Invesco

Naturally, this is the time when market-watchers issue their forecasts for what may lie ahead, and my team is no exception. Simply put, we expect continued monetary policy accommodation with little fiscal stimulus. Therefore, we are more optimistic about capital markets than we are about the overall economy, and we favor risk assets over non-risk assets for 2020.

Why the country represents an increasingly attractive opportunity for both domestic and global investors.

Two Invesco strategists debate the prospects of a value rotation in 2020.

Insured bonds continue to pay interest and principal even if an issuer defaults.

A wave of volatility may knock back a passive fund, but active managers can nimbly assess the situation.

Changing dynamics may present a new set of opportunities for investors.

Economic policy uncertainty and trade conflict may linger, but without a US recession, I do not anticipate significant further slowing in global growth.

In the longer term, we believe the Fed will enact a more permanent solution to maintain stability.

Both endeavors are driven by statistical analysis. Explore three different ways that managers can build their ‘teams.’

Volatility has increased this year. How can investors adjust without losing equity exposure?

Opportunistic investors are taking advantage of the disconnect between solid fundamentals and currently low valuations.

Fintech can bring tremendous benefits to emerging markets but mimicking China’s success in the space might be unwise.

Invesco Fixed Income remains cautious on risk until the dynamic between growth and monetary policy is resolved.

We believe the macro environment is supportive of stocks that are growing their dividend payments.

What did the Invesco Global Small Cap team learn from their recent investor road trip?

The transition from LIBOR to SOFR has been slow. We present some key reasons for the delay in SOFR’s broader integration into markets. Important bottlenecks include lags in the evolution of SOFR-based swaps and derivatives markets and in the development of a term SOFR structure.

On the positive side, we see room for more policy action from EM central banks.

Don’t let short-term volatility detract from your long-term plans.

On the positive side, we see room for more policy action from EM central banks.

Government contracts and a focus on innovation may be attractive in an uncertain geopolitical environment.

The eurozone economy has experienced a sharp slowdown since the second half of 2018 in a reversal from the mini-boom enjoyed in 2017.

The “rise of the middle class” has been a ubiquitous theme touted by emerging market (EM) investors for several years.

Emerging markets (EM) assets had a favorable first quarter likely driven by an improvement in external funding conditions and global central bank moves toward policy accommodation. EM credit outperformed the more volatile EM local debt over the period.

Part 2 in a series focusing on different types of alternative investments.

It can be difficult to endure short-term bumps, but we believe that’s critical for long-term success.

The BBB bond market is growing, but we believe that worries about significant downgrades are overblown.

Diversification has been in hibernation during this bull market, but it may be coming out of its slumber.

After several interest rate increases, these bonds may be an attractive alternative for cash.

What will we learn from upcoming data releases and political negotiations?

China’s Belt and Road Initiative – from increased commodity demand to shifting supply routes.

When will prices in China and Japan become attractive?

Fourth-quarter volatility expanded the opportunity set for those looking for a deal.

The strong economy and market pressure may drive companies to pay down debt.

With defined-maturity ETFs, investors may be able to mitigate market noise.

While EM has lagged overall in 2018, some EM factors did outperform.

Our team believes the answer is yes. Here’s why.

If you’ve shortened your bond duration due to rising rates, we believe you may be more vulnerable to market volatility. Here’s a way to address both issues.

In the fourth quarter, Dividend Yield was also a strong competitor.

Low Volatility and Quality offer potential benefits in stressed markets.

In the long-term, however, we expect prices to be range-bound.

Equity markets send a timely reminder about diversifying into alternatives.

See what themes may impact global markets in the new year from Invesco Global Market Strategist Kristina Hooper and her team.

Lowering ‘down capture’ can help ease the impact of dramatic market swings.

Our new global study examines trends in factor investing around the world.

We see selective value in fixed income with more to come as the US dollar eases.

Q3 performance shows that different factors outperform in different market environments.

Making the case for US REIT preferred stock in flexible real estate portfolios.

As I’ve written in this blog before, trying to define the technology sector has become more difficult over the past decade. Technology utilization throughout the economy is ubiquitous, making it difficult to imagine any company, regardless of its sector, outperforming its peers without effectively implementing technology.

