| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 34.05 | 207 |
| Intrinsic value (DCF) | 4.95 | -55 |
| Graham-Dodd Method | 5.09 | -54 |
| Graham Formula | 12.03 | 8 |
Invesco High Income Trust II (NYSE: VLT) is a closed-end fixed income mutual fund managed by Invesco Ltd., specializing in high-yield corporate debt securities rated between BB and C by Standard & Poor's. Launched in 1989, the fund targets income-seeking investors by maintaining a diversified portfolio with an average duration of three to four years, benchmarked against the Barclays U.S. Corporate High Yield 2% Issuer Cap Index. With a market cap of approximately $68 million, VLT operates in the Financial Services sector under the Asset Management - Income industry, offering a dividend yield of $1.1568 per share. The fund leverages Invesco's global asset management expertise, with co-management from subsidiaries across the U.S., Europe, and Asia, ensuring a well-researched approach to high-yield fixed income investing. Its strategy focuses on capitalizing on undervalued credit opportunities while managing risk through duration control and credit quality selection.
Invesco High Income Trust II (VLT) presents an attractive option for income-focused investors, given its high-yield corporate debt strategy and consistent dividend payouts. The fund's diversified portfolio and disciplined duration management mitigate some risks associated with lower-rated bonds. However, its exposure to speculative-grade debt subjects it to credit risk, particularly in economic downturns. The fund's modest market cap and reliance on leverage (total debt of $30.55 million) could amplify volatility. While its beta of 0.769 suggests lower sensitivity to market swings than equities, investors should weigh the trade-off between yield and credit risk. The fund's performance is closely tied to the high-yield bond market, making it sensitive to interest rate fluctuations and corporate default rates.
Invesco High Income Trust II (VLT) competes in the high-yield fixed income space by leveraging Invesco's global credit research capabilities and multi-manager approach. Its competitive edge lies in its ability to access a broad universe of high-yield securities through Invesco's extensive network, including specialized teams like INVESCO Senior Secured Management. The fund's focus on maintaining a controlled duration (3-4 years) differentiates it from peers with more aggressive duration strategies, offering a balance between yield and interest rate risk. However, its smaller size ($68M AUM) may limit economies of scale compared to larger high-yield funds. The fund's performance is highly dependent on the credit selection skills of its management teams across regions, which could be both a strength (diversified insights) and a weakness (coordination challenges). Its benchmark-aware approach provides transparency but may constrain alpha generation versus unconstrained competitors. The fund's use of leverage (debt-to-equity ~47%) enhances yield but increases risk in volatile markets.