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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANIES
Investment Company Act file number 811-05769
Invesco Van Kampen High Income Trust II
(Exact name of registrant as specified in charter)
| 1555 Peachtree Street, N.E., Atlanta, Georgia | 30309 | |
| (Address of principal executive offices) | (Zip code) | |
| Colin Meadows 1555 Peachtree Street, N.E., Atlanta, Georgia 30309 | ||
| (Name and address of agent for service) | ||
Registrant’s telephone number, including area code: (713) 626-1919
Date of fiscal year end: 2/28
Date of reporting period: 8/31/11
Item 1. Reports to Stockholders.
Invesco Van Kampen High Income Trust II
Semiannual Report to Shareholders § August 31, 2011
NYSE: VLT
2 |
Trust Performance | |
3 |
Dividend Reinvestment Plan | |
4 |
Schedule of Investments | |
14 |
Financial Statements | |
17 |
Notes to Financial Statements | |
23 |
Financial Highlights | |
25 |
Approval of Investment Advisory and Sub-Advisory Agreements | |
27 |
Results of Proxy | |
Unless otherwise noted, all data provided by Invesco.
| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||
Trust Performance
Performance summary
Cumulative total returns, 2/28/11 to 8/31/11
Trust at NAV |
-4.87 | % | ||
Trust at Market Value |
1.70 | |||
Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index▼ |
-1.57 | |||
Market Price Premium to NAV as of 8/31/11 |
6.20 | |||
▼Lipper Inc.
|
||||
The performance data quoted represent past performance and cannot guarantee comparable
future results; current performance may be lower or higher. Investment return, net asset value
and common share market price will fluctuate so that you may have a gain or loss when you sell
shares. Please visit invesco.com/performance for the most recent month-end performance.
Performance figures reflect Trust expenses, the reinvestment of distributions (if any) and
changes in net asset value (NAV) for performance based on NAV and changes in market price
for performance based on market price.
Since the Trust is a closed-end management investment company, shares of the Trust may
trade at a discount or premium from the NAV. This characteristic is separate and distinct from
the risk that NAV could decrease as a result of investment activities and may be a greater risk
to investors expecting to sell their shares after a short time. The Trust cannot predict whether
shares will trade at, above or below NAV. The Trust should not be viewed as a vehicle for trading
purposes. It is designed primarily for risk-tolerant long-term investors.
The Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index is an unmanaged index
that covers U.S. corporate, fixed-rate, non-investment grade debt with at least one year to
maturity and at least $150 million in par outstanding. Index weights for each issuer are capped
at 2%.
The Trust is not managed to track the performance of any particular index, including the
index(es) defined here, and consequently, the performance of the Trust may deviate significantly
from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results
include reinvested dividends, and they do not reflect sales charges.
NYSE
Symbol
|
VLT | |||
| 2 | Invesco Van Kampen High Income Trust II |
Dividend Reinvestment Plan
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 Trust. Under the Plan, the money you earn from Distributions will be
reinvested automatically in more shares of your Trust, allowing you to potentially increase your investment over time. All shareholders
in the Trust are automatically enrolled in the Plan when shares are purchased.
Plan benefits
| n | Add to your account: You may increase the amount of shares in your Trust easily and automatically with the Plan. |
|
| n | Low transaction costs: Shareholders who participate in the Plan are able to buy shares at below-market prices when the Trust is trading at a premium to its net asset value (NAV). In addition, transaction costs are low because when new shares are issued by the Trust, there is no brokerage fee, and when shares are bought in blocks on the open market, the per share fee is shared among all Participants. |
|
| n | Convenience: You will receive a detailed account statement from Computershare Trust Company, N.A. (the Agent) which administers the Plan. The statement shows your total Distributions, date of investment, shares acquired, and price per share, as well as the total number of shares in your reinvestment account. You can also access your account at invesco.com/us. |
|
| n | Safekeeping: The Agent will hold the shares it has acquired for you in safekeeping. |
How to participate in the Plan
If you own shares in your own name, you can
participate directly in the Plan. If your shares
are held in “street name” – in the name of
your brokerage firm, bank, or other financial
institution – you must instruct that entity to
participate on your behalf. If they are unable
to participate on your behalf, you may request
that they reregister your shares in your own
name so that you may enroll in the Plan.
How to enroll
To enroll in the Plan, please read the Terms
and Conditions in the Plan Brochure. You can
obtain a copy of the Plan Brochure and enroll
in the Plan by visiting invesco.com/us, calling
toll-free 800 341 2929 or notifying us
in writing at Invesco Closed-End Funds,
Computershare Trust Company, N.A.
P.O. Box 43078, Providence, RI 02940-3078.
Please include your Trust name and account
number and ensure that all shareholders
listed on the account sign these written
instructions. Your participation in the Plan will
begin with the next Distribution payable after
the Agent receives your authorization, as long
as they receive it before the “record date,”
which is generally 10 business days before the
Distribution is paid. If your authorization
arrives after such record date, your participation
in the Plan will begin with the following
Distribution.
How the Plan works
If you choose to participate in the Plan, your
Distributions will be promptly reinvested for
you, automatically increasing your shares. If
the Trust is trading at a share price that is
equal to its NAV, you’ll pay that amount for
your reinvested shares. However, if the Trust
is trading above or below NAV, the price is
determined by one of two ways:
| 1. | Premium: If the Trust is trading at a premium - a market price that is higher than its NAV - you’ll pay either the NAV or 95 percent of the market price, whichever is greater. When the Trust trades at a premium, you’ll pay less for your reinvested shares than an investor purchasing shares on the stock exchange. Keep in mind, a portion of your price reduction may be taxable because you are receiving shares at less than market price. | ||
| 2. | Discount: If the Trust is trading at a discount - a market price that is lower than NAV - you’ll pay the market price for your reinvested shares. |
Costs of the Plan
There is no direct charge to you for reinvesting
Distributions because the Plan’s fees are paid
by the Trust. If your Trust is trading at or above
its NAV, your new shares are issued directly by
the Trust and there are no brokerage charges
or fees. However, if the Trust is trading at a
discount, the shares are purchased on the
open market, and you will pay your portion of
any per share fees. These per share fees are
typically less than the standard brokerage
charges for individual transactions because
shares are purchased for all Participants in
blocks, resulting in lower fees for each
individual Participant. Any service or per share
fees are added to the purchase price. Per
share fees include any applicable brokerage
commissions the Agent is required to pay.
Tax implications
The automatic reinvestment of Distributions
does not relieve you of any income tax that
may be due on Distributions. You will receive
tax information annually to help you prepare
your federal income tax return.
Invesco does not offer tax advice. The tax
information contained herein is general and is
not exhaustive by nature. It was not intended
or written to be used, and it cannot be used,
by any taxpayer for avoiding penalties that
may be imposed on the taxpayer under U.S.
federal tax laws. Federal and state tax laws are
complex and constantly changing. Shareholders
should always consult a legal or tax adviser
for information concerning their individual
situation.
How to withdraw from the Plan
You may withdraw from the plan at any
time by calling 800 341 2929, visiting
invesco.com/us or by writing to Invesco
Closed-End Funds, Computershare Trust
Company, N.A., P.O. Box 43078, Providence,
RI 02940-3078. Simply indicate that you
would like to withdraw from the Plan, and be
sure to include your Trust name and account
number. Also, ensure that all shareholders
listed on the account have signed these
written instructions. If you withdraw, you have
three options with regard to the shares held in
the Plan:
| 1. | If you opt to continue to hold your non-certificated whole shares (Investment Plan Book Shares), they will be held by the Agent electronically as Direct Registration Book-Shares (Book-Entry Shares) and fractional shares will be sold at the then-current market price. Proceeds will be sent via check to your address of record after deducting applicable fees. | ||
| 2. | If you opt to sell your shares through the Agent, we will sell all full and fractional shares and send the proceeds via check to your address of record after deducting a $2.50 service fee and per share fee. Per share fees include any applicable brokerage commissions the Agent is required to pay. | ||
| 3. | You may sell your shares through your financial adviser through the Direct Registration System (DRS). DRS is a service within the securities industry that allows Trust shares to be held in your name in electronic format. You retain full ownership of your shares, without having to hold a share certificate. You should contact your financial adviser to learn more about any restrictions or fees that may apply. |
To obtain a complete copy of the Dividend
Reinvestment Plan, please call our Client
Services department at 800 341 2929 or
visit invesco.com/us.
