N-2
N-2 | 12 Months Ended |
Feb. 29, 2024 | |
Cover [Abstract] | |
Entity Central Index Key | 0000846671 |
Amendment Flag | false |
Document Type | N-CSR |
Entity Registrant Name | Invesco High Income Trust II |
General Description of Registrant [Abstract] | |
Investment Objectives and Practices [Text Block] | Recent Changes During the Trust’s most recent fiscal year, there were no material changes in the Trust’s investment objectives or policies that have not been approved by shareholders or in the principal risk factors associated with investment in the Trust, except that disclosure was updated to clarify that the Trust may also invest in exchange-traded funds. This information may not reflect all of the changes that have occurred since you purchased the Trust. Investment Objective The investment objective of Invesco High Income Trust II (the “Trust”) is to provide to its common shareholders high current income, while seeking to preserve shareholders’ capital, through investment in a professionally managed, diversified portfolio of high-income producing fixed-income securities. The investment objective is fundamental and may not be changed without approval of a majority of the Trust’s outstanding voting securities, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”). Investment Policies of the Trust The Trust will invest primarily in high income producing fixed-income securities rated in the medium and lower categories by established rating agencies, or unrated securities determined by Invesco Advisers, Inc. (the “Adviser”) to be of comparable quality. Medium and lower grade securities are those rated BB or lower by S&P Global Ratings (“S&P”) or Ba or lower by Moody’s Investors Service, Inc. (“Moody’s”) or an equivalent rating by another nationally recognized statistical rating organization (“NRSRO”), or securities that are not rated but are believed by the Adviser to be of comparable quality.† Lower-grade securities are commonly referred to as “junk bonds.” No limitation exists as to the rating category in which the Trust may invest. If two or more NRSROs have assigned different ratings to a security, the Adviser uses the lowest rating assigned. High income producing fixed-income securities are generally corporate fixed-income securities rated between BB/Ba and C/C by S&P and Moody’s and are frequently issued by corporations in the growth stage of their development. Securities which are rated BB, B, CCC, CC and C are regarded by S&P, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. In normal market conditions, at least 65% of the Trust’s assets will be invested in fixed-income securities. The fixed-income securities in which the Trust will invest will consist primarily of debt securities. “Fixed-income securities” which may be acquired by the Trust include all types of debt obligations having varying terms with respect to security or credit support, subordination, purchase price, interest payments and maturity. Such obligations may include, for example, bonds, debentures, notes and obligations issued or guaranteed by the United States government or any of its political subdivisions, agencies or instrumentalities. Most debt securities in which the Trust will invest will bear interest at fixed rates. However, the Trust reserves the right to invest without limitation in fixed-income securities that have variable rates of interest or involve equity features, such as contingent interest or participation based on revenues, sales or profits. Fixed-income securities which may be acquired also include preferred stocks that have cumulative or non-cumulative The Trust may invest up to 35% of its total assets in securities rated higher than BB by S&P or higher than Ba by Moody’s or unrated securities of comparable quality and may invest a higher percentage, up to 100% of its total assets, in such higher rated securities (i) when the difference in yields between quality classifications is relatively narrow, (ii) when, consistent with seeking to maintain the dollar-weighted average maturity of the Trust’s portfolio of up to 12 years, high income producing fixed-income securities of appropriate maturities are unavailable or are available only at prices that the Adviser deems are unfavorable or (iii) when the Adviser determines that market conditions warrant a temporary, defensive policy. The Trust will seek to preserve capital through portfolio diversification and by limiting investments to fixed-income securities which the Adviser believes entail reasonable credit risk. The Trust has a non-fundamental Convertible Securities Zero Coupon Securities zero coupon securities. Zero coupon securities are debt securities that do not entitle the holder to any periodic payment of interest prior to maturity or a specified date when the securities begin paying current interest. Loans Restricted and Illiquid Securities case-by-case Rule 144A Securities and Other Exempt Securities. Non–Dollar Denominated Securities non-U.S. The foregoing percentage and rating limitations apply at the time of acquisition of a security based on the last previous determination of the Trust’s net asset value. Any subsequent change in any rating by a rating service or change in percentages resulting from market fluctuations or other changes in the Trust’s total assets will not require elimination of any security from the Trust’s portfolio. The Trust may purchase and sell foreign currency on a spot (i.e., cash) basis