INVESTMENTS & PENSIONS
FIGURE 3 . ICE BOFA EUROPEAN CURRENCY HIGH YIELD , GLOBAL HY HYBRIDS , & COCOS INDICIES - YIELD %
Source Macrobond , ICE BofA indices , to 31 / 1 / 24 .
Example of recent issues include :
• Societe Generale – USD 10 %, BB rated AT1 , callable in 2028
• Barclays – USD 9.625 %, BB rated AT1 , callable 2029
• AXA – EUR 6.375 %, BBB + rated , callable 2033
In funds with a focus on delivering a high income , we can take a little more credit risk at the issuer level , and find examples such as :
• Co-Operative Bank – GBP 11.75 %, BB rated . Subordinated bond maturing 2034
• Virgin Money – GBP 11 %, BB rated AT1 callable 2029
To answer our earlier question , of what ’ s out there to tempt investors out of cash - interest rate cuts are expected from the US Federal Reserve , European Central Bank and Bank of England in the first half of this year . Falling interest rates will feed through quickly to the rates achievable on savings accounts .
In bond markets though , we continue to have the opportunity to ‘ lock in ’ attractive income streams that can benefit the funds for many years , without taking on too much in the way of credit risk . We have already started to see early signs that investors are reallocating from cash to bond markets , especially investment grade .
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 .
INVESTING IN FIXED INCOME
Whether you ’ re looking for income , diversification , capital preservation or total returns , we have the strategies , the scale and the flexibility needed to match your objectives as markets evolve .
Important information . This content is for Professional Clients only and is not for consumer use . All information as at 29 February 2024 and sourced by Invesco , unless otherwise stated . Views and opinions are based on current market conditions and are subject to change . 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 . Issued by Invesco Asset Management 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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