Invesco expanding product suite with eye toward inflation protection, income generation

Product launch features alternative fund, new approach to fixed income with two flexible portfolios

May 05, 2014, 16:01 ET from Invesco

HOUSTON, May 5, 2014 /PRNewswire/ -- As financial advisors continue to look for ways to diversify client portfolios to reach savings goals, Invesco today announced the launch of three new mutual funds – Invesco Global Infrastructure Fund, Invesco Strategic Income Fund and Invesco Strategic Real Return Fund.

"We are always looking for ways to leverage the depth and breadth of our investment management capabilities to meet client needs," said Gary Wendler, Head of Product Development & Investment Measurement/Risk.  "These funds give our clients additional tools and a fresh approach to build portfolios that seek to address two very important needs in light of the current and potentially future market backdrop."

Invesco Global Infrastructure Fund is the newest addition to Invesco's suite of alternative mutual funds that seeks to provide total return through growth of capital and current income. It may also provide investors with a hedge against potential inflation and an opportunity for portfolio diversification. The fund will invest in equity securities of companies with infrastructure assets in the US and abroad, including up to 20% in master limited partnerships, and be managed by the Invesco Real Estate team, which oversees approximately $60 billion* in real assets (physical/tangible assets that have intrinsic value like real estate investment trusts and direct property).

The team is bolstered by its global presence with 18 offices in 12 different countries. With the Invesco Global Infrastructure Fund the management team will attempt to maximize predictability and consistency of investment returns and minimize risk through strict attention to portfolio design.

"Our comprehensive approach to stringent research and our global reach helps us identify investment value. We believe compelling long-term performance can be achieved by investing in infrastructure companies with highly visible cash flows, strong balance sheets and dependable demand characteristics," said Joe Rodriguez, lead portfolio manager for Invesco Global Infrastructure Fund and Head of Global Real Estate Securities for Invesco Real Estate. "Our team's investment focus has always been on utilizing local market expertise to best evaluate the cash flows derived from tangible, long-lived assets."

Invesco Strategic Income Fund and Invesco Strategic Real Return Fund offer a new approach to the fixed income markets for those looking to potentially capture additional income or even growth. Both funds will draw from the experience of Invesco Fixed Income, which manages more than $230 billion* in fixed income assets.

"Given the potential for rising interest rates, which can put more traditional bond strategies under pressure, now may be the time for investors to consider new tactics to generate income and provide growth in their portfolios," said Rob Waldner, Head of Global Macro and Chief Strategist for Invesco Fixed Income and portfolio manager of the Invesco Strategic Income Fund.

Invesco Strategic Income Fund will look to provide current income, and secondarily long-term growth of capital, by investing primarily in US and foreign debt securities, including emerging market debt securities. The team will broadly pursue income across such global fixed income sectors as high yield and investment grade credit, emerging markets, bank loans, and foreign and US government securities.

The management team will use a top-down analysis of macroeconomic trends along with bottom-up fundamental analysis of market sub-sectors and individual issuers from more than 70 specialized research analysts to identify investable information advantages. The dynamic balancing of the top-down and bottom-up investment views is designed to help the team identify and take advantage of opportunities in any market environment or geographic region. The investment process is underpinned by a strategic allocation across fixed income markets that allows for tactical adjustments in an effort to capitalize on relative value and forward looking expectations.

Invesco Strategic Real Return Fund will seek to mitigate the effects of unanticipated inflation and to provide current income. The fund will employ a diversified approach to managing inflation risk by using different fixed income asset classes, including Treasury Inflation Protected Securities (TIPS), high yield bonds and bank loans, which have the potential to perform well in inflationary environments while still offering competitive yield.

The management team will use a top-down analysis of macroeconomic trends along with bottom-up fundamental analysis of market sub-sectors and individual issuers from more than 70 specialized research analysts to identify investable information advantages throughout a market cycle. A risk-parity1 approach will be employed to determine initial asset allocation of fund holdings and then input from Invesco Fixed Income's Investment Strategy Team will be used for ongoing allocation decisions.

