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Choosing the right product for your clients
Changing views of asset allocation
Surviving in turbulent markets
© CENTAUR COMMUNICATIONS LTD 2018. ALL RIGHTS RESERVED
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Equity markets have continued their bull run, in spite of Donald Trump’s bombastic take on the presidency (or because of, if you believe his account). Bond markets have rather fallen out of favour; a shelter from the storm is all well and good, but in the public conscience, when an investment returns less than inflation, it’s like a shelter slowly filling up with water.
But there are signs that perceptions are turning. There are some very tough questions for active evangelists to answer when it comes to the fundamentals unpinning most equity markets. It’s not just the added security that should be a draw. When Treasury and emerging market yields are outstripping inflation, there is also an income case to be made in conjunction with the obvious benefits of a diversified portfolio.
There are plenty of fish in the fixed income sea. If anything, the market trends present a compelling case for further diversification, and diversification that should not be limited to asset classes outside of fixed income. As our contributors
for this supplement note, options in the strategic and absolute return sectors, as well as short and long-term durations, can often be overlooked.
Performance rarely lies, and not all managers are alike either. Some have clearly made bad calls, but others will make good ones that will be to the benefit of both advisers and clients. Be it by geography, duration, structure or yield, there are opportunities out there, however tough they are to find.
So, fixed income may be a tough sell, but one that still has a place in 2018, and the IFA community has a key role to play, with deep fact-finds and risk tolerance exercises helping to put a number on the right fixed income allocation for each client. If advisers want to stick to a traditional 60:40 allocation of equities and bonds, that is all well and good, but at a time where suitability requirements are being picked at with a fine tooth-comb, they would do well to illustrate why the rest of the options on the table did not suit their client’s needs.
Invesco Summit
Growth Range
This communication is for professional clients only and must not be relied upon by retail clients
• Truly diversified: Access to a huge variety of different investment viewpoints, selected from over 500
Invesco funds and 300 ETFs across our 13 global investment centres.
• Easy to use: Simply match a range of client risk profiles, with asset allocation and fund selection done for you and a time-saving reporting tool that generates customised client reports.
• Cost-effective: Offering an actively managed blend of Invesco's active, passive and factor-based funds from as little as 60bps.
Seeks to grow the amount invested over the long term.
A range of five risk-managed products that enables advisers to match different client risk profiles to relevant funds.
Reasons to invest
Investment objective
Fund overview
This puts it ahead of inflation, meaning that investors are receiving a positive real return from government bonds.
The 10-year
Treasury yield
March 2018
THE FUNDS
As at 31 October 2018
% Expected Return
Risk Target
Source: Invesco. For illustrative purposes only. 1Risk targets are relative to the MSCI AC World index.
There is no guarantee that these risk targets will be met. will assign an internal credit rating.
Diversified by asset class
As at 31 October 2018
Source: Invesco.
KEY FACTS
As at 31 October 2018
invesco key facts
As at 30 September 2018
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