VVR: Avoid This Floating-Rate Fund For The Time Being
Seeking Alpha
February 23, 2026
AI-Generated Deep Dive Summary
The Invesco Senior Income Trust (VVR) offers a high yield of 13.94%, but investors should be cautious. Despite its attractive returns, the fund’s distributions are unsustainable due to declining net asset value (NAV) and falling floating-rate income. VVR’s portfolio is heavily concentrated in variable-rate senior loans, which carry significant risks, including exposure to junk-rated debt and high leverage. This strategy has led to a 14.63% NAV decline over two years, raising concerns about its ability to maintain distributions.
The fund has consistently failed to cover its distributions with net investment income, creating a concerning pattern of declining performance. With the Federal Reserve likely to cut rates further, VVR’s income and NAV are expected to face additional pressure. Investors should be wary of funds that prioritize high yields over sustainable income generation, as this can lead to significant losses in the long term.
For those seeking reliable income in the current market environment, it is crucial to focus on funds with more stable and diversified portfolios. High leverage and concentration in risky assets like variable-rate loans amplify volatility, making VVR a less appealing option for risk-averse investors. As always, diversification and careful portfolio management are key to navigating uncertain markets.
With interest rates expected to
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Originally published on Seeking Alpha on 2/23/2026