Invesco

Real estate income will face challenges in the new value cycle, Invesco says, but investors will have the chance to build growth if they lean into secular drivers and key differentiators.

The small-cap space can be rife with risk, as emotion and understanding wrestle with common sense practice. But with a systematic style overlaid to provide flexibility, diversification and liquidity, the benefits become clear.

Australian small cap managers are some of the most successful active managers in the world – and charge like it. But their apparently anomalous outcomes might have a relatively simple explanation, according to Invesco.

By employing smart active management, investors can avoid the ghoulish company cohorts that haunt the small cap sector of the stock exchange, Invesco writes in a recent whitepaper.

In this paper, Invesco debunks ten of the most common myths surrounding senior secured loans and explains why they think they’re a valuable addition to an investor’s portfolio. 

Indices are flush in developed markets the world over, but that doesn’t mean prices have necessarily peaked according to Invesco chief global market strategist Kristina Hooper.

Contrary to popular misconception, senior secured loans actually sit at the safest part of the capital structure and remain backed by company assets. That they’re unsafe is one of several fallacies that needs to be busted, says Invesco’s Ashley O’Connor.

In the near to medium term, the group forecasts “ample opportunity” in the loan asset class to generate higher than average returns while maintaining a minimal risk profile for investors.

Inflation has likely peaked and the small cap market has bottomed out. The bad news is that relative returns have already started improving. The good news is that we’re still a few standard deviations from the mean, and there’s still plenty of upside.

The tailwinds for disinflation are starting to coalesce across the globe, which should give some central banks the ‘anchoring’ required to start dropping rates by the middle of the year.