Defined maturity ETFs can help investors build diversified bond ladders.

Invesco research reveals a disconnect between market expectations and portfolio allocations in market-cap-weighted funds.

The September Federal Open Market Committee (FOMC) meeting saw the US Federal Reserve increase rates as expected. Additionally, the 10-year US Treasury yield has risen about 42 basis points (bps) off its lows in late August and is up almost 96 bps from a year ago. Historically, upward moves in the federal funds rate or US Treasury yields have typically led to diminished sentiment toward real estate investment trusts (REITs) and/or price pressure relative to general equities.

The case for active management in US REITs today.

Brexit uncertainty has captured the headlines, but we are constructive on quality growth holdings.

More than ever, people want to be fully informed about what they are eating — not only the calories, but whether it’s gluten-free, pesticide-free, organic or raised with growth hormones. They even want to know if the packaging is recyclable. Why? Because they’re seeking to avoid risks to their health and to the environment. In the same way, investors today are well aware that risk can come from a variety of places — and that’s helping to fuel an interest in environmental, social and governance (ESG) investing.

Both endeavors are driven by statistical analysis. Explore three different ways that managers can build their ‘teams.’

Perhaps the biggest news of the last week was the meeting of the Federal Open Market Committee (FOMC), the policymaking arm of the US Federal Reserve (Fed). As expected, the Fed raised interest rates. But what was far more interesting were the hints provided about the future. In this blog, I discuss my outlook for the Fed and highlight five issues to watch in October.

Facebook illustrates how a big company’s big loss can dominate traditional benchmarks.

With the clock ticking on LIBOR, the market begins the adjustment to SOFR

How alternative investments may complement different portfolio objectives in various market environments.

• Municipal bonds have been strong performers over the past few months.
• We believe this is due to investor risk aversion and reduced supply as compared to 2017.
• Invesco Fixed Income believes municipals will continue to be supported by limited supply as well as strong US macro and credit fundamentals for the rest of this year.

The master limited partnership (MLP) asset class has experienced considerable volatility since 2014, with many individual securities trading well off previous highs. However, the Invesco Real Estate team believes there has been a dislocation in MLP pricing, resulting in value and opportunity in the space.

In recent years, factor-based investments have become increasingly popular for equity investors. Often missing from the discussion, however, is the concept of fixed income factor strategies. At Invesco Fixed Income, our view is that bond investors can potentially benefit from a factor-based approach. We’ve launched a new suite of exchange-traded funds focused on two factors — quality and value — that we believe may help investors reach their objectives.

Over the past year, it’s been next to impossible to avoid a conversation or news story on bitcoin. It went from a relatively arcane subject to possibly the most discussed topic within financial markets across both Wall Street and Main Street.

Infrastructure is not a glamorous topic — it isn’t satirized on late-night TV, nor is it trending on social media. But the need for increased infrastructure investment is real across the globe. Given expected demographic trends, disruption by new technology and insufficient spending in the past, we at Invesco Real Estate believe infrastructure-related companies could be poised for decades of growth.

With fears of a trade war looming over global large-cap stocks, the small-cap factor emerged as the clear winner of the second quarter. Specifically, small-cap low volatility/high dividend was the best-performing factor, followed by the small-cap versions of value, growth, equal weight and momentum.

Invesco Fixed Income is positive on fundamentals for the rest of this year. Global growth is solid and inflation is tame. As central banks have pivoted away from stimulus, tighter financial conditions have hurt risky assets. But major central bank policies are still generally easy — we expect the Federal Reserve to tighten gradually, and the runway for other central banks to normalize policy is still long.

We are coming to the mid-year point for 2018, and the past six months have felt like six years. Markets have experienced a significant uptick in volatility, yet equity investors may not have much to show for all their troubles.

Alternative investments (alts) were first embraced by institutions, and some people still view them as a complex solution for complex needs. However, a growing number of alternative strategies are now available via mutual funds.

We are coming to the mid-year point for 2018, and the past six months have felt like six years. Markets have experienced a significant uptick in volatility, yet equity investors may not have much to show for all their troubles.

