Invesco Senior Income Trust VVR

This is a levered fund that invests in 2-7 year floating rate loans, syndicated by banks. When interest rates go up, the fund cash flow will also increase as the loan coupons adjust upward. And of course as rates decline, the fund cash flow will decline. The borrowers on these loans are generally small/medium size companies and the credit quality is not great. As everyone knows short rates have been on the decline as the fed decided to begin adjusting the fed funds rate last year. So it is absolutely expected that the fund distributions will decrease as the interest payments on all the loans in the portfolio reset to lower coupons. And this will continue as short term rates decline. The positive is that the leverage the fund uses, is also floating rate debt, so the cost of that borrowing also goes down. Don’t buy high and sell low. Stay the course and keep this investment as part of your diversified portfolio.