Summary

• The Invesco Floating Rate ESG Fund's Class Y shares at net asset value returned -0.45% for the first quarter, compared to the -0.47% return of the S&P UBS Leveraged Loan Index.
• Loans began 2026 with strong momentum and a high rate of repricing activity in January, followed by weakness in leveraged loans sparked by artificial intelligence disruption concerns.
• Gross loan issuance was $223.8 billion for the quarter, 31% above the prior quarter, fueled by a near record setting January volume of $164.2 billion.
• Credit fundamentals appeared to hold up, with the default rate below the historical average, while issuer leverage, interest coverage and cash balances remained healthy.
• At quarter end, the Invesco Floating Rate ESG Fund's largest overweights were in the service, transportation and chemicals sectors, while the largest underweights were in IT, financial and health care.

Q1 2026 Key takeaways

1 ESG integrationThe fund actively uses an environmental, social and governance (ESG) overlay in its investment process.

2 Full cycle viewWe position the fund for the long term, a full market