The Invesco Perpetual European High Yield Fund aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding Corporate and Government bonds, together with UK and European equities.
Fixed income markets saw widespread volatility as the turmoil affecting financial institutions intensified. Benelux financial group Fortis was partly nationalised, as was Icelandic bank Glitnir. The Irish government guaranteed all bank deposits and debt for two years while the prospect of further bank bailouts saw the euro fall 4% against the US dollar. The US$700bn rescue plan proposed by the US Treasury was rejected by Congress, causing further extreme levels of volatility.In credit markets, spreads over government bonds widened sharply. According to data from Merrill Lynch, European high-yield spreads increased by 336bps, while investment-grade spreads increased by 97bps. September saw European high-yield bonds post an 11.3% fall in local currency terms, the worst monthly return since June 2001.Macroeconomic data weakened further. The latest surveys from the major eurozone economies confirmed that activity is slowing sharply, with the industrial sector bearing the brunt of the downturn. Eurozone economic sentiment also sank to the lowest level in almost seven years.
