Today, we are talking about Global Targeted Returns Fund. This fund is a multi-strategy portfolio that seeks to deliver positive total returns over the long term, in all market environments. Utilizing an unconstrained global opportunity set of ideas to produce returns less correlated to traditional asset classes – acting as an ideal diversifier within investors’ broader portfolios.
Invesco announced today the closure of their PS364m Global Targeted Returns strategy after conducting a strategic review concluded that demand was diminishing over time. As part of its Summit range and Model Portfolio Services – subject to regulatory approval.
Introduction
Global Targeted Returns invests across various asset classes with an aim of producing long-term returns with targeted targets. It takes an unconstrained opportunity set approach and applies risk management protocols effectively in its pursuit of this aim. The fund may invest across geographies, sectors and currencies while holding assets including stocks, bonds (issued by companies, governments or supranational institutions without regard for maturity), cash or commodities.
This fund was launched in September 2013 with an aim of providing positive total returns regardless of market conditions, over a rolling three-year period. Specifically, its gross returns aim for an annualized average over UK three-month Libor while offering less than half the volatility experienced with global equities.
Investors can access this fund via various investment platforms, including open-end funds, closed-end funds and exchange-traded funds (ETFs). Its management team is led by senior managing director Stephanie Butcher of Multi-Asset Strategies Group – comprising multi-asset investing capabilities such as systematic/factor investing as well as solutions teams – which manage over $145bn for clients around the globe.
Is Global Targeted Returns Fund Right for You?
The Global Targeted Returns Fund gives investors an exciting opportunity to access multiple investment ideas under one risk-managed umbrella. It aims to deliver an average gross return of 5% above three-month EURIBOR over a three-year rolling period with less than half the volatility associated with global equities – though no guarantee can be given as to either positive returns or volatility targets being met, nor could an investor receive back their entire amount invested.
Since its launch in September 2013, the Invesco Perpetual Global Targeted Returns Fund has outshone rival Standard Life GARS. According to FE Analytics, it has produced returns of 9.48 per cent with annualised volatility of 3.48 per cent; significantly better than its peers FTSE All-Share (9.57%) and IMA Targeted Absolute Return (4.17).
Stephanie Butcher, Invesco Perpetual’s chief executive officer, acknowledged that closing their equity strategy was difficult but necessary as demand had continued to diminish for it. Instead, the firm will concentrate on its multi-asset capabilities such as Summit Ranges and Model Portfolio Services where there was strong client demand.
Who Can Benefit from Global Targeted Return fund
This fund may be interesting to investors who want to try a lot of different investment ideas by using a variety of assets. It gives investors access to global opportunity sets with low correlation total returns that focus on minimizing capital loss.
This fund offers exposure to global investments such as equities, debt securities (including bonds ), money market instruments (MMIs) and cash. Furthermore, the fund seeks exposure to emerging markets which have the greatest potential for return with reduced risks than developed markets.
James Taylor, the head of Invesco’s multi-asset strategies division and a seasoned professional with more than two decades of experience, leads a skilled investment team that is in charge of this fund. Before Invesco acquired GARS it had previously run Standard Life’s global absolute return strategy (GARS). However, as part of an initiative to streamline their multi-asset product range and focus on other capabilities in the UK where there is strong client demand (FE Trustnet has learned), Invesco decided to close GARS as part of an effort to streamline and streamline their multi-asset product range while prioritising other capabilities (GARS being closed)
The Impact of Global Targeted Returns Fund
After five dismal years, Invesco Perpetual will close its target return strategies fund in order to simplify its multi-asset portfolios and streamline operations. After conducting a strategic review they determined that demand had decreased further for targeted return strategies; it would therefore be more advantageous for them to focus on growing areas such as their Summit Ranges or Model Portfolio Services instead.
In September 2013, the firm unveiled their Global Targeted Returns Fund with the goal of producing positive total returns in all market conditions over three-year rolling periods, and achieving gross annual returns exceeding UK three-month Libor by at least five percent p.a. while maintaining volatility below that seen with global equities.
Since its debut, the fund has delivered returns of 9.66% – outpacing GARS and the FTSE All-Share and significantly exceeding sector average returns. This success was accomplished while boasting lower volatility than either of these benchmarks and with an annualised correlation score of just 0.33 percent, according to FE Analytics.
Conclusion
The fund aims to generate attractive income for investors through high-quality debt securities. Furthermore, its flexible approach enables it to adjust exposure between equities and bonds according to market conditions, thus taking full advantage of any opportunities presented as they arise.
One year after its introduction in September 2013, Invesco Perpetual launched their Global Targeted Returns fund as an alternative to Standard Life Investment’s Global Absolute Return Strategies (GARS) fund. With less volatility than what global equities experienced over the same three-year rolling period, their goal is to generate positive total returns in all market conditions. FE Trustnet reviewed it closely.
However, as this chart shows, Invesco Fund has fallen short of its goals over the past five years; only two out of 36 trading periods saw positive returns, and it did not outperform its benchmark index.