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Invesco Senior Loan Trust - Class A

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Investment Objective

The Fund seeks income.

Fund Management

Fund Trustee & Investment manager
Invesco Trust Company (the “Trust Company”) serves as the trustee of the Trust. In addition, the Trust Company is (i) an “investment manager” under Section 3(38) of ERISA and (ii) a fiduciary as defined under Section 3(21) of ERISA with respect to assets of the Participating Trusts that are placed in the Fund.

Fund Sub-Adviser
Invesco Senior Secured Management, Inc. (the “Sub-Adviser”), an affiliate of the Trust Company, has been appointed by the Trust Company to render investment advice to the Fund. For more information regarding the Sub-Adviser and the portfolio manager(s), please refer to the Sub-Adviser’s Form ADV Part 2A and 2B.

The Trust Company has delegated to the Sub-Adviser as much of its authority with regard to the management of the Fund as may be permitted by applicable law. As such, the Sub- Adviser will act on behalf of the Trust Company with regard to all of the investment management and other related activities of the Fund (including the exercise of proxy voting or consent rights with respect to the securities in which the Fund may invest), subject to the supervision of the Trust Company. Nevertheless, the Trust Company will remain exclusively liable to the Fund and the Participating Trusts for the performance of its duties.

Fund Benchmark
JP Morgan Leveraged Loan Index

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Performance

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Price History

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Important information

Current and prospective participating trusts are strongly encouraged to review the complete terms of the Declaration of Trust for additional details regarding the Fund and its operations. Further information regarding the Fund, including performance and portfolio holdings, can be found at www.InvescoTrustCompany.com.
The Fund is not guaranteed by Invesco, its subsidiaries or affiliates, including Invesco Advisers, Inc. The Fund is not insured by the FDIC or the Federal Reserve Bank, nor guaranteed by any governmental agency.

 Principal Risks of Investing

Principal risks of investing in the Fund

The risks of the Fund’s business are substantial. The Fund could realize losses rather than gains from some or all of the investments described herein and there is no assurance that the Fund will achieve its investment objective. In seeking its investment objective, the Fund may invest substantially all of its assets in the Master Loan Fund.

The following is a general description of certain investment risks relating to the Master Loan Fund. Except as otherwise set forth herein, the Master Loan Fund’s investment objective, investment strategies, investment guidelines and investment risks are substantially the same as those of the Fund, and the description below would also apply (directly and/or indirectly) to the Fund. Unless the context requires otherwise, references below to the Master Loan Fund and the Master Loan Fund Manager also apply to the Fund and the Trust Company and Sub- Adviser.

The Authorized Fiduciary should review the attached Registration Statement of the Master Loan Fund for additional risk information related to the Master Loan Fund.

In general, the Fund’s investment strategies have been broadly structured to provide the Trust Company and the Sub-Adviser with flexibility to achieve the Fund’s investment objective. It is impossible to predict the degree of profitability, if any, that may be achieved from the investment strategies described herein or other investment strategies the Fund may pursue. The Trust Company and the Sub-Adviser will endeavor to commit the Fund’s resources among the various investments and strategies consistent with the philosophy and processes articulated herein and in response to changing market conditions and opportunities. The risks of the Fund’s business are substantial and the Fund could realize losses rather than gains from some or all of the investments described herein. The Sub-Adviser believes that having the flexibility to allocate capital dynamically among geographies, industries, markets and instruments is critical in achieving the Fund’s investment objectives as it seeks to diversify risk and create opportunities.

The development of a trading strategy is a continuous process and the Fund’s trading strategy and methods may, therefore, be modified from time to time. The Fund’s trading methods are confidential and the descriptions of them in this Fund Supplement are not exhaustive. The Fund’s trading strategies may differ from those used by the Sub-Adviser and its affiliates with respect to other accounts they manage. Trading decisions require the exercise of judgment by the Sub-Adviser. The Sub-Adviser may, at times, decide not to make certain trades, thereby foregoing participation in price movements that would have yielded profits or avoided losses. Unit holders cannot be assured that the strategies or methods utilized by the Sub-Adviser will result in profitable trading for the Fund. The price of the Fund's Units can go up and down substantially. The value of the Fund's investments may change because of broad changes in the markets in which the Fund invests or because of poor investment selection, which could cause the Fund to underperform other funds with similar investment objectives. There is no assurance that the Fund will achieve its investment objective. The price of the Master Loan Fund's shares (and therefore the value of the Fund’s Units) can go up and down substantially. The value of the Master Loan Fund's investments may change because of broad changes in the markets in which the Master Loan Fund invests or because of poor investment selection, which could cause the Master Loan Fund to underperform other funds with similar investment objectives. There is no assurance that the Master Loan Fund (and thus the Fund) will achieve its investment objective.

Please refer to the Offering Memorandum for a detailed discussion of the regulatory and general fund risks associated with investing in the Fund. Specific investment risks related to the Fund’s investment strategy include, but are not limited to, the following:

1. Selection Risk. Poor investment selection by the Master Loan Fund Manager will cause the Master Loan Fund to underperform other funds having a similar investment objective and investment strategies. While the Master Loan Fund Manager expects to have access to financial and other information about borrowers, the amount of public information available with respect to loans will generally be less extensive than what is available for exchange-listed or otherwise registered securities.

2. Limited Availability of Loans. Investments in loans may be limited. The limited availability of loans may be due to a number of factors. Direct lenders may allocate only a small number of loans to new investors, including the Master Loan Fund. There may be fewer loans available for investment that meet the Master Loan Fund’s standards, particular in times of economic downturns. Also, lenders or agents may have an incentive to market the less desirable loans to investors such as the Master Loan Fund while retaining attractive loans for themselves. This would reduce the amount of suitable investments for the Master Loan Fund.

3. Participation Interests in Loans. Participation interests represent an undivided fractional interest in a loan. They are typically purchased from banks or dealers that have made the loan or have become members of the loan syndicate by purchasing the loan by assignment. When the Master Loan Fund invests in a loan via a participation, the participation seller remains the lender of record under the loan agreement, and the Master Loan Fund typically becomes the beneficial owner of the loan, and is entitled to receive from the participation seller any payments or other property or distributions received by the participation seller from or on behalf of the borrower of the loan. When the Master Loan Fund buys a participation, it may be required to pay a fee, or cede a portion of the interest and fees that accrued prior to settlement of the participation, to the lender selling the participation. Occasionally, the selling lender pays a fee to the participant. If the Master Loan Fund sells a participation, it may be required to pass along to a buyer a portion of any interest and fees that the Master Loan Fund would otherwise be entitled to.

4. Corporate Debt Obligations. The Master Loan Fund can purchase debt obligations, such as bonds, debentures, notes and preferred stock issued by U.S. and foreign corporations, partnerships or other business entities. Debt securities purchased by the fund may be subordinate to other liabilities of the issuer. If a borrower becomes insolvent, the borrower’s assets may be insufficient to meet its obligations to the holders of its subordinated debt.

