UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number |
811-02090 | |
Invesco Bond Fund | ||
(Exact name of registrant as specified in charter) | ||
1555 Peachtree Street, N.E., Suite 1800 Atlanta, Georgia 30309 | ||
(Address of principal executive offices) (Zip code) | ||
Sheri Morris 1555 Peachtree Street, N.E., Suite 1800 Atlanta, Georgia 30309 | ||
(Name and address of agent for service) |
Registrants telephone number, including area code: | (713) 626-1919 |
Date of fiscal year end: | 2/28 |
|||||
Date of reporting period: | 8/31/18 |
Item 1. Report to Stockholders.
| ||||
Semiannual Report to Shareholders
|
August 31, 2018 | |||
| ||||
Invesco Bond Fund | ||||
NYSE: VBF |
| ||||
2 | Letters to Shareholders | |||
3 | Fund Performance | |||
3 | Share Repurchase Program Notice | |||
4 | Dividend Reinvestment Plan | |||
5 | Schedule of Investments | |||
22 | Financial Statements | |||
24 | Notes to Financial Statements | |||
30 | Financial Highlights | |||
31 | Approval of Investment Advisory and Sub-Advisory Contracts | |||
33 | Proxy Results | |||
Unless otherwise noted, all data provided by Invesco. | ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
|
Dear Fellow Shareholders: As independent chair of the Invesco Funds Board, I can assure you that the members of the Board are strong advocates for the interests of investors in Invescos mutual funds. We work hard to represent your interests through oversight of the quality of the investment management services your funds receive and other matters important to your investment. This includes but is not limited to: monitoring how the portfolio management teams of the Invesco funds are performing in light of changing economic and market conditions; assessing each portfolio management teams investment performance within the context of the funds investment strategy; and monitoring for potential conflicts of interests that may impact the nature of the services that your funds receive. We believe one of the most important services we provide our fund shareholders is the |
annual review of the funds advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This review is required by the Investment Company Act of 1940 and focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing information received from Invesco and a variety of independent sources, such as performance and fee data prepared by Lipper, Inc. (a subsidiary of Broadridge Financial Solutions, Inc.), an independent, third-party firm widely recognized as a leader in its field. We also meet with our independent legal counsel and other independent advisers to review and help us assess the information that we have received. Our goal is to assure that you receive quality investment management services for a reasonable fee.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a complete list of its investments as of the close of the reporting period. The investment professionals at Invesco invest with high conviction. This means that, no matter the asset class or the strategy, each investment team has a passion to exceed. We want to help investors achieve better outcomes, such as seeking higher returns, helping mitigate risk and generating income. Of course, investing with high conviction cant guarantee a profit or ensure success; no investment strategy can. To learn more about how we invest with high conviction, visit invesco.com/HighConviction. Our website, invesco.com/us, offers timely information about your Fund. Also, you can obtain updates to help you stay informed about the markets and the economy by connecting with Invesco on Twitter, LinkedIn or Facebook. Additionally, you can access our blog at blog.invesco.us.com. |
Our goal is to provide you the information you want, when and where you want it.
Finally, Im pleased to share with you Invescos commitment to both the Principles for Responsible Investment and to considering environmental, social and governance issues in our robust investment process. I invite you to learn more at invesco.com/esg.
For questions about your account, contact an Invesco client services representative at 800 341 2929. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
All of us at Invesco look forward to serving your investment management needs. Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
2 Invesco Bond Fund |
3 Invesco Bond Fund |
The dividend reinvestment plan (the Plan) offers you a prompt and simple way to reinvest your dividends and capital gains distributions (Distributions) into additional shares of your Invesco closed-end Fund (the Fund). Under the Plan, the money you earn from Distributions will be reinvested automatically in more shares of the Fund, allowing you to potentially increase your investment over time. All shareholders in the Fund are automatically enrolled in the Plan when shares are purchased.