When most investors think about traditional real estate investment trust (REIT) investment opportunities, they often think about the “four major food groups” of real estate — the retail, office, residential and industrial sectors. While these sectors continue to be a major component of REIT investing, they are increasingly being joined by nontraditional REIT sectors.

Small caps have materially outperformed large caps in 2018, with the S&P SmallCap 600 Index outpacing the S&P 500 Index 7.80% to 2.58% between Dec. 29, 2017, and May 25, 2018. Below, I highlight the drivers of small-cap returns this year, and why I believe the trend could continue.

US interest rates have defied market expectations in recent years, staying historically low despite solid economic growth. But in the last year, and especially the last few months, rates have started to climb.

There are many determinants of stock performance. Corporate earnings, fiscal policy and interest rates can all influence the equity markets. But equity returns are also dependent on where we stand in the economic cycle.

Interest rates continue their upward trend. In March, the US Federal Reserve (Fed) hiked the federal funds rate by 25 basis points to a target range of 1.5% to 1.75%, citing strength in the US labor market, a low unemployment rate and moderate economic growth.

Effective May 14, 2018, new regulations will be adopted aimed at increasing the transparency of bond pricing. The new rules require dealers of corporate, municipal and agency bonds to clearly disclose bond markups and provide retail investors with relevant price comparisons.

Equity volatility, the prospect of rising interest rates and an uptick in issuance may bode well for the asset class.

The last time we wrote about the US dollar London lnterbank Offered Rate (LIBOR) was in 2016, when the spread between LIBOR and the Overnight Indexed Swap (OIS) rate increased due to market dislocations leading up to US money market fund reform. Now in early 2018, we have seen LIBOR rates rise and LIBOR-OIS spreads widen again, causing us to ask the same question — what’s up with LIBOR?

Technology companies are known for innovation, and it doesn’t take long for a revolutionary new technology to take hold and become a part of people’s daily lives. In my view, investors shouldn’t be threatened by technology. Rather, they should be skeptical of companies not utilizing technology to its fullest potential.

Equities experienced heightened volatility during the first quarter of 2018, with the S&P 500 Index surging 7.55% from Dec. 31 2017, through Jan. 26, 2018, before dropping nearly 8% through quarter-end.

The recent ruling reverses a longstanding tax policy affecting MLPs’ interstate pipelines.

The first quarter of the year has ended with major developed market indices down slightly and major emerging market indices up slightly. But those numbers belie a very turbulent period in which stocks were whipsawed.

The ninth anniversary of the current bull market recently occurred in March — which is the second-longest period without a 20% drop in the closing price of the S&P 500 Index.

The Federal Reserve (Fed) raised interest rates by a quarter of a percentage point as expected on Wednesday and signaled two more rate hikes for 2018. It also released its Summary of Economic Projections (SEP) for the next few years, which suggests that the Fed is optimistic regarding the future performance of the US economy.

The US Department of Labor reported March 13 that the overall consumer price index (CPI) and core CPI, which excludes the volatile food and energy sectors, each rose 0.2% in February, in line with market expectations and Invesco Fixed Income’s forecasts.

Tax reform has incentivized companies to return their offshore cash to the US. This could create opportunities for US investment grade bonds.

Last week brought renewed focus to three areas of concern that I’ve been writing about for some time: populism, protectionism and pressure on debtors. It appears that we may be moving closer to certain outcomes that could be of concern to markets.

Stocks globally have experienced more than a week of tumultuous trading, with the US stock market officially in correction territory. And after being relatively sedate for years, the VIX Index has risen dramatically in recent days, indicating rising volatility.

We expect US interest rates to be range-bound in the first half of 2018, but with a risk of higher yields in the second half. Our rates view is driven by our analysis of growth, inflation and monetary policy in the US and globally.

In my most recent blog, I described how choosing the appropriate alternative strategy (Real estate? Market neutral? Senior loans?) could become the biggest challenge for new investors in alternatives. This is one of the most common questions I receive here at Invesco, along with how to identify the best fund managers and how to select specific alt funds for a portfolio.

