UK - Invesco has redesigned its GT Strategic Bond Fund. From October 24, 2001 it will be known as the GT Global High Income Fund and will extend its investment guidelines to allow it to also invest in global high yield bonds.
John Cleary, head of the global high income team at Invesco, and lead manager of the fund, said: The fixed income market is changing, with better managed economies and lower global interest rates driving yields further downwards.
Low volatility bonds in the developed markets are currently giving lower returns, which suits some investors, but those seeking higher returns realise that, to achieve those returns, they have to accept the possibility of greater volatility.
To contain risk the maximum allocation to an emerging market sovereign borrower will be 15% and to a global high yield corporate borrower 2.5%. The majority of the fund’s return will come from income, which is relatively constant, compared with equity investments where the majority of the return comes from price appreciation.
Cleary said: While emerging markets over the medium term is the best performing fixed income asset class, volatility can often scare investors away from the return potential. However adding global high yield bonds to a portfolio increases diversification, which dilutes the impact of specific event risk, and is the key to long-term investments.
Invesco manages more than $160bn in worldwide fixed income.
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