4 Invesco Bond Fund |
August 31, 2018
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Bond Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Bond Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Bond Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Bond Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Bond Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 Invesco Bond Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 Invesco Bond Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco Bond Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco Bond Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco Bond Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco Bond Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
16 Invesco Bond Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
17 Invesco Bond Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
18 Invesco Bond Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
19 Invesco Bond Fund
Investment Abbreviations:
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor's. |
(b) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the "1933 Act"). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at August 31, 2018 was $66,600,866, which represented 30.37% of the Fund's Net Assets. |
(c) | Perpetual bond with no specified maturity date. |
(d) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on August 31, 2018. |
(e) | All or a portion of this security is Pay-in-Kind. Pay-in-Kind securities pay interest income in the form of securities. |
(f) | Zero coupon bond issued at a discount. The interest rate shown represents the yield to maturity at issue. |
(g) | Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. |
(h) | All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1J. |
(i) | Foreign denominated security. Principal amount is denominated in the currency indicated. |
(j) | The money market fund and the Fund are affiliated by having the same investment adviser. The rate shown is the 7-day SEC standardized yield as of August 31, 2018. |
Portfolio Composition
By security type, based on Net Assets
as of August 31, 2018
U.S. Dollar Denominated Bonds & Notes |
89.4 | % | ||
U.S. Treasury Securities |
4.1 | |||
Preferred Stocks |
3.6 | |||
Asset-Backed Securities |
0.4 | |||
Municipal Obligations |
0.1 | |||
Non-U.S. Dollar Denominated Bonds & Notes |
0.1 | |||
Money Market Funds Plus Other Assets Less Liabilities |
2.3 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
20 Invesco Bond Fund
Open Futures Contracts | ||||||||||||||||||||
Long Futures Contracts | Number of Contracts |
Expiration Month | Notional Value |
Value | Unrealized Appreciation (Depreciation) |
|||||||||||||||
U.S. Treasury 2 Year Notes |
17 | December-2018 | $ | 3,593,109 | $ | (36 | ) | $ | (36 | ) | ||||||||||
U.S. Treasury 5 Year Notes |
19 | December-2018 | 2,154,570 | (45 | ) | (45 | ) | |||||||||||||
U.S. Treasury 10 Year Notes |
202 | December-2018 | 24,293,656 | 10,074 | 10,074 | |||||||||||||||
U.S. Treasury Long Bonds |
65 | December-2018 | 9,374,219 | (40,780 | ) | (40,780 | ) | |||||||||||||
Subtotal Long Futures Contracts |
(30,787 | ) | (30,787 | ) | ||||||||||||||||
Short Futures Contracts | ||||||||||||||||||||
U.S. Treasury 10 Year Ultra Bonds |
40 | December-2018 | (5,121,875 | ) | 217 | 217 | ||||||||||||||
U.S. Treasury Ultra Bonds |
21 | December-2018 | (3,345,563 | ) | 7,989 | 7,989 | ||||||||||||||
Subtotal Short Futures Contracts |
8,206 | 8,206 | ||||||||||||||||||
Total Futures Contracts Interest Rate Risk |
$ | (22,581 | ) | $ | (22,581 | ) |
Open Forward Foreign Currency Contracts Currency Risk | ||||||||||||||||||||||
Settlement Date | Contract to | Unrealized Appreciation |
||||||||||||||||||||
Counterparty | Deliver | Receive |
||||||||||||||||||||
11/30/2018 |
Barclays Bank PLC |
EUR | 200,000 | USD | 236,007 | $ | 2,191 |
Abbreviations:
EUR | Euro | |
USD | U.S. Dollar |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
21 Invesco Bond Fund
Statement of Assets and Liabilities
August 31, 2018
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
22 Invesco Bond Fund
Statement of Operations
For the six months ended August 31, 2018
(Unaudited)
Investment income: |
||||
Interest |
$ | 5,036,209 | ||
Dividends |
227,734 | |||
Dividends from affiliated money market funds |
23,682 | |||
Total investment income |
5,287,625 | |||
Expenses: |
||||
Advisory fees |
465,332 | |||
Administrative services fees |
25,482 | |||
Custodian fees |
9,330 | |||
Transfer agent fees |
25,306 | |||
Trustees and officers fees and benefits |
11,854 | |||
Registration and filing fees |
12,500 | |||
Reports to shareholders |
14,085 | |||
Professional services fees |
32,716 | |||
Other |
32,732 | |||
Total expenses |
629,337 | |||
Less: Fees waived |
(1,447 | ) | ||
Net expenses |
627,890 | |||
Net investment income |
4,659,735 | |||
Realized and unrealized gain (loss) from: |
||||
Net realized gain (loss) from: |
||||
Investment securities |
(236,450 | ) | ||
Foreign currencies |
1,957 | |||
Forward foreign currency contracts |
5,729 | |||
Futures contracts |
103,132 | |||
(125,632 | ) | |||
Change in net unrealized appreciation (depreciation) of: |
||||
Investment securities |
(3,895,344 | ) | ||
Foreign currencies |
(38 | ) | ||
Forward foreign currency contracts |
2,191 | |||
Futures contracts |
(80,980 | ) | ||
(3,974,171 | ) | |||
Net realized and unrealized gain (loss) |
(4,099,803 | ) | ||
Net increase in net assets resulting from operations |
$ | 559,932 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
23 Invesco Bond Fund
Statement of Changes in Net Assets
For the six months ended August 31, 2018 and the year ended February 28, 2018
(Unaudited)
August 31, 2018 |
February 28, 2018 |
|||||||
Operations: |
||||||||
Net investment income |
$ | 4,659,735 | $ | 9,296,918 | ||||
Net realized gain (loss) |
(125,632 | ) | 2,771,380 | |||||
Change in net unrealized appreciation (depreciation) |
(3,974,171 | ) | (4,627,516 | ) | ||||
Net increase in net assets resulting from operations |
559,932 | 7,440,782 | ||||||
Distributions to shareholders from net investment income |
(4,710,106 | ) | (9,420,213 | ) | ||||
Distributions to shareholders from net realized gains |
| (2,056,974 | ) | |||||
Net increase (decrease) in net assets |
(4,150,174 | ) | (4,036,405 | ) | ||||
Net assets: |
||||||||
Beginning of period |
223,433,138 | 227,469,543 | ||||||
End of period (includes undistributed net investment income of $(317,850) and $(267,479), respectively) |
$ | 219,282,964 | $ | 223,433,138 |
August 31, 2018
(Unaudited)
NOTE 1Significant Accounting Policies
Invesco Bond Fund (the Fund) is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a diversified, closed-end management investment company.
