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Invesco Balanced-Risk Allocation Fund Reaches Risk-Parity Milestone

Stocks in this article: ABRZX IVZ

HOUSTON, March 22, 2011 /PRNewswire/ -- As advisors look for prudent ways to manage risk in their clients' portfolios, Invesco announced today that assets in Invesco Balanced-Risk Allocation Fund (Ticker: ABRZX) have reached $1 billion.

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Relative to traditional balanced portfolios, the Invesco Balanced-Risk Allocation Fund seeks to provide greater capital loss protection during down markets through its proprietary long-only, investment process. The fund invests in derivatives and other financially linked instruments to provide leveraged exposure to certain U.S. and international equity, fixed-income and commodity markets.

"Reaching this milestone speaks to how our clients are embracing this innovative and workable solution for providing investors the potential for greater risk management in their portfolios," said Philip Taylor, Senior Managing Director of Invesco and Head of Invesco's North American Retail business.

Lead manager Scott Wolle, CIO of Invesco Global Asset Allocation, and his team provide low-cost access to strategic asset allocation as they manage the risk-parity fund so shareholders own assets that Invesco believes cover all three major types of economic environments – recessionary, non-inflationary growth, and inflationary growth. The ultimate goal of this approach is to provide total return with a low to moderate correlation to traditional financial market indices.

"As we carefully analyze the economy, we actively adjust portfolio positions to reflect the near-term market environment while remaining consistent with the optimized long-term portfolio structure described in the fund prospectus," Wolle said. "At this time, the portfolio is overweight equities and commodities with a neutral bond allocation. This positioning reflects a constructive economic outlook, along with the recognition of further upside price risk for commodities."

The management team balances these two competing ideas – opportunity for excess return from active positioning and the need to maintain asset class exposure set forth in the optimized portfolio structure – by setting controlled tactical ranges around the long-term asset allocation. The tactical ranges differ for each asset based on the management team's estimates of volatility.

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