5. Asset-Backed Securities. The Master Loan Fund may invest in asset-backed securities, which are fractional interests in pools of loans, other assets or receivables. They are issued by trusts or other special purpose vehicles and are collateralized by the loans, other assets or receivables that make up the pool. The trust or other issuer passes the income from the underlying asset pool to the investor. Neither the Master Loan Fund nor the Master Loan Fund Manager selects the loans, receivables, or other assets that are included in the pools or the collateral backing those pools. Asset-backed securities are subject to interest rate risk and credit risk. These securities are subject to the risk of default by the issuer as well as by the borrowers of the underlying loans in the pool. Certain asset-backed securities are subject to prepayment and extension risks. Collateralized loan obligations are subject to the credit risk of the borrower and the institution that creates the pool, as well as prepayment risks.

6. Debt Securities. The Master Loan Fund may invest in debt securities, including securities issued or guaranteed by the U.S. government, or its agencies and instrumentalities, or foreign sovereigns, and foreign and domestic corporate bonds, notes and debentures. Debt securities may be subject to the following risks:

a. Interest Rate Risk. Interest rate risk is the risk that rising interest rates, or an expectation of rising interest rates in the near future, will cause the values of the Master Loan Fund’s investments in debt securities to decline. The values of debt securities usually change when prevailing interest rates change. When interest rates rise, the values of outstanding debt securities generally fall, and those securities may sell at a discount from their face amount. When interest rates rise, the decrease in values of outstanding debt securities may not be offset by higher income from new investments. When interest rates fall, the values of already-issued debt securities generally rise. However, when interest rates fall, the Master Loan Fund’s investments in new securities may be at lower yields and may reduce the Master Loan Fund’s income. The values of longer-term debt securities usually change more than the values of shorter-term debt securities when interest rates change; thus, interest rate risk is usually greater for securities with longer maturities or durations. “Zero-coupon” or “stripped” securities may be particularly sensitive to interest rate changes. Risks associated with rising interest rates are heightened given that interest rates in the U.S. are at, or near, historic lows. Interest rate changes may have different effects on the values of mortgagerelated securities because of prepayment and extension risks.

b. Duration Risk. Duration risk is the risk that longer-duration debt securities are more likely to decline in price than shorter-duration debt securities, in a rising interest-rate environment. Duration is a measure of the price sensitivity of a debt security or portfolio to interest rate changes. “Effective duration” attempts to measure the expected percentage change in the value of a bond or portfolio resulting from a change in prevailing interest rates. The change in the value of a bond or portfolio can be approximated by multiplying its duration by a change in interest rates. For example, if a bond has an effective duration of three years, a 1% increase in general interest rates would be expected to cause the bond’s value to decline about 3% while a 1% decrease in general interest rates would be expected to cause the bond’s value to increase 3%. The duration of a debt security may be equal to or shorter than the full maturity of a debt security.

c. Credit Risk. Credit risk is the risk that the issuer of a security might not make interest and principal payments on the security as they become due. U.S. government securities generally have lower credit risks than securities issued by private issuers or certain foreign governments. If an issuer fails to pay interest, the Master Loan Fund's income might be reduced, and if an issuer fails to repay principal, the value of the security might fall and the Master Loan Fund could lose the amount of its investment in the security. The extent of this risk varies based on the terms of the particular security and the financial condition of the issuer. A downgrade in an issuer's credit rating or other adverse news about an issuer, for any reason, can reduce the market value of that issuer's securities.

d. Credit Spread Risk. Credit spread risk is the risk that credit spreads (i.e., the difference in yield between securities that is due to differences in their credit quality) may increase when the market expects lower-grade bonds to default more frequently. Widening credit spreads may quickly reduce the market values of the Master Loan Fund’s below-investment grade and unrated securities. Some unrated securities may not have an active trading market or may trade less actively than rated securities, which means that the Master Loan Fund might have difficulty selling them promptly at an acceptable price.

e. Extension Risk. Extension risk is the risk that, if interest rates rise rapidly, repayments of principal on certain debt securities may occur at a slower rate than expected, and the expected maturity of those securities could lengthen as a result. Securities that are subject to extension risk generally have a greater potential for loss when prevailing interest rates rise, which could cause their values to fall sharply. Extension risk is particularly prevalent for a callable security where an increase in interest rates could result in the issuer of that security choosing not to redeem the security as anticipated on the security’s call date. Such a decision by the issuer could have the effect of lengthening the debt security’s expected maturity, making it more vulnerable to interest rate risk and reducing its market value.

f. Reinvestment Risk. Reinvestment risk is the risk that when interest rates fall, the Master Loan Fund may be required to reinvest the proceeds from a security’s sale or redemption at a lower interest rate. Callable bonds are generally subject to greater reinvestment risk than non-callable bonds.

g. Prepayment Risk. Certain fixed-income securities (in particular mortgage-related securities) are subject to the risk of unanticipated prepayment. Prepayment risk is the risk that, when interest rates fall, the issuer will redeem the security prior to the security’s expected maturity, or that borrowers will repay the loans that underlie these fixed-income securities more quickly than expected, thereby causing the issuer of the security to repay the principal prior to expected maturity. The Master Loan Fund may need to reinvest the proceeds at a lower interest rate, reducing its income. Securities subject to prepayment risk generally offer less potential for gains when prevailing interest rates fall. If the Master Loan Fund buys those securities at a premium, accelerated prepayments on those securities could cause the Master Loan Fund to lose a portion of its principal investment. The impact of prepayments on the price of a security may be difficult to predict and may increase the security’s price volatility. Interest-only and principal-only securities are especially sensitive to interest rate changes, which can affect not only their prices but can also change the income flows and repayment assumptions about those investments.

h. Event Risk. If an issuer of debt securities is the subject of a buyout, debt restructuring, merger or recapitalization that increases its debt load, it could interfere with its ability to make timely payments of interest and principal and cause the value of its debt securities to fall.

7. Fixed Income Market Risks. The fixed-income securities market can be susceptible to unusual volatility and illiquidity. Volatility and illiquidity may be more pronounced in the case of belowinvestment grade and unrated securities. Liquidity can decline unpredictably in response to overall economic conditions or credit tightening. Increases in volatility and decreases in liquidity may be caused by a rise in interest rates (or the expectation of a rise in interest rates), which are at or near historic lows in the U.S. and in other countries. During times of reduced market liquidity, the Master Loan Fund may not be able to readily sell bonds at the prices at which they are carried on the Master Loan Fund’s books. If the Master Loan Fund needed to sell large blocks of bonds to meet shareholder redemption requests or to raise cash, those sales could further reduce the bonds’ prices. An unexpected increase in Master Loan Fund redemption requests, which may be triggered by market turmoil or an increase in interest rates, could cause the Master Loan Fund to sell its holdings at a loss or at undesirable prices. Similarly, the prices of the Master Loan Fund’s holdings could be adversely affected if an investment account managed similarly to that of the Master Loan Fund were to experience significant redemptions and those accounts were required to sell its holdings at an inopportune time. The liquidity of an issuer’s securities may decrease as result of a decline in an issuer’s credit rating, the occurrence of an event that causes counterparties to avoid transacting with the issuer, or an increase in the issuer’s cash outflows. A lack of liquidity or other adverse credit market conditions may hamper the Master Loan Fund’s ability to sell the debt securities in which it invests or to find and purchase suitable debt instruments.

