in team and () refers to industry experience. Subject to rounding. 6

7 Invesco Euro Corporate Bond Fund Fund facts Fund name Fund objectives Invesco Euro Corporate Bond Fund The Fund is invested to achieve, in the medium to long-term, a competitive overall investment return in Euros with relative security of capital in comparison to equities 1 Launch date 31 March 2006 Domicile Legal structure Base currency Unit type Reference index Luxembourg Luxembourg SICAV with UCITS status EUR Accumulation and distribution Mstar GIF OS EUR Corporate Bond Share class Unit type Share class ccy Annual management fee Minimum investment ISIN code A Acc EUR 1.00% EUR 1,000 LU There may be additional share classes 2 registered for sale in individual jurisdictions. 1 For the full objectives and investment policy please consult the current prospectus. 2 For information on fund and fund s shares registrations, please refer to the appropriate internet site or your local Invesco office. Not all share classes are the same nor do they necessarily suit every investor. There may be differences in fee structures, in minimum investment amounts, etc. Please check the fund prospectus for additional information. 7

8 Investment philosophy and process

9 Investment philosophy We will only take risk if we expect to be rewarded Active We do not track indices. No minimum holding requirements at stock, sector or country level Flexible and pragmatic Our approach is informal and iterative. We have flexible funds which enable us to reduce risk when we are cautious Market oriented We have a strong network of trading counterparties in London and other financial centres Although every effort will be made, it cannot be guaranteed that the stated targets will be reached. 9

10 Four stage investment process Macro analysis Credit analysis Value assessment and security selection Portfolio construction and risk management For illustrative purposes only. 10

11 Stage 1 is macro analysis The aim of our macro analysis is to 11 Develop a view of the economic outlook Anticipate broad trends in yields and spreads We use a wide variety of sources to identify key economic themes Primary data sources (via Bloomberg and Macrobond) Sell side strategists and economists Invesco economists (team resources and John Greenwood) Henley equity colleagues Company management We produce frequent written analysis and meet regularly to discuss market evolution, economic data and credit research Weekly team meeting Monthly strategy meeting Ad hoc economic and credit meetings Written analysis includes daily market reports, weekly market and economic reports, company specific reports and meeting summaries

12 Stage 2 is credit analysis Team responsibilities and idea generation Our seven credit analysts cover industrial sectors across high yield and investment grade Idea generation is the responsibility of analysts and fund managers. Ideas come from: Expected issuance Financial reporting A change in credit spread Change in business outlook M&A activity Governance concerns Change in credit rating New research Meetings with management Views from Henley equity colleagues 12

13 Credit analysis encompasses a range of inputs Ratings Operational Balance sheet Cashflow Protection Moody s Management Capital structure S&P Fitch Competitive position Business outlook Leverage Equity Cash Debt mix/ maturity EBITDA Capital expenditure Working capital Interest coverage Covenants Assets values Franchise Banks For illustrative purposes only. 13

14 Stage 3 is value assessment and security selection Value assessment is the fund manager s judgement We consider the risk and return profile of a bond relative to cash and government bonds as well as corporate bonds Each bond selected on merit (no index tracking) We seek to understand why an opportunity may exist 14

15 Stage 4 is portfolio construction and risk management We maintain well diversified funds but can express conviction Bond weightings in portfolios are a function of the risk and return of a bond in the context of the fund We manage portfolio risk from the perspective of: Individual positions (price, spread, yield, reporting, news flow, research) Overall credit risk (rating, sector and issuer exposure) Liquidity Duration VaR and performance contribution (using Barclays Point) We are also closely monitored: 15 Investment Oversight Team with a dedicated fixed income risk specialist CIO Challenge Process (meeting with CIO and Head of Investment Oversight Team) Independent Risk Function (IRF) which reports to the boards of Management Companies Compliance (investment and borrowing powers monitoring etc. using Charles River Development pre-trade compliance system*, prospectus review) Internal Audit (systems/trading monitoring) * External systems used for portfolio performance and compliance purposes.