This time last year, the Invesco International and Global Growth team was optimistic about the better relative earnings potential that we saw building in Europe. Indeed, the trends played out to our benefit over the course of 2017. In dollar terms, European equities outperformed US equities by 3% in 2017, the first time since 2012.

In a number of places around the world, it’s an exciting time to be a taxpayer — or tax attorney. That’s because a variety of countries have brought or are bringing tax cuts to fruition.

Despite the near non-stop drama of the legislative process, we ended December with the Tax Cut and Jobs Act of 2017 being signed into law. What does this mean for fixed income investors? In my opinion, the news is overwhelmingly positive for the US investment grade market; here are four reasons why.

Invesco Fixed Income’s macro factor framework provides an understanding of how developments in growth, inflation and financial conditions globally are likely to impact markets.

2017 was the year when financial technology, or “fintech,” made industry headlines. After such a year of change, what might 2018 bring? I highlight six trends I expect to see this year.

2017 was a positive year for the economy and capital markets. The global economy grew at a faster pace than in 2016, and risk assets also rose significantly.1 However, investors are wondering whether the current environment will continue through 2018.

Tax reform is currently underway in Congress and could have important implications for the tax-exempt municipal market. As we wait for a final agreement between the House and Senate versions — which could come as soon as today or tomorrow — we can make some observations about how tax reform is likely to impact the US municipal bond market, based on the details reported to date.

Weekly Market Review: Central banks are trying to chaperone the money supply without stifling growth, but uncertainty lies ahead.

Now, for the first time, investors are able to purchase futures on bitcoin, the digital currency. The Chicago Board Options Exchange just began offering derivatives contracts on bitcoin, which provide the ability to bet on the future price of this cryptocurrency.

Since the global financial crisis, inflation in the advanced economies has persistently undershot their 2% targets despite unprecedented quantitative easing (QE), extraordinarily low interest rates, large fiscal deficits and near all-time low unemployment.

I recently have been traveling around the country participating on a panel titled: “Alternatives: Time to Buy When Others Are Selling?” Spoiler alert — my answer to that question is a resounding “yes.” There are two reasons why.

As we look ahead to 2018, it’s important to first recognize how significant 2017 has been for international markets. This is the eighth year of a global bull market, but prior to 2017, international markets had trailed the US for four consecutive years — and for six of the last seven years.

The financial impact of 2017’s three devastating hurricanes has varied greatly depending on the region affected. From a credit standpoint, the most important takeaway is that each region’s ability to withstand the financial impact of the storms depends on its credit quality ahead of the storm.

In the past, investing according to your values, or anything other than financial fundamentals, was seen as a potential detriment to performance. Over time, however, investors have learned that non-financial metrics can help them better understand the risks a company faces, and may even impact that company’s stock price.

We’re now in the eighth year of a global bull market, and the positive effects are being felt in all regions. The Organization for Economic Cooperation and Development expects gross domestic product (GDP) for all of its member countries to grow in 2017 — a feat that has not occurred since 2007.

The Treasury market received a reprieve in September when the White House and Congress agreed on legislation coupling hurricane relief funding with a suspension of the debt ceiling until Dec. 8. The agreement puts off a potentially contentious political debate and keeps the government funded until at least year-end.

As 2017 nears its end, US value stocks are mired in their longest stretch of underperformance versus growth stocks since the Great Depression, held back by low interest rates and easy monetary policy. In my view, the top issue that will help determine whether that trend continues or abates is US tax reform.

About 100 years ago, Argentina was one of the wealthiest countries in the world by virtue of its fertile land. Its economy thrived by shipping beef and grains around the world. But economic and political turmoil through the 1930s sowed the seeds of populism — the effects of which have lasted decades.

Last quarter saw stocks globally continue to rise. The relatively accommodative monetary policy environment and improved global growth were strong drivers. However, as we head into the fourth quarter, I think it’s important that we recognize the potential for greater disruption — in terms of both geopolitics and monetary policy — which can cause greater volatility in capital markets.

CEOs and boards are focusing on the wrong metrics. But if they change their ways, the opportunity could be great.