The Funds investment objective is to seek interest income while conserving capital.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services Investment Companies.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations Securities, including restricted securities, are valued according to the following policy. |
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and asked prices. For purposes of determining net asset value (NAV) per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end-of-day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Foreign securities (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the investment adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by
24 Invesco Bond Fund
the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trusts officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuers assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. | Securities Transactions and Investment Income Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Bond premiums and discounts are amortized and/or accreted over the lives of the respective securities. Pay-in-kind interest income and non-cash dividend income received in the form of securities in-lieu of cash are recorded at the fair value of the securities received. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Funds net asset value and, accordingly, they reduce the Funds total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and the Statement of Changes in Net Assets, or the net investment income per share and the ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
C. | Country Determination For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions The Fund declares and pays monthly dividends from net investment income to common shareholders. Distributions from net realized capital gain, if any, are generally declared and paid annually and are distributed on a pro rata basis to common shareholders. |
E. | Federal Income Taxes The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), necessary to qualify as a regulated investment company and to distribute substantially all of the Funds taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Funds uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
G. | Indemnifications Under the Funds organizational documents, each Director, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Funds servicing agreements, that contain a variety of indemnification clauses. The Funds maximum |
25 Invesco Bond Fund
exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
H. | Foreign Currency Translations Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
I. | Forward Foreign Currency Contracts The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis, or through forward foreign currency contracts, to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to lock in the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to the daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between two parties (Counterparties) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
J. | Futures Contracts The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between Counterparties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Funds basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal Counterparty risk since the exchanges clearinghouse, as Counterparty to all exchange-traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities. |
K. | Leverage Risk Leverage exists when the Fund can lose more than it originally invests because it purchases or sells an instrument or enters into a transaction without investing an amount equal to the full economic exposure of the instrument or transaction. |
L. | Collateral To the extent the Fund has designated or segregated a security as collateral and that security is subsequently sold, it is the Funds practice to replace such collateral no later than the next business day. |
NOTE 2Advisory Fees and Other Fees Paid to Affiliates
The Fund has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the Adviser or Invesco). Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly an advisory fee to the Adviser based on the annual rate of the Funds average daily net assets as follows:
Average Daily Net Assets | Rate | |||
First $500 million |
0.42% | |||
Over $500 million |
0.35% |
For the six months ended August 31, 2018, the effective advisory fees incurred by the Fund was 0.42%.
26 Invesco Bond Fund
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers) the Adviser, not the Fund, will pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Affiliated Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2020, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended August 31, 2018, the Adviser waived advisory fees of $1,447.
The Fund has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended August 31, 2018, expenses incurred under this agreement are shown in the Statement of Operations as Administrative services fees.
Certain officers and trustees of the Fund are officers and directors of Invesco.
NOTE 3Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investments assigned level:
Level 1 | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Funds own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of August 31, 2018. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
The Funds policy is to recognize transfers in and out of the valuation levels as of the end of the reporting period. During the six months ended August 31, 2018, there were no material transfers between valuation levels.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments in Securities |
||||||||||||||||
U.S. Dollar Denominated Bonds & Notes |
$ | | $ | 195,979,963 | $ | | $ | 195,979,963 | ||||||||
U.S. Treasury Securities |
| 8,966,632 | | 8,966,632 | ||||||||||||
Preferred Stocks |
7,762,620 | 129,765 | | 7,892,385 | ||||||||||||
Asset-Backed Securities |
| 869,745 | | 869,745 | ||||||||||||
Municipal Obligations |
| 367,215 | | 367,215 | ||||||||||||
Non-U.S. Denominated Bonds & Notes |
| 236,032 | | 236,032 | ||||||||||||
Money Market Funds |
2,327,562 | | | 2,327,562 | ||||||||||||
Total Investments in Securities |
10,090,182 | 206,549,352 | | 216,639,534 | ||||||||||||
Other Investments Assets* |
||||||||||||||||
Forward Foreign Currency Contracts |
| 2,191 | | 2,191 | ||||||||||||
Futures Contracts |
18,280 | | | 18,280 | ||||||||||||
18,280 | 2,191 | | 20,471 | |||||||||||||
Other Investments Liabilities* |
||||||||||||||||
Futures Contracts |
(40,861 | ) | | | (40,861 | ) | ||||||||||
Total Other Investments |
(22,581 | ) | 2,191 | | (20,390 | ) | ||||||||||
Total Investments |
$ | 10,067,601 | $ | 206,551,543 | $ | | $ | 216,619,144 |
* | Unrealized appreciation (depreciation). |
27 Invesco Bond Fund
NOTE 4Derivative Investments
The Fund may enter into an International Swaps and Derivatives Association Master Agreement (ISDA Master Agreement) under which a fund may trade OTC derivatives. An OTC transaction entered into under an ISDA Master Agreement typically involves a collateral posting arrangement, payment netting provisions and close-out netting provisions. These netting provisions allow for reduction of credit risk through netting of contractual obligations. The enforceability of the netting provisions of the ISDA Master Agreement depends on the governing law of the ISDA Master Agreement, among other factors.
