OOSAX
Invesco Senior Floating Rate Fund
Seeks total return by investing in senior secured floating rate loans and debt instruments while integrating environmental, social, and governance (ESG) criteria.
Recognized among large U.S. investment managers for outstanding overall performance1.
The Invesco Floating Rate ESG Fund targets floating-rate high yield returns by investing in the senior, private debt of large companies. Floating-rate loans can help mitigate the impact of rising interest rates. The fund is managed to a high standard for environmental, social, and governance (ESG) risk.
Our floating-rate team is one of the world’s largest, with 25+ years of credit selection expertise and conservative management.
As a private-side investor, we make investment decisions using information that may not be readily accessible to most of our competitors.
We were the first floating-rate fund to employ a proprietary ratings framework to evaluate ESG factors that can affect credit risk.
The questions that are uppermost on the minds of financial professionals and their clients.
Floating rate loans—also known as bank loans, senior loans, or leveraged loans—are debt obligations issued by companies through banks and other financial institutions. The coupon payments on floating-rate loans reset periodically (typically every 30 or 90 days) based on changes in short-term interest rates such as the London Interbank Offered Rate (LIBOR) and the Secured Overnight Funding Rate (SOFR), plus a credit spread.
Unlike fixed-rate bonds, yields on floating loans rise along with short-term interest rates. The low duration of floating rate loans also aims to help provide some mitigation for investors when interest rates rise.
Floating rate loans and high-yield corporate bonds are both typically issued by companies with credit ratings below investment grade, which is why they tend to have higher yields. Unlike high-yield bonds, floating-rate loans are backed by a company’s collateral and are classified as senior secured debt, which helps mitigate credit risk.
Senior loans may be attractive in rising interest rate environments thanks to their floating rate coupons. They also offer a core long-term holding in any market environment due to high income potential, diversification potential, and senior secured status.
Invesco is a leader in this asset class and our floating rate team is one of the world’s largest, with over 25 years of credit selection expertise and conservative management. As a private-side investor, we make investment decisions using information not readily accessible to most of our competitors.
The following share classes are offered for this fund: Class A, Class C, Class R, Class R5, Class R6, and Class Y.
To learn more about our alternative bank loan offerings, explore the funds below.
OOSAX
Invesco Senior Floating Rate Fund
XCRTX
Invesco Dynamic Credit Opportunity Fund
The Fund’s investment objective is total return, comprised of current income and capital appreciation.
Source: LSEG Lipper Fund Awards. © 2024 LSEG Lipper. All The LSEG Lipper Fund Awards, granted annually, highlight funds and fund companies that have excelled in delivering consistently strong risk-adjusted performance relative to their peers. The LSEG Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is an objective, quantitative, risk-adjusted performance measure calculated over 36, 60 and 120 months. The fund with the highest Lipper Leader for Consistent Return (Effective Return) value in each eligible classification wins the LSEG Lipper Fund Award. For more information, see lipperfundawards.com. Although LSEG Lipper makes reasonable efforts to ensure the accuracy and reliability of the data used to calculate the awards, their accuracy is not guaranteed. LSEG Lipper Inc. is a major independent mutual fund tracking organization.
ABOUT RISK
NA3146495
Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa.
Not all share classes are available to all investors. Please see the prospectus for more information.
Diversification does not guarantee a profit or eliminate the risk of loss.
An issuer may be unable to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer’s credit rating.
The values of junk bonds fluctuate more than those of high quality bonds and can decline significantly over short time periods.
There is a risk that the value of the collateral required on investments in senior secured floating rate loans and debt securities may not be sufficient to cover the amount owed, may be found invalid, may be used to pay other outstanding obligations of the borrower or may be difficult to liquidate.
Risks of collateralized loan obligations include the possibility that distributions from collateral securities will not be adequate to make interest or other payments, the quality of the collateral may decline in value or default, the collateralized loan obligations may be subordinate to other classes, values may be volatile, and disputes with the issuer may produce unexpected investment results.
Most senior loans are made to corporations with below investment-grade credit ratings and are subject to significant credit, valuation and liquidity risk. The value of the collateral securing a loan may not be sufficient to cover the amount owed, be found invalid or used to pay other outstanding obligations. The loan's collateral may be difficult to liquidate, or a majority of the collateral may be illiquid.
The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, political and economic instability, and foreign taxation issues.
Derivatives may be more volatile and less liquid than traditional investments and are subject to market, interest rate, credit, leverage, counterparty and management risks. An investment in a derivative could lose more than the cash amount invested.
In general, stock values fluctuate, sometimes widely, in response to activities specific to the company as well as general market, economic and political conditions.
The Fund uses an Environmental, Social and Governance (ESG) scoring methodology to evaluate securities and may forego some market opportunities available to funds that do not use ESG factors. As a result, the Fund may underperform funds that do not screen or score companies based on ESG factors or that use a different methodology. Information used by the Fund to evaluate ESG factors may not be readily available, complete or accurate, which could negatively impact the Fund’s ability to apply its methodology, and in turn its performance. Companies eligible for inclusion in the Fund may not reflect the beliefs or values of certain investors or exhibit positive/favorable ESG factors if different metrics were used to evaluate them.
The Fund invests in financial instruments that use the London Interbank Offered Rate (“LIBOR”) as a reference or benchmark rate for variable interest rate calculations. LIBOR will be phased out by the end of 2021, and it's anticipated that LIBOR will cease to be published after that time. To assist with the transition, US dollar LIBOR rates will continue to be published until June 2023. There is uncertainty on the effects of the LIBOR transition process, therefore any impact of the LIBOR transition on the Fund or its investments cannot yet be determined. There is no assurance an alternative rate will be similar to, produce the same value or economic equivalence or instruments using the rate will have the same volume or liquidity as LIBOR. Any effects of LIBOR transition and the adoption of alternative rates could result in losses to the Fund.
The Fund is subject to certain other risks. Please see the prospectus for more information regarding the risks associated with an investment in the Fund.
This link takes you to a site not affiliated with Invesco. The site is for informational purposes only. Invesco does not guarantee nor take any responsibility for any of the content.