On Sept. 20, the Federal Reserve (Fed) officially announced the start of its balance sheet unwinding process, embarking on a slow journey of reversing the quantitative easing (QE) policy that it launched in the wake of the global financial crisis.

Science fiction is real. In October of last year, a self-driving semi in Colorado carried over 2,000 cases of beer from Fort Collins to a distribution center in Colorado Springs — a journey of over 130 miles. While there was a professional driver on board, he monitored the trip from the sleeping berth for most of the journey and never took the controls.

Invesco Fixed Income shares its views on rates around the world.

There’s an ongoing narrative about the energy industry that says exploration and production (E&P) companies are making money in unconventional shale plays, even with oil selling for only $50 a barrel. This is touted as a positive trend. But a deeper dive into energy company fundamentals suggests a vastly different story — one that prioritizes production volume over economic value.

The world economy and financial markets have been buffeted over the past year by national and geopolitical shocks, yet the current synchronized upswing across the world’s largest economies — the first since the global financial crisis (GFC) — remains unscathed so far.

Once again, the US debt ceiling is in focus. Since March, the US Treasury has been employing “extraordinary measures” to fund the US government, such as halting contributions to certain government pension funds and borrowing money set aside to manage exchange rate fluctuations. But those measures are expected to run out this fall.

The only constant is change — and the global market is certainly proof of that. As we assess our outlook for the rest of the year, we see several potential changes that could impact international small- and all-cap funds. Here are the five trends we anticipate having the biggest effect — and the ways the Invesco International and Global Growth team is poised to respond.

Prior to the global financial crisis (GFC), Ireland’s economy was a stellar performer, earning the country the moniker of “Celtic tiger.” The onset of the GFC caused a major economic contraction and a housing crash — but today, Ireland is once again the fastest-growing economy in the eurozone. In this blog, I examine the key elements that allowed Ireland to regain its footing.

Let’s take a closer look at these emerging market catalysts.

Can 529 funds be used for gap-year expenses? I recently had a parent ask me if their child’s 529 college savings account money could be used to help pay for gap-year expenses. Here’s the short answer: Maybe.

Invesco Fixed Income shares its views of rates around the world.

Stocks turned in a strong performance in the front half of 2017 despite geopolitical and monetary policy risks. The question, of course, is whether this performance trend can continue in the second half. I believe these two risks will cast an even longer shadow over markets going forward — making concepts such as diversification and risk management even more important for investors’ portfolios.

Valuations and regulations are among the trends that we’re watching in this industry.

The decision brings better representation of the entire Chinese economy.

As I travel around the country to meet with institutional clients, I often hear this question: “What is everyone selling? Because that’s something I’m really interested in buying.” These are clients who have the confidence and experience to contradict the herd mentality that causes many investors to chase market returns (which often results in buying near market tops while selling near market bottoms).

Invesco Fixed Income shares its views of rates around the world

Department of Labor (DOL) Secretary Alexander Acosta announced in a Wall Street Journal op-ed last week that the initial implementation date of the fiduciary rule will not be extended beyond June 9. Mr. Acosta’s decision is a victory for supporters of the rule, which will require financial advisors to act in the best interests of their clients in retirement accounts.

What to consider when saving for multiple children’s college educations.

Today’s parents are all too aware that higher education comes with a sky-high price tag, but financial aid can offer a real lifeline when it comes to mounting college costs.

Invesco Fixed Income shares its views of rates around the world.

Celebrate the day by opening a college savings account for the child you love.

A high-conviction, bottom-up approach to finding sustainable profit margins.

New SEC guidance provides effective ways for advisors to comply with disclosure regulations.

• The Trump “reflation trade” is being undermined by the new administration’s failure to enact planned legislation like the ACA repeal, tax cuts, and the border adjustment tax.

• Following the March 0.25% hike in the US federal funds rate, the Fed will likely raise interest rates twice more in 2017, taking the target range to 1.25% to 1.50% by the end of the year.

• In the Euro-area the near-term environment will continue to be dominated by politics with upcoming elections in France and Germany, all against the backdrop of extended negotiations over Brexit.

