Change of Investment Policy and Objective - Invesco Euro Corporate Bond Fund

Summary of the changes: 

As from the effective date of 8 March 2018, the investment objective and policy of the Euro Corporate Bond fund will be amended. The changes proposed by the fund manager will allow the fund to remain a strategy with a focus on investment grade, but also providing flexibility in the fund's ability to retain cash and access other opportunities. 

Invesco have also taken the opportunity to simplify the investment policy and change the primary investment universe to debt securities denominated in Euro issued by corporate issuers. 

Investment Objective and Policy 

Until 7 March 2018 

The fund is invested to achieve, in the medium to long-term, a competitive overall investment return in Euros with relative security of capital in comparison to equities. 

The Fund will invest at least two thirds of its NAV in debt securities or instruments denominated in Euro issued by corporate issuers. 

The Fund will invest primarily in investment grade (Moody's Baa or higher) fixed and floating rate bonds and other debt securities which, in the opinion of the Investment Manager, have a comparable credit quality issued by corporations in any part of the world or issued or guaranteed by any government, government agency, supranational or public international organisation in any part of the world.

The Fund may invest up to 20% of its NAV in contingent convertibles. 

The Fund may invest up to 10% of its NAV in securities which are either in default or deemed to be at high risk of default as determined by the SICAV ("Distressed Securities). 

The Fund may invest in non-investment grade securities which generally not exceed 30% of the NAV of the Fund. 

Up to one third of the NAV of the Fund may be invested in Non-Euro debt instruments or debt instruments issued by public international debtors. Investments not denominated in the Euro are intended to be hedged back into Euro at the discretion of the Investment Manager. 

Fixed interest securities comprise any or all of the following types of security: 

• bonds, debentures, notes and treasury bills issued by governments, local authorities and public authorities.
• corporate bonds, notes and debentures whether secured or unsecured (including securities convertible into or exchangeable for equity shares.
• securities issued by public international bodies such as the European Investment Bank, International Bank for Reconstruction and Development or such other body which is, in the opinion of the Investment Manager, of similar standing.
• certificates of deposit, commercial paper and bankers acceptances.

Derivatives and forwards relating to debt instruments may be used for the efficient portfolio management. The aim of any derivative or forward used for such reasons is not to materially alter the risk profile of the Fund, rather their use is to assist the Investment Manager in meeting the investment objectives of the Fund by: 

• reducing risk and/or
• reducing cost and/or
• generating additional income or capital for the Fund at an acceptable level of cost and risk.

The Fund may, from time to time, sell interest rate futures in order to reduce participation in the bond markets or to produce gains for the Fund in falling bond markets.

The Fund may also enter into credit default swaps (as both a protection buyer and seller).

The Fund can invest up to 30% of its NAV in liquid assets.

Investment Objective and Policy

From 8 March 2018

The Fund aims to achieve a combination of income and capital growth over the medium to long-term.

The Fund seeks to achieve its objective by investing primarily in debt securities denominated in Euro issued by corporate issuers.

Up to 30% of the NAV of the Fund many be invested in aggregate in cash, cash equivalents, Money Market Instruments and debt securities issued by companies or other entities not meeting the above requirements.

The Fund may invest up to 20% of its NAV in contingent convertibles.

The Fund may invest up to 10% of its NAV in securities which are either in default or deemed to be at high risk of default as determined by the SICAV ("Distressed Securities").

Up to 30% of the NAV of the Fund may be invested in non-investment grade debt.

The Fund's use of derivatives may include derivatives on credit, rates and currencies and may be used to achieve both long and short positions, which overall will not result in the Fund being directionally short or short any asset class.

Non-Euro denominated investments are intended to be hedged back into Euro at the discretion of the Investment Manager.

Use of financial derivative instruments

Until 7 March 2018

The Fund may enter into financial derivative instruments for efficient portfolio management and hedging purposes only (please refer to the "Investment Policy" above for further details of the use of derivatives).

Use of financial derivative instruments

From 8 March 2018

The Fund may enter into financial derivative instruments for efficient portfolio management and hedging purposes and for investment purposes (please refer to the "Investment Policy" above for further details of the use of derivatives for investment purposes).

The expected proportion of the NAV of the Fund subject to total return swaps is 0%. Under normal circumstances, the maximum proportion of the NAV of the Fund subject to total return swaps is 30%.

There is no action required from shareholders of the fund. The shareholder notification and a Q&A document from Invesco in relation to the changes can be viewed opposite.

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For more information about Invesco visit www.invesco.lu