Partner Insight: Bond market outlook - good news after a tricky transition year

In this short video update, Invesco Fund Manager Stuart Edwards shares his thoughts on where bond markets are headed and why flexibility is more important than ever.

clock • 3 min read

Catch up on all things fixed income in under three minutes with Bitesized Bonds

 

As ever, the important thing for us as fixed income managers is that we have the right mandate - flexible, broad and downside-aware - to navigate current and future market conditions.

 

 

Investment risks
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.

The securities that the Fund invests in may not always make interest and other payments nor is the solvency of the issuers guaranteed. Market conditions, such as a decrease in market liquidity for the securities in which the Fund invests, may mean that the Fund may not be able to sell those securities at their true value. These risks increase where the Fund invests in high yield or lower credit quality bonds.

As the fund can rapidly change its holdings across the fixed income and debt spectrum and cash, this can increase its risk profile.

The fund has the ability to make significant use of financial derivatives (complex instruments) which may result in the fund being leveraged and can result in large fluctuations in the value of the fund. Leverage on certain types of transactions including derivatives may impair the fund's liquidity, cause it to liquidate positions at unfavourable times or otherwise cause the fund not to achieve its intended objective. Leverage occurs when the economic exposure created by the use of derivatives is greater than the amount invested resulting in the fund being exposed to a greater loss than the initial investment.

The fund may be exposed to counterparty risk should an entity with which the fund does business become insolvent resulting in financial loss.

The fund may invest in contingent convertible bonds which may result in significant risk of capital loss based on certain trigger events.

The fund's performance may be adversely affected by variations in interest rates.

The fund has the ability to invest more than 35% of its value in securities issued by a single government or public international body.

Important information

This marketing communication is for Professional Clients only.

Data as at 12.09.2023, unless otherwise stated.

This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell 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.

Views and opinions are based on current market conditions and are subject to change.

For the most up to date information on our funds, please refer to the relevant fund and share class-specific Key Investor Information Documents, the Supplementary Information Document, the financial reports and the Prospectus, which are available using the contact details shown. For details of fund specific risks, please refer to the relevant Key Investor Information Documents.

Invesco Fund Managers Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK. Authorised and regulated by the Financial Conduct Authority.

 

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