in connection with the settlement of transactions in securities traded in such foreign currency. Derivatives. Real Estate Investment Trusts (“REITS”). Exchange–Traded Funds. Borrowing Money Market Funds Temporary Defensive Investments Investment Process bottom-up financial condition. The credit analysts also assess the ability of an issuer to reduce its leverage (i.e., the amount of borrowed debt). The credit research process utilized by the Trust to implement its investment strategy in pursuit of its investment objective considers factors that may include, but are not limited to, an issuer’s operations, capital structure and environmental, social and governance (“ESG”) considerations. Credit quality analysis for certain issuers therefore may consider whether any ESG factors pose a material financial risk or opportunity to an issuer. The Adviser may determine that ESG considerations are not material to certain issuers or types of investments held by the Trust and not all issuers or investments in the Trust may undergo a credit quality analysis that considers ESG factors, and not all investments held by the Trust will rate strongly on ESG criteria . The bottom-up top-down Although the Trust is actively managed, it is reviewed regularly against its style-specific benchmark index (the Bloomberg U.S. Corporate High Yield 2% Issuer Cap Index) and its peer group index (the Lipper High Current Yield Bond Funds Index) to assess the portfolio’s relative risk and its positioning. Decisions to purchase or sell securities are determined by the relative value considerations of the portfolio managers that factor in economic and credit-related fundamentals, market supply and demand, market dislocations and situation-specific opportunities. The purchase or sale of securities may be related to a decision to alter the Trust’s macro risk exposure (such as duration, yield curve positioning and sector exposure), a need to limit or reduce the Trust’s exposure to a particular security or issuer, degradation of an issuer’s credit quality, or general liquidity needs of the Trust. |
Risk Factors [Table Text Block] | Principal Risks of Investing in the Trust As with any fund investment, loss of money is a risk of investing. The risks associated with an investment in the Trust can increase during times of significant market volatility. The principal risks of investing in the Trust are: Market Risk. The market values of the Trust’s investments, and therefore the value of the Trust’s shares, will go up and down, sometimes rapidly or unpredictably. Market risk significant impact on the value of the Trust’s investments, as well as the financial markets and global economy generally. Such circumstances may also impact the ability of the Adviser to effectively implement the Trust’s investment strategy. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Trust will rise in value. Market Disruption Risks Related to Armed Conflict. High Yield Debt Securities (Junk Bond) Risk Debt Securities Risk to anticipate such changes, which could result in buying a debt security at an inopportune time or failing to sell a debt security in advance of a price decline or other credit event. Changing Fixed Income Market Conditions Risk. Credit Risk. Interest Rate Risk Market Discount from Net Asset Value Risk closed-end Income Risk Call Risk Convertible Securities Risk Derivatives Risk the derivative contract will default on its obligation to pay the Trust the amount owed or otherwise perform under the derivative contract. Derivatives create leverage risk because they do not require payment up front equal to the economic exposure created by holding a position in the derivative. As a result, an adverse change in the value of the underlying asset could result in the Trust sustaining a loss that is substantially greater than the amount invested in the derivative or the anticipated value of the underlying asset, which may make the Trust’s returns more volatile and increase the risk of loss. Derivative instruments may also be less liquid than more traditional investments and the Trust may be unable to sell or close out its derivative positions at a desirable time or price. This risk may be more acute under adverse market conditions, during which the Trust may be most in need of liquidating its derivative positions. Derivatives may also be harder to value, less tax efficient and subject to changing government regulation that could impact the Trust’s ability to use certain derivatives or their cost. Derivatives strategies may not always be successful. For example, derivatives used for hedging or to gain or limit exposure to a particular market segment may not provide the expected benefits, particularly during adverse market conditions. Forward Foreign Currency Contracts Risk Futures Contracts Risk Options Risk. Swap Transactions Risk over-the-counter Liquidity Risk Restricted Securities Risk Rule 144A Securities and Other Exempt Securities Risk Unrated Securities Risk other factors, in categories similar to those of nationally recognized statistical rating organizations. There can be no assurance, nor is it intended, that the Adviser’s credit analysis process is consistent or comparable with the credit analysis process used by a nationally recognized statistical rating organization. Unrated securities are considered “investment-grade” or “below-investment-grade” if judged by the Adviser to be comparable to rated investment-grade