Invesco unveils three risk-managed funds

According to Craig Newman, sales director for Invesco Perpetual, the launch of these quant-based funds came on the back of client demand.

He said: “Clients tell us that managing risk is one of the biggest challenges they face in the current climate, so we decided to look for an investment approach that would allow us to deliver products that could be matched to clients’ different attitude to risk and volatility. We believe this is a compelling concept for the market.”

The three funds will be managed by the Invesco global asset allocation team based in Atlanta, US, headed by chief investment officer Scott Wolle.

Traditional balanced or multi-asset solutions typically combine the defensive properties of bonds with the growth potential of equities.

However, because of their higher volatility, equities can often represent a disproportionate amount of portfolio risk, and that means investors can experience larger-than-expected losses when stock markets fall.

The team’s asset allocation approach manages exposure to equities, bonds and commodities, ensuring risk allocation drives asset weightings across asset classes and within them.

The team’s proven investment strategy employs proprietary quantitative models built on fundamental research, which has been back-tested rigorously from 1973 to 2008.

Amanda Davidson, director for Baigrie Davies, said: “Risk assessment can be tricky. A fund manager could develop good funds that will be risk managed, but these might not necessarily be in line with an individual client’s attitude to risk.

“What one person may consider to be medium risk can be very different to what someone else thinks is medium risk.

“So, even if Invesco thinks this is medium risk, it may not be considered so by the client, and it will be up to the adviser to assess the client’s need and match the products to that accordingly.”