| 3 | Invesco Van Kampen High Income Trust II |
Schedule
of Investments
August 31,
2011
(Unaudited)
|
Principal |
||||||||
| Amount | Value | |||||||
|
U.S. Dollar Denominated Bonds & Notes–125.29% |
||||||||
|
Aerospace & Defense–2.45% |
||||||||
|
Alliant Techsystems Inc., Sr. Unsec. Gtd. Sub. Notes,
6.88%, 09/15/20
|
$ | 35,000 | $ | 35,175 | ||||
|
BE Aerospace, Inc., Sr. Unsec. Notes, 6.88%, 10/01/20
|
220,000 | 227,700 | ||||||
|
Bombardier Inc. (Canada), Sr. Unsec. Notes,
7.75%, 03/15/20(a)
|
295,000 | 325,237 | ||||||
|
Huntington Ingalls Industries, Inc., Sr. Unsec. Gtd. Notes,
6.88%, 03/15/18(a) |
65,000 | 61,263 | ||||||
|
7.13%, 03/15/21(a)
|
110,000 | 103,812 | ||||||
|
Spirit Aerosystems Inc., Sr. Unsec. Gtd. Global Notes,
6.75%, 12/15/20
|
140,000 | 140,000 | ||||||
|
TransDigm Inc., Sr. Unsec. Gtd. Sub. Notes,
7.75%, 12/15/18(a)
|
55,000 | 56,375 | ||||||
|
Triumph Group, Inc., Sr. Unsec. Gtd. Sub. Global Notes,
8.00%, 11/15/17
|
440,000 | 456,500 | ||||||
| 1,406,062 | ||||||||
|
Airlines–3.94% |
||||||||
|
American Airlines Inc.,
Sr. Sec. Gtd. Notes, 7.50%, 03/15/16(a) |
110,000 | 100,925 | ||||||
|
Series 2011-1,
Class B, Sec. Gtd. Pass Through Ctfs.,
7.00%, 01/31/18(a)
|
79,472 | 70,333 | ||||||
|
Continental Airlines Inc.,
Series 2007-1, Class C, Sec. Sub. Global Pass Through Ctfs., 7.34%, 04/19/14 |
708,111 | 701,030 | ||||||
|
Series 2009-2,
Class B, Sec. Global Pass Through Ctfs.,
9.25%, 05/10/17
|
107,332 | 106,527 | ||||||
|
Delta Air Lines, Inc.,
Sr. Sec. Notes, 9.50%, 09/15/14(a) |
485,000 | 499,550 | ||||||
|
Series 2002-1,
Class C, Sec. Notes,
12.25%, 03/15/15(a)
|
85,000 | 90,312 | ||||||
|
Series 2010-1,
Class B, Sec. Pass Through Ctfs.,
6.38%, 01/02/16
|
85,000 | 77,775 | ||||||
|
Series 2010-2,
Class B, Sec. Pass Through Ctfs.,
6.75%, 11/23/15
|
100,000 | 92,000 | ||||||
|
UAL Corp.,
Series 2007-1, Class A, Sec. Gtd. Global Pass Through Ctfs., 6.64%, 07/02/22 |
96,088 | 94,106 | ||||||
|
Series 2009-2,
Class B, Sec. Gtd. Pass Through Ctfs.,
12.00%, 01/15/16(a)
|
209,199 | 219,659 | ||||||
|
US Airways Pass Through
Trust–Series 1998-1,
Class C, Sec. Pass Through Ctfs., 6.82%, 01/30/14
|
224,790 | 206,245 | ||||||
| 2,258,462 | ||||||||
|
Alternative Carriers–1.70% |
||||||||
|
Cogent Communications Group, Inc., Sr. Sec. Gtd. Notes,
8.38%, 02/15/18(a)
|
250,000 | 262,500 | ||||||
|
Level 3 Communications Inc., Sr. Unsec. Notes,
11.88%, 02/01/19(a)
|
245,000 | 256,025 | ||||||
|
Level 3 Escrow, Inc., Sr. Unsec. Notes,
8.13%, 07/01/19(a)
|
140,000 | 136,500 | ||||||
|
Level 3 Financing, Inc.,
|
||||||||
|
Sr. Unsec. Gtd. Global Notes,
9.25%, 11/01/14
|
190,000 | 191,900 | ||||||
|
Sr. Unsec. Gtd. Notes,
9.38%, 04/01/19(a)
|
125,000 | 124,375 | ||||||
| 971,300 | ||||||||
|
Aluminum–1.08% |
||||||||
|
Century Aluminum Co., Sr. Sec. Gtd. Sub. Notes,
8.00%, 05/15/14
|
605,000 | 618,991 | ||||||
|
Apparel Retail–1.57% |
||||||||
|
Express LLC/Express Finance Corp., Sr. Unsec. Gtd. Global Notes,
8.75%, 03/01/18
|
255,000 | 269,662 | ||||||
|
Gap, Inc. (The), Sr. Unsec. Notes, 5.95%, 04/12/21
|
275,000 | 261,594 | ||||||
|
J Crew Group, Inc., Sr. Unsec. Gtd. Global Notes,
8.13%, 03/01/19
|
285,000 | 253,650 | ||||||
|
Ltd. Brands Inc., Sr. Unsec. Gtd. Notes, 6.63%, 04/01/21
|
110,000 | 112,200 | ||||||
| 897,106 | ||||||||
|
Apparel, Accessories & Luxury Goods–2.10% |
||||||||
|
Hanesbrands Inc., Sr. Unsec. Gtd. Global Notes,
6.38%, 12/15/20
|
220,000 | 217,800 | ||||||
|
Jones Group/Apparel Group Holdings/Apparel Group USA/Footwear
Accessories Retail, Sr. Unsec. Notes, 6.88%, 03/15/19
|
585,000 | 554,287 | ||||||
|
Quiksilver Inc., Sr. Unsec. Gtd. Global Notes,
6.88%, 04/15/15
|
460,000 | 430,100 | ||||||
| 1,202,187 | ||||||||
|
Asset Management & Custody Banks–0.55% |
||||||||
|
First Data Corp., Sr. Sec. Gtd. Notes,
7.38%, 06/15/19(a)
|
120,000 | 113,400 | ||||||
|
Travelport LLC/Travelport Inc., Sr. Unsec. Gtd. Global Notes,
9.00%, 03/01/16
|
250,000 | 203,750 | ||||||
| 317,150 | ||||||||
|
Auto Parts & Equipment–1.21% |
||||||||
|
Allison Transmission Inc., Sr. Unsec. Gtd Notes,
7.13%, 05/15/19(a)
|
330,000 | 311,850 | ||||||
|
Dana Holding Corp.,
Sr. Unsec. Gtd. Notes, 6.50%, 02/15/19 |
80,000 | 79,000 | ||||||
|
Sr. Unsec. Notes,
6.75%, 02/15/21
|
125,000 | 123,437 | ||||||
|
Tenneco Inc.,
Sr. Gtd. Global Notes, 6.88%, 12/15/20 |
65,000 | 66,300 | ||||||
|
Sr. Unsec. Gtd. Global Notes,
7.75%, 08/15/18
|
110,000 | 114,950 | ||||||
| 695,537 | ||||||||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
4 Invesco
Van Kampen High Income Trust II
|
Principal |
||||||||
| Amount | Value | |||||||
|
Automobile Manufacturers–0.58% |
||||||||
|
Chrysler Group LLC/ Chrysler Group Co. Inc., Sr. Sec. Gtd.
Notes,
8.00%, 06/15/19(a)
|
$ | 200,000 | $ | 173,000 | ||||
|
Ford Motor Co., Sr. Unsec. Global Notes, 7.45%, 07/16/31
|
135,000 | 148,500 | ||||||
|
Motors Liquidation Corp., Sr. Unsec. Global Notes,
8.38%, 07/15/49(b)
|
795,000 | 9,937 | ||||||
| 331,437 | ||||||||
|
Biotechnology–0.26% |
||||||||
|
Giant Funding Corp., Sr. Sec. Notes,
8.25%, 02/01/18(a)
|
70,000 | 70,700 | ||||||
|
STHI Holding Corp., Sec. Gtd. Notes,
8.00%, 03/15/18(a)
|
80,000 | 79,200 | ||||||
| 149,900 | ||||||||
|
Broadcasting–0.82% |
||||||||
|
Allbritton Communications Co., Sr. Unsec. Global Notes,
8.00%, 05/15/18
|
155,000 | 151,125 | ||||||
|
Clear Channel Communications, Inc., Sr. Sec. Gtd. Global
Notes 9.00%, 03/01/21
|
385,000 | 317,625 | ||||||
| 468,750 | ||||||||
|
Building Products–7.11% |
||||||||
|
American Standard Americas, Sr. Sec. Notes,
10.75%, 01/15/16(a)
|
205,000 | 171,175 | ||||||
|
Associated Materials LLC, Sr. Sec. Gtd. Global Notes,
9.13%, 11/01/17
|
490,000 | 428,750 | ||||||
|
Building Materials Corp. of America,
Sr. Sec. Gtd. Notes, 7.50%, 03/15/20(a) |
170,000 | 174,250 | ||||||
|
Sr. Unsec. Notes,
6.88%, 08/15/18(a)
|
675,000 | 668,250 | ||||||
|
Gibraltar Industries Inc.–Series B, Sr. Unsec. Gtd.
Sub. Global Notes, 8.00%, 12/01/15
|
270,000 | 266,625 | ||||||
|
Nortek Inc.,
Sr. Gtd. Notes, 8.50%, 04/15/21(a) |
805,000 | 696,325 | ||||||
|
Sr. Unsec. Gtd. Notes,
10.00%, 12/01/18(a)
|
195,000 | 188,175 | ||||||
|
Ply Gem Industries Inc., Sr. Unsec. Gtd. Sub. Global Notes,
13.13%, 07/15/14
|
145,000 | 144,094 | ||||||
|
Roofing Supply Group LLC/Roofing Supply Finance Inc., Sr. Sec.
Notes,
8.63%, 12/01/17(a)
|
510,000 | 497,250 | ||||||
|
USG Corp.,
Sr. Unsec. Gtd. Notes, |
||||||||
|
8.38%, 10/15/18(a)
|
30,000 | 26,400 | ||||||
|
9.75%, 08/01/14(a)
|
670,000 | 653,250 | ||||||
|
Sr. Unsec. Notes,
9.75%, 01/15/18
|
175,000 | 157,281 | ||||||
| 4,071,825 | ||||||||
|
Cable & Satellite–1.55% |
||||||||
|
Cablevision Systems Corp., Sr. Unsec. Global Notes,
8.63%, 09/15/17
|
40,000 | 42,750 | ||||||
|
EH Holding Corp.,
Sr. Sec. Gtd. Notes, 6.50%, 06/15/19(a) |
120,000 | 120,600 | ||||||
|
Sr. Unsec. Gtd. Notes,
7.63%, 06/15/21(a)
|
70,000 | 70,000 | ||||||
|
Intelsat Jackson Holdings S.A. (Luxembourg), Sr. Unsec. Gtd.