or below-investment-grade securities. The Adviser’s rating does not constitute a guarantee of the credit quality. In addition, some unrated securities may not have an active trading market or may trade less actively than rated securities, which means that the Trust might have difficulty selling them promptly at an acceptable price. In evaluating the credit quality of a particular security, whether rated or unrated, the Adviser will normally take into consideration a number of factors such as, if applicable, the financial resources of the issuer, the underlying source of funds for debt service on a security, the issuer’s sensitivity to economic conditions and trends, any operating history of the facility financed by the obligation, the degree of community support for the financed facility, the capabilities of the issuer’s management, and regulatory factors affecting the issuer or the particular facility. A reduction in the rating of a security after the Trust buys it will not require the Trust to dispose of the security. However, the Adviser will evaluate such downgraded securities to determine whether to keep them in the Trust’s portfolio. Borrowing and Leverage Risk issuer of a security, or any of their agents, goes bankrupt. Trading in many foreign securities may be less liquid and more volatile than U.S. securities due to the size of the market or other factors. Changes in political and economic factors in one country or region could adversely affect conditions in another country or region. At times, the Trust may emphasize investments in a particular country or region and may be subject to greater risks from adverse events that occur in that country or region. Unless the Trust has hedged its foreign currency exposure, foreign securities risk also involves the risk of negative foreign currency rate fluctuations, which may cause the value of securities denominated in such foreign currency (or other instruments through which the Trust has exposure to foreign currencies) to decline in value. Currency exchange rates may fluctuate significantly over short periods of time. Currency hedging strategies, if used, are not always successful. For instance, currency forward contracts, if used by the Trust, could reduce performance if there are unanticipated changes in currency exchange rates. Foreign Credit Exposure Risk Emerging Markets Securities Risk Risk of Investing in Loans settlement periods may impair the Trust’s ability to sell loans within its desired time frame or at an acceptable price and its ability to accurately value existing and prospective investments. Extended trade settlement periods may result in cash not being immediately available to the Trust. As a result, the Trust may have to sell other investments or engage in borrowing transactions to raise cash to meet its obligations. The risk of holding loans is also directly tied to the risk of insolvency or bankruptcy of the borrower. If the borrower defaults on its obligation to pay, there is the possibility that the collateral securing a loan, if any, may be difficult to liquidate or be insufficient to cover the amount owed under the loan. The value of loans can be affected by and sensitive to changes in government regulation and to economic downturns in the United States and abroad. These risks could cause the Trust to lose income or principal on a particular investment, which in turn could affect the Trust’s returns. Additionally, valuation of loans may require greater research due to limited public information available and elements of judgment may play a greater role in valuation since there may be a lack of objective data available. Loans may include floating rate loans, which are subject to interest rate risk as the interest paid on the floating rate loans adjusts periodically based on changes in widely accepted reference rates. Newly originated loans (including reissuances and restructured loans) may possess lower levels of credit document protections than has historically been the case. Accordingly, in the event of default the Trust may experience lower levels of recoveries than has historically been the norm. Environmental, Social and Governance (ESG) Considerations Risk ESG-focused Preferred Securities Risk non-payment company’s financial condition or prospects. Preferred securities may be less liquid than many other securities, such as common stocks, and generally offer no voting rights with respect to the issuer. REIT Risk/Real Estate Risk mid-cap Exchange–Traded Funds Risk Zero Coupon or Pay–In–Kind Securities Risk pay-in-kind non-cash-paying pay-in-kind pay-in-kind Pay-in-kind in valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of any associated collateral. Special tax considerations are associated with investing in certain lower-grade securities, such as zero coupon or pay-in-kind U.S. Government Obligations Risk Financial Markets Regulatory Risk Money Market Fund Risk Distribution Risk Management Risk |
Market Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Market Risk. The market values of the Trust’s investments, and therefore the value of the Trust’s shares, will go up and down, sometimes rapidly or unpredictably. Market risk |
Market Disruption Risks Related to Armed Conflict [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Market Disruption Risks Related to Armed Conflict. |
High Yield Debt Securities Junk Bond Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | High Yield Debt Securities (Junk Bond) Risk |