"With yields so low and credit spreads tight, we believe some investors are going to have to broaden their search for opportunities in the bond markets," Mr. Waldner said. "We are transitioning to a new investing environment and it will be important to be prepared with a well-defined macro investment strategy. These new products offer a more active approach to asset allocation and security selection, which we believe benefits investors as opportunities shift between market/sector rotation and security selection."

About Invesco Ltd.
Invesco Ltd. is a leading independent global investment management firm, dedicated to helping investors worldwide achieve their financial objectives. By delivering the combined power of our distinctive investment management capabilities, Invesco provides a wide range of investment strategies and vehicles to our clients around the world. Operating in more than 20 countries, the firm is listed on the New York Stock Exchange under the symbol IVZ. Additional information is available at

Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.'s retail mutual funds, exchange-traded funds and institutional money market funds and the subdistributor for its STIC Global Funds. It is an indirect, wholly owned subsidiary of Invesco Ltd.


Before investing, investors should carefully read the prospectus and/or summary prospectus and carefully consider the investment objectives, risks, charges and expenses. For this and more complete information about the fund(s), investors should ask their advisers for a prospectus/summary prospectus or visit

About Risk

Alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors considering alternatives should be aware of their unique characteristics and additional risks from the strategies they use. Like all investments, performance will fluctuate. You can lose money.

Infrastructure-Related Companies Risk: Infrastructure-related companies are subject to a variety of industry specific risk factors that may adversely affect their business or operations, including costs associated with environmental, government and other regulations, high interest costs, high leverage, economic slowdown, increased competition, commodity prices, unfavorable tax laws or accounting policies, etc. They are also affected by environmental damage, difficulty raising adequate financing, increased susceptibility to terrorist acts or political actions and general market sentiment.

MLP Risk: Although the characteristics of MLPs closely resemble a traditional limited partnership, a major difference is that MLPs may trade on a public exchange or in the over-the-counter market. Although this provides a certain amount of liquidity, MLP interests may be less liquid and subject to more abrupt or erratic price movements than conventional publicly traded securities. The risks of investing in an MLP are similar to those of investing in a partnership and include more flexible governance structures, which could result in less protection for investors than investments in a corporation. MLPs are generally considered interest-rate sensitive investments. During periods of interest rate volatility, these investments may not provide attractive returns. Additionally, if the Fund were to invest more than 25% of its net assets in MLPs this could cause the Fund to lose its status as regulated investment company under Subchapter M of the Code.

MLP Tax Risk: A change in current tax law, or a change in the underlying business mix of a given MLP, could result in an MLP being treated as a corporation for US federal income tax purposes. This would result in such MLP being required to pay U.S. federal income tax on its taxable income and could result in a reduction of the value of the MLP.

High yield bonds involve a greater risk of default or price changes due to changes in the issuer's credit quality. The values of high yield bonds fluctuate more than those of higher quality bonds and can decline significantly over short time periods.

The income you receive from the funds is based primarily on prevailing interest rates, which can vary widely over the short- and long-term. If interest rates drop, your income from the funds may drop as well.

The value of an inflation-indexed security (such as TIPS) tends to decrease when real interest rates increase, and increase when real interest rates decrease. Interest payments on inflation-indexed securities will vary along with changes in the Consumer Price Index.

Fixed-income investments are subject to credit risk of the issuer and the effects of changing interest rates. Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa. An issuer may be unable to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer's credit rating.

The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, political and economic instability, and foreign taxation issues.  An investment in emerging market countries carries greater risks compared to more developed economies.

The investment techniques and risk analysis used by the portfolio managers may not produce the desired results.

Most senior loans are made to corporations with below investment-grade credit ratings and are subject to significant credit, valuation and liquidity risk. The value of the collateral securing a loan may not be sufficient to cover the amount owed, may be found invalid or may be used to pay other outstanding obligations of the borrower under applicable law. There is also the risk that the collateral may be difficult to liquidate, or that a majority of the collateral may be illiquid.

Each fund is subject to specific risks.  Please see the prospectus for more information regarding the risks associated with an investment in each fund.

1Risk parity is a portfolio optimization technique where the different asset classes contribute equally to overall portfolio risk.

*As of March 31, 2014.

Diversification does not guarantee a profit or eliminate the loss of risk.

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SOURCE Invesco