Notes,
7.50%, 04/01/21(a)
|
125,000 | 121,875 | ||||||
|
Kabel BW Erste Beteiligungs GmbH/Kabel Baden-Wurttemberg
GmbH & Co. KG (Germany), Sr. Sec. Gtd. Notes,
7.50%, 03/15/19(a)
|
525,000 | 532,875 | ||||||
| 888,100 | ||||||||
|
Casinos & Gaming–7.36% |
||||||||
|
Ameristar Casinos Inc., Sr. Unsec. Gtd. Notes,
7.50%, 04/15/21(a)
|
140,000 | 143,150 | ||||||
|
Boyd Gaming Corp., Sr. Unsec. Notes,
9.13%, 12/01/18(a)
|
35,000 | 32,900 | ||||||
|
Caesars Entertainment Operating Co. Inc.,
Sr. Sec. Gtd. Global Notes, |
||||||||
|
11.25%, 06/01/17
|
795,000 | 864,562 | ||||||
|
12.75%, 04/15/18
|
260,000 | 230,100 | ||||||
|
Sr. Unsec. Gtd. Global Bonds,
5.63%, 06/01/15
|
295,000 | 213,875 | ||||||
|
CityCenter Holdings LLC/CityCenter Finance Corp.,
Sec. Gtd. PIK Notes, 10.75%, 01/15/17(a) |
73,890 | 72,320 | ||||||
|
Sr. Sec. Gtd. Notes,
7.63%, 01/15/16(a)
|
20,000 | 19,850 | ||||||
|
Mandalay Resort Group, Sr. Unsec. Gtd. Sub. Notes,
7.63%, 07/15/13
|
105,000 | 101,325 | ||||||
|
MGM Resorts International,
Sr. Unsec. Gtd. Global Notes, 6.63%, 07/15/15 |
295,000 | 272,138 | ||||||
|
Sr. Unsec. Gtd. Notes,
10.00%, 11/01/16(a)
|
115,000 | 118,019 | ||||||
|
Pinnacle Entertainment Inc., Sr. Unsec. Gtd. Global Notes,
8.63%, 08/01/17
|
250,000 | 261,250 | ||||||
|
Scientific Games Corp., Sr. Unsec. Gtd. Sub. Global Notes,
8.13%, 09/15/18
|
35,000 | 35,350 | ||||||
|
Scientific Games International Inc., Sr. Unsec. Gtd. Sub. Global
Notes, 9.25%, 06/15/19
|
350,000 | 361,375 | ||||||
|
Seneca Gaming Corp., Sr. Unsec. Gtd. Notes,
8.25%, 12/01/18(a)
|
90,000 | 90,000 | ||||||
|
Snoqualmie Entertainment Authority,
Sr. Sec. Floating Rate Notes, 4.20%, 02/01/14(a)(c) |
200,000 | 178,000 | ||||||
|
Sr. Sec. Notes,
9.13%, 02/01/15(a)
|
405,000 | 392,850 | ||||||
|
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., Sec. Gtd. First
Mortgage Global Notes, 7.75%, 08/15/20
|
755,000 | 826,725 | ||||||
| 4,213,789 | ||||||||
|
Coal & Consumable Fuels–0.46% |
||||||||
|
Alpha Natural Resources Inc., Sr. Unsec. Gtd. Notes,
6.00%, 06/01/19 |
65,000 | 64,350 | ||||||
|
6.25%, 06/01/21
|
35,000 | 34,388 | ||||||
|
Arch Coal Inc., Sr. Unsec. Gtd. Notes, 7.25%, 10/01/20
|
65,000 | 65,812 | ||||||
|
CONSOL Energy Inc., Sr. Unsec. Gtd. Global Notes,
8.25%, 04/01/20
|
90,000 | 97,200 | ||||||
| 261,750 | ||||||||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
5 Invesco
Van Kampen High Income Trust II
|
Principal |
||||||||
| Amount | Value | |||||||
|
Commodity Chemicals–0.83% |
||||||||
|
Westlake Chemical Corp., Sr. Unsec. Gtd. Notes,
6.63%, 01/15/16
|
$ | 465,000 | $ | 477,497 | ||||
|
Communications Equipment–0.98% |
||||||||
|
Avaya Inc., Sr. Sec. Gtd. Notes,
7.00%, 04/01/19(a)
|
530,000 | 484,950 | ||||||
|
CommScope Inc., Sr. Unsec. Gtd. Notes,
8.25%, 01/15/19(a)
|
75,000 | 75,375 | ||||||
| 560,325 | ||||||||
|
Computer & Electronics Retail–0.14% |
||||||||
|
RadioShack Corp., Sr. Gtd. Notes,
6.75%, 05/15/19(a)
|
35,000 | 32,638 | ||||||
|
Rent-A-Center,
Inc., Sr. Unsec. Gtd Global Notes, 6.63%, 11/15/20
|
50,000 | 48,750 | ||||||
| 81,388 | ||||||||
|
Computer Hardware–0.24% |
||||||||
|
SunGard Data Systems Inc., Sr. Unsec. Gtd. Global Notes,
7.38%, 11/15/18 |
70,000 | 67,550 | ||||||
|
7.63%, 11/15/20
|
70,000 | 67,900 | ||||||
| 135,450 | ||||||||
|
Computer Storage & Peripherals–0.63% |
||||||||
|
Seagate HDD Cayman, Sr. Unsec. Gtd. Notes,
7.00%, 11/01/21(a)
|
85,000 | 80,963 | ||||||
|
7.75%, 12/15/18(a)
|
275,000 | 277,750 | ||||||
| 358,713 | ||||||||
|
Construction & Engineering–1.94% |
||||||||
|
Dycom Investments Inc., Sr. Unsec. Gtd. Sub. Global Notes,
7.13%, 01/15/21
|
100,000 | 103,000 | ||||||
|
Great Lakes Dredge & Dock Corp., Sr. Unsec. Gtd.
Notes,
7.38%, 02/01/19(a)
|
70,000 | 66,850 | ||||||
|
MasTec Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 02/01/17
|
350,000 | 351,750 | ||||||
|
Tutor Perini Corp., Sr. Unsec. Gtd. Global Notes,
7.63%, 11/01/18
|
660,000 | 589,050 | ||||||
| 1,110,650 | ||||||||
|
Construction & Farm Machinery & Heavy Trucks–2.13% |
||||||||
|
Case New Holland Inc., Sr. Unsec. Gtd. Global Notes,
7.88%, 12/01/17
|
255,000 | 277,950 | ||||||
|
CNH America LLC, Sr. Unsec. Gtd. Notes, 7.25%, 01/15/16
|
150,000 | 159,750 | ||||||
|
Commercial Vehicle Group Inc., Sr. Sec. Gtd. Notes,
7.88%, 04/15/19(a)
|
275,000 | 262,625 | ||||||
|
Manitowoc Co. Inc. (The), Sr. Unsec. Gtd. Notes,
8.50%, 11/01/20
|
145,000 | 145,000 | ||||||
|
Navistar International Corp., Sr. Unsec. Gtd. Notes,
8.25%, 11/01/21
|
260,000 | 269,100 | ||||||
|
Titan International Inc., Sr. Sec. Gtd. Global
Notes 7.88%, 10/01/17
|
100,000 | 105,500 | ||||||
| 1,219,925 | ||||||||
|
Construction Materials–2.58% |
||||||||
|
Building Materials Corp. of America, Sr. Unsec. Notes,
6.75%, 05/01/21(a)
|
120,000 | 115,800 | ||||||
|
Cemex Finance LLC, Sr. Sec. Gtd. Bonds,
9.50%, 12/14/16(a)
|
410,000 | 357,513 | ||||||
|
Ply Gem Industries Inc., Sr. Sec. Gtd. Global Notes,
8.25%, 02/15/18
|
370,000 | 321,900 | ||||||
|
Texas Industries Inc., Sr. Unsec. Gtd. Global Notes,
9.25%, 08/15/20
|
750,000 | 684,375 | ||||||
| 1,479,588 | ||||||||
|
Consumer Finance–4.07% |
||||||||
|
Ally Financial Inc., Sr. Unsec. Gtd. Global Notes,
7.50%, 09/15/20
|
1,210,000 | 1,203,950 | ||||||
|
8.00%, 03/15/20
|
100,000 | 102,250 | ||||||
|
Ford Motor Credit Co. LLC, Sr. Unsec. Notes,
5.88%, 08/02/21
|
200,000 | 201,000 | ||||||
|
8.00%, 12/15/16
|
501,000 | 558,615 | ||||||
|
National Money Mart Co. (Canada), Sr. Unsec. Gtd. Global Notes,
10.38%, 12/15/16
|
250,000 | 264,375 | ||||||
| 2,330,190 | ||||||||
|
Data Processing & Outsourced Services–0.69% |
||||||||
|
CoreLogic Inc., Sr. Unsec. Gtd. Notes,
7.25%, 06/01/21(a)
|
420,000 | 396,900 | ||||||
|
Department Stores–0.45% |
||||||||
|
Sears Holdings Corp., Sr. Sec. Gtd. Notes,
6.63%, 10/15/18(a)
|
310,000 | 258,850 | ||||||
|
Distillers & Vintners–0.68% |
||||||||
|
CEDC Finance Corp. International Inc., Sr. Sec. Gtd. Notes,
9.13%, 12/01/16(a)
|
100,000 | 73,500 | ||||||
|
Constellation Brands Inc., Sr. Unsec. Gtd. Global Notes,
7.25%, 05/15/17
|
295,000 | 313,437 | ||||||
| 386,937 | ||||||||
|
Diversified Banks–0.13% |
||||||||
|
RBS Capital Trust II, Jr. Unsec. Gtd. Sub. Global Bonds,
6.43%, 12/29/49(i)
|
140,000 | 76,300 | ||||||
|
Diversified Chemicals–0.14% |
||||||||
|
Huntsman International LLC, Sr. Unsec. Gtd. Sub. Global Notes,
8.63%, 03/15/21
|
75,000 | 78,938 | ||||||
|
Diversified Commercial & Professional Services–0.19% |
