Invesco Senior Income Trust to Reduce Monthly Distribution Effective January 2025
Invesco Advisers, Inc., a subsidiary of Invesco Ltd. (NYSE: IVZ), made a significant announcement regarding its Invesco Senior Income Trust (NYSE: VVR). In a decision taken by its Board of Trustees, the firm has confirmed a reduction in the monthly distribution for common shareholders under the Managed Distribution Plan. Beginning January 1, 2025, shareholders will receive a fixed monthly distribution of $0.0380 per share, down from the previous $0.0430 per share. This change reflects a more cautious approach towards maintaining shareholder returns amid evolving market conditions.
The Managed Distribution Plan is designed to provide shareholders with regular cash payments, regardless of whether income is earned or capital gains are realized. By establishing a consistent payment, the Fund aims to potentially reduce the gap between the market price and the net asset value (NAV) of its shares. However, it’s important to note that there are no guarantees that the Plan will successfully close this gap.
If the income generated by the Fund's investments is insufficient to meet its planned distributions, the Fund can resort to distributing long-term capital gains or even return capital to maintain the targeted payout levels. This mechanism allows the Trust to continue providing distributions even during leaner periods but carries the inherent risk of capital dilution for shareholders, as some of their initial investments could essentially be paid back to them instead of being generated through investment performance. Hence, it's crucial for investors to understand that a return of capital does not directly indicate the Fund's investment performance and should not be viewed as yield or income.
According to the Investment Company Act of 1940, the Fund will issue a 19(a) notice to its shareholders on each distribution date. This notice will clarify the sources of dividend payments, especially when distributions include elements beyond net investment income. Investors are advised that estimates provided in these notices are not for tax reporting purposes and will be finalized upon the fiscal year’s conclusion, based on actual investment performance.
While the Board may review the Managed Distribution Plan periodically, they retain the right to amend or discontinue it without prior notice to shareholders. Any changes could impact the market price of the Fund’s shares, increasing the volatility of the investment.
Past dividend payments do not guarantee future payouts, underscoring the necessity for stakeholders to remain apprised of the potential risks involved in investing in the managed fund environment. Moreover, investors face the risk of losing capital, further illustrating the importance of a well-informed investment strategy. For more details, shareholders are encouraged to reach out to Invesco directly at 800-341-2929 for additional insights.
The Managed Distribution Plan is designed to provide shareholders with regular cash payments, regardless of whether income is earned or capital gains are realized. By establishing a consistent payment, the Fund aims to potentially reduce the gap between the market price and the net asset value (NAV) of its shares. However, it’s important to note that there are no guarantees that the Plan will successfully close this gap.
If the income generated by the Fund's investments is insufficient to meet its planned distributions, the Fund can resort to distributing long-term capital gains or even return capital to maintain the targeted payout levels. This mechanism allows the Trust to continue providing distributions even during leaner periods but carries the inherent risk of capital dilution for shareholders, as some of their initial investments could essentially be paid back to them instead of being generated through investment performance. Hence, it's crucial for investors to understand that a return of capital does not directly indicate the Fund's investment performance and should not be viewed as yield or income.
According to the Investment Company Act of 1940, the Fund will issue a 19(a) notice to its shareholders on each distribution date. This notice will clarify the sources of dividend payments, especially when distributions include elements beyond net investment income. Investors are advised that estimates provided in these notices are not for tax reporting purposes and will be finalized upon the fiscal year’s conclusion, based on actual investment performance.
While the Board may review the Managed Distribution Plan periodically, they retain the right to amend or discontinue it without prior notice to shareholders. Any changes could impact the market price of the Fund’s shares, increasing the volatility of the investment.
Past dividend payments do not guarantee future payouts, underscoring the necessity for stakeholders to remain apprised of the potential risks involved in investing in the managed fund environment. Moreover, investors face the risk of losing capital, further illustrating the importance of a well-informed investment strategy. For more details, shareholders are encouraged to reach out to Invesco directly at 800-341-2929 for additional insights.
Topics Financial Services & Investing）
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