For financial reporting purposes, the Fund does not offset OTC derivative assets or liabilities that are subject to ISDA Master Agreements in the Statement of Assets and Liabilities.
Value of Derivative Investments at Period-End
The table below summarizes the value of the Funds derivative investments, detailed by primary risk exposure, held as of August 31, 2018:
Value | ||||||||||||
Derivative Assets | Currency Risk | Interest Rate Risk |
Total | |||||||||
Unrealized appreciation on futures contracts Exchange-Traded(a) |
$ | | $ | 18,280 | $ | 18,280 | ||||||
Unrealized appreciation on forward foreign currency contracts outstanding |
2,191 | | 2,191 | |||||||||
Total Derivative Assets |
2,191 | 18,280 | 20,471 | |||||||||
Derivatives not subject to master netting agreements |
| (18,280 | ) | (18,280 | ) | |||||||
Total Derivative Assets subject to master netting agreements |
$ | 2,191 | $ | | $ | 2,191 |
Value | ||||
Derivative Liabilities | Interest Rate Risk |
|||
Unrealized depreciation on futures contracts Exchange-Traded(a) |
$ | (40,861 | ) | |
Derivatives not subject to master netting agreements |
40,861 | |||
Total Derivative Liabilities subject to master netting agreements |
$ | |
(a) | The daily variation margin receivable at period-end is recorded in the Statement of Assets and Liabilities. |
Offsetting Assets and Liabilities
The table below reflects the Funds exposure to Counterparties subject to either an ISDA Master Agreement or other agreement for OTC derivative transactions as of August 31, 2018.
Financial Derivative Assets |
Financial Derivative Liabilities |
Collateral (Received)/Pledged | Net
|
|||||||||||||||||||||
Counterparty | Forward Foreign Currency Contracts |
Forward Foreign Currency Contracts |
Net Value of Derivatives |
Non-Cash | Cash | |||||||||||||||||||
Barclays Bank PLC |
$ | 2,191 | $ | | $ | 2,191 | $ | | $ | | $ | 2,191 |
Effect of Derivative Investments for the six months ended August 31, 2018
The table below summarizes the gains (losses) on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:
Location of Gain (Loss) on Statement of Operations |
||||||||||||
Currency Risk |
Interest Rate Risk |
Total | ||||||||||
Realized Gain: |
||||||||||||
Forward foreign currency contracts |
$ | 5,729 | $ | | $ | 5,729 | ||||||
Futures contracts |
| 103,132 | 103,132 | |||||||||
Change in Net Unrealized Appreciation (Depreciation): |
||||||||||||
Forward foreign currency contracts |
2,191 | | 2,191 | |||||||||
Futures contracts |
| (80,980 | ) | (80,980 | ) | |||||||
Total |
$ | 7,920 | $ | 22,152 | $ | 30,072 |
The table below summarizes the average notional value of forward foreign currency contracts and futures contracts outstanding during the period.
Forward Foreign Currency Contracts |
Futures Contracts |
|||||||
Average notional value |
$ | 234,504 | $ | 37,055,727 |
28 Invesco Bond Fund
NOTE 5Trustees and Officers Fees and Benefits
Trustees and Officers Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees and Officers Fees and Benefits includes amounts accrued by the Fund to fund such deferred compensation amounts.
NOTE 6Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period-end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 7Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund did not have a capital loss carryforward as of February 28, 2018.
NOTE 8Investment Transactions
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended August 31, 2018 was $58,646,287 and $63,467,618, respectively. During the same period, purchases and sales of U.S. Treasury obligations were $59,560,071 and $56,681,723, respectively. Cost of investments, including any derivatives, on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
Unrealized Appreciation (Depreciation) of Investments on a Tax Basis | ||||
Aggregate unrealized appreciation of investments |
$ | 4,053,289 | ||
Aggregate unrealized (depreciation) of investments |
(3,924,639 | ) | ||
Net unrealized appreciation of investments |
$ | 128,650 |
Cost of investments for tax purposes is $216,490,494.
