Invesco Advisers Adjusts Monthly Dividends for Invesco Senior Income Trust
Invesco Advisers, Inc., a subsidiary of Invesco Ltd. (NYSE: IVZ), recently announced significant changes regarding the Invesco Senior Income Trust (NYSE: VVR). The Board of Trustees of this Fund made the decision to reduce the monthly distribution amount payable to common shareholders. This adjustment comes as part of their Managed Distribution Plan.
Details of the Distribution Change
Effective from January 1, the Fund will now pay a fixed monthly distribution of $0.0380 per share, a step down from the previous amount of $0.0430 per share. This decrease will be reflected in the distribution payable on January 31.
Understanding the Managed Distribution Plan
The purpose of the Managed Distribution Plan is to provide shareholders with reliable cash payments, despite the uncertainties surrounding when income is earned or capital gains realized. Although the plan aims to narrow the gap between the Fund's market price and net asset value (NAV), there are no guarantees of its effectiveness.
How Distributions Are Funded
In situations where the Fund's investment income does not cover the intended monthly distribution, the Fund may resort to distributing long-term capital gains or return of capital to maintain the distribution level. It is crucial for shareholders to understand that this return of capital may result in receiving some of their original investment back, which does not necessarily reflect the Fund's performance.
Compliance and Reporting Requirements
To adhere to the regulations set by the Investment Company Act of 1940, the Fund will issue a 19(a) Notice to shareholders on each distribution date. This notice, along with an accompanying press release, will outline the sources of the dividend payments, especially if any portion exceeds net investment income.
Tax Reporting for Shareholders
The specifics regarding distribution amounts and sources that appear in 19(a) Notices are estimates and not suitable for tax reporting. For actual tax reporting, shareholders will receive a Form 1099-DIV after the calendar year concludes, detailing how to report these distributions for federal income tax purposes.
Future Outlook and Dividend Variability
The determination of the source and tax implications of all distributions for the year ahead will be finalized after the year's end, highlighting the observable variability in the dividend payments. The Board regularly reviews the Managed Distribution Plan and retains the authority to amend or terminate it, which may influence the market price of the Fund's common shares.
Investment Risks to Consider
Investing in the Fund carries inherent risks, including the potential for financial loss. Shareholders must be aware that past dividend amounts do not guarantee future distributions. Engaging with the Fund requires a clear understanding of associated risks and market dynamics.
For additional inquiries related to closed-end funds, shareholders can contact Invesco directly at 800-341-2929.
About Invesco Ltd.
Invesco Ltd. operates as a global independent investment management firm committed to enhancing investment experiences for clients. With an extensive range of active, passive, and alternative investment offerings, Invesco managed an impressive US$1.79 trillion in assets globally as of the end of the last fiscal quarter. To learn more about Invesco's offerings, visit their official website.
Frequently Asked Questions
What prompted Invesco to decrease the monthly distribution?
The decrease in the monthly distribution was approved by the Board of Trustees as part of the Fund's Managed Distribution Plan, to adjust to the Fund's income levels.
When will the new distribution rate take effect?
The new fixed monthly distribution rate of $0.0380 per share becomes effective January 1, with the first payout reflecting this change set for January 31.
How does the Managed Distribution Plan work?
This plan aims to provide shareholders with regular cash payments irrespective of actual income or capital gains, but it is not guaranteed.
What if the Fund's investment income is insufficient?
If investment income is inadequate, the Fund may distribute capital gains or return of capital to maintain the distribution levels.
How can shareholders stay informed about their distributions?
Shareholders will receive a 19(a) Notice on each distribution date, detailing the sources of the payments, particularly if they include anything beyond net investment income.