Economic and other market developments can adversely affect fixed-income securities markets in the United States, Europe and elsewhere. At times, participants in debt securities markets may develop concerns about the ability of certain issuers of debt securities to make timely principal and interest payments, or they may develop concerns about the ability of financial institutions that make markets in certain debt securities to facilitate an orderly market. Those concerns may impact the market price or value of those debt securities and may cause increased volatility in those debt securities or debt securities markets, reducing the willingness of some lenders to extend credit, and making it more difficult for borrowers to obtain financing on attractive terms (or at all). Under some circumstances, as was the case during the latter half of 2008 and early 2009, those concerns could cause reduced liquidity in certain debt securities markets.

Following the financial crisis, the Federal Reserve has sought to stabilize the economy by keeping the federal funds rate at or near zero percent. The Federal Reserve has also purchased large quantities of securities issued or guaranteed by the U.S. government, its agencies or instrumentalities, pursuant to its monetary stimulus program known as “quantitative easing.” As the Federal Reserve tapers its securities purchases pursuant to quantitative easing or raises the federal funds rate, there is a risk that interest rates may rise and cause fixedincome investors to move out of fixed-income securities, which may also increase redemptions in fixed-income mutual funds.

In addition, although the fixed-income securities markets have grown significantly in the last few decades, regulations and business practices have led some financial intermediaries to curtail their capacity to engage in trading (i.e., “market making”) activities for certain debt securities. As a result, dealer inventories of fixed-income securities, which provide an indication of the ability of financial intermediaries to make markets in fixed-income securities, are at or near historic lows relative to market size. Because market makers help stabilize the market through their financial intermediary services, further reductions in dealer inventories could have the potential to decrease liquidity and increase volatility in the fixed-income securities markets.

8. Credit Quality. The Master Loan Fund may invest in securities that are rated or unrated. “Investment-grade” securities are those rated within the four highest rating categories by nationally recognized statistical rating organizations such as Moody’s or Standard & Poor’s (or, in the case of unrated securities, determined by the Master Loan Fund Manager to be comparable to securities rated investment-grade). “Below investment--grade” securities are those that are rated below those categories. While securities rated within the fourth highest category by Standard & Poor’s (meaning BBB+, BBB or BBB-) or by Moody’s (meaning Baa1, Baa2 or Baa3) are considered “investment-grade,” they have some speculative characteristics. If two or more nationally recognized statistical rating organizations have assigned different ratings to a security, the Master Loan Fund Manager uses the highest rating assigned.

9. Unrated Securities. Because the Master Loan Fund purchases securities that are not rated by any nationally recognized statistical rating organization, the Master Loan Fund Manager may internally assign ratings to those securities, after assessing their credit quality and other factors, in categories similar to those of nationally recognized statistical rating organizations. There can be no assurance, nor is it intended, that the Master Loan Fund Manager’s credit analysis process is consistent or comparable with the credit analysis process used by a nationally recognized statistical rating organization. Unrated securities are considered “investment-grade” or “below-investment-grade” if judged by the Master Loan Fund Manager to be comparable to rated investment-grade or below-investment-grade securities. The Master Loan Fund Manager’s rating does not constitute a guarantee of the credit quality. In addition, some unrated securities may not have an active trading market or may trade less actively than rated securities, which means that the Master Loan Fund might have difficulty selling them promptly at an acceptable price.

In evaluating the credit quality of a particular security, whether rated or unrated, the Master Loan Fund Manager will normally take into consideration a number of factors such as, if applicable, the financial resources of the issuer, the underlying source of funds for debt service on a security, the issuer’s sensitivity to economic conditions and trends, any operating history of the facility financed by the obligation, the degree of community support for the financed facility, the capabilities of the issuer’s management, and regulatory factors affecting the issuer or the particular facility.

A reduction in the rating of a security after the Master Loan Fund buys it will not require the Master Loan Fund to dispose of the security. However, the Master Loan Fund Manager will evaluate such downgraded securities to determine whether to keep them in the Master Loan Fund’s portfolio.

10. Risks of Below-Investment-Grade Securities. Below-investment-grade securities generally have higher yields than securities rated in the higher rating categories but also have higher risk profiles. Below-investment-grade securities are considered to be speculative and entail greater risk with respect to the ability of the issuer to timely repay principal and pay interest or dividends in accordance with the terms of the obligation and may have more credit risk than investmentgrade rated securities, especially during times of weakening economic conditions or rising interest rates. These additional risks mean that the Master Loan Fund may not receive the anticipated level of income from these securities, and the Master Loan Fund’s net asset value may be affected by declines in the value of lower-grade securities. The major risks of belowinvestment- grade securities include:

  • Prices of below-investment-grade securities are subject to extreme price fluctuations, even under normal market conditions. Adverse changes in an issuer's industry and general economic conditions may have a greater impact on the prices of belowinvestment- grade securities than on the prices of investment grade fixed-income securities.
  • Below-investment-grade securities may be issued by less creditworthy issuers and may be more likely to default than investment-grade securities. Issuers of below-investmentgrade securities may have more outstanding debt relative to their assets than issuers of higher-grade securities. Issuers of below-investment-grade securities may be unable to meet their interest or principal payment obligations because of an economic downturn, specific issuer developments, or the unavailability of additional financing.
  • In the event of an issuer’s bankruptcy, claims of other creditors may have priority over the claims of below-investment-grade securities holders.
  • Below-investment-grade securities may be less liquid than higher rated fixed-income securities, even under normal market conditions. There are fewer dealers in the belowinvestment- grade securities market and there may be significant differences in the prices quoted by the dealers. Because they are less liquid, judgment may play a greater role in valuing certain of the Master Loan Fund’s securities than is the case with securities trading in a more liquid market.
  • Below-investment-grade securities typically contain redemption provisions that permit the issuer of the securities containing such provisions to redeem the securities at its discretion. If the issuer redeems below-investment-grade securities, the Master Loan Fund may have to invest the proceeds in securities with lower yields and may lose income.
  • Below-investment-grade securities markets may be more susceptible to real or perceived adverse credit, economic, or market conditions than higher rated securities. Because the Master Loan Fund can invest without limit in below-investment-grade securities, the Master Loan Fund’s credit risks are greater than those of funds that buy only investment-grade securities. Credit rating downgrades of a single issuer or related similar issuers whose securities the Master Loan Fund holds in significant amounts could substantially and unexpectedly increase the Master Loan Fund’s exposure to below-investment-grade securities and the risks associated with them, especially liquidity and default risk.

11. Special Considerations of Senior Loans and Other Loans. Typically, Senior Loans have higher recoveries than other debt obligations that rank lower in the priority of payments for a particular debtor, because in most instances they take preference over those subordinated debt obligations with respect to payment of interest and principal. However, the Master Loan Fund is subject to the risk that the borrower under a loan will default on scheduled interest or principal payments and that the assets of the borrower to which the Master Loan Fund has recourse will be insufficient to satisfy in full the payment obligations that the borrower has to the Master Loan Fund. The risk of default will increase in the event of an economic downturn or, in the case of a floating rate loan, a substantial increase in interest rates (because the cost of the borrower’s debt service will increase as the interest rate on its loan is upwardly adjusted). The Master Loan Fund may own a debt obligation of a borrower that becomes, or is about to become, insolvent. The Master Loan Fund can also purchase debt obligations that are extended to a bankrupt entity (so called debtor-in-possession or ‘DIP’ financing) or debt obligations that are issued in connection with a restructuring of the borrower under bankruptcy laws.

