OOSCX
Invesco Senior Floating Rate-C
High Yield and Income Focus
The Invesco Senior Floating Rate-C (OOSCX) fund is designed to provide investors with a high level of current income while preserving capital. With a yield of 8.41%, it stands out as an attractive option for income-focused investors. The fund primarily invests in senior floating rate loans and other debt securities, which are known for their ability to offer higher yields compared to traditional fixed-income securities. This focus on income generation makes OOSCX particularly appealing to those looking to supplement their income, especially in a low-interest-rate environment. The fund’s strategy of investing in floating rate loans also helps mitigate interest rate risk, providing a buffer against rising rates.
At A Glance
Executive Summary
OOSCX offers high income with a yield of 8.41% and low volatility, making it ideal for income-focused investors seeking capital preservation.
High yield of 8.41% for income-focused investors. Low volatility with a beta of 0.19. Strong performance with a 1-year return of 8.19%.
Higher expense ratio of 1.82%. Limited sector diversification. Potentially lower returns compared to peers.
Performance Amidst Market Volatility
OOSCX has demonstrated strong performance, particularly over the past year, with a 1-year return of 8.19%. This performance is notable given the fund’s focus on capital preservation and income generation. The fund’s low beta of 0.19 indicates that it has lower volatility compared to the broader market, making it a stable choice for investors seeking consistent returns. Additionally, the fund’s alpha of 0.34% suggests that it has been able to generate returns above its benchmark, the BBG Barclay Agg Bond- US Composite TR Ix, which had a 1-year return of 7.85%. This outperformance highlights the fund’s ability to navigate market fluctuations effectively.
Risk Metrics and Stability
The risk metrics for OOSCX reveal a fund that is well-positioned for stability and risk management. With a standard deviation of 0.81% and a Treynor Ratio of 1.81, the fund exhibits a strong risk-adjusted return profile. The low correlation with its benchmark at 38.84% further underscores its potential as a diversifying asset within a broader portfolio. The fund’s downside risk, measured by a downside risk (UI) of 0.21, is minimal, indicating limited potential for significant losses. This stability is further supported by a max drawdown of only -0.8%, with a swift recovery, making it a resilient choice for conservative investors.
Portfolio Composition and Holdings
OOSCX’s portfolio is heavily weighted towards corporate bonds, with 96.34% of its bond sector allocation in this category. This focus on corporate debt is complemented by a small allocation to cash (3.34%) and securitized assets (0.33%). The fund’s top holdings include a mix of senior loans and other debt securities, such as the Invesco Shrt-Trm Inv Gov&Agcy Instl and My Alarm Class A Units. These holdings reflect the fund’s strategy of targeting high-yield opportunities within the corporate debt market. The absence of sector diversification in equities is notable, as the fund does not invest in traditional equity sectors, aligning with its objective of income generation and capital preservation.
Comparative Analysis with Peers
When compared to similar funds, OOSCX holds its ground with a competitive yield and performance. For instance, while the Eaton Vance Floating-Rate & High Inc-C (ECFHX) offers a slightly higher 1-year return of 9.24%, OOSCX’s yield of 8.41% remains attractive. However, OOSCX’s expense ratio of 1.82% is higher than its peers, such as the Hartford Floating Rate-C (HFLCX) with an expense ratio of 0.0179. Despite this, OOSCX’s low beta and strong risk-adjusted returns make it a compelling choice for investors prioritizing income and stability over cost. The fund’s unique positioning in the bank loans category further differentiates it from traditional fixed-income funds.
Expense Ratio and Cost Considerations
The expense ratio of OOSCX is 1.82%, which is relatively high compared to some of its peers in the floating rate category. This higher cost may be a consideration for cost-sensitive investors, as it can impact net returns over time. However, the fund’s strong yield and performance may justify the expense for those prioritizing income generation. Investors should weigh the cost against the fund’s benefits, such as its low volatility and high yield, to determine if it aligns with their investment goals. The fund’s management by Invesco, a reputable firm, also adds a layer of confidence in its operational efficiency and strategic execution.
Investor Suitability and Profile
OOSCX is particularly suitable for investors seeking high current income with a focus on capital preservation. Its low volatility and strong yield make it an ideal choice for conservative investors or those nearing retirement who prioritize income over growth. The fund’s strategy of investing in senior floating rate loans provides a hedge against interest rate fluctuations, appealing to those concerned about rising rates. However, the higher expense ratio and limited sector diversification may not suit all investors, particularly those looking for growth or cost efficiency. Overall, OOSCX offers a compelling option for income-focused investors who value stability and consistent returns.
Conclusion: A Strategic Income Solution
In conclusion, the Invesco Senior Floating Rate-C (OOSCX) fund stands out as a strategic solution for income-focused investors seeking high yields and capital preservation. Its strong performance, low volatility, and competitive yield make it a valuable addition to a diversified income portfolio. While the higher expense ratio may be a drawback for some, the fund’s benefits, such as its resilience in market volatility and focus on senior floating rate loans, offer significant advantages. Investors looking for a stable income stream with minimal downside risk will find OOSCX to be a fitting choice, particularly in uncertain economic climates.
Similar Securities
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AFRAX offers high yield and capital preservation with a focus on senior debt securities, boasting a 9.20% yield and low beta of 0.21.
PAFRX: TRPrice Floating Rate-Adv | High Income, Low Volatility Investment
PAFRX offers high current income with low volatility, boasting a 0.97% expense ratio and 8.19% yield, ideal for income-focused investors.
OOSCX: Invesco Senior Floating Rate-C | High Income & Capital Preservation
OOSCX offers high income with a yield of 8.41% and low volatility, making it ideal for income-focused investors seeking capital preservation.
XAXCX: Invesco Dynamic Credit Opportunity-AX | High-Yield Bank Loan Fund
XAXCX offers a high yield of 11.27% with unique bank loan exposure, but has a high expense ratio of 4.15%.
Futher Reading
https://finance.yahoo.com/quote/OOSCX/”>Yahoo: Invesco Senior Floating Rate-C
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