Summary

• Invesco Senior Floating Rate Fund Y Class shares returned -0.47% for the first quarter of 2026, compared to its benchmark, the JP Morgan Leveraged Loan Index, which returned -0.44%.
• Loans began 2026 with strong momentum, but concerns about potential disruption from artificial intelligence appeared to spark an equity selloff, followed by weakness in leveraged loans.
• The par-weighted loan default rate rose from 1.23% in the fourth quarter to 1.44% as credit fundamentals appeared to hold up with healthy interest coverage and cash balances.
• The fund's overweight in the services sector reflects strong relative value among individual issuers that face limited direct effects from tariff-related inflation or disruption.
• Invesco Senior Floating Rate Fund has been underweight the technology sector for several years, reflecting concerns that excessive valuations and leverage constrained free cash flow generation.

Q1 2026 Key takeaways

1 High conviction investment styleThe fund employs a high conviction opportunistic investment style and seeks to yield more than its competitors over the long term.

2 Full cycle viewWe position