In certain circumstances, loans may not be deemed to be securities, and in the event of fraud or misrepresentation by a borrower or an arranger, lenders will not have the protection of the antifraud provisions of the federal securities laws, as would be the case for bonds or stocks. Instead, in such cases, lenders generally rely on the contractual provisions in the loan agreement itself, and common-law fraud protections under applicable state law. a. Interest Rates and Floating or Adjustable Rate Loans. The loans in which the Master Loan Fund invests typically have floating or adjustable interest rates. For that reason, the Master Loan Fund Manager expects that when interest rates change, the values of these floating rate loans will fluctuate less than the values of fixed-rate debt securities, and that the net asset values of the Master Loan Fund’s shares will fluctuate less than the shares of funds that invest mainly in fixed-rate debt obligations. However, the interest rates of some floating rate loans adjust only periodically. Between the times that interest rates on Senior Loans adjust (which is most often quarterly, but may be monthly, every six months, or some other period), the interest rates on those floating rate loans may not correlate to prevailing interest rates. That will affect the value of the loans and may cause the net asset values of the Master Loan Fund’s shares to fluctuate.

b. Prepayment. The Master Loan Fund has no limits as to the maturity of loans it may purchase. Senior Loans in general have a stated term of between five and seven years, and other types of loans in which the Master Loan Fund may invest may have shorter or longer maturities. . Notwithstanding their stated maturity, loans may be prepaid prior to their stated terms for reasons including, but not limited to, high market demand for loans, refinancing by the borrower, mandatory prepayment requirements or desire of the borrower to repay outstanding debt. If a borrower prepays a loan, the Master Loan Fund will have to reinvest the proceeds in other loans or financial assets that may pay lower rates of return. However, any prepayment and facility fees the Master Loan Fund receives may help reduce any adverse impact on the Master Loan Fund’s yield. Because the interest rates on Senior Loans adjust periodically, the Master Loan Fund Manager believes that the Master Loan Fund should generally be able to reinvest prepayments in Senior Loans that have yields similar to those that have been prepaid.

c. Subordination. Senior loans typically hold the most senior position in a borrower’s capital structure. They may include loans that hold the most senior position alone, loans that hold an equal ranking with other senior debt, or loans that are, in the judgment of the Master Loan Fund Manager, in the category of senior debt of the borrower. Borrowers typically are required contractually to pay the holders of Senior Loans before they pay the holders of subordinated debt, and preferred or common shareholders and give the holders of senior secured loans a claim on some or all of the borrower’s assets that is senior to that of subordinated debt, preferred stock and common stock of the borrower in the event that the borrower defaults or becomes bankrupt. Senior loans are subject to the risk that a court could subordinate a senior loan to presently existing or future indebtedness or take other action detrimental to the holders of senior loans.

That senior position in the borrower’s capital structure typically gives the holders of senior loans a claim on some or all of the borrower’s assets that is senior to that of subordinated debt, preferred stock and common stock of the borrower in the event that the borrower defaults or becomes bankrupt. This means in the event the assets of the borrower are insufficient in value to satisfy all its creditors, senior debt will be satisfied in priority to debt that is subordinate to senior debt.

d. Collateral. Loans may be fully collateralized with one or more of (i) working capital assets, such as accounts receivable and inventory, (ii) tangible fixed assets, such as real property, buildings and equipment, (iii) intangible assets such as trademarks or patents, or (iv) shares of stock of the borrower or its subsidiaries or affiliates. A loan agreement may or may not require the borrower to pledge additional collateral to secure a loan if the value of the initial collateral declines, or if additional assets are acquired by the borrower. Collateral may consist of assets that may not be readily liquidated, and there is no assurance that the liquidation of those assets would satisfy a borrower's obligations under a loan in full. A borrower’s subsidiaries, affiliates, shareholders or owners may provide collateral in the form of secured guarantees and/or security interests in assets that they own. However, the value of the collateral may decline after the Master Loan Fund invests in the loan, particularly if the collateral consists of equity securities of the borrower or its subsidiaries or affiliates. If a borrower defaults, insolvency laws may limit the Master Loan Fund’s access to the collateral, or the lenders may be unable to liquidate the collateral. A bankruptcy court might find that the lenders’ security interest or their enforcement of their security under the loan to be invalid, or a bankruptcy court may require the borrower to use the collateral to pay other outstanding obligations prior to satisfying the lenders in full. If the collateral consists of stock of the borrower or its subsidiaries, the stock may lose all of its value in the event of a bankruptcy, which would leave the Master Loan Fund exposed to greater potential loss. In addition, in the event of a borrower default on a collateralized loan, the Master Loan Fund may receive assets other than cash or securities in full or partial satisfaction of the borrower’s obligation under the loan. Those assets may be illiquid, and the Master Loan Fund might not be able to realize the benefit of the assets for legal, practical or other reasons. The Master Loan Fund might hold those assets until the Master Loan Fund Manager determines it is appropriate to dispose of them. If the collateral becomes illiquid or loses some or all of its value, the collateral may not be sufficient in value to compensate the Master Loan Fund in full in the event of a default of scheduled interest or principal payments.

The Master Loan Fund can invest in loans that are not secured by any specific collateral of the borrower. If the borrower is unable to pay interest or defaults in the payment of principal, there will be no collateral on which the Master Loan Fund can foreclose. Therefore, these loans present greater risks than collateralized loans because the recourse of the Master Loan Fund to the borrower’s assets in the case of a default would be as a general unsecured creditor. The Master Loan Fund applies the same investment and credit standards to unsecured loans as to secured loans, except for collateral requirements.

e. Highly Leveraged Transactions and Insolvent Borrowers. The Master Loan Fund can invest in Senior Loans made in connection with highly leveraged transactions. These transactions may include operating loans, leveraged buyout loans, leveraged capitalization loans and other types of acquisition financing. Those loans are subject to greater credit risks than other loans. Highly leveraged loans and loans in default also may be less liquid than other loans. If the Master Loan Fund voluntarily or involuntarily sold those types of loans, it might not receive the full value it expected.

The Master Loan Fund can also invest in loans of borrowers that are experiencing, or are likely to experience, financial difficulty. In addition, the Master Loan Fund can invest in loans of borrowers that have filed for bankruptcy protection or that have had involuntary bankruptcy petitions filed against them by creditors. Various laws enacted for the protection of debtors may apply to loans. A bankruptcy proceeding against a borrower could delay or limit the ability of the Master Loan Fund to collect the principal and interest payments on that borrower’s loans. If a lawsuit is brought by creditors of a borrower under a loan, a court or a trustee in bankruptcy could take certain actions that would be adverse to the Master Loan Fund. For example:

  • Other creditors might convince the court to set aside a Senior Loan or the collateralization of the loan as a “fraudulent conveyance” or “preferential transfer.” In that event, the court could recover from the Master Loan Fund the interest and principal payments that the borrower made before becoming insolvent. There can be no assurance that the Master Loan Fund would be able to prevent that recapture.
  • A bankruptcy court may restructure the payment obligations under the Senior Loan so as to reduce the amount to which the Master Loan Fund would be entitled.
  • The court might discharge the amount of the Senior Loan that exceeds the value of the collateral or assets to which the lenders have recourse.
  • The court could subordinate the Master Loan Fund’s rights to the rights of other creditors of the borrower under applicable law.

