Invesco Glbl IG Corp Bd E EUR Acc |
by Hunter Beaudoin
The report text was written on Nov. 28, 2022; the Pillar and resulting ratings were affirmed again on Nov. 22, 2023. Invesco Global Investment Grade Corporate Bond benefits from a knowledgeable lead manager, stable and robust senior investment team, and well-structured investment approach that spans the full scope of Invesco’s research capabilities. Despite these advantages, its fee levels relative to the limited alpha potential of the asset class continue to hold back its appeal. As a result, the strategy earns a Morningstar Analyst Rating of Neutral across most share classes, including the clean C USD AD share class, and a Negative rating for its retail R USD Acc share class. Lead manager and co-head of of global investment-grade credit Lyndon Man has helmed this strategy since August 2013 and has been supported by comanager Michael Booth since July 2017. Fellow co-head Luke Greenwood is also named on this strategy but is less involved in its day-to-day management, instead primarily focusing on passive strategies. Man, who oversees a number of other investment-grade credit strategies and is also named on the group’s diversified euro bond fund, carries a substantial workload. However, added resourcing over the years has helped alleviate these concerns. The managers are backed by Invesco’s well-resourced macro research, credit research, and investment strategy teams. The latter, a group of senior macro and sector specialists who formulate the top-down investment themes that Man and Booth draw upon to build this portfolio, has remained stable over the past several years, bolstering our confidence in the process. These investment themes are molded via a recurring four-week idea generation process that involves members from across Invesco Fixed Income. Man and Booth choose the investment themes most appropriate for this strategy and populate the portfolio with individual names recommended by the firm’s ample credit analyst team. While the portfolio may hold up to 30% in non-investment-grade debt, high-yield exposure has averaged just 14% over the past eight years and is limited to BB rated issuers. For the year to date through September 2022, returns have suffered owing to the portfolio’s continued overweighting in European credit and allocation to subordinated debt. Performance over Man’s tenure from September 2013 through September 2022, however, has held up well despite the recent underperformance, with the clean C USD AD share class outperforming its Bloomberg Barclays Global Aggregate Corporate (USD Hedged) Index benchmark, and 68% of investment-grade global bond – USD hedged Morningstar Category peers. |
Morningstar Pillars | |
People | Above Average |
Parent | Average |
Process | Above Average |
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