Invesco Advisers, Inc. Ceases Managed Distribution Plans for High Income Trusts

Invesco Advisers, Inc. Ceases Managed Distribution Plans

Invesco Advisers, Inc., a well-known investment management firm and subsidiary of Invesco Ltd. (NYSE: IVZ), has officially announced the termination of its Managed Distribution Plans (MDPs) for the Invesco High Income Trust II and the Invesco Senior Income Trust. This decision is effective immediately, following a strategic review by the Board of Trustees for each fund.

The Managed Distribution Plans were originally crafted to ensure that investors received a regular income stream. Specifically, the VLT Plan allowed the Invesco High Income Trust II to pay a fixed monthly distribution, pegged at 8.5% of its share price as of August 1, 2018. On the other hand, the VVR Plan enabled the Invesco Senior Income Trust to distribute a consistent monthly payment of $0.0380 per share to its investors.

These plans were designed to provide predictability for shareholders, offering periodic cash payments regardless of whether the funds had actual income generated during that period or capital gains realized. This mechanism included distributing long-term capital gains and/or capital returns in instances when investment income fell short.

However, after evaluating various factors, the Boards of both funds concluded that it would be prudent to terminate these distribution plans. This decision carries potential ramifications for the market price of the shares associated with these funds, with future distributions now to be declared in conjunction with other Invesco closed-end funds.

Investors have been advised not to draw conclusions regarding a fund's investment performance based solely on the distribution amounts or the cessation of these plans. The final source and characteristics of distributions during 2025 will be determined at year-end.

In accordance with regulatory requirements under Section 19 of the Investment Company Act of 1940, each fund will issue a Section 19 Notice to shareholders before any distribution that includes funds outside of net investment income. This notice will serve as an informational tool rather than for tax reporting purposes and will be available on the respective fund's website.

It is important to note that the amount of dividends disbursed may fluctuate over time, and past distribution amounts are not indicative of future payouts. Investing continues to involve risks, including potential losses.

Invesco Ltd. is recognized globally for its independent investment management practices, providing a diverse range of active, passive, and alternative investment capabilities. With a management portfolio valued at $1.85 trillion as of December 31, 2024, Invesco remains dedicated to enhancing the investment experience for clients across the globe.

As a reminder, potential investors should thoroughly evaluate the risks associated with closed-end funds and remain cognizant that shares traded may operate at a discount or premium to their net asset values. Investors can reach Invesco for further information at 1-800-341-2929.

In summary, while the cessation of the Managed Distribution Plans may introduce uncertainties, Invesco's ongoing commitment to managing assets efficiently provides a foundation for future financial navigation.