f. Restrictive Loan Covenants. Borrowers must comply with various restrictive covenants typically contained in loan agreements. They may include restrictions on dividend payments and other distributions to stockholders, provisions requiring the borrower to maintain specific financial ratios, and limits on total debt. They may include requirements that the borrower prepay the loan with any free cash flow. A break of a covenant that is not waived by the agent bank (or the lenders) is normally an event of default that provides the agent bank or the lenders the right to call the outstanding amount on the loan. If a lender accelerates the repayment of a loan because of the borrower’s violation of a restrictive covenant under the loan agreement, the borrower might default in payment of the loan.

g. Limited Secondary Market for Loans. Due to restrictions on transfers in loan agreements and the nature of the private syndication of loans, some loans are not as easily purchased or sold as publicly-traded securities. As a result, some loans are illiquid, which means that the Master Loan Fund may be limited in its ability to sell those loans at an acceptable price when it wants to in order to generate cash, avoid losses or to meet repurchase requests. The market for illiquid financial assets is more volatile than the market for liquid securities and it may be more difficult to obtain accurate valuations for the Master Loan Fund’s investments.

h. Possible Limited Availability of Loans. Direct investments in loans and, to a lesser degree, investments in participation interests in or assignments of loans may be limited. The limited availability may be due to a number of factors. Direct lenders may allocate only a small number of loans to new investors, including the Master Loan Fund. There may be fewer loans available for investment that meet the Master Loan Fund’s credit standards, particularly in times of economic downturns. Also, lenders or agents may have an incentive to market the less desirable loans to investors such as the Master Loan Fund while retaining attractive loans for themselves. This would reduce the amount of attractive investments for the Master Loan Fund. If market demand for loans increases, the interest paid by loans that the Master Loan Fund holds may decrease.

i. Delayed Settlement. Compared to securities and to certain other types of financial assets, purchases and sales of loans take relatively longer to settle. This is partly due to the nature of loans, which require a written assignment agreement and various ancillary documents for each transfer, and frequently require discretionary consents from both the borrower and the administrative agent. In addition, dealers frequently insist on matching their purchases and sales, which can lead to delays in the Master Loan Fund’s settlement of a purchase or sale in circumstances where the dealer’s corresponding transaction with another party is delayed. Dealers will also sometimes sell loans short, and hold their trades open for an indefinite period while waiting for a price movement or looking for inventory to purchase.

j. This extended settlement process can (i) increase the counterparty credit risk borne by the Master Loan Fund; (ii) leave the Master Loan Fund unable to timely vote, or otherwise act with respect to, loans it has agreed to purchase; (iii) delay the Master Loan Fund from realizing the proceeds of a sale of a loan; (iv) inhibit the Master Loan Fund’s ability to re-sell a loan that it has agreed to purchase if conditions change (leaving the Master Loan Fund more exposed to price fluctuations); (v) prevent the Master Loan Fund from timely collecting principal and interest payments; and (vi) expose the Master Loan Fund to adverse tax or regulatory consequences. To the extent the extended loan settlement process gives rise to short-term liquidity needs, such as the need to satisfy redemption requests, the Master Loan Fund may hold cash, sell investments or temporarily borrow from banks or other lenders.

12. Floating or Adjustable Rate Loans. The Senior Loans the Master Loan Fund invests in are “floating” or adjustable rate loans. The base rate usually is a benchmark that “floats” or changes to reflect current interest rates, such as: the prime rate offered by one or more major U.S. banks (referred to as the “Prime Rate”), or the London Inter-Bank Offered Rate (“LIBOR”).

The applicable rate is defined in the loan agreement. Borrowers tend to select the base lending rate that results in the lowest interest cost, and the rate selected may change from time to time. If the benchmark interest rate on a Senior Loan changes, the rate payable to lenders under the Senior Loan will, in turn, change at the next scheduled adjustment date. If the benchmark rate increases, the Master Loan Fund would earn interest at a higher rate on that Senior Loan after the next scheduled adjustment date. If the benchmark rate decreases, the Master Loan Fund would earn interest at a lower rate on that Senior Loan after the next scheduled adjustment date. Interest rates may adjust daily, monthly, quarterly, semi-annually or annually. The Master Loan Fund does not intend to invest more than 5% of its total assets in Senior Loans with interest rates that adjust less often than semi-annually. Because investments in Senior Loans with longer interest rate adjustment periods may increase fluctuations in the Master Loan Fund’s net asset values as a result of interest rate changes, the Master Loan Fund will attempt to maintain a dollar-weighted average time until the next interest rate adjustment of 90 days or less for its portfolio of Senior Loans.

13. Recourse. When the Master Loan Fund invests in loans as an original lender it will have direct recourse against the borrower in the event of a failure to pay scheduled principal or interest. When it purchases a loan by assignment, it typically succeeds to whatever rights the assigning lender had under the loan agreement, and will therefore be entitled to the same rights (including, but not limited, enforcement or set-off rights) that are available to lenders. When the Master Loan Fund buys a participation interest, it assumes the credit risk of the borrower and the counterparty risk of the lender selling the participation interest (and, in certain circumstances, such lender’s credit risk), and the terms of the participation may not entitle the Master Loan Fund to all rights of a direct lender under the loan (for example, with respect to consent, voting or enforcement rights). Therefore, the Master Loan Fund’s rights under a participation interest for a particular loan may be more limited than the rights of the original lender or an investor who acquires an assignment of that loan. Where the Master Loan Fund invests in a loan via a participation, the Master Loan Fund generally will have no right of direct recourse against the borrower or ability to otherwise directly enforce the terms of the loan agreement.

14. Credit Quality Standards for Loans. Rating organizations, such as S&P or Moody’s, rate debt obligations by rating the issuer, after evaluating the issuer’s financial soundness. Generally, the lower the investment rating, the more risky the investment. Debt securities rated below “BBB-” by S&P or “Baa3” by Moody’s are commonly referred to as “high risk” securities. Senior Loans rated “B” are below investment grade and are regarded by rating organizations as predominantly speculative with respect to the borrower’s ability to repay interest and principal when due over a long period. While securities rated Baa by Moody’s or BBB by S&P are considered to be “investment grade,” they have some speculative characteristics. The Master Loan Fund may invest in loans that are rated both investment grade and below-investment grade by different rating organizations. An appendix to the Master Loan Fund’s Statement of Additional Information includes the definitions of the rating categories of the principal rating organizations.

Many loans are not rated by rating organizations. The lack of a rating does not necessarily imply that a loan is of lesser investment quality.

While the Master Loan Fund expects to have access to financial and other information regarding the borrower that has been made available to the lenders under a loan, it may not have such information in connection with participation interests and certain loan assignments. Additionally, the amount of public information available with respect to loans generally will be less extensive than what is available for exchange-listed or otherwise registered securities.

