Invesco

Thailand has been held up as a model of a country that has dealt well with the virus. It has only recorded 59 deaths from Covid-19 and there have been no domestic infections since June (the only cases since then have been people coming into the country). Other countries in the region have also performed well: Singapore and Hong Kong have only recorded a total of 132 deaths between them. You might think that these countries have been able to a large extent to get ‘back to normal’, and that stocks which initially were sold off heavily would have rebounded back to where they started the year.

China is a land rich in compelling bottom-up investment opportunities. This is based on our expectations that its domestic economy will emerge as a reliable driver of growth while the increasing digitalisation of Chinese society is opening up new markets which some companies are taking advantage of to enhance their product offerings. While selecting stocks, we favour private enterprises which demonstrate entrepreneurship and possess a notable track record in running businesses for their shareholders.

Historically, equity dividends and fixed income coupons have been an incredibly important component of income investing. However, current macroeconomic forces mean that both are under pressure. Fixed income yields are low and dividends have been, or are, at risk of being cut.

Randall Dishmon discusses his investment philosophy and approach.

In the post COVID-19 era, domestic consumption plays a bigger role in driving economic recovery. Asia, especially North Asia, has the advantage of boosting domestic consumption as the COVID-19 pandemic is largely under control.

“Diversification is the only free lunch in finance” is a cliché which is easy to dismiss but one which captures an important truth: in a world where it is difficult to predict returns, lowering volatility without reducing return is extremely valuable.

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.

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.

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.

Listen to the replay to hear fund managers Mike Matthews and Thomas Moore discuss their views on fixed income markets and the opportunities they see across the risk spectrum presented by the current environment and beyond, as well as reflecting on the portfolio positioning and performance.

In the 20 odd years that I have been in the financial markets, inflation has rarely ignited as much debate as it is doing right now. I see that in meetings across the Henley investment floor and in numerous blogs and research pieces written by Invesco colleagues worldwide.

Listen to the replay as fund managers from our fixed income, global equities and multi-asset teams discuss the outlook for markets and portfolio ideas to help investors navigate the income dilemma.

Many investors are familiar with the investment grade corporate bond market and its range of issuers. However, they may be less familiar with the types of corporate issuers with lower credit ratings in the high yield market.

Listen to the replay to hear Will and Ian discuss how markets have been impacted, with a particular focus on China, and the outlook for the region as we look beyond the pandemic.

William Lam discusses how he is positioning his Invesco Asian Fund (UK) after the rebound, having outlined 12 weeks earlier – near the trough of the Asian equity market - how he was positioning the fund for a rebound.

In anticipation of a resumption of economic growth, the UK equity market has rapidly recovered over the past two months. Jonathan Brown and Robin West caution that it could be two-three years, however, before the economy returns to full health. Given their preference for quality businesses with strong balance sheets, they believe that it’s never been more important to maintain their focus on businesses with the ability to do well even in more difficult times.

Generating attractive levels of income in today’s low yield environment without taking excessive risk can be difficult. One way to try to meet this challenge is to broaden the potential investment universe to include both bonds and equities in a mixed-asset strategy.

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).