Debt Securities Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Debt Securities Risk |
Changing Fixed Income Market Conditions Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Changing Fixed Income Market Conditions Risk. |
Credit Risks [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Credit Risk. |
Interest Rate Risks [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Interest Rate Risk |
Market Discount from Net Asset Value Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Market Discount from Net Asset Value Risk closed-end |
Income Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Income Risk |
Call Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Call Risk |
Convertible Securities Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Convertible Securities Risk |
Derivatives Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Derivatives Risk |
Forward Foreign Currency Contracts Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Forward Foreign Currency Contracts Risk |
Futures Contracts Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Futures Contracts Risk |
Options Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Options Risk. |
Swap Transactions Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Swap Transactions Risk over-the-counter |
Liquidity Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Liquidity Risk |
Restricted Securities Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Restricted Securities Risk |
Rule 144A Securities and Other Exempt Securities Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Rule 144A Securities and Other Exempt Securities Risk |
Unrated Securities Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Unrated Securities Risk |
Borrowing and Leverage Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Borrowing and Leverage Risk |
Foreign Credit Exposure Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Foreign Credit Exposure Risk |
Emerging Markets Securities Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Emerging Markets Securities Risk |
Risk of Investing in Loans [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Risk of Investing in Loans |
Environmental Social and Governance ESG Considerations Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Environmental, Social and Governance (ESG) Considerations Risk ESG-focused |
Preferred Securities Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Preferred Securities Risk non-payment |
REIT RiskReal Estate Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | REIT Risk/Real Estate Risk mid-cap |
ExchangeTraded Funds Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Exchange–Traded Funds Risk |
Zero Coupon or PayInKind Securities Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Zero Coupon or Pay–In–Kind Securities Risk pay-in-kind non-cash-paying pay-in-kind pay-in-kind Pay-in-kind pay-in-kind |
US Government Obligations Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | U.S. Government Obligations Risk |
Financial Markets Regulatory Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Financial Markets Regulatory Risk |
Money Market Fund Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Money Market Fund Risk |
Distribution Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Distribution Risk |
Management Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Management Risk |
Bank Loan Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | O. Bank Loan Risk |
Leverage Risk [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | P. Leverage Risk |
Collateral [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | Q. Collateral |
Other Risks [Member] | |
General Description of Registrant [Abstract] | |
Risk [Text Block] | R. Other Risks Increases in the federal funds and equivalent foreign rates or other changes to monetary policy or regulatory actions may expose fixed income markets to heightened volatility and reduced liquidity for certain fixed income investments, particularly those with longer maturities. It is difficult to predict the impact of interest rate changes on various markets. In addition, decreases in fixed income dealer market-making capacity may also potentially lead to heightened volatility and reduced liquidity in the fixed income markets. As a result, the value of the Trust’s investments and share price may decline. Changes in central bank policies could also result in higher than normal redemptions by shareholders, which could potentially increase the Trust’s portfolio turnover rate and transaction costs. Policy changes by the U.S. government or its regulatory agencies and political events within the U.S. and abroad may, among other things, affect investor and consumer confidence and increase volatility in the financial markets, perhaps suddenly and to a significant degree, which may adversely impact the Trust’s operations, universe of potential investment options, and return potential. Active trading of portfolio securities may result in added expenses, a lower return and increased tax liability. |
Notes [Member] | |
General Description of Registrant [Abstract] | |
Investment Objectives and Practices [Text Block] | The Trust’s investment objective is to provide its common shareholders high current income, while seeking to preserve shareholders’ capital, through investment in a professionally managed, diversified portfolio of high-income producing fixed-income securities. |