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Invesco Perpetual Fixed Interest

Our philosophy and approach

At the core of the Fixed Interest team's philosophy is a belief in active management: this underpins our work to deliver the individual long term objectives of all our funds.

We seek to invest where we see the potential for attractive returns and to avoid risks that we don't think are being well rewarded. Our conviction-backed, proven approach is based on fundamental analysis, with a strong emphasis on valuation.

For a quick overview of our philosophy and process watch our short film.

Approach

The team have a straightforward approach to investment management.

How would you summarise the Henley Fixed Interest team's philosophy and approach?

Duration 2.08

  • Active

    The team do not track indices: their focus is on absolute risk and return.

  • Flexible and pragmatic

    Their approach is informal, iterative and flexible.

  • Market driven

    The team can exploit opportunities on a short-term as well as a longer-term basis.

  • 'All weather' portfolios

    We have flexible funds which enable us to reduce risk when we are cautious.

  • Valuation driven

    Strong emphasis is placed on assessing value: the team only take risk where they believe they are being rewarded for doing so.

  • We are not going to get caught up in any desire or need to track a benchmark. Paul Read, March 2004

  • 2004

    Active management and a focus on absolute risk and return lies at the heart of Invesco Perpetual Fixed Interest team's investment philosophy. All the funds are managed without reference to an index, which means the team are not constrained by benchmark weightings in terms of security, sector or country. This allows the fund managers to exploit value wherever they see an opportunity.

  • We are not going to get caught up in any desire or need to track a benchmark. Paul Read, March 2004

    Read the quote

  • 2004

What do you look for when analysing a bond?

Duration 2.53
  1. Process

    This philosophy and approach have shaped an investment process which adheres to the core disciplines of

    Logical thought processes
    Comprehensive analysis
    Constant evaluation of underlying assumptions

    The investment process comprises three key elements which deliver the information our fund managers need to make decisions when constructing our portfolios:

  2. Top-down, macroeconomic analysis - examining the factors that shape the economy plays an integral role in the main portfolio decisions.

  3. Credit analysis - the assessment of individual corporate bonds is central to our investment process, and combines both external and, crucially, internal research. This part of the process is not designed to minimise risk in isolation from return considerations, but looks to maximise returns from acceptable and well understood credit risk exposure. For example, a company that is actively taking steps to reduce very high debt levels will be more attractive to us than one with the same degree of borrowing which is doing little to address the situation.
  4. Value assessment – as each fund is managed within a total risk and return framework, this is the stage at which the team determine whether potential return sufficiently justifies the risks. In doing so, the risk/return profile of any bond is considered in relation to cash, core government bonds and the rest of the fixed income universe.

  • We have to adapt our thinking and portfolios to the environment and the latter of course changes over time. That's why our portfolios evolve. We don't take the approach of sitting down at formal committee meetings once a quarter and saying okay, let's decide what to do. It's more incremental than that, it's much more fluid. Paul Read, June 2004

  • 2004

    2004 signified the successful 10-year partnership of Paul Causer and Paul Read. Through their experience of navigating market events and managing bonds through the investment cycle - the co-heads of Fixed Interest have always tried to find consensus on the investment strategy they want to adopt. An approach which has helped develop the culture within the team as it has grown over the years.

  • We have to adapt our thinking and portfolios to the environment and the latter of course changes over time. Paul Read, June 2004

    Read the quote

  • 2004

The reassurance of award-winning fund management

Over the last 20 years, our Fixed Interest team has won 80 awards. From their very first award in 1998, the funds and investment companies they manage have continued to be recognised for their investment excellence.

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. Past performance is not a guide to future returns.

Important information

Where Paul Read has expressed opinions, they are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco Perpetual investment professionals.

Where Invesco Perpetual has expressed views and opinions, these may change.