16 Portfolio performance and positioning

17 Invesco Euro Corporate Bond Fund Indexed performance Indexed performance /13 10/13 04/14 10/14 04/15 10/15 04/16 10/16 04/17 10/17 04/18 Fund Mstar GIF OS EUR Corporate Bond The performance data shown relates to a past period. Past performance is not a guide to future returns. 1 (Source: 2017 Morningstar as at 30 April 2018) Fund returns are inclusive of gross income re-invested and net of the ongoing charge and portfolio transaction costs, cumulative in fund currency. The figures do not reflect the entry charge payable by individual investors. The performance data shown does not take account of the commissions and costs incurred on the issue and redemption of units. 17

18 Invesco Euro Corporate Bond Fund Cumulative and calendar year performance Cumulative performance 1 in % YTD 1 month 1 year 3 years 5 years Fund Index Quartile ranking Absolute ranking 180/ /198 85/ /168 80/141 Mstar GIF OS Sector: EUR Corporate Bond Calendar year performance 1 in % Fund Index LU Rolling 12 month performance to end of 1 in % Apr 2014 Apr 2015 Apr 2016 Apr 2017 Apr 2018 Fund Index The performance data shown relates to a past period. Past performance is not a guide to future returns. 1 (Source: 2017 Morningstar as at 30 April 2018) Fund returns are inclusive of gross income re-invested and net of the ongoing charge and portfolio transaction costs, cumulative in fund currency. The figures do not reflect the entry charge payable by individual investors. The performance data shown does not take account of the commissions and costs incurred on the issue and redemption of units. 2 Mstar GIF OS EUR Corporate Bond. 18

19 Invesco Euro Corporate Bond Fund Top 10 bond issuers Top 10 bond issuers 1 (total holdings: 188) in % AT&T 4.1 Allianz 3.1 Unicredit 2.8 Apple 2.8 Total 2.4 Walgreens 2.4 Coca Cola 2.1 Sanofi 2.0 Johnson & Johnson 2.0 JPM Source: Invesco as at 30 April Portfolio weightings can change any time and without warning. This is no financial advice and no recommendation to buy/hold/sell these securities. There is no guarantee that Invesco will hold these securities within its funds in the future. 19

20 Invesco Euro Corporate Bond Fund Credit ratings Credit ratings 1 Average rating: BBB+ Credit ratings of the fund in % 1 in % AAA 5.6 AA 12.4 A 22.7 BBB 43.2 BB 7.5 B 3.8 DERIVATIVE -0.1 Cash 4.9 AAA AA A BBB BB B DERIVATIVE Cash 1 Source: Invesco as at 30 April Portfolio weightings can change any time and without warning. 20

21 Invesco Euro Corporate Bond Fund Modified duration 1 in years Modified Duration 5.4 Yield % 1 Gross Current Yield 2.4 Gross Redemption Yield year characteristics 2 Alpha -0.9 Beta 1.2 Correlation 0.9 Information Ratio -0.5 Sharpe Ratio 0.2 Tracking Error 1.4 Volatility in % Source: Invesco as at 30 April Source: Morningstar as at 30 April Portfolio weightings can change any time and without warning. 21

22 Risk Warnings 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. Investments in debt instruments which are of lower credit quality 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. 22