The Master Loan Fund Manager will normally seek to avoid receiving material, non-public information about the issuers of loans being considered for acquisition by the Master Loan Fund or held in the Master Loan Fund’s portfolio. The Master Loan Fund Manager’s decision not to receive material, non-public information under normal circumstances may place the Fund at a disadvantage relative to other investors in loans, and could adversely affect the Fund’s investment performance. In certain cases, the Master Loan Fund Manager may nevertheless receive material, non-public information regarding loans, and its ability to trade in such loans for the account of the Master Loan Fund could potentially be limited by its possession of such information. Such limitations on the Master Loan Fund Manager’s ability to trade could have an adverse effect on the Master Loan Fund by, for example, preventing the Master Loan Fund from selling a loan that is experiencing a material decline in value. In some instances, these trading restrictions could continue in effect for a substantial period of time.

15. Repurchase Agreements. The Master Loan Fund can acquire securities subject to repurchase agreements. In a repurchase transaction, the Master Loan Fund buys a security from, and simultaneously resells it to, an approved vendor for delivery on an agreed-upon future date. Approved vendors include U.S. commercial banks, U.S. branches of foreign banks or brokerdealers that have been designated as primary dealers in government securities and have met credit requirements set by the Master Loan Fund Manager. The resale price exceeds the purchase price by an amount that reflects an agreed-upon interest rate effective for the period during which the repurchase agreement is outstanding. The Master Loan Fund might enter into a repurchase agreement for liquidity purposes to meet anticipated redemptions of limited liability company interests in the Master Loan Fund, pending the investment of the proceeds from sales of shares, pending the settlement of portfolio securities transactions, or for temporary defensive purposes, as described below.

Repurchase agreements must be fully collateralized. However, if the seller fails to pay the repurchase price on the delivery date, the Fund may incur costs in disposing of the collateral and may experience losses if there is any delay in its ability to do so. If the default on the part of the seller is due to its bankruptcy, the Fund's ability to liquidate the collateral may be delayed or limited.

16. Risks of Foreign Investing. The Master Loan Fund can invest in loans that are made to foreign borrowers, or other debt securities issued by them. The Master Loan Fund’s foreign loans must be dollar-denominated, and interest and principal payments must be payable in U.S. dollars. However, foreign obligations have risks not typically involved in domestic investments. Foreign investing can result in higher transaction and operating costs for the Master Loan Fund. Foreign issuers are not subject to the same accounting and disclosure requirements to which U.S. issuers are subject. The value of foreign investments may be affected by exchange control regulations, expropriation or nationalization of a company’s assets, foreign taxes, higher transaction and other costs, delays in the settlement of transactions, changes in governmental, economic or monetary policies in the U.S. or abroad, or other political and economic factors.

a. Foreign Market Risk. If there are fewer investors in a particular foreign market, securities traded in that market may be less liquid and more volatile than U.S. securities. Foreign markets may also be subject to delays in the settlement of transactions and difficulties in pricing securities. If the Master Loan Fund is delayed in settling a purchase or sale transaction, it may not receive any return on the invested assets or it may lose money if the value of the security declines. It may also be more expensive for the Master Loan Fund to buy or sell securities in certain foreign markets than in the United States, which may increase the Master Loan Fund’s expense ratio.

b. Foreign Economy Risk. Foreign economies may be more vulnerable to political or economic changes than the U.S. economy. They may be more concentrated in particular industries or may rely on particular resources or trading partners to a greater extent. Certain foreign economies may be adversely affected by shortages of investment capital or by high rates of inflation. Changes in economic or monetary policy in the U.S. or abroad may also have a greater impact on the economies of certain foreign countries.

c. Foreign Governmental and Regulatory Risks. Foreign companies may not be subject to the same accounting and disclosure requirements as U.S. companies. As a result there may be less accurate information available regarding a foreign company’s operations and financial condition. Foreign companies may be subject to capital controls, nationalization, or confiscatory taxes. Some countries also have restrictions that limit foreign ownership and may impose penalties for increases in the value of the Master Loan Fund’s investment. The value of the Master Loan Fund’s foreign investments may be affected if it experiences difficulties in enforcing legal judgments in foreign courts.

d. Foreign Currency Risk. A change in the value of a foreign currency against the U.S. dollar will result in a change in the U.S. dollar value of securities denominated in that foreign currency. If the U.S. dollar rises in value against a foreign currency, a security denominated in that currency will be worth less in U.S. dollars and if the U.S. dollar decreases in value against a foreign currency, a security denominated in that currency will be worth more in U.S. dollars. The dollar value of foreign investments may also be affected by exchange controls. The Master Loan Fund can also invest in derivative instruments linked to foreign currencies. The change in value of a foreign currency against the U.S. dollar will result in a change in the U.S. dollar value of derivatives linked to that foreign currency. The Master Loan Fund Manager’s selection of foreign currency denominated investments may not perform as expected. Currency derivative investments may be particularly volatile and subject to greater risks than other types of foreign-currency denominated investments.

e. Foreign Custody Risk. There may be very limited regulatory oversight of certain foreign banks or securities depositories that hold foreign securities and foreign currency and the laws of certain countries may limit the ability to recover such assets if a foreign bank or depository or their agents goes bankrupt. There may also be an increased risk of loss of portfolio securities.

f. Time Zone Arbitrage. If the Master Loan Fund invests a significant amount of its assets in foreign securities, it may be exposed to “time-zone arbitrage” attempts by investors seeking to take advantage of differences in the values of foreign securities that might result from events that occur after the close of the foreign securities market on which a security is traded and before the close of the New York Stock Exchange that day, when the Master Loan Fund’s net asset value is calculated. If such time zone arbitrage were successful, it might dilute the interests of other shareholders. However, the Master Loan Fund’s use of “fair value pricing” under certain circumstances, to adjust the closing market prices of foreign securities to reflect what the Master Loan Fund Manager and the Master Loan Fund’s Board believe to be their fair value, may help deter those activities.

g. Globalization Risks. The growing inter-relationship of global economies and financial markets has increased the effect of conditions in one country or region on issuers of securities in a different country or region. In particular, the adoption or prolongation of protectionist trade policies by one or more countries, changes in economic or monetary policy in the United States or abroad, or a slowdown in the U.S. economy, could lead to a decrease in demand for products and reduced flows of capital and income to companies in other countries. h. Regional Focus. At times, the Master Loan Fund might increase the relative emphasis of its investments in a particular region of the world. Securities of issuers in a region might be affected by changes in economic conditions or by changes in government regulations, availability of basic resources or supplies, or other events that affect that region more than others. If the Master Loan Fund has a greater emphasis on investments in a particular region, it may be subject to greater risks from adverse events that occur in that region than a fund that invests in a different region or that is more geographically diversified. Political, social or economic disruptions in the region may adversely affect the values of the Master Loan Fund's holdings.

17. Risks of Derivative Investments. Derivatives may be volatile and may involve significant risks. The underlying security, obligor or other instrument on which a derivative is based, or the derivative itself, may not perform as expected. For some derivatives, it is possible to lose more than the amount invested in the derivative investment. In addition, some derivatives have the potential for unlimited loss, regardless of the size of the Master Loan Fund’s initial investment. Certain derivative investments held by the Master Loan Fund may be illiquid, making it difficult to close out an unfavorable position. Derivative transactions may require the payment of premiums and may increase portfolio turnover. Derivatives are subject to credit risk, since the Master Loan Fund may lose money on a derivative investment if the issuer or counterparty fails to pay the amount due. As a result of these risks, the Master Loan Fund could realize little or no income or lose money from the investment, or the use of a derivative for hedging might be unsuccessful. In addition, under financial reform legislation currently being implemented, certain over-thecounter derivatives, including certain interest rate swaps and certain credit default swaps, are (or soon will be) required to be executed on a regulated market and/or cleared through a clearinghouse, which may result in increased margin requirements and costs for the Master Loan Fund. It is unclear how these regulatory changes will affect counterparty risk, and entering into a derivative transaction that is cleared may entail further risks and costs, including the counterparty risk of the clearinghouse and the futures commission merchant through which the Master Loan Fund accesses the clearinghouse.

