HEAD-TO-HEAD: Invesco versus Pimco

123456

Source: FE Fundinfo. Three-year cumulative returns in US dollars.

Performance

Both funds have performed well over a three-year horizon, although they each struggled in 2020, and lagged expectations during the recovery in bond prices in 2021, said Poole.

The Invesco fund has generated a 12.14% three-year cumulative return, outperforming its US fixed income sector average (8.43%), according to FE Fundinfo. Its annualised volatility during the same period was 6.73%, compared with an average of 4.63% for the sector.

“The longer-term performance since manager Lyndon Man took the helm has been very strong, benefiting from high yield bod exposure,” said Poole.

‘However, allocations to high yield credit meant its downside volatility in 2020 was high; on the other hand, it means the portfolio can capture upside when markets turn,” he said. “Although, the fund failed to position itself for the rebound in late 2020 and early 2021.”

The Pimco strategy has posted 6.75% over the past three years, with annualised volatility of 7.24%, FE Fundinfo data shows.

“The fund has a tremendous long-term record, with reasonable downside protection as well as some upside capture,” said Poole. “However, suffered during the market volatility in 2020, and although credit selection helped the fund in 2021, its performance was marred by its foreign exchange and interest rate exposure.”

Despite a difficult couple of years, “the fund is a steady performer with low volatility,” he said.

Discrete calendar year performance

Source: FE Fundinfo. Returns in US dollars

123456