23 Important Information This marketing document is exclusively for use by Professional Clients and Financial Advisers in Continental Europe (as defined below) and Ireland, Qualified Investors in Switzerland and Professional Clients in Cyprus, Dubai, Jersey, Guernsey, Isle of Man, Malta and the UK. This document may also be used by financial intermediaries in the United States as defined below. By accepting this document, you consent to communicate with us in English, unless you inform us otherwise. This document is not for consumer use, please do not redistribute. Data as at , unless otherwise stated. This document 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. Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals, they are subject to change without notice and are not to be construed as investment advice. For more information on our funds, please refer to the most up to date relevant fund and share class-specific Key Investor Information Documents, the latest Annual or Interim Reports and the latest Prospectus, and constituent documents. This information is available using the contact details of the issuer and is without charge. Further information on our products is available in English using the contact details shown. This marketing document is not an invitation to subscribe for shares in the fund and is by way of information only, it should not be considered financial advice. This does not constitute an offer or solicitation by anyone in any jurisdiction in which such an offer is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. Persons interested in acquiring the fund should inform themselves as to (i) the legal requirements in the countries of their nationality, residence, ordinary residence or domicile; (ii) any foreign exchange controls and (iii) any relevant tax consequences. As with all investments, there are associated risks. This document is by way of information only. Asset management services are provided by Invesco in accordance with appropriate local legislation and regulations where applicable. The fund is available only in jurisdictions where its promotion and sale is permitted. 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. Fee structure and minimum investment levels may vary dependent on share class chosen. Please check the most recent version of the fund prospectus in relation to the criteria for the individual share classes and contact your local Invesco office for full details of the fund registration status in your jurisdiction.please be advised that the information provided in this document is referring to Class A ( accumulation - EUR) exclusively. This fund is domiciled in Luxembourg. For the distribution of this document, Continental Europe is defined as Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Liechtenstein, Luxembourg, Netherlands, Norway, Portugal, Spain and Sweden. Germany, Austria, Switzerland and Liechtenstein: This document is issued in Germany by Invesco Asset Management Deutschland GmbH. This document is issued in Austria by Invesco Asset Management Österreich Zweigniederlassung der Invesco Asset Management Deutschland GmbH, and in Switzerland as well as Liechtenstein by Invesco Asset Management (Schweiz) AG. Subscriptions of shares are only accepted on the basis of the most up to date legal offering documents. The legal offering documents (fund & share class specific Key Investor Information Document, prospectus, annual & semi-annual reports, articles and trustee deed) are available free of charge at our website and in hardcopy and local language from the issuers: Invesco Asset Management Deutschland GmbH, An der Welle 5, D Frankfurt am Main, Invesco Asset Management Österreich Zweigniederlassung der Invesco Asset Management Deutschland GmbH, Rotenturmstrasse 16-18, A-1010 Wien, and Invesco Asset Management (Schweiz) AG, Talacker 34, CH-8001 Zurich, who acts as a representative for the funds distributed in Switzerland. In Liechtenstein the KIID and Prospectus are available in German and English on respectively. Paying agent in Switzerland: BNP PARIBAS SECURITIES SERVICES, Paris, succursale de Zurich, Selnaustrasse 16, CH-8002 Zürich. Paying agent in Liechtenstein: LGT Bank AG, Herrengasse 12, FL-9490 Vaduz. Denmark: The fund is not registered for public distribution in this jurisdiction. This document is provided only to Professional Clients and must not be redistributed to retail clients. Belgium, Denmark, Finland, France, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden: This document is issued by Invesco Asset ManagementS.A., rue de Londres, Paris, France. Ireland: Issued by Invesco Global Asset Management DAC, Central Quay, Riverside IV, Sir John Rogerson s Quay, Dublin 2, Ireland. Regulated in Ireland by the Central Bank of Ireland. Cyprus: Issued by Invesco Asset Management S.A. 18, rue de Londres, F Paris. Authorised and regulated by the Autorité des marchés financiers in France. Any scheme provided by the Cyprus regulatory system, for the protection of retail clients, does not apply to offshore investments. Compensation under any such scheme will not be available.the Invesco Euro Corporate Bond Fund is subject to the provisions of the European Directive 2009/65/EC. Dubai: Issued by Invesco Asset Management Limited, Po Box , DIFC Precinct Building No 4, Level 3, Office 305, Dubai, United Arab Emirates. Regulated by the Dubai Financial Services Authority. Jersey and Guernsey: Issued by Invesco International Limited, 2nd Floor, Orviss House, 17a Queen Street, St Helier, Jersey, JE2 4WD. Regulated by the Jersey Financial Services Commission. In Guernsey, the fund can only be promoted to Professional Clients. Isle of Man: Issued by Invesco Global Asset Management DAC, Central Quay, Riverside IV, Sir John Rogerson s Quay, Dublin 2, Ireland. Regulated in Ireland by the Central Bank of Ireland. The Invesco Euro Corporate Bond Fund is an unregulated scheme that cannot be promoted to retail clients in the Isle of Man. The participants in the scheme will not be protected by any statutory compensation scheme. Malta: Issued by Invesco Asset Management S.A. 18, rue de Londres, F Paris. Authorised and regulated by the Autorité des marchés financiers in France. Investments should be based on the full details of the Prospectuses. The Prospectuses, the fund and share class-specific Key Investor Information Documents and further information are available from Invesco Asset Management S.A. UK: Issued by Invesco Fund Managers Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK. Authorised and regulated by the Financial Conduct Authority. For the purposes of UK law, the fund is a recognised scheme under section 264 of the Financial Services & Markets Act The protections provided by the UK regulatory system, for the protection of Retail Clients, do not apply to offshore investments. Additional information for financial intermediaries in the United States: This document is intended for distribution to US financial intermediaries for informational purposes and in relation to their activities with offshore clients only. The Funds are not registered under any US securities law, and may not be offered or sold directly or indirectly in the US, its territories or possessions, nor to any US persons, citizens or residents. The Fund must not be marketed on US soil. This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial professional before making any investment decisions. Issued in the US by Invesco Distributors, Inc., 11 Greenway Plaza, Suite 1000, Houston, Texas 77046, USA. Invesco Distributors, Inc. is the appointed US sub-distributor of the Invesco 23 Funds SICAV and Invesco Fund Series 1-6. All entities are indirect, wholly owned subsidiaries of Invesco Ltd.EMEA449/2018