||||||||
|
International Lease Finance Corp., Sr. Unsec. Notes,
5.63%, 09/20/13
|
115,000 | 110,688 | ||||||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
6 Invesco
Van Kampen High Income Trust II
|
Principal |
||||||||
| Amount | Value | |||||||
|
Diversified Metals & Mining–0.45% |
||||||||
|
Midwest Vanadium Pty Ltd. (Australia), Sr. Sec. Gtd. Notes,
11.50%, 02/15/18(a)
|
$ | 90,000 | $ | 84,945 | ||||
|
Thompson Creek Metals Co. Inc. (Canada), Sr. Unsec. Gtd. Notes,
7.38%, 06/01/18(a)
|
30,000 | 27,450 | ||||||
|
Vedanta Resources PLC (United Kingdom), Sr. Unsec. Notes,
9.50%, 07/18/18(a)
|
140,000 | 142,545 | ||||||
| 254,940 | ||||||||
|
Diversified Support Services–2.19% |
||||||||
|
International Lease Finance Corp., Sr. Unsec. Global Notes,
|
||||||||
|
5.75%, 05/15/16
|
55,000 | 50,703 | ||||||
|
6.25%, 05/15/19
|
90,000 | 81,675 | ||||||
|
8.75%, 03/15/17
|
1,057,000 | 1,085,407 | ||||||
|
Mobile Mini Inc., Sr. Unsec. Gtd. Global Notes,
7.88%, 12/01/20
|
35,000 | 34,125 | ||||||
| 1,251,910 | ||||||||
|
Electrical Components & Equipment–0.13% |
||||||||
|
Polypore International Inc., Sr. Unsec. Gtd. Global Notes,
7.50%, 11/15/17
|
75,000 | 75,000 | ||||||
|
Electronic Manufacturing Services–0.37% |
||||||||
|
Sanmina-SCI Corp., Sr. Unsec. Gtd. Notes,
7.00%, 05/15/19(a)
|
225,000 | 210,375 | ||||||
|
Environmental & Facilities Services–0.59% |
||||||||
|
Clean Harbors Inc., Sr. Sec. Gtd. Global Notes,
7.63%, 08/15/16
|
192,000 | 203,520 | ||||||
|
EnergySolutions Inc./LLC, Sr. Unsec. Gtd. Global Notes,
10.75%, 08/15/18
|
130,000 | 131,950 | ||||||
| 335,470 | ||||||||
|
Food Retail–0.32% |
||||||||
|
Simmons Foods Inc., Sec. Notes,
10.50%, 11/01/17(a)
|
200,000 | 183,000 | ||||||
|
Forest Products–0.36% |
||||||||
|
Millar Western Forest Products Ltd. (Canada), Sr. Unsec. Notes,
8.50%, 04/01/21(a)
|
250,000 | 195,000 | ||||||
|
Sino-Forest Corp. (Canada), Sr. Unsec. Gtd. Notes,
6.25%, 10/21/17(a)
|
30,000 | 9,750 | ||||||
| 204,750 | ||||||||
|
Gas Utilities–0.77% |
||||||||
|
Ferrellgas L.P./Ferrellgas Finance Corp., Sr. Unsec. Global
Notes, 6.50%, 05/01/21
|
230,000 | 207,575 | ||||||
|
Suburban Propane Partners, L.P./Suburban Energy Finance Corp.,
Sr. Unsec. Notes, 7.38%, 03/15/20
|
225,000 | 231,187 | ||||||
| 438,762 | ||||||||
|
Health Care Equipment–0.59% |
||||||||
|
DJO Finance LLC/Corp.,
|
||||||||
|
Sr. Unsec. Gtd. Global Notes,
10.88%, 11/15/14
|
220,000 | 227,700 | ||||||
|
Sr. Unsec. Gtd. Notes,
7.75%, 04/15/18(a)
|
35,000 | 32,550 | ||||||
|
Sr. Unsec. Gtd. Sub. Notes,
9.75%, 10/15/17(a)
|
85,000 | 78,625 | ||||||
| 338,875 | ||||||||
|
Health Care Facilities–3.89% |
||||||||
|
HCA, Inc., Sr. Sec. Gtd. Global Notes, 7.88%, 02/15/20
|
640,000 | 680,000 | ||||||
|
Health Management Associates Inc., Sr. Sec. Gtd. Notes,
6.13%, 04/15/16
|
425,000 | 419,687 | ||||||
|
Healthsouth Corp., Sr. Unsec. Gtd. Notes,
|
||||||||
|
7.25%, 10/01/18
|
50,000 | 50,125 | ||||||
|
7.75%, 09/15/22
|
90,000 | 90,450 | ||||||
|
8.13%, 02/15/20
|
70,000 | 70,700 | ||||||
|
Select Medical Holdings Corp., Sr. Unsec. Floating Rate Global
Notes,
6.21%, 09/15/15(c) |
135,000 | 124,200 | ||||||
|
Tenet Healthcare Corp.,
Sr. Sec. Gtd. Global Notes, 10.00%, 05/01/18 |
350,000 | 387,625 | ||||||
|
Sr. Unsec. Global Notes,
|
||||||||
|
8.00%, 08/01/20
|
60,000 | 58,350 | ||||||
|
9.25%, 02/01/15
|
330,000 | 348,975 | ||||||
| 2,230,112 | ||||||||
|
Health Care Services–0.60% |
||||||||
|
DaVita Inc., Sr. Unsec. Gtd. Notes, 6.38%, 11/01/18
|
65,000 | 63,456 | ||||||
|
Radnet Management Inc., Sr. Unsec. Gtd. Global Notes,
10.38%, 04/01/18
|
220,000 | 215,050 | ||||||
|
Universal Hospital Services Inc., Sec. Gtd. PIK Global Notes,
8.50%, 06/01/15
|
65,000 | 65,407 | ||||||
| 343,913 | ||||||||
|
Health Care Technology–0.57% |
||||||||
|
MedAssets Inc., Sr. Unsec. Gtd. Notes,
8.00%, 11/15/18(a)
|
335,000 | 329,138 | ||||||
|
Home Improvement Retail–0.28% |
||||||||
|
Michaels Stores Inc., Sr. Unsec. Gtd. Global Notes,
7.75%, 11/01/18
|
170,000 | 161,500 | ||||||
|
Homebuilding–2.04% |
||||||||
|
Beazer Homes USA, Inc., Sr. Unsec. Gtd. Global Notes,
6.88%, 07/15/15 |
310,000 | 226,300 | ||||||
|
8.13%, 06/15/16
|
210,000 | 148,050 | ||||||
|
K. Hovnanian Enterprises Inc., Sr. Sec. Gtd. Global Notes,
10.63%, 10/15/16
|
590,000 | 528,050 | ||||||
|
Lennar Corp., Sr. Unsec. Gtd. Global Notes, 6.95%, 06/01/18
|
110,000 | 101,750 | ||||||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
7 Invesco
Van Kampen High Income Trust II
|
Principal |
||||||||
| Amount | Value | |||||||
|
Homebuilding–(continued) |
||||||||
|
M/I Homes Inc., Sr. Unsec. Gtd. Global Notes,
8.63%, 11/15/18
|
$ | 95,000 | $ | 88,112 | ||||
|
Standard Pacific Corp., Sr. Sec. Gtd. Notes, 8.38%, 05/15/18
|
85,000 | 74,800 | ||||||
| 1,167,062 | ||||||||
|
Hotels, Resorts & Cruise Lines–0.15% |
||||||||
|
Royal Caribbean Cruises Ltd., Sr. Unsec. Global Notes,
7.25%, 03/15/18
|
50,000 | 50,875 | ||||||
|
Wyndham Worldwide Corp., Sr. Unsec. Notes, 5.63%, 03/01/21
|
35,000 | 35,481 | ||||||
| 86,356 | ||||||||
|
Household Products–0.55% |
||||||||
|
Central Garden & Pet Co., Sr. Gtd. Sub. Notes,
8.25%, 03/01/18
|
235,000 | 230,300 | ||||||
|
Reynolds Group Issuer Inc./LLC/Luxembourg S.A., Sr. Unsec. Gtd.
Notes,
8.25%, 02/15/21(a)
|
100,000 | 85,500 | ||||||
| 315,800 | ||||||||
|
Housewares & Specialties–0.03% |
||||||||
|
Jarden Corp., Sr. Unsec. Gtd. Notes, 6.13%, 11/15/22
|
20,000 | 19,900 | ||||||
|
Independent Power Producers & Energy Traders–1.83% |
||||||||
|
AES Corp. (The), Sr. Unsec. Global Notes, 7.75%, 10/15/15
|
900,000 | 945,000 | ||||||
|
AES Red Oak LLC–Series A, Sr. Sec. Bonds,
8.54%, 11/30/19
|
100,391 | 104,657 | ||||||
| 1,049,657 | ||||||||
|
Industrial Machinery–1.10% |
||||||||
|
Cleaver-Brooks, Inc., Sr. Sec. Notes,
12.25%, 05/01/16(a)
|
305,000 | 306,525 | ||||||
|
Columbus McKinnon Corp., Sr. Unsec. Gtd. Sub. Global Notes,
7.88%, 02/01/19
|
25,000 | 23,750 | ||||||
|
SPX Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 09/01/17
|
290,000 | 301,600 | ||||||
| 631,875 | ||||||||
|
Industrial REIT’s–0.75% |
||||||||
|
DuPont Fabros Technology L.P., Sr. Unsec. Gtd. Global Notes,
8.50%, 12/15/17
|
400,000 | 428,000 | ||||||
|
Integrated Telecommunication Services–1.98% |
||||||||
|
Integra Telecom Holdings Inc., Sr. Sec. Notes,
10.75%, 04/15/16(a)
|
195,000 | 186,225 | ||||||
|
Intelsat Jackson Holdings S.A. (Luxembourg), Sr. Unsec.
