XPRTX
Invesco Senior Loan-IB
Introduction to Invesco Senior Loan-IB
The Invesco Senior Loan-IB (XPRTX) is a mutual fund designed to provide investors with a high level of current income by investing primarily in senior loans. As part of the Bank Loans category, this fund offers a unique opportunity for investors seeking exposure to floating-rate debt instruments, which can be particularly beneficial in rising interest rate environments. With a yield of 9.81%, XPRTX stands out as an attractive option for income-focused investors. Managed by Invesco, a reputable name in the investment industry, this fund aims to deliver consistent returns while maintaining a relatively low level of volatility, as evidenced by its beta of 0.20.
At A Glance
Executive Summary
XPRTX offers a high yield of 9.81% with low volatility, making it ideal for income-focused investors. Its bank loan focus provides unique market exposure.
High yield of 9.81% for income-focused investors. Low beta of 0.20 indicates low market volatility. Strong performance with 8.81% 1-year return.
High expense ratio of 2.63% may reduce net returns. Limited stock exposure at 3.36% may not suit growth investors. Lower 10-year return of 4.53% compared to peers.
Performance Amidst Market Fluctuations
XPRTX has demonstrated strong performance over the past year, with a 1-year return of 8.81%, outperforming its benchmark, the BBG Barclay Agg Bond- US Composite TR Ix, which returned 7.85% over the same period. This performance is indicative of the fund’s ability to navigate market fluctuations effectively, providing investors with a stable income stream. The fund’s low standard deviation of 0.93% and a Sharpe Ratio of 0.30 further highlight its risk-adjusted return potential. Investors looking for a fund that can deliver consistent income while managing downside risk may find XPRTX to be a suitable choice.
Portfolio Composition and Asset Allocation
The portfolio of XPRTX is heavily weighted towards bonds, with 91.03% of its assets allocated to this asset class. This focus on bonds, particularly senior loans, aligns with the fund’s objective of generating income. The fund also maintains a small allocation to cash (3.86%) and stocks (3.36%), providing some diversification. The top holdings include loans from companies like 1011778 B.C. Unlimited Liability Company and Datasite A, which contribute to the fund’s income generation. This strategic allocation allows XPRTX to capitalize on the income potential of senior loans while maintaining a degree of liquidity and diversification.
Comparative Analysis with Similar Funds
When compared to similar funds, XPRTX holds its ground with a competitive yield of 9.81%. However, its expense ratio of 2.63% is higher than those of its peers, such as Eaton Vance Floating-Rate & High Inc-C (ECFHX) and Credit Suisse Floating Rate High Inc-A (CHIAX), which have lower expense ratios. Despite this, XPRTX’s performance remains robust, with a 1-year return that is competitive within its category. Investors should weigh the higher expense ratio against the fund’s strong yield and performance when considering it as part of their portfolio.
Risk Metrics and Volatility Management
XPRTX exhibits a low beta of 0.20, indicating its low sensitivity to market movements, which is a desirable trait for investors seeking stability in volatile markets. The fund’s correlation with its benchmark is 36.18%, suggesting a moderate level of independence from broader market trends. Additionally, the fund’s downside risk, as measured by its Ulcer Index of 0.24, is relatively low, further emphasizing its risk management capabilities. These metrics suggest that XPRTX is well-suited for investors who prioritize income and stability over aggressive growth.
Max Drawdown and Recovery Analysis
The fund’s max drawdown of -0.9% over a brief period, with a recovery length of zero days, highlights its resilience in adverse market conditions. This quick recovery from drawdowns is a testament to the fund’s effective risk management strategies and its ability to protect investor capital. The short drawdown and recovery periods suggest that XPRTX can maintain its value even during market downturns, making it an appealing option for risk-averse investors seeking steady income.
Suitability for Income-Focused Investors
XPRTX is particularly well-suited for income-focused investors due to its high yield of 9.81% and its focus on senior loans, which typically offer higher interest rates than traditional fixed-income securities. The fund’s low volatility and strong performance metrics make it an attractive option for those looking to enhance their income without taking on excessive risk. Additionally, the fund’s ability to perform well in various market conditions further solidifies its position as a reliable income-generating investment.
Conclusion: A Compelling Choice for Stability and Income
In conclusion, the Invesco Senior Loan-IB (XPRTX) stands out as a compelling choice for investors seeking a combination of high income and stability. Its focus on senior loans provides a unique opportunity to benefit from floating-rate debt instruments, which can be advantageous in rising interest rate environments. While the fund’s expense ratio is higher than some of its peers, its strong yield and performance metrics make it a worthwhile consideration for income-focused investors. Overall, XPRTX offers a balanced approach to income generation and risk management, making it a suitable addition to a diversified investment portfolio.
Similar Securities
AFRAX: Invesco Floating Rate ESG-A | High Income & Capital Preservation
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.
PFLRX: Putnam Floating Rate Income-A | High Income Corporate Loan Fund
PFLRX offers high current income through corporate loans with a competitive yield of 8.00% and a low beta of 0.21, ideal for income-focused investors.
BFRAX: BlackRock Floating Rate Income-InvA | High Income, Low Volatility
BFRAX offers high current income with low volatility, featuring a competitive yield of 8.23% and a low beta of 0.20, ideal for income-focused investors.
CREDX: BlackRock Credit Strategies-Inst | High Yield Bank Loan Fund
CREDX offers a high yield of 9.28% with a low beta of 0.30, making it a stable choice for income-focused investors in bank loans.
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.
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