18. Risks of Credit Default Swaps. Credit default swaps are subject to credit risk on the underlying issuer and to counterparty credit risk. If the counterparty fails to meet its obligations, the Master Loan Fund may lose money. Credit default swaps are also subject to the risk that the Master Loan Fund will not properly assess the risk of the underlying issuer. If the Master Loan Fund is selling credit protection, there is a risk that a credit event will occur and that the Master Loan Fund will have to pay the counterparty. If the Master Loan Fund is buying credit protection, there is a risk that no credit event will occur and the Master Loan Fund will receive no benefit for the premium paid.

19. Investments by “Fund of Funds.” Shares of the Master Loan Fund are offered as an investment to certain other Invesco funds that act as “funds of funds.” The Master Loan Fund’s Board of Directors has approved making the Master Loan Fund’s shares available as an investment for those funds. From time to time, those funds of funds may invest significant portions of their assets in shares of the Master Loan Fund, and may own a significant amount of the Master Loan Fund’s outstanding shares. Those funds of funds typically use asset allocation strategies under which they may increase or reduce the amount of their investments in the Master Loan Fund frequently, and may do so on a daily basis during volatile market conditions. If the size of those purchases and redemptions of the Master Loan Fund’s Shares were significant relative to the size of the Master Loan Fund’s assets, the Master Loan Fund could be required to purchase or sell portfolio securities, increasing its transaction costs and possibly reducing its performance. 20. Risks of Borrowing. Under the Investment Company Act, the Master Loan Fund may not incur indebtedness unless immediately after it incurs debt it has “asset coverage” of at least three hundred percent (300%) of the aggregate outstanding principal amount of the indebtedness. The Master Loan Fund may be required to dispose of portfolio investments on unfavorable terms if market fluctuations reduce its asset coverage to less than three hundred percent (300%). Lenders to the Master Loan Fund will have preference over the Master Loan Fund’s shareholders as to payments of interest and repayments of principal on amounts that the Master Loan Fund borrows and preference to the Master Loan Fund’s assets in the event of its liquidation. Lending agreements may grant the lenders certain voting rights if the Master Loan Fund defaults in the payment of interest or principal on the loan. Borrowing will cost the Master Loan Fund interest expense and other fees. The cost of borrowing may reduce the Master Loan Fund’s return.

21. Illiquid and Restricted Securities. Investments that do not have an active trading market, or that have legal or contractual limitations on their resale, are generally referred to as “illiquid” securities. Illiquid securities may be difficult to value or to sell promptly at an acceptable price or may require registration under applicable securities laws before they can be sold publicly. Securities that have limitations on their resale are referred to as “restricted securities.” Certain restricted securities that are eligible for resale to qualified institutional purchasers may not be regarded as illiquid. The Master Loan Fund will not invest more than fifteen percent (15%) of its net assets in illiquid securities. The Master Loan Fund’s holdings of illiquid securities are monitored on an ongoing basis to determine whether to sell any of those securities to maintain adequate liquidity.

22. Diversification and Concentration. The Master Loan Fund is a diversified fund. It attempts to reduce its exposure to the risks of individual securities by diversifying its investments across a broad number of different issuers. Generally, the Master Loan Fund cannot invest more than twenty-five percent (25%) of its total assets in securities or obligations of borrowers in a single industry. However, because the Master Loan Fund regards the agent bank and other intermediate participants in a loan as “issuers” of that loan, the Master Loan Fund may invest more than twenty-five percent (25%) of its total assets in securities of issuers in the group of industries in the financial services sector, including banks, bank holding companies, commercial finance, consumer finance, diversified financial, insurance, savings and loans and special purpose financial. The Master Loan Fund will be subject to the risks associated with financial institutions in those industries. The SEC has taken the position that investment of more than twenty-five percent (25%) of a fund’s total assets in issuers in the same industry constitutes concentration in that industry. That limit does not apply to securities issued or guaranteed by the U.S. government or its agencies and instrumentalities or securities issued by investment companies; however, securities issued by any one foreign government are considered to be part of a single “industry.”

23. Companies in the financial securities industries may be more susceptible to particular economic and regulatory events such as fluctuations in interest rates, changes in the monetary policy of the Board of Governors of the Federal Reserve System, governmental regulations concerning those industries and affecting capital raising activities and fluctuations in the financial markets. 24. Borrowing. The Master Loan Fund can borrow money to fund redemptions, but may not use borrowed money to make investments. The Master Loan Fund can borrow money in amounts up to thirty-three and one third percent (33 1/3%) of the value of its total assets at the time of the borrowings. Borrowing money involves transaction and interest costs. The Master Loan Fund may pay a commitment fee or other fees to maintain a line of credit, and will pay interest on amounts it borrows.

The Fund does not intend to use leverage in connection with its investment activities. However, the Fund may synthetically borrow through the use of derivative instruments and may borrow money from any source as may be necessary or advisable to protect it in the event of a temporary net cash overdraft or similar event (including borrowings to meet redemption requests).

25. Investments in Invesco Oppenheimer Institutional Government Money Market Fund. The Master Loan Fund can invest its free cash balances in money market instruments to provide liquidity or for defensive purposes. Money market instruments are short-term, U.S. dollardenominated debt instruments issued or guaranteed by domestic and foreign corporations and financial institutions, the U.S. government, its agencies and instrumentalities and other entities. Money market instruments include certificates of deposit, commercial paper, repurchase agreements, treasury bills and other short-term debt obligations that have a final maturity, as defined under rules under the Investment Company Act, of 397 days or less. They may have fixed, variable or floating interest rates. Money market instruments are subject to certain risks, including the risk that an issuer of an obligation that the Master Loan Fund holds might have its credit rating downgraded or might default on its obligations, or that interest rates might rise sharply, causing the value of the Master Loan Fund's investments to fall.

The Master Loan Fund may invest in money market instruments by investing in Institutional Class shares of Invesco Oppenheimer Institutional Government Money Market Fund (the “Government Money Market Fund”). It may also invest in money market instruments directly, or in other affiliated or unaffiliated money market funds. The Master Loan Fund may invest in such other money market funds, such as the Government Money Market Fund, rather than purchasing individual short-term investments. The Government Money Market Fund is a registered open-end management investment company, regulated as a money market fund under the Investment Company Act, and is part of the Invesco family of funds. At the time of an investment, the Master Loan Fund cannot always predict what will be the yield of the Government Money Market Fund, or any other money market fund it may hold, because of the wide variety of instruments that such fund may hold in its portfolio. The return on those investments may, in some cases, be lower than the return that would have been derived from other types of investments that would provide liquidity. As a shareholder, the Master Loan Fund will be subject to its proportional share of the expenses of any other money market fund it may hold, including its advisory fee. However, the Master Loan Fund Manager will waive a portion of the Fund's advisory fee to the extent of the Master Loan Fund's share of the advisory fee paid to the Master Loan Fund Manager by the Government Money Market Fund, or to any other similar money market fund of which the Master Loan Fund is a shareholder. If the Master Loan Fund invests in an unaffiliated money market fund, the Master Loan Fund Manager will not waive a portion of the Master Loan Fund's advisory fee paid by such unaffiliated fund to any unaffiliated fund manager.