Gtd. Notes,
7.25%, 04/01/19(a) |
95,000 | 92,625 | ||||||
|
7.25%, 10/15/20(a)
|
880,000 | 853,600 | ||||||
| 1,132,450 | ||||||||
|
Internet Software & Services–0.83% |
||||||||
|
Equinix Inc., Sr. Unsec. Notes,
7.00%, 07/15/21 |
205,000 | 210,125 | ||||||
|
8.13%, 03/01/18
|
245,000 | 262,762 | ||||||
| 472,887 | ||||||||
|
Investment Banking & Brokerage–1.19% |
||||||||
|
Cantor Fitzgerald L.P., Bonds,
7.88%, 10/15/19(a)
|
275,000 | 300,011 | ||||||
|
E*Trade Financial Corp., Sr. Unsec. Notes,
6.75%, 06/01/16
|
90,000 | 92,700 | ||||||
|
7.88%, 12/01/15
|
290,000 | 288,550 | ||||||
| 681,261 | ||||||||
|
Leisure Facilities–0.30% |
||||||||
|
AMC Entertainment, Inc., Sr. Gtd. Global Sub. Notes,
9.75%, 12/01/20
|
105,000 | 101,850 | ||||||
|
Speedway Motorsports, Inc., Sr. Unsec. Gtd. Global Notes,
6.75%, 02/01/19
|
70,000 | 67,200 | ||||||
| 169,050 | ||||||||
|
Leisure Products–0.06% |
||||||||
|
Toys R US-Delaware Inc., Sr. Sec. Gtd. Notes,
7.38%, 09/01/16(a)
|
35,000 | 34,213 | ||||||
|
Life Sciences Tools & Services–0.29% |
||||||||
|
Patheon Inc. (Canada), Sr. Sec. Gtd. Notes,
8.63%, 04/15/17(a)
|
175,000 | 167,563 | ||||||
|
Marine–0.37% |
||||||||
|
CMA CGM S.A. (France), Sr. Unsec. Notes,
8.50%, 04/15/17(a)
|
150,000 | 77,438 | ||||||
|
Navios Maritime Acquisition Corp./Navios Acquisition Finance
U.S. Inc. (Zambia), Sr. Sec. Gtd. Notes,
8.63%, 11/01/17(a)
|
35,000 | 29,400 | ||||||
|
Stena A.B. (Sweden), Sr. Unsec. Global Notes,
7.00%, 12/01/16
|
105,000 | 103,162 | ||||||
| 210,000 | ||||||||
|
Movies & Entertainment–1.90% |
||||||||
|
AMC Entertainment, Inc., Sr. Unsec. Gtd. Global Notes,
8.75%, 06/01/19
|
455,000 | 456,706 | ||||||
|
Cinemark USA, Inc., Sr. Unsec. Gtd. Global Notes,
8.63%, 06/15/19
|
165,000 | 174,075 | ||||||
|
NAI Entertainment Holdings LLC, Sr. Sec. Notes,
8.25%, 12/15/17(a)
|
445,000 | 458,350 | ||||||
| 1,089,131 | ||||||||
|
Multi-Line Insurance–2.85% |
||||||||
|
American International Group Inc., Jr. Unsec. Sub. Variable Rate
Global Deb.,
8.18%, 05/15/58(c)
|
75,000 | 74,625 | ||||||
|
Fairfax Financial Holdings Ltd. (Canada), Sr. Unsec. Notes,
5.80%, 05/15/21(a)
|
135,000 | 131,456 | ||||||
|
Hartford Financial Services Group Inc., Jr. Unsec. Sub. Variable
Rate Deb.,
8.13%, 06/15/38(c)
|
260,000 | 263,400 | ||||||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
8 Invesco
Van Kampen High Income Trust II
|
Principal |
||||||||
| Amount | Value | |||||||
|
Multi-Line Insurance–(continued) |
||||||||
|
Liberty Mutual Group Inc.,
Jr. Unsec. Gtd. Sub. Bonds, 7.80%, 03/15/37(a) |
$ | 599,000 | $ | 566,055 | ||||
|
Sr. Unsec. Gtd. Notes,
5.00%, 06/01/21(a)
|
60,000 | 58,577 | ||||||
|
Nationwide Mutual Insurance Co., Sub. Notes,
9.38%, 08/05/39(a)
|
435,000 | 536,813 | ||||||
| 1,630,926 | ||||||||
|
Multi-Sector Holdings–0.34% |
||||||||
|
Reynolds Group Issuer Inc./LLC/Luxembourg S.A., Sr. Sec. Gtd.
Notes,
7.13%, 04/15/19(a) |
200,000 | 193,000 | ||||||
|
Office Services & Supplies–0.28% |
||||||||
|
IKON Office Solutions, Inc., Sr. Unsec. Notes,
6.75%, 12/01/25
|
105,000 | 101,587 | ||||||
|
Interface Inc., Sr. Unsec. Gtd. Global Notes,
7.63%, 12/01/18
|
55,000 | 56,513 | ||||||
| 158,100 | ||||||||
|
Oil & Gas Equipment & Services–1.26% |
||||||||
|
Bristow Group, Inc., Sr. Unsec. Gtd. Global Notes,
7.50%, 09/15/17
|
220,000 | 226,600 | ||||||
|
Calfrac Holdings L.P., Sr. Unsec. Notes,
7.50%, 12/01/20(a)
|
75,000 | 73,500 | ||||||
|
Key Energy Services, Inc., Sr. Unsec. Gtd. Notes,
6.75%, 03/01/21
|
290,000 | 285,469 | ||||||
|
SESI, LLC, Sr. Unsec. Gtd. Notes,
6.38%, 05/01/19(a)
|
135,000 | 134,325 | ||||||
| 719,894 | ||||||||
|
Oil & Gas Exploration & Production–8.47% |
||||||||
|
Berry Petroleum Co., Sr. Unsec. Notes, 6.75%, 11/01/20
|
95,000 | 92,863 | ||||||
|
Chaparral Energy Inc., Sr. Unsec. Gtd. Global Notes,
8.25%, 09/01/21
|
350,000 | 334,250 | ||||||
|
Chesapeake Energy Corp., Sr. Unsec. Gtd. Notes,
6.13%, 02/15/21
|
445,000 | 452,231 | ||||||
|
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/17
|
280,000 | 289,450 | ||||||
|
Continental Resources Inc., Sr. Unsec. Gtd. Global Notes,
|
||||||||
|
7.13%, 04/01/21
|
80,000 | 82,300 | ||||||
|
7.38%, 10/01/20
|
180,000 | 187,875 | ||||||
|
8.25%, 10/01/19
|
130,000 | 140,888 | ||||||
|
EXCO Resources Inc., Sr. Unsec. Gtd. Notes, 7.50%, 09/15/18
|
325,000 | 312,000 | ||||||
|
Forest Oil Corp., Sr. Unsec. Gtd. Global Notes,
7.25%, 06/15/19
|
340,000 | 339,150 | ||||||
|
McMoRan Exploration Co., Sr. Unsec. Gtd. Notes,
11.88%, 11/15/14
|
430,000 | 456,875 | ||||||
|
Newfield Exploration Co., Sr. Unsec. Sub. Global Notes,
7.13%, 05/15/18
|
195,000 | 204,262 | ||||||
|
OGX Petroleo e Gas Participacoes S.A. (Brazil), Sr. Unsec. Gtd.
Notes,
8.50%, 06/01/18(a) |
205,000 | 205,229 | ||||||
|
Petrohawk Energy Corp.,
Sr. Unsec. Gtd. Global Notes, 7.25%, 08/15/18 |
400,000 | 468,000 | ||||||
|
Sr. Unsec. Gtd. Notes,
6.25%, 06/01/19(a)
|
245,000 | 284,812 | ||||||
|
Pioneer Natural Resources Co., Sr. Unsec. Notes,
6.65%, 03/15/17
|
160,000 | 172,800 | ||||||
|
Plains Exploration & Production Co., Sr. Unsec. Gtd.
Notes, 7.63%, 06/01/18
|
235,000 | 242,050 | ||||||
|
Range Resources Corp., Sr. Unsec. Gtd. Sub. Notes,
5.75%, 06/01/21
|
305,000 | 308,050 | ||||||
|
SM Energy Co., Sr. Unsec. Notes,
6.63%, 02/15/19(a)
|
135,000 | 135,675 | ||||||
|
Whiting Petroleum Corp., Sr. Unsec. Gtd. Sub. Notes,
6.50%, 10/01/18
|
140,000 | 141,575 | ||||||
| 4,850,335 | ||||||||
|
Oil & Gas Refining & Marketing–1.37% |
||||||||
|
SunCoke Energy Inc., Sr. Unsec. Gtd. Notes,
7.63%, 08/01/19(a)
|
40,000 | 39,400 | ||||||
|
Tesoro Corp., Sr. Unsec. Gtd. Global Bonds, 6.50%, 06/01/17
|
195,000 | 198,656 | ||||||
|
United Refining Co., Sr. Sec. Gtd. Global Notes,
10.50%, 02/28/18
|
540,000 | 549,450 | ||||||
| 787,506 | ||||||||
|
Oil & Gas Storage & Transportation–3.61% |
||||||||
|
Chesapeake Midstream Partners L.P./CHKM Finance Corp., Sr.
Unsec. Gtd. Notes,
5.88%, 04/15/21(a)
|
105,000 | 100,800 | ||||||
|
Copano Energy LLC/Copano Energy Finance Co., Sr. Unsec. Gtd.
Notes, 7.13%, 04/01/21
|
445,000 | 445,000 | ||||||
|
Energy Transfer Equity L.P., Sr. Sec. Gtd. Notes,
7.50%, 10/15/20
|
250,000 | 259,062 | ||||||
|
Inergy L.P./Inergy Finance Corp., Sr. Unsec. Gtd. Notes,
6.88%, 08/01/21(a)
|
170,000 | 161,713 | ||||||
|
MarkWest Energy Partners L.P./MarkWest Energy Finance Corp.,
Sr. Unsec. Gtd. Notes, 6.50%, 08/15/21 |
50,000 | 50,438 | ||||||
|
Series B, Sr. Unsec. Gtd. Global Notes,
8.75%, 04/15/18
|
330,000 | 351,037 | ||||||
|
Overseas Shipholding Group, Inc., Sr. Unsec. Notes,
8.13%, 03/30/18
|
275,000 | 233,750 | ||||||
|
Regency Energy Partners L.P./Regency Energy Finance Corp., Sr.