Invesco Fixed Income shares its views of rates around the world

We examine the potential effects of Trump’s tax and infrastructure proposals on the muni market.

Without a surge in monetary growth, fiscal policy alone doesn’t indicate inflation.

College savings plans can help companies boost their employee benefits packages.

As the National People’s Congress convenes, we highlight three government priorities to watch.

While robos can help simplify processes, human relationships are key to satisfaction, says one investment survey.

If an issuer defaults, insurance firms can make sure your payments don’t stop.

In December, the US Federal Reserve (Fed) raised interest rates, as predicted, and raised expectations for more increases in 2017. At Invesco Fixed Income, we believe one of the best ways to handle a rising interest rate environment is to have a portfolio diversified across different credit-related asset classes.

Uncertainty about US trade policy changes that could potentially harm emerging market economies dragged them down 4% during the fourth quarter of 2016, underperforming developed markets by 2%.¹ Yet emerging market economies generally showed positive signs, with exports beginning to recover, commodity prices rebounding, and inflation remaining benign.

Being a deep value investor can be a lonely endeavor. We crunch the numbers to find unloved companies that we believe have bright futures ahead — years ahead, in many cases. But if you wait long enough, market sentiment can shift and your previously unloved holdings may suddenly appear on everyone’s radar screen.

When most investors think of diversification, they think about including stocks and bonds in their portfolio, or US and international investments. Fewer investors think about diversifying among investment vehicles — such as active mutual funds, factor-based exchange-traded funds or passive benchmark strategies.

Learn why Invesco Unit Trusts views information technology as a critical part of the infrastructure category.

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

On July 21, 2016, the Department of Labor (DOL) issued proposed amendments to the 5500 series forms in a “Notice of Proposed Forms Revisions,” prepared jointly by three agencies: the DOL, the Internal Revenue Service and the Pension Benefit Guaranty Corporation, collectively referred to as “the agencies.”

As 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 the first quarter of 2017, a newly minted Congress will be tasked with approving an increase in the US government’s debt limit — the so-called “debt ceiling” — which is set to expire on March 15, 2017. If the debt ceiling is not raised, the Treasury bill market could experience volatility as investors adjust to a potential reduction in the supply of Treasury bills.

Investors have been drawn to real assets in general and to real estate in particular due to the comparative stability and attractiveness of their income returns and the prospects for growth.

The holidays are upon us again, and many grandparents are looking forward to one of their favorite moments of the season – the delighted smiles of grandkids opening a present they’ve been dreaming of all year. Give it a few weeks, though, and last year’s trendiest toy often becomes this year’s latest giveaway.

Invesco Fixed Income utilizes a framework based on the idea that changes in growth, inflation and financial conditions drive much of market beta performance, and that understanding these “macro factors” can help us understand market conditions and price action.

As we look toward 2017, the general near-term outlook for international equities continues to appear somewhat mixed, given a combination of global macroeconomic risks.

Three reasons to consider commodities in today’s market

What yield-seeking investors need to know about this expanding asset class

The US election results bring short-term uncertainty, but policy will be key in the medium term

The new provision can help people who missed the deadline due to error, illness or other reasons

On Nov. 8, American voters will go to the polls to choose the next president of the United States, and global investors will await the potential ramifications of that decision — from short-term market volatility to long-term policy changes.

There are seasons I look forward to during the year — the warm months for fishing and the cold months for hunting — and some I’d just as soon avoid — like hurricane season and allergy season.

The Organization of Petroleum Exporting Countries (OPEC) has been in existence for nearly 60 years. OPEC is the textbook definition of a cartel, but cooperation between member nations has been inconsistent. OPEC’s production targets have generally served as a gentlemen’s agreement, with member nations often prone to producing more than their allotted quota of crude oil.

As a young Army paratrooper, much of my training was focused on learning to operate under chaotic circumstances. The battlefield is nothing if not chaotic, especially in the pitch black of night, which is how we often trained.

The Russell 1000 Value Index has generally underperformed the Russell 1000 Growth Index for the past decade, on average. Naturally, this leads to questions about when the tide may turn back in favor of value. Below, I highlight two of the key factors that I believe will influence performance during the next few years.