Invesco Floating Rate ESG Fund

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.