Unsec. Gtd. Notes, 6.88%, 12/01/18
|
205,000 | 210,381 | ||||||
|
Targa Resources Partners L.P./Targa Resouces Partners Finance
Corp., Sr. Unsec. Gtd. Notes,
6.88%, 02/01/21(a)
|
260,000 | 254,150 | ||||||
| 2,066,331 | ||||||||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
9 Invesco
Van Kampen High Income Trust II
|
Principal |
||||||||
| Amount | Value | |||||||
|
Other Diversified Financial Services–0.82% |
||||||||
|
International Lease Finance Corp.,
|
||||||||
|
Sr. Sec. Notes,
|
||||||||
|
6.75%, 09/01/16(a)
|
$ | 175,000 | $ | 177,078 | ||||
|
7.13%, 09/01/18(a)
|
175,000 | 177,188 | ||||||
|
Sr. Unsec. Notes,
8.25%, 12/15/20
|
115,000 | 117,156 | ||||||
| 471,422 | ||||||||
|
Packaged Foods & Meats–0.31% |
||||||||
|
Del Monte Foods Co., Sr. Unsec. Gtd. Notes,
7.63%, 02/15/19(a)
|
175,000 | 175,000 | ||||||
|
Paper Packaging–0.12% |
||||||||
|
Cascades Inc. (Canada), Sr. Unsec. Gtd. Global Notes,
7.88%, 01/15/20
|
70,000 | 68,075 | ||||||
|
Paper Products–2.42% |
||||||||
|
Boise Cascade LLC, Sr. Unsec. Gtd. Sub. Global Notes,
7.13%, 10/15/14
|
465,000 | 455,700 | ||||||
|
Clearwater Paper Corp., Sr. Unsec. Gtd. Global Notes,
7.13%, 11/01/18
|
210,000 | 210,000 | ||||||
|
Mercer International Inc., Sr. Unsec. Gtd. Global Notes,
9.50%, 12/01/17
|
205,000 | 204,744 | ||||||
|
NewPage Corp., Sr. Sec. Gtd. Global Notes, 11.38%, 12/31/14
|
215,000 | 190,812 | ||||||
|
P.H. Glatfelter Co., Sr. Unsec. Gtd. Global Notes,
7.13%, 05/01/16
|
320,000 | 324,400 | ||||||
| 1,385,656 | ||||||||
|
Personal Products–0.06% |
||||||||
|
Elizabeth Arden Inc., Sr. Unsec. Global Notes,
7.38%, 03/15/21
|
35,000 | 34,825 | ||||||
|
Pharmaceuticals–2.36% |
||||||||
|
Aptalis Pharma Inc., Sr. Unsec. Gtd. Global Notes,
12.75%, 03/01/16
|
255,000 | 266,475 | ||||||
|
Elan Finance PLC/Corp. (Ireland), Sr. Unsec. Gtd. Global Notes,
8.75%, 10/15/16
|
145,000 | 148,988 | ||||||
|
Endo Pharmaceuticals Holdings Inc., Sr. Unsec. Gtd. Notes,
7.00%, 12/15/20(a)
|
45,000 | 45,450 | ||||||
|
Mylan Inc., Sr. Unsec. Gtd. Notes,
6.00%, 11/15/18(a)
|
435,000 | 430,650 | ||||||
|
NBTY Inc., Sr. Unsec. Gtd. Global Notes, 9.00%, 10/01/18
|
105,000 | 110,775 | ||||||
|
Valeant Pharmaceuticals International, Sr. Unsec. Gtd. Notes,
|
||||||||
|
6.75%, 10/01/17(a)
|
90,000 | 83,925 | ||||||
|
6.75%, 08/15/21(a)
|
265,000 | 233,862 | ||||||
|
7.00%, 10/01/20(a)
|
35,000 | 31,675 | ||||||
| 1,351,800 | ||||||||
|
Property & Casualty Insurance–0.34% |
||||||||
|
XL Group PLC (Ireland)–Series E, Jr. Sub. Global Pfd.
Bonds,
6.50%, 12/29/49(c)
|
220,000 | 195,800 | ||||||
|
Publishing–0.45% |
||||||||
|
Nielsen Finance LLC/Co., Sr. Unsec Gtd. Global Notes,
7.75%, 10/15/18
|
248,000 | 257,300 | ||||||
|
Railroads–0.03% |
||||||||
|
Kansas City Southern de Mexico S.A. de C.V. (Mexico), Sr. Unsec.
Global Notes, 6.13%, 06/15/21
|
15,000 | 15,038 | ||||||
|
Real Estate Services–0.37% |
||||||||
|
CB Richard Ellis Service Inc., Sr. Unsec. Gtd. Global Notes,
6.63%, 10/15/20
|
215,000 | 211,238 | ||||||
|
Regional Banks–3.73% |
||||||||
|
AmSouth Bancorp., Unsec. Sub. Deb.,
6.75%, 11/01/25(d)
|
75,000 | 62,250 | ||||||
|
BB&T Capital Trust II, Jr. Unsec. Gtd. Sub. Global
Trust Pfd. Capital Securities, 6.75%, 06/07/36
|
170,000 | 169,423 | ||||||
|
CIT Group Inc., Sec. Gtd. Bonds,
7.00%, 05/02/17(a)
|
750,000 | 733,125 | ||||||
|
PNC Financial Services Group Inc.–Series O, Jr. Unsec.
Sub. Variable Rate Pfd. Notes, 6.75%, 12/31/49
|
125,000 | 120,937 | ||||||
|
Regions Financial Corp.,
Sr. Unsec. Notes, 5.75%, 06/15/15 |
210,000 | 198,450 | ||||||
|
Unsec. Sub. Notes,
7.38%, 12/10/37
|
415,000 | 354,825 | ||||||
|
Synovus Financial Corp., Unsec. Sub. Global Notes,
5.13%, 06/15/17
|
310,000 | 266,600 | ||||||
|
Zions Bancorp., Unsec. Sub. Notes, 6.00%, 09/15/15
|
230,000 | 231,150 | ||||||
| 2,136,760 | ||||||||
|
Research & Consulting Services–0.43% |
||||||||
|
FTI Consulting Inc., Sr. Unsec. Gtd. Global Notes,
6.75%, 10/01/20
|
250,000 | 248,125 | ||||||
|
Semiconductor Equipment–1.56% |
||||||||
|
Amkor Technology Inc.,
Sr. Unsec. Global Notes, 7.38%, 05/01/18 |
430,000 | 430,000 | ||||||
|
Sr. Unsec. Notes,
6.63%, 06/01/21(a)
|
130,000 | 121,875 | ||||||
|
Freescale Semiconductor, Inc., Sr. Unsec. Gtd. Global Notes,
8.05%, 02/01/20
|
225,000 | 216,000 | ||||||
|
Sensata Technologies B.V. (Netherlands), Sr. Unsec. Gtd. Notes,
6.50%, 05/15/19(a)
|
130,000 | 125,450 | ||||||
| 893,325 | ||||||||
|
Semiconductors–0.72% |
||||||||
|
Freescale Semiconductor Inc.,
Sr. Sec. Gtd. Notes, 9.25%, 04/15/18(a) |
361,000 | 380,855 | ||||||
|
Sr. Unsec. Gtd. Global Notes,
10.75%, 08/01/20
|
30,000 | 31,725 | ||||||
| 412,580 | ||||||||
|
Specialized Consumer Services–0.08% |
||||||||
|
Carriage Services Inc., Sr. Unsec. Gtd. Global Notes,
7.88%, 01/15/15
|
45,000 | 44,663 | ||||||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
10 Invesco
Van Kampen High Income Trust II
|
Principal |
||||||||
| Amount | Value | |||||||
|
Specialized REIT’s–1.29% |
||||||||
|
Host Hotels & Resorts L.P.,
Sr. Gtd. Global Notes, 6.00%, 11/01/20 |
$ | 205,000 | $ | 202,950 | ||||
|
Sr. Unsec. Notes,
5.88%, 06/15/19(a)
|
50,000 | 49,625 | ||||||
|
MPT Operating Partnership L.P./MPT Finance Corp., Sr. Unsec.
Gtd. Notes,
6.88%, 05/01/21(a)
|
140,000 | 134,050 | ||||||
|
Omega Healthcare Investors Inc., Sr. Unsec. Gtd. Global Notes.,
6.75%, 10/15/22
|
155,000 | 148,800 | ||||||
|
Sabra Health Care L.P./Sabra Capital Corp., Sr. Unsec. Gtd.
Global Notes, 8.13%, 11/01/18
|
210,000 | 201,075 | ||||||
| 736,500 | ||||||||
|
Specialty Chemicals–1.83% |
||||||||
|
Ferro Corp., Sr. Unsec. Notes, 7.88%, 08/15/18
|
270,000 | 273,713 | ||||||
|
NewMarket Corp., Sr. Unsec. Gtd. Global Notes,
7.13%, 12/15/16
|
415,000 | 424,078 | ||||||
|
PolyOne Corp., Sr. Unsec. Notes, 7.38%, 09/15/20
|
340,000 | 351,475 | ||||||
| 1,049,266 | ||||||||
|
Steel–1.66% |
||||||||
|
AK Steel Corp., Sr. Unsec. Gtd. Notes, 7.63%, 05/15/20
|
285,000 | 262,200 | ||||||
|
APERAM (Luxembourg), Sr. Unsec. Notes,
7.38%, 04/01/16(a)
|
150,000 | 142,228 | ||||||
|
FMG Resources Pty Ltd. (Australia), Sr. Unsec. Gtd. Notes,
|
||||||||
|
6.38%, 02/01/16(a)
|
260,000 | 252,851 | ||||||
|
7.00%, 11/01/15(a)
|
35,000 | 35,306 | ||||||
|
United States Steel Corp., Sr. Unsec. Notes,
|
||||||||
|
7.00%, 02/01/18
|
220,000 | 211,200 | ||||||
|
7.38%, 04/01/20
|
50,000 | 47,750 | ||||||
| 951,535 | ||||||||
|
Systems Software–2.14% |
||||||||
|
Allen Systems Group Inc., Sec. Gtd. Notes,
10.50%, 11/15/16(a)
|
600,000 | 559,500 | ||||||
|
Vangent Inc., Sr. Unsec. Gtd. Sub. Global Notes,
9.63%, 02/15/15
|
635,000 | 666,750 | ||||||
| 1,226,250 | ||||||||
|
Textiles–1.30% |
||||||||
|
Levi Strauss & Co., Sr. Unsec. Global Notes,
7.63%, 05/15/20
|
770,000 | 746,900 | ||||||
|
Tires & Rubber–0.98% |
||||||||
|
Cooper Tire & Rubber Co., Sr. Unsec. Gtd. Notes,
8.00%, 12/15/19
|
425,000 | 427,125 | ||||||
|
Goodyear Tire & Rubber Co. (The), Sr. Unsec. Gtd
Notes, 8.25%, 08/15/20
|
125,000 | 131,875 | ||||||
| 559,000 | ||||||||
|
Trading Companies & Distributors–1.32% |
||||||||
|
H&E Equipment Services Inc., Sr. Unsec. Gtd. Global Notes,
8.38%, 07/15/16
|
560,000 | 558,600 | ||||||
|
Interline Brands, Inc., Sr. Unsec. Gtd. Global Notes,
7.00%, 11/15/18
|
100,000 | 99,500 | ||||||
|
RSC Equipment Rental Inc./RSC Holdings III LLC, Sr. Unsec. Gtd.