The Fund may, as an alternative to investing in the Master Loan Fund, invest in two or more Underlying Funds, including, without limitation, the Government Money Market Fund and/or other Invesco-affiliated money market funds. Fees and expenses charged by Underlying Fund are in addition to, and will not be offset by, Fund expenses and Management Fees charged to a Unit holder by the Fund and the Trust Company, as applicable.

26. Temporary Defensive and Interim Investments. For temporary defensive purposes in times of adverse or unstable market, economic or political conditions, the Master Loan Fund can invest up to 100% of its assets in investments that may be inconsistent with the Master Loan Fund’s principal investment strategies. Generally, the Master Loan Fund would invest in shares of the Government Money Market Fund or other money market funds or short-term investment funds or vehicles, including collective investment trusts, or in the types of instruments in which the Government Money Market Fund or a short-term investment fund or vehicle invests, or other short-term U.S. government securities. The Master Loan Fund might also hold these types of securities as interim investments pending the investment of proceeds from the sale of Master Loan Fund shares or the sale of Master Loan Fund portfolio securities or to meet anticipated redemptions of Master Loan Fund shares. To the extent the Master Loan Fund invests in these securities, it might not achieve its investment objective.

27. Proprietary Strategies of the Master Loan Fund Manager or Underlying Managers. The Fund currently invests all or substantially all of its assets in the Master Loan Fund. As an alternative to investing in the Master Loan Fund, the Fund may also invest in two or more Underlying Funds. The Trust Company and the Sub-Adviser do not have control over the day-to-day management of the investments made by the Master Loan Fund Manager or the managers of any such Underlying Funds (“Underlying Managers”). The Master Loan Fund Manager or the Underlying Managers may use proprietary investment strategies that are based on considerations and factors that are not fully disclosed to the Trust Company and the Sub- Adviser or the Fund, and these strategies may involve risks under some market conditions that are not anticipated by the Trust Company and the Sub-Adviser or the Fund. In this regard, the Trust Company and the Sub-Adviser may not have access to information concerning the securities positions of the Master Loan Fund Manager or the Underlying Managers at any given point in time.

28. Multiple Underlying Managers. As an alternative to investing in the Master Loan Fund, the Fund may invest in two or more Underlying Funds. Because the Fund may allocate its assets to multiple Underlying Managers who make their trading decisions independently, it is theoretically possible that one or more of such Underlying Managers may, at any time, take positions which may be opposite of positions taken by other Underlying Managers. As a result, the Fund, taken as a whole, may be unable to achieve any gain or loss despite incurring fees and expenses. It is also possible that Underlying Managers may on occasion take substantial positions in the same security or group of securities at the same time. Also, a particular Underlying Manager may take positions for its other clients which may be opposite to positions taken for the Fund. The possible lack of diversification caused by these factors may subject the investments of the Fund to more rapid change in value than would be the case if the assets of the Fund were more widely diversified.

29. Portfolio Turnover. A change in the securities held by the Master Loan Fund is known as “portfolio turnover.” The Master Loan Fund may engage in active and frequent trading to try to achieve its investment objective and may have a portfolio turnover rate of over 100% annually. Increased portfolio turnover may result in higher brokerage fees or other transaction costs, which can reduce performance. If the Master Loan Fund realizes capital gains when it sells investments, it generally must pay those gains to shareholders, increasing its taxable distributions.

The Fund currently invests substantially all of its assets in the Master Loan Fund and may, as an alternative to investing in the Master Loan Fund, invest in two or more Underlying Funds. Thus, there may be a significant turnover rate associated with the Fund’s indirect investments, and the Fund may indirectly incur high brokerage fees. Such turnover rate will be out of the direct control of the Trust Company and the Sub-Adviser.

30. Competition. The securities industry, the various markets in which the Fund and the Master Loan Fund participates, and the varied strategies and techniques engaged in by the Trust Company and the Sub-Adviser and the Master Loan Fund Manager are extremely competitive and each involves a high degree of risk. The Fund, the Master Loan Fund, the Trust Company, the Sub-Adviser and the Master Loan Fund Manager compete with firms, including, without limitation, many of the larger securities and investment banking firms, which may have substantially greater financial resources, larger research staffs and more traders than the Trust Company, the Sub-Adviser and the Master Loan Fund Manager have or expect to have in the future, which may place the Fund, the Master Loan Fund and the Master Loan Fund Manager at a competitive disadvantage.

31. Master-Feeder and Fund-of-Funds Risks. The Fund currently invests substantially all of its assets in the Master Loan Fund and may, as an alternative to investing in the Master Loan Fund, invest in two or more Underlying Funds. A “master-feeder” or “fund-of-funds” fund structure, in particular the existence of multiple investment vehicles investing in the same portfolio, presents certain unique risks to investors. Smaller investment vehicles investing in a master fund or an underlying fund may be materially affected by the actions of larger investment vehicles investing in the master fund or the underlying fund, as applicable. For example, if a larger investment vehicle withdraws from the master fund or underlying fund, the remaining funds may experience higher pro rata operating expenses, thereby producing lower returns. Substantial withdrawals of capital by investors in a master fund or underlying fund over a short time period could necessitate the liquidation of master fund or underlying fund investments at a time and in a manner which does not provide the most economic advantage to the master fund or underlying fund and which therefore could adversely affect the value of the master fund’s or underlying fund’s assets. In a “master-feeder” or “fund-of-funds” structure, in addition to its own expenses, the Fund would be responsible for its pro rata share of the organizational, operating and other expenses of a master fund or underlying fund, as applicable. Creditors of a master fund or underlying fund may enforce claims against all the assets of the master fund or underlying fund, including, without limitation, any assets that may be invested by the Fund. In a master-feeder or fund-of-funds fund structure, a potential conflict may arise if the interests of the investors in the Fund and the interests of the investors in other investment vehicles investing in the master fund or underlying fund differ regarding tax efficiency (i.e., holding investments longer for preferential capital gains treatment). In addition, the master-feeder or fund-of-funds structure may result in certain tax risks given the master fund’s or the underlying fund’s intended investment strategy.

32. Dependence on the Master Loan Fund Manager or the Underlying Managers. The Fund will be dependent upon the expertise and abilities of the Master Loan Fund Manager or, to the extent the Fund invests in two or more Underlying Funds, the Underlying Managers of such Underlying Funds. The death, incapacity or retirement of any principal or key employee of the Master Loan Fund Manager or any such Underlying Manager may adversely affect investment results. The Trust Company and the Sub-Adviser have no right to participate in the management of the Master Loan Fund or any such Underlying Fund, and no opportunity to select or evaluate any of the investments or strategies of the Master Loan Fund or any such Underlying Fund. The foregoing list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in an investment in the Fund. In addition, over time an investment in the Fund may be subject to additional and different risk factors.