Invesco Perpetual has launched the Invesco Perpetual Balanced Risk 6, 8 and 10 funds to provide long-term “equity-like” returns with reduced volatility, under the management of the firm’s Atlanta-based global asset allocation team.

The managing team, which is headed by chief investment officer Scott Wolle, will provide exposure to three key asset classes - equities, bonds and commodities - while following a three-tier investment strategy, the firm said in a statement.

Asset allocation - the first step - involves establishing exposure to assets which can be expected to have a low degree of correlation with each other at different stages of the economic cycle, the firm said. 

The second stage is portfolio construction, whereby the team takes exposure to 16 underlying assets within the 3 asset classes themselves. This is subsequently followed by active positioning so as to make "final tactical adjustments" and capture additional returns by taking advantage of “short-term market anomalies”.

The firm said that the investment team aims to capture between 15 per cent and 20 per cent of the funds’ target return via active positioning.

“We believe that the funds benefit from multiple potential applications within client portfolios. They can be positioned as a core holding, providing reassurance to investors when other parts of the portfolio are more volatile. Alternatively, they can be positioned as a satellite holding, sitting alongside more traditional highly-correlated assets to provide diversification,” said Craig Newman, sales director.  

“In a period of non-inflationary growth, developed equities are likely to perform well. In a recession the fund’s bond exposure is designed to preserve portfolio value. And during times of inflationary growth, commodities have traditionally performed well,” added Scott Wolle, chief investment officer of the global asset allocation team