Global Notes, 8.25%, 02/01/21
|
105,000 | 98,700 | ||||||
| 756,800 | ||||||||
|
Trucking–1.80% |
||||||||
|
Avis Budget Car Rental LLC/Avis Budget Finance Inc., Sr.
Unsec. Gtd. Global Notes, 8.25%, 01/15/19
|
420,000 | 407,400 | ||||||
|
Hertz Corp. (The), Sr. Unsec. Gtd. Notes,
|
||||||||
|
6.75%, 04/15/19(a)
|
130,000 | 122,850 | ||||||
|
7.38%, 01/15/21(a)
|
340,000 | 327,250 | ||||||
|
7.50%, 10/15/18(a)
|
175,000 | 174,125 | ||||||
| 1,031,625 | ||||||||
|
Wireless Telecommunication Services–7.96% |
||||||||
|
Clearwire Communications LLC/Clearwire Finance Inc., Sr.
Sec. Gtd. Notes,
12.00%, 12/01/15(a)
|
610,000 | 579,500 | ||||||
|
Cricket Communications, Inc.,
Sr. Sec. Gtd. Global Notes, 7.75%, 05/15/16 |
305,000 | 310,719 | ||||||
|
Sr. Unsec. Gtd. Global Notes,
7.75%, 10/15/20
|
400,000 | 358,000 | ||||||
|
Sr. Unsec. Notes,
7.75%, 10/15/20(a)
|
105,000 | 95,025 | ||||||
|
Digicel Group Ltd. (Bermuda), Sr. Unsec. Notes,
8.88%, 01/15/15(a)
|
100,000 | 99,875 | ||||||
|
Digicel Ltd. (Bermuda), Sr. Unsec. Gtd. Notes,
8.25%, 09/01/17(a)
|
355,000 | 349,675 | ||||||
|
MetroPCS Wireless Inc., Sr. Unsec. Gtd. Notes,
6.63%, 11/15/20
|
255,000 | 239,700 | ||||||
|
7.88%, 09/01/18
|
170,000 | 173,081 | ||||||
|
SBA Telecommunications Inc., Sr. Unsec. Gtd. Global Notes,
8.25%, 08/15/19
|
450,000 | 473,625 | ||||||
|
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes,
6.90%, 05/01/19
|
635,000 | 619,125 | ||||||
|
Sprint Nextel Corp., Sr. Unsec. Notes, 8.38%, 08/15/17
|
400,000 | 421,000 | ||||||
|
VimpelCom (Ireland), Sec. Notes,
6.49%, 02/02/16(a)
|
200,000 | 196,250 | ||||||
|
VimpelCom (Ireland), Sec. Notes,
7.75%, 02/02/21(a)
|
200,000 | 193,681 | ||||||
|
Wind Acquisition Finance S.A. (Luxembourg),
Sr. Sec. Gtd. Notes, 7.25%, 02/15/18(a) |
200,000 | 190,000 | ||||||
|
11.75%, 07/15/17(a)
|
250,000 | 260,000 | ||||||
| 4,559,256 | ||||||||
|
Total U.S. Dollar Denominated Bonds & Notes
(Cost $73,270,825)
|
71,752,466 | |||||||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
11 Invesco
Van Kampen High Income Trust II
|
Principal |
||||||||
| Amount | Value | |||||||
|
Non-U.S. Dollar Denominated Bonds & Notes–14.84% |
||||||||
|
Belgium–0.49% |
||||||||
|
Ontex IV S.A. (Belgium), Sr. Unsec. Gtd. Notes,
9.00%, 04/15/19(a)
|
EUR | 250,000 | $ | 281,113 | ||||
|
Canada–0.44% |
||||||||
|
Gateway Casinos & Entertainment Ltd. (Canada), Sec.
Gtd. Notes,
8.88%, 11/15/17(a)
|
CAD | 235,000 | 250,817 | |||||
|
Croatia–0.51% |
||||||||
|
Agrokor D.D. (Croatia), Sr. Unsec. Gtd. Notes,
10.00%, 12/07/16(a)
|
EUR | 210,000 | 294,233 | |||||
|
Czech Republic–0.24% |
||||||||
|
CET 21 spol sro (Czech Republic), Sr. Sec. Notes,
9.00%, 11/01/17(a)
|
EUR | 100,000 | 137,234 | |||||
|
Germany–1.13% |
||||||||
|
Kabel Deutschland Vetrieb und Service GmbH & Co. K.G.
(Germany), Sr. Sec. Notes,
6.50%, 06/29/18(a)
|
EUR | 170,000 | 240,317 | |||||
|
KION Finance S.A. (Germany), Sr. Sec. Gtd Notes,
7.88%, 04/15/18(a)
|
EUR | 340,000 | 407,964 | |||||
| 648,281 | ||||||||
|
Ireland–2.47% |
||||||||
|
Ardagh Packaging Finance PLC (Ireland), Sr. Unsec. Gtd. Notes,
9.25%, 10/15/20(a)
|
EUR | 405,000 | 514,329 | |||||
|
Bord Gais Eireann (Ireland), Sr. Unsec. Medium-Term Euro Notes,
5.75%, 06/16/14
|
EUR | 250,000 | 343,745 | |||||
|
Nara Cable Funding Ltd. (Ireland), Sr. Sec. Notes,
8.88%, 12/01/18(a)
|
EUR | 440,000 | 554,826 | |||||
| 1,412,900 | ||||||||
|
Luxembourg–3.09% |
||||||||
|
Boardriders S.A. (Luxembourg), Sr. Unsec. Notes,
8.88%, 12/15/17(a)
|
EUR | 100,000 | 142,982 | |||||
|
Cirsa Funding Luxembourg S.A. (Luxembourg), Sr. Unsec. Gtd.
Notes,
8.75%, 05/15/18(a)
|
EUR | 130,000 | 163,225 | |||||
|
Codere Finance Luxembourg S.A. (Luxembourg), Sr. Sec. Gtd.
Notes,
8.25%, 06/15/15(a)
|
EUR | 200,000 | 268,719 | |||||
|
ConvaTec Healthcare S.A. (Luxembourg),
Sr. Sec. Gtd. Notes, 7.38%, 12/15/17(a) |
EUR | 100,000 | 130,049 | |||||
|
Sr. Unsec. Gtd. Notes,
10.88%, 12/15/18(a)
|
EUR | 100,000 | 128,612 | |||||
|
Mark IV Europe Lux SCA (Luxembourg), Sr. Sec. Gtd. Notes,
8.88%, 12/15/17(a)
|
EUR | 300,000 | 424,633 | |||||
|
TMD Friction Finance S.A. (Luxembourg), Sr. Sec. Gtd. Bonds,
10.75%, 05/15/17(a)
|
EUR | 260,000 | 379,228 | |||||
|
Xefin Lux SCA (Luxembourg), Sr. Sec. Notes,
8.00%, 06/01/18(a)
|
EUR | 100,000 | 132,743 | |||||
| 1,770,191 | ||||||||
|
Netherlands–2.11% |
||||||||
|
Elster Finance B.V. (Netherlands), Sr. Unsec. Gtd. Notes,
6.25%, 04/15/18
|
EUR | 220,000 | 294,800 | |||||
|
Goodyear Dunlop Tires Europe B.V. (Netherlands), Sr. Unsec. Gtd.
Notes,
6.75%, 04/15/19(a)
|
EUR | 300,000 | 404,156 | |||||
|
Polish Television Holding B.V. (Netherlands)-REGS, Sr. Sec.
Medium-Term Euro Notes,
11.25%, 05/15/17(e)
|
EUR | 95,000 | 137,198 | |||||
|
Ziggo Bond Co. B.V. (Netherlands), Sr. Sec. Gtd. Notes,
8.00%, 05/15/18(a)
|
EUR | 265,000 | 374,141 | |||||
| 1,210,295 | ||||||||
|
Sweden–0.37% |
||||||||
|
TVN Finance Corp II A.B. (Sweden), Sr. Unsec. Gtd. Notes,
10.75%, 11/15/17(a)
|
EUR | 140,000 | 212,245 | |||||
|
United Kingdom–3.71% |
||||||||
|
Bakkavor Finance 2 PLC (United Kingdom), Sr. Sec. Gtd. Notes,
8.25%, 02/15/18(a)
|
GBP | 200,000 | 228,956 | |||||
|
Exova Ltd. (United Kingdom), Sr. Unsec. Notes,
10.50%, 10/15/18(a)
|
GBP | 200,000 | 324,750 | |||||
|
Kerling PLC (United Kingdom), Sr. Sec. Gtd. Notes,
10.63%, 02/01/17(a)
|
EUR | 180,000 | 236,674 | |||||
|
Odeon & UCI Finco PLC (United Kingdom),
Sr. Sec. Gtd. Floating Rate Notes, 6.61%, 08/01/18(a) |
EUR | 285,000 | 387,020 | |||||
|
Sr. Sec. Gtd. Notes,
9.00%, 08/01/18(a)
|
GBP | 200,000 | 298,779 | |||||
|
Pipe Holdings PLC (United Kingdom), Sr. Sec. Gtd. Bonds,
9.50%, 11/01/15(a)
|
GBP | 200,000 | 318,265 | |||||
|
R&R Ice Cream PLC (United Kingdom), Sr. Sec. Gtd. Notes,
8.38%, 11/15/17(a)
|
EUR | 275,000 | 327,007 | |||||
| 2,121,451 | ||||||||
|
United States–0.28% |
||||||||
|
CEDC Finance Corp. International Inc., Sr. Sec. Gtd. Notes,
8.88%, 12/01/16(a)
|
EUR | 155,000 | 157,028 | |||||
|
Total Non-U.S. Dollar Denominated Bonds & Notes
(Cost $9,071,523)
|
8,495,788 | |||||||
| Shares | Value | |||||||
|
Preferred Stocks–1.62% |
||||||||
|
Consumer Finance–0.54% |
||||||||
|
Ally Financial, Inc. Series G 7.00%
Pfd.(a)
|
410 | $ | 311,997 | |||||
|
Industrial REIT’s–0.13% |
||||||||
|
DuPont Fabros Technology, Inc. Series B, 7.63%
Pfd.(f)
|
2,930 | 72,693 | ||||||
|
Regional Banks–0.95% |
||||||||
|
Zions Bancorp. Series C, 9.50%
Pfd.(f)
|
21,400 | 543,560 | ||||||
|
Total Preferred Stocks (Cost $853,274)
|
928,250 | |||||||
|
Common Stocks & Other Equity Interests–0.26%(g) |
||||||||
|
Apparel, Accessories & Luxury Goods–0.00% |
||||||||
|
Hosiery Corp. of America, Inc.
