Morningstar this week looks at euro corporate bond funds and compares Janus Henderson with Invesco. After tariff tensions rattled markets, fund managers remain cautiously positioned in defensive sectors despite temporary relief.
Following the US tariffs announcement in early April, corporate bond spreads widened significantly on concerns that higher manufacturing and production costs would lead to higher prices, slowing consumer demand and lowering corporate revenues. However, both investment grade and high yield bond spreads tightened later that month, following the announcement of a 90-day pause that brought some relief to a faltering market. Almost two months into that hiatus, there is still considerable uncertainty across global markets.
Many corporate bond managers have maintained or slightly increased their already cautious portfolio positioning and refrained from making any large changes to their portfolios during May. Common themes have focused on defensive sectors like healthcare and telecoms, as well as financials. On the other hand, managers are treading lightly in those sectors most sensitive to trade volatility, such as autos and retail.
With that in mind, we take a closer look at two funds in the Morningstar EUR Corporate Bond category that are qualitatively rated by our analysts: Janus Henderson Horizon Euro Corporate Bond and Invesco Euro Corporate Bond.
People
The Janus Henderson strategy is co-managed by Tom Ross and Tim Winstone. Ross brings valuable continuity, having been named here in 2015. He was joined on the roster by Winstone (who heads the investment-grade credit team) in 2017. The duo receives credit ideas and trade recommendations from an experienced 22-member credit analyst team. The collegial team approach, backed by solid and stable expertise earns an Above Average People Pillar rating.
Julien Eberhardt and Tom Hemmant stepped up as co-lead managers on the Invesco strategy in 2021, after previous managers Paul Read and Paul Causer announced their retirement. The transition was a smooth one, as Eberhardt had already been a co-manager here since his promotion from analyst in 2017. His background in financials is a key advantage given the sector is a large portion of the overall euro corporate-bond market. Hemmant had joined the roster in 2020, after his own promotion from utilities and energy analyst. Over 2023 and 2024, the Invesco Henley and Invesco London teams integrated to create one group, Invesco Fixed Income Europe. The managers should thus benefit from having a larger 17-member analyst team with more in-depth coverage of investment-grade companies. The well-resourced, integrated team earns an Above Average People rating.
Process
The Janus Hendersen team aims to outperform the iBoxx EUR Corporates Index, mainly via a bottom-up bond-picking approach, but are also pragmatic in shifting top-down positioning in response to a changing macro environment. The managers collaborate on top-down views with the wider portfolio-management team, which culminates in a medium-term outlook for corporate credit that drives their sector biases, and their use of credit derivatives as an alpha source also sets them apart from many peers. The well-defined team-based process earns an Above Average Pillar rating.
Invesco’s benchmark-agnostic approach has more flexibility, with no caps on sector or country weightings. There is also a greater emphasis on top-down calls. Portfolio construction focuses on defensiveness at its core (nonfinancial investment-grade corporate bonds, and senior and covered bank debt), as well as credit risk (high yield, financial subordinated debt and corporate hybrids) and liquidity (cash, short-term debt, and high-quality government bonds). A combination of strong security selection and solid sector allocation decisions earns an Above Average Process Pillar rating.
Portfolio
The Janus Henderson portfolio typically holds at least 80 percent in euro-denominated investment-grade bonds, with up to 20 percent in cash, high-yield fare and government bonds. While duration management (a portfolio’s level of interest rate sensitivity) is not used as a performance driver, the team does actively use credit default swaps to add value. Like many peers, the team maintained an overweight to financials in 2025, favoring the senior and short-dated debt of high-quality national champions. On the other hand, they reduced exposure to cyclical sectors and industries they view as sensitive to tariff hikes (such as real estate and energy) during April and May, and dialed down exposure to the US.
The Invesco mandate allows more high yield exposure (up to 30 percent) than some peers, but that stake stayed around a modest 5 percent for most of 2025. While investment-grade corporate debt only made up around half of the portfolio in recent years, the team has continued to hold a multi-year overweighting in subordinated financials (since 2008), citing stricter regulation and higher capital buffers in Europe since the financial crisis. The team dialed down duration to a 1.5 year underweight in 2022 as inflation rose and interest rates followed. They slowly reduced that underweight in the 3 years that followed, but tariff-induced uncertainty around inflation and growth forecasts stalled duration around 5 years in May 2025.
Performance
The Janus Hendersen strategy has held its own under longest-tenured manager Ross’s 10-year charge through May 2025—beating two thirds of peers and the Morningstar category index. The high-conviction approach can lead to periods of underperformance though, such as in 2022 when an initial overweight to risk stung amid fears of gas shortages and heightened inflation, and then a subsequent underweight to risk held it back in the final quarter’s bear market rally.
The Invesco strategy has produced strong returns over the medium and longer term, landing ahead of 75 percent of peers—partly under the direction of previous management. Recent performance versus peers has been mixed though. For example, in 2022 the fund’s underweight to duration and real estate boosted returns amid interest-rate volatility. But the fund fell behind peers in 2024, partly due to reduced credit risk ahead of the late year rally, and an underweight in corporate hybrids within real estate which recovered as interest rates declined.
Corporate bonds: Janus Henderson vs Invesco
Jeana Marie Doubell is investment analyst fixed income EMEA bij Morningstar. Morningstar is a member of the expert panel at Investment Officer.