NOTE 9Common Shares of Beneficial Interest
Transactions in common shares of beneficial interest were as follows:
Six months ended August 31, 2018 |
Year ended February 28, 2018 |
|||||||
Beginning shares |
11,377,069 | 11,377,069 | ||||||
Shares issued through dividend reinvestment |
| | ||||||
Ending shares |
11,377,069 | 11,377,069 |
The Fund may, when appropriate, purchase shares in the open market or in privately negotiated transactions at a price not above market value or net asset value, whichever is lower at the time of purchase.
NOTE 10Dividends
The Fund declared the following dividends from net investment income subsequent to August 31, 2018:
Declaration Date | Amount per Share | Record Date | Payable Date | |||||||||
September 4, 2018 |
$ | 0.0690 | September 14, 2018 | September 28, 2018 | ||||||||
October 1, 2018 |
$ | 0.0690 | October 16, 2018 | October 31, 2018 |
29 Invesco Bond Fund
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Six months ended August 31, 2018 |
Years ended February 28, | Year ended February 29, |
Years ended February 28, | |||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||
Net asset value, beginning of period |
$ | 19.64 | $ | 19.99 | $ | 18.84 | $ | 20.49 | $ | 20.38 | $ | 20.90 | ||||||||||||
Net investment income(a) |
0.41 | 0.82 | 0.83 | 0.84 | 0.85 | 0.86 | ||||||||||||||||||
Net gains (losses) on securities (both realized and unrealized) |
(0.37 | ) | (0.16 | ) | 1.16 | (1.54 | ) | 0.64 | (0.20 | ) | ||||||||||||||
Total from investment operations |
0.04 | 0.66 | 1.99 | (0.70 | ) | 1.49 | 0.66 | |||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Dividends from net investment income |
(0.41 | ) | (0.83 | ) | (0.84 | ) | (0.85 | ) | (0.87 | ) | (0.89 | ) | ||||||||||||
Distributions from net realized gains |
| (0.18 | ) | | (0.10 | ) | (0.51 | ) | (0.29 | ) | ||||||||||||||
Total distributions |
(0.41 | ) | (1.01 | ) | (0.84 | ) | (0.95 | ) | (1.38 | ) | (1.18 | ) | ||||||||||||
Net asset value, end of period |
$ | 19.27 | $ | 19.64 | $ | 19.99 | $ | 18.84 | $ | 20.49 | $ | 20.38 | ||||||||||||
Market value, end of period |
$ | 17.78 | $ | 18.23 | $ | 18.98 | $ | 17.79 | $ | 18.81 | $ | 18.43 | ||||||||||||
Total return at net asset value(b) |
0.42 | 3.44 | % | 10.96 | % | (3.09 | ) | 8.22 | % | 4.05 | % | |||||||||||||
Total return at market value(c) |
(0.18 | ) | 1.12 | % | 11.57 | % | (0.32 | ) | 9.85 | % | (4.63 | )% | ||||||||||||
Net assets, end of period (000s omitted) |
$ | 219,283 | $ | 223,433 | $ | 227,470 | $ | 214,293 | $ | 233,150 | $ | 231,912 | ||||||||||||
Portfolio turnover rate(d) |
55 | % | 160 | % | 168 | % | 167 | % | 218 | % | 192 | % | ||||||||||||
Ratios/supplemental data based on average net assets: |
|
|||||||||||||||||||||||
Ratio of expenses: |
|
|||||||||||||||||||||||
With fee waivers and/or expense reimbursements |
0.57 | %(e) | 0.55 | % | 0.54 | % | 0.56 | % | 0.55 | % | 0.59 | % | ||||||||||||
Without fee waivers and/or expense reimbursements |
0.57 | %(e) | 0.55 | % | 0.54 | % | 0.56 | % | 0.55 | % | 0.59 | % | ||||||||||||
Ratio of net investment income to average net assets |
4.20 | %(e) | 4.04 | % | 4.18 | % | 4.31 | % | 4.12 | % | 4.26 | % |
(a) | Calculated using average shares outstanding. |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Not annualized for periods less than one year, if applicable. |
(c) | Total return assumes an investment at the share market price at the beginning of the period indicated, reinvestment of all distributions for the period in accordance with the Trusts dividend reinvestment plan, and sale of all shares at the closing share market prices at the end of the period indicated. Not annualized for periods less than one year, if applicable. |
(d) | Portfolio turnover is not annualized for periods less than one year, if applicable. |
(e) | Ratios are annualized and based on average daily net assets (000s omitted) of $219,780. |
30 Invesco Bond Fund
Approval of Investment Advisory and Sub-Advisory Contracts
31 Invesco Bond Fund
32 Invesco Bond Fund
A Joint Annual Meeting (Meeting) of Shareholders of Invesco Bond Fund (the Fund) was held on August 9, 2018. The Meeting was held for the following purpose:
(1). | Election of Trustees by Common Shareholders. |
The results of the voting on the above matter were as follows:
Matter | Votes For | Votes Withheld |
||||||||
(1). | Bruce L. Crockett | 9,869,568 | 390,365 | |||||||
Jack M. Fields | 9,876,412 | 383,521 | ||||||||
Martin L. Flanagan | 9,877,268 | 382,665 | ||||||||
Robert C. Troccoli | 9,871,406 | 388,527 |
33 Invesco Bond Fund
Correspondence information
Send general correspondence to Computershare Trust Company, N.A., P.O. Box 505000, Louisville, KY 40233-5000.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Funds semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q (or any successor Form). The most recent list of portfolio holdings is available at invesco.com/us. Shareholders can also look up the Funds Forms N-Q (or any successor Form) on the SEC website at sec.gov. Copies of the Funds Forms N-Q (or any successor Form) may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file number for the Fund is shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 341 2929 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov. Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. In addition, this information is available on the SEC website at sec.gov. |
|
SEC file number: 811-02090 | VK-CE-BOND-SAR-1 | 10112018 0908 |
ITEM 2. | CODE OF ETHICS. |
Not required for a semi-annual report.
ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
Not applicable.
ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
PricewaterhouseCoopers LLP (PwC) informed the Trust that it has identified an issue related to its independence under Rule 2-01(c)(1)(ii)(A) of Regulation S-X (referred to as the Loan Rule). The Loan Rule prohibits accounting firms, such as PricewaterhouseCoopers LLP, from being deemed independent if they have certain financial relationships with their audit clients or certain affiliates of those clients. The Trust is required under various securities laws to have its financial statements audited by an independent accounting firm.
The Loan Rule specifically provides that an accounting firm would not be independent if it or certain affiliates and covered persons receives a loan from a lender that is a record or beneficial owner of more than ten percent of an audit clients equity securities (referred to as a more than ten percent owner). For purposes of the Loan Rule, audit clients include the Funds as well as all registered investment companies advised by the Adviser and its affiliates, including other subsidiaries of the Advisers parent company, Invesco Ltd. (collectively, the Invesco Fund Complex). PricewaterhouseCoopers LLP informed the Trust it and certain affiliates and covered persons have relationships with lenders who hold, as record owner, more than ten percent of the shares of certain funds within the Invesco Fund Complex, which may implicate the Loan Rule.
On June 20, 2016, the SEC Staff issued a no-action letter to another mutual fund complex (see Fidelity Management & Research Company et al., No-Action Letter) related to the audit independence issue described above. In that letter, the SEC confirmed that it would not recommend enforcement action against a fund that relied on audit services performed by an audit firm that was not in compliance with the Loan Rule in certain specified circumstances. In connection with prior independence determinations, PricewaterhouseCoopers LLP communicated, as contemplated by the no-action letter, that it believes that it remains objective and impartial and that a reasonable investor possessing all the facts would conclude that PricewaterhouseCoopers LLP is able to exhibit the requisite objectivity and impartiality to report on the Funds financial statements as the independent registered public accounting firm. PricewaterhouseCoopers LLP also represented that it has complied with PCAOB Rule 3526(b)(1) and (2), which are conditions to the Funds relying on the no action letter, and affirmed that it is an independent accountant within the meaning of PCAOB Rule 3520. Therefore, the Adviser, the Funds and PricewaterhouseCoopers LLP concluded that PricewaterhouseCoopers LLP could continue as the Funds independent registered public accounting firm. The Invesco Fund Complex relied upon the no-action letter in reaching this conclusion.
If in the future the independence of PricewaterhouseCoopers LLP is called into question under the Loan Rule by circumstances that are not addressed in the SECs no-action letter, the Funds will need to take other action in order for the Funds filings with the SEC containing financial statements to be deemed compliant with applicable securities laws. Such additional actions could result in additional costs, impair the ability of the Funds to issue new shares or have other material adverse effects on the Funds. The SEC no-action relief was initially set to expire 18 months from issuance but has been extended by the SEC without an expiration date,
except that the no-action letter will be withdrawn upon the effectiveness of any amendments to the Loan Rule designed to address the concerns expressed in the letter.
PwC advised the Registrants Audit Committee that PwC had identified two matters for consideration under the SECs auditor independence rules. PwC stated that a PwC manager and a PwC Senior Manager each held financial interests in investment companies within the Invesco Fund complex that were inconsistent with the requirements of Rule 2-01(c)(1) of Regulation S-X.
PwC advised the Audit Committee that it believes its objectivity and impartiality had not been adversely affected by these matters as they related to the audit of the Registrant. In reaching this conclusion, PwC noted, among other things, that during the time of its audit, the engagement team was not aware of the investments, neither individual was in the chain of command of the audit or the audit partners of Invesco or the affiliate of the Registrant, the services each individual provided were not relied upon by the audit engagement team with respect to the audit of the affiliate of the Registrant and the investments were not material to the net worth of either individual or their immediate family members.
ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable.
ITEM 6. | SCHEDULE OF INVESTMENTS. |
Investments in securities of unaffiliated issuers is included as part of the reports to stockholders filed under Item 1 of this Form.
ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES |
Not applicable.
ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable.
ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
None.
ITEM 11. | CONTROLS AND PROCEDURES. |
(a) | As of October 16, 2018, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the PEO and PFO, to assess the effectiveness of the Registrants disclosure controls and procedures, as that term is defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the Act), as |
amended. Based on that evaluation, the Registrants officers, including the PEO and PFO, concluded that, as of October 16, 2018, the Registrants disclosure controls and procedures were reasonably designed to ensure: (1) that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission; and (2) that material information relating to the Registrant is made known to the PEO and PFO as appropriate to allow timely decisions regarding required disclosure. |
(b) | There have been no changes in the Registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by the report that has materially affected, or is reasonably likely to materially affect, the Registrants internal control over financial reporting. |
ITEM 12. | DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
ITEM 13. | EXHIBITS. |
13(a) (1) | Not applicable. |
13(a) (2) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. |
13(a) (3) | Not applicable. |
13(a) (4) | Not applicable. |
13(b) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: Invesco Bond Fund
By: | /s/ Sheri Morris | |
Sheri Morris | ||
Principal Executive Officer | ||
Date: | November 8, 2018 |
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: | /s/ Sheri Morris | |
Sheri Morris | ||
Principal Executive Officer | ||
Date: | November 8, 2018 | |
By: | /s/ Kelli Gallegos | |
Kelli Gallegos | ||
Principal Financial Officer | ||
Date: | November 8, 2018 |
EXHIBIT INDEX
13(a) (1) | Not applicable. | |
13(a) (2) | Certifications of principal executive officer and Principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. | |
13(a) (3) | Not applicable. | |
13(a) (4) | Not applicable. |
I, Sheri Morris, Principal Executive Officer, certify that:
1. I have reviewed this report on Form N-CSR of Invesco Bond Fund;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting.
5. The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of trustees (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: November 8, 2018 | /s/ Sheri Morris | |||||
Sheri Morris, Principal Executive Officer |
I, Kelli Gallegos, Principal Financial Officer, certify that:
1. I have reviewed this report on Form N-CSR of Invesco Bond Fund;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting.
5. The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of trustees (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: November 8, 2018 | /s/ Kelli Gallegos | |||||
Kelli Gallegos, Principal Financial Officer |
CERTIFICATION OF SHAREHOLDER REPORT
In connection with the Certified Shareholder Report of Invesco Bond Fund (the Company) on Form N-CSR for the period ended August 31, 2018, as filed with the Securities and Exchange Commission (the Report), I, Sheri Morris, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 8, 2018 | /s/ Sheri Morris | |||||
Sheri Morris, Principal Executive Officer |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided by the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
CERTIFICATION OF SHAREHOLDER REPORT
In connection with the Certified Shareholder Report of Invesco Bond Fund (the Company) on Form N-CSR for the period ended August 31, 2018, as filed with the Securities and Exchange Commission (the Report), I, Kelli Gallegos, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 8, 2018 | /s/ Kelli Gallegos | |||||
Kelli Gallegos, Principal Financial Officer |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided by the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
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
'!A8VME="!B96=I;CTG[[N_)R!I9#TG5S5-,$UP0V5H:4AZ
M O3$,M?H]=**FDG!FCF-D9AF#F#9N
M63I,R;@%')0;J%$J@D$! /N%[MK/L'T'W5[W]=B_:/MCR7J/N+W)YKT?T+T_
M^?S?6Z'1_?XO#]>WSP?_ #^G/_'^\=N9G)?:(RUOM@HL[K51RB;AK9.P,91%
M\\Q.MWF&F#P<4];Q=E5=V6T>-RE()+D,@V*D7P@8PCSJK)T7,S8>+?(R1Y(X
MPQ;Q[=\]A7E;S"DVK28.,/Y=60)'6FI/)KJ((&+WNUP4[C?4IN#OQPU-\29U
M8G(RP9S8H5M(2#FX1CCIJNUP<+&:-6L#QNX[9-C[5JFHF+^HTZ*;69Z"
MJAU5#3%Q=(NK;.JF.H/[WKUP<"_M ?" ']>?FO
G)E4WI.5&-Z:V,Y9"<_/@H\/V%D;V)E+7AA<"UF:6QT97)S(&5S8STB0U(B
M/SX*/'@Z>&%P;65T82!X;6QN (69AE%A)T]&HN!
