Invesco launches suite of self-indexed fixed income factor ETFs

Jul 26th, 2018 | By | Category: Fixed Income

Invesco has rolled out a suite of smart beta bond ETFs – the Invesco Fixed Income Factor ETF Suite – on NYSE Arca. The suite has been created on the back of research from the firm’s active management capability, and comprises eight funds linked to proprietary in-house indices.

Invesco launches suite of self-indexed fixed income factor ETFs on NYSE Arca

Andrew Waisburd, head of Invesco Indexing.

“Self-indexing is a natural extension of Invesco’s commitment to pursuing better outcomes for our clients and we are excited to have the capacity to address their diverse needs,” said Andrew Waisburd, head of Invesco Indexing.

“Our ability to internally build index instruments will allow Invesco to leverage our company-wide factor and fixed income proficiency to create more nuanced products that better incorporate the full range of its investment capabilities.”

Dan Draper, global head of ETFs at Invesco, added, “Invesco was the pioneer in the smart beta fixed income ETF space with our first launch in 2007 and based on client demand we continue to introduce new fixed income ETFs that can serve as attractive portfolio diversifies.

“With the launch of the new self-indexed Fixed Income Factor Suite, investors have a new way to gain broad-based exposure in fixed income, while using factors to navigate the challenges in the current rising rate environment.”

The strategies seek to take advantage of recurring market risk premia to deliver key outcomes across a variety of fixed income asset classes within the US dollar-denominated universe.

The suite includes single-factor (value and quality) and multi-factor options.

Value factor

The value strategy targets high-yielding, inexpensive bonds, while attempting to screen out those with the highest probability of default. There are three ETFs in this category, providing coverage of the investment grade corporate, high yield corporate, and emerging markets government bond segments.

Invesco Investment Grade Value ETF (IIGV US) (0.13%)
Invesco Corporate Income Value ETF (IHYV US) (0.23%)
Invesco Emerging Markets Debt Value ETF (IEMV US) (0.29%)

Quality factor

The quality (or defensive) strategy targets higher-quality, lower-volatility bonds and will generally tilt the portfolio to bonds with shorter maturities. The category also contains three ETFs covering the same market segments.
Invesco Investment Grade Defensive ETF (IIGD US) (0.13%)
Invesco Corporate Income Defensive ETF (IHYD US)
 (0.23%)
Invesco Emerging Markets Debt Defensive ETF (IEMD US)
 (0.29%)

Multi-factor

The multi-factor strategy blends factor exposures together using an index-of-indexes approach. There are two ETFs in this category, including a ‘core’ fund targeting US investment grade bonds, mortgage-backed securities, and Treasuries, and a ‘core plus’ fund which also includes high-yield bonds and emerging market debt in its investment scope.
Invesco Multi-Factor Core Fixed Income ETF (IMFC US) (0.12%)
Invesco Multi-Factor Core Plus Fixed Income ETF (IMFP US)
 (0.16%)

(Eexpense ratios in brackets)

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