Video: What can long and short equities do for your portfolio?

Part of Invesco’s High-Conviction Investing series

Wilson_Donna_Chapman_sm_150dpi_RGBA “long” position in a stock is designed to benefit when that stock’s price rises, while a “short” position is designed to benefit when a stock’s price falls. By including both types of positions in Invesco Long/Short Equity Fund, we seek to achieve positive returns in a variety of market conditions. In the video below, I explain how our strategy works.

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Can the Trump administration make the American economy great again?

Trump’s tax and infrastructure proposals will soon face the reality of US debt and monetary policy. We analyze what to expect next.

James Ong

Since the US election, financial markets seem to have priced in a significant boost to growth and inflation under a Trump administration. It is still early in the presidential transition, yet the US equity markets have rallied and bonds have sold off in an apparent anticipation of major fiscal policy easing and deregulation under soon-to-be President Trump. The Trump campaign was generally unspecific about its favored policies in most areas, and it also remains unclear which policies will actually materialize. However, we attempt to delve into President-elect Trump’s proposed policy agenda, acknowledging that uncertainty remains high.

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Examining factor performance in the fourth quarter of 2016

Small caps and value stocks shined amid a period of wide performance dispersion

Nick KalivasFactor returns showed wide dispersion in the fourth quarter, with a nearly 20% spread between the best and worst performers.1 During the quarter, investment performance was powered by economic fundamentals and expectations of additional economic and profit growth following November’s elections.

Fourth-quarter factor performance influenced by investor expectations

The US economy was already on an upswing before Nov. 8, but some market participants are anticipating potential  deregulation and tax cuts with the incoming Trump administration. If enacted, such policies could further stimulate the economy, although some market observers are concerned about potential trade disruptions. These expectations alone were enough to influence factor performance late in the fourth quarter.

Below are fourth-quarter 2016 factor returns. Note that I’ve added additional performance data covering the period following the Nov. 8 elections through the end of the year.

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Video: How does a high-conviction approach translate to commodities?

Part of Invesco’s High-Conviction Investing series

Wolle_Scott_sm_150dpi_RGBMany investors include commodities in their portfolio in an effort to hedge against inflation — but can they offer investors attractive long-term returns as well? We believe that potential exists, but it requires a deep understanding of each type of commodity, as well as a sharp focus on risk management.

Invesco Balanced-Risk Commodity Strategy Fund combines a focus on key near-term drivers and long-term return sources that seek to help investors capitalize during periods of inflation without sacrificing total return potential.

In the following video, I dive deeper into Invesco’s balanced-risk commodities strategy, including:

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China: Growth, debt and liquidity promise to capture the spotlight

2017 Investment Outlook series

Mike_ShiaoLooking ahead in 2017, the Invesco Equity Investment team in Asia believes the focus of attention for the Chinese economy and equity markets will be on growth, debt and liquidity. We expect China’s policymakers to focus their efforts on near-term growth stability, with reforms taking a secondary role for now. Consumption will continue to be the growth driver. China’s debt problem will linger on, but we see no imminent risk of an economic blowout. We are seeing a shift in loan activity from corporations to consumers, which we see as a positive development for the economy. As for liquidity, the existing Shanghai-Hong Kong Stock Connect and the recently launched Shenzhen-Hong Kong Stock Connect will continue to enhance market accessibility from both north- and southbound channels. In particular, we believe that global investors in offshore Chinese equities will benefit from the strong liquidity in the southbound channel. In this piece, we will explore these three topics in greater depth.

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Video: Searching for a fund that targets a positive return with lower volatility?

Part of Invesco’s High-Conviction Investing Series

Millar_David_sm_150dpi_RGBI like to say that a high-conviction approach means investing in ideas — ideas that span locations, currencies, asset classes and market sectors. This priority on ideas over assets informed the creation of Invesco Global Targeted Returns, a strategy comprising 20 to 30 long-term investment ideas within one risk-managed fund.

By finding independent sources of return, the fund emphasizes a flexible approach to long-term investing and seeks to minimize volatility. In the video below, I explain the methodology behind our strategy, including how we strive to:

  • Identify and combine long-term investment ideas that will work together in a single fund.
  • Manage risk to deliver a lower-volatility return over time.
  • Introduce additional, independent return sources, beyond traditional stocks and bonds.
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Video: Looking for an equity strategy that minimizes market volatility?

Part of Invesco’s High-Conviction Investing series

Wilson_Donna_Chapman_sm_150dpi_RGBInvesco All Cap Market Neutral is a high-conviction strategy that seeks to minimize investors’ exposure to market movements, and deliver returns that are generated from our stock selection ability. We believe this type of strategy helps to reduce equity market volatility, which is a concern for many investors. In this video, I outline several aspects of this strategy, including details about:

  • The characteristics we look for when making investment decisions.
  • How we attempt to mitigate risk.
  • Why investors might consider market neutral strategies.
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Using factor analysis to explain the performance of dividend strategies

Factor tilts have resulted in divergent dividend strategy performance following the November elections

Nick KalivasNovember’s US elections have buoyed investor optimism about the potential for tax reform, increased infrastructure spending, reduced regulation and accelerating economic growth. These expectations led to a 0.75% spike in the 10-year Treasury yield between Nov. 8 and Dec. 16, and a 5.2% increase in the US dollar, as measured by the US Dollar Index.1

Still, by historical standards, interest rates remain low. Nearly a decade ago, the 10-year Treasury yield finished 2007 at 4.02%; it now stands near 2.50%.1 When adjusted for inflation, even the 0.75% bump in the 10-year Treasury yield amounts to a modest 0.40% increase. Compare that with the average annual real (inflation-adjusted) increase in the 10-year Treasury yield between January 1962 and November 2016 of 2.40%.1

Shouldn’t dividend stocks be underperforming?

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What may be in store for alternatives in 2017?

We highlight which strategies could possibly benefit from policy changes, rising rates and more

Davis_Walter_sm_150dpi_RGBAs we enter 2017, there is a long list of issues that could affect alternative investments: policy changes in the US, elections in Europe, rising rate expectations and more. Given this changing landscape, I would like to highlight some alternative investments that I believe have the potential to benefit investors in the new year. In doing so, I’ll be using Invesco’s Alternatives Framework (see below) to identify strategies for each of the five alternative buckets.

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Video: Are returns possible in a down market? A balanced-risk strategy might be the key

Part of Invesco’s High-Conviction Investing series

Wolle_Scott_sm_150dpi_RGBInvesco Balanced-Risk Allocation Fund is an actively managed portfolio of strategically weighted stocks, bonds and commodities selected on the basis of their long-term return prospects, diversification potential and liquidity. In the video below, I discuss our strategy’s three goals to provide return potential and help defend against the type of significant losses that can derail an investor’s long-term objectives:

  • Prepare — Invesco Balanced-Risk Allocation Fund is diversified to include assets that we expect to perform well at different stages in the economic cycle, even when equities struggle.
  • Protect — Portfolio weights can be adjusted to pursue additional upside while seeking to protect long-term returns on the downside.
  • Participate — By seeking to defend against major losses, the fund attempts to provide investors with a smoother path toward reaching their financial goals.
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