MS19C5D322XB#5B+'9%P-*;$48X9IP-0-*-X90Z9EEEY$@K./.:1A&:' 'H+8
MB')&LG024%^/<>+05A,H3)% =PDF6;"8)_E X[95R6ZCGD<1M2$HZXUA*,OX
M*:2_(DF6W%%)YIR9YJQSCO&E&*+#RUXM%(_GF]-$3V'>*PBPH?$I6+&SX/64
M[EF!- V _P"39(VD'!XAVR60P@SXWQOAY!I!:@-X:\0XACD+TAR>
M=(-@,.F,UJ_H<>.PHW4K)\Y%R)T,<:*S*(1F9U=#7$<:C.IXN]8.OR4M4K#L
M+>1J_ID 0>:^1Y[69>:;%OH\'S["R6CE/)
MD@1$;C(N[/HSVS:(),Y%(_?K LE[=
MW2"D(]9O!O*MJYK\6L *,;EC8?:T^.5U@*JR]9A?):T\ LS'7UQ$G,I)KM5I.2)W21T<4,^)8,-(^S\DNUG0/C[
ME=9ZSZQN-0@\VS7H9E)-Q6@@DYVK16<,_)!]9RQN@VC#*D28K*"/N@H(>ES'
MH7./T>4VIQ+VCR*,V;[;UG'4"'5BJV&EE9:M;.4F'+K"OY)$I ADHZ9&IRAG
MY&([6KJUJ%+.I=*699:V'36E1GI0NJOI*%]7'T&(.?U*R8OBW'J5[E')S@?U;CX:+C
MLY9?HRW-=7U^[I$^J'-2RSXWF\=RSX]P+"M,4RZO"W+8W[%C72GTPGH^4"Q0&2Z/K4,]DMHM.K;K,N00%G>
M8M]T]T/S#)I)V7RR:&UI$H;2-*G9'K0>\4GM,DV32=UKR12>875E:#\#'6XO
M?:+U?/(U8I.GHX ;-Q*P ^P[I'13DBON2>YQG271DV"QZSX?;W!\JB)67Q S
M"#?\K=78T!K$M&>DQLK6N^M5<'+$>?BYS\]=M]_MV9 B!+07 ]=,89BA#6/2
M98H'=QW#I!31T!)OC'_=.N%0SW18?H['Y_+29I/,%9D[6.C0C/*+TNZ%-<,2
M$W>AVI=YH[4#KFW! Q;W4K!G:T8@5EXN
MIWU&1(B.8XQ19]]TR?D4((]8BS%BRY?>5E(_:%XU[KLLHP*P>6/HM,*IG=/R
M.Y+*MN4S05XU9%,6
WP_^N?E[P#$4]GN6OS.?F?E_P"?NK]WX^?;X+?G?M@#\C\P
MMESE1Q]'U._VW.^_W?6ZSO\ +'O]C/\ %PZS\OS:N-7]?GO$#\A<@XARFMR?D6[X^;D< YOR ;/)$5.2!1
MR./[.U0XW:J2VXMCVU]>@]P3!^\\UXCQGD=?>W_#G(BXAO.7I'J%>SF)"]QC
M>1?>M%G0JZ^$]#8<:XGJ404R?=T_[%9\>\ =2W/-V[FD2%22[.;X]H7 @4<@
MY$H2F6ZKE'+,^A/_ )LC\KNU,##M+?Y!J:&YN[-Q^CK[&K:;=TM/0LG++%R[
M:<1,<]ISUF9]HCI$1 Q$1_\ .]#7M>1^24>"?QQW>2^.O%'B+QQ;U3^-O,G&+%W+QJV;Q_#T,S@US5HYNQ1143I4+K%K6LB9)><^.#Y$S\;F'
MBOS74?QO:OV7LO<:\CZ_CSC7D;@*<6]E6(T1'\2T*>97T+57C
MF.P\;C"=BY3=W%:9I3W$<=H=V3QVFH;%*A1'2T3-IF8U\ZNVX3+4N8]G^JOM6T^
MI1+/LB.Z8GI;YM>)WY7.&+LY"WPN75>!X=:*&!5 4$: G3JU3TF&/=W3H=)F
M.D1%[E<7?GS[^95/$J@B$33QWA!0065/,K<;]I:2%10HP*U-1?4I>IA2"NXNT2B9D>GUS
MZ(M'Y+Q0GN>:Q43+8D#_ );)PV%@Q1%'<<=((OIUZ>M@%@T%UWIA:V#T+X($
M$24$R DD@P)@2Z3'2.D^_K8M+.JL*OX-TYOD/RK:K1JPNRF.\/D96["E?2)[
MI]NDS[>@U>+\AO\ 'M6UE_ON#MTGM 'U;]8K=J-$#'\1U#+LF2[:K R$S[S$
M1,3.7B>0TT>/\T9G4&JNI(UX7)C:!+8ZDTU_BT-!CTE_I/E/Y(F"5,C/:*C1
M92T7A#4R!C/RJGVA@>_W+G])CVGU/:0ET^O28GI^GZ?K$_\ 8?%?\>LZ-VSR
M+S[Y