Class A(f)
|
1,000 | 0 | ||||||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
12 Invesco
Van Kampen High Income Trust II
| Shares | Value | |||||||
|
Automobile Manufacturers–0.26% |
||||||||
|
General Motors
Co.(f)
|
3,168 | $ | 76,127 | |||||
|
General Motors Co., Wts.
expiring 07/10/16(f)
|
2,880 | 44,035 | ||||||
|
General Motors Co., Wts.
expiring 07/10/19(f)
|
2,880 | 30,413 | ||||||
| 150,575 | ||||||||
|
Total Common Stocks & Other Equity Interests
(Cost $254,363)
|
150,575 | |||||||
|
Money Market Funds–0.89% |
||||||||
|
Liquid Assets Portfolio–Institutional
Class(h)
|
255,912 | 255,912 | ||||||
|
Premier Portfolio–Institutional
Class(h)
|
255,912 | 255,912 | ||||||
|
Total Money Market Funds (Cost $511,824)
|
511,824 | |||||||
|
TOTAL INVESTMENTS–142.90% (Cost $83,961,809)
|
81,838,903 | |||||||
|
OTHER ASSETS LESS LIABILITIES–1.19%
|
680,888 | |||||||
|
BORROWINGS–(44.09)%
|
(25,250,000 | ) | ||||||
|
NET ASSETS–100.00%
|
$ | 57,269,791 | ||||||
Investment Abbreviations:
|
CAD
|
– Canadian Dollar | |
|
Ctfs.
|
– Certificates | |
|
EUR
|
– Euro | |
|
GBP
|
– British Pound | |
|
Gtd.
|
– Guaranteed | |
|
Jr.
|
– Junior | |
|
Pfd.
|
– Preferred | |
|
PIK
|
– Payment in Kind | |
|
REGS
|
– Regulation S | |
|
REIT
|
– Real Estate Investment Trust | |
|
Sec.
|
– Secured | |
|
Sr.
|
– Senior | |
|
Sub.
|
– Subordinated | |
|
Unsec.
|
– Unsecured | |
|
Unsub.
|
– Unsubordinated |
Notes to Schedule of Investments:
| (a) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. 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, 2011 was $31,241,993, which represented 54.55% of the Trust’s Net Assets. | |
| (b) | Defaulted security. Currently, the issuer is partially or fully in default with respect to interest payments. The aggregate value of these securities at August 31, 2011 was $9,937, which represented 0.02% of the Trust’s Net Assets. | |
| (c) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on August 31, 2011. | |
| (d) | Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put. | |
| (e) | Step coupon bond. The interest rate represents the coupon rate at which the bond will accrue at a specified future date. | |
| (f) | Non-income producing security. | |
| (g) | 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. | |
| (h) | The money market fund and the Fund are affiliated by having the same investment adviser. | |
| (i) | Interest payments have been suspended under European union agreement for 24 months beginning April 30, 2010. |
By
credit quality rating
|
A
|
0.6 | % | ||
|
BBB
|
6.6 | |||
|
BB
|
35.1 | |||
|
B
|
45.8 | |||
|
CCC
|
8.0 | |||
|
Non-Rated
|
3.3 | |||
|
Cash
|
0.6 | |||
| * | Source: Standard and Poor’s. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations, including specific securities, money market instruments or other debts. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest); ratings are subject to change without notice. “Non-Rated” indicates the debtor was not rated, and should not be interpreted as indicating low quality. For more information on Standard and Poor’s rating methodology, please visit standardandpoors.com and select ‘Understanding Ratings’ under Rating Resources on the homepage. |
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
13 Invesco
Van Kampen High Income Trust II
Statement
of Assets and Liabilities
August 31,
2011
(Unaudited)
|
Assets: |
||||
|
Investments, at value (Cost $83,449,985)
|
$ | 81,327,079 | ||
|
Investments in affiliated money market funds, at value and cost
|
511,824 | |||
|
Total investments, at value (Cost $83,961,809)
|
81,838,903 | |||
|
Receivable for:
|
||||
|
Investments sold
|
2,926 | |||
|
Dividends and interest
|
1,820,940 | |||
|
Other assets
|
16,897 | |||
|
Total assets
|
83,679,666 | |||
|
Liabilities: |
||||
|
Payable for:
|
||||
|
Investments purchased
|
858,207 | |||
|
Foreign currencies overdraft, at value (Cost $10,094)
|
10,665 | |||
|
Dividends
|
23,832 | |||
|
Foreign currency contracts closed
|
12,127 | |||
|
Foreign currency contracts outstanding
|
104,478 | |||
|
Loan outstanding
|
25,250,000 | |||
|
Accrued fees to affiliates
|
17,749 | |||
|
Accrued other operating expenses
|
129,489 | |||
|
Accrued interest expense and line of credit fees
|
3,328 | |||
|
Total liabilities
|
26,409,875 | |||
|
Net assets applicable to shares outstanding
|
$ | 57,269,791 | ||
|
Net assets consist of: |
||||
|
Shares of beneficial interest
|
$ | 91,886,315 | ||
|
Undistributed net investment income (loss)
|
(123,193 | ) | ||
|
Undistributed net realized gain (loss)
|
(32,266,518 | ) | ||
|
Unrealized appreciation (depreciation)
|
(2,226,813 | ) | ||
| $ | 57,269,791 | |||
|
Shares outstanding, $0.01 par value per common share, with an unlimited number of shares authorized: |
||||
|
Shares outstanding
|
3,770,265 | |||
|
Net asset value per share
|
$ | 15.19 | ||
|
Market value per common share
|
$ | 16.11 | ||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
14 Invesco
Van Kampen High Income Trust II
Statement
of Operations
For
the six months ended August 31, 2011
(Unaudited)
|
Investment income: |
||||
|
Interest
|
$ | 3,283,294 | ||
|
Dividends
|
45,151 | |||
|
Dividends from affiliated money market funds
|
609 | |||
|
Total investment income
|
3,329,054 | |||
|
Expenses: |
||||
|
Advisory fees
|
307,946 | |||
|
Administrative services fees
|
25,137 | |||
|
Custodian fees
|
9,141 | |||
|
Interest and facilities fees
|
100,246 | |||
|
Transfer agent fees
|
18,500 | |||
|
Trustees’ and officers’ fees and benefits
|
6,261 | |||
|
Professional services fees
|
230,860 | |||
|
Other
|
58,606 | |||
|
Total expenses
|
756,697 | |||
|
Less: Fees waived
|
(1,084 | ) | ||
|
Net expenses
|
755,613 | |||
|
Net investment income
|
2,573,441 | |||
|
Realized and unrealized gain (loss) from: |
||||
|
Net realized gain (loss) from:
|
||||
|
Investment securities
|
2,374,040 | |||
|
Foreign currencies
|
1,397 | |||
|
Foreign currency contracts
|
(332,500 | ) | ||
| 2,042,937 | ||||
|
Change in net unrealized appreciation (depreciation) of:
|
||||
|
Investment securities
|
(7,421,326 | ) | ||
|
Foreign currencies
|
(13,839 | ) | ||
|
Foreign currency contracts
|
1,551 | |||
| (7,433,614 | ) | |||
|
Net realized and unrealized gain (loss)
|
(5,390,677 | ) | ||
|
Net increase (decrease) in net assets resulting from operations
|
$ | (2,817,236 | ) | |
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
15 Invesco
Van Kampen High Income Trust II
Statement
of Changes in Net Assets
For
the six months ended August 31, 2011, the two months ended
February 28, 2011 and the year ended December 31,
2010
(Unaudited)
|
For the six |
For the two |
For the |
||||||||||
|
months ended |
months ended |
year ended |
||||||||||
|
August 31, |
February 28, |
December 31, |
||||||||||
| 2011 | 2011 | 2010 | ||||||||||
|
Operations: |
||||||||||||
|
Net investment income
|
$ | 2,573,441 | $ | 896,053 | $ | 6,077,558 | ||||||
|
Net realized gain
|
2,042,937 | 647,749 | 2,852,360 | |||||||||
|
Change in net unrealized appreciation (depreciation)
|
(7,433,614 | ) | 1,125,554 | (135,837 | ) | |||||||
|
Distributions to preferred shareholders from net investment
income
|
— | — | (20,881 | ) | ||||||||
|
Net increase (decrease) in net assets applicable to common
shares from operations
|
(2,817,236 | ) | 2,669,356 | 8,773,200 | ||||||||
|
Distributions to common shareholders from net investment income
|
(2,624,105 | ) | (874,701 | ) | (5,853,346 | ) | ||||||
|
Net increase (decrease) in net assets from net investment income
|
(5,441,341 | ) | 1,794,655 | 2,919,854 | ||||||||
|
Net assets applicable to common shares: |
||||||||||||
|
Beginning of period
|
62,711,132 | 60,916,477 | 57,996,623 | |||||||||
|
End of period (includes undistributed net investment income
(loss) of $(123,193), $(72,529) and $(93,956), respectively)
|
$ | 57,269,791 | $ | 62,711,132 | $ | 60,916,477 | ||||||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
16 Invesco
Van Kampen High Income Trust II
Statement
of Cash Flows
For
the six months ended August 31, 2011
(Unaudited)
|
Net increase (decrease) in net assets resulting from operations
|
$ | (2,817,236 | ) | |
|
Adjustments to reconcile the net decrease in net assets resulting from operations to net cash provided by operating activities: |
||||
|
Purchases of investments
|
(53,256,780 | ) | ||
|
Proceeds from sales of investments
|
53,999,401 | |||
|
Amortization of premium
|
90,697 | |||
|
Accretion of discount
|
(76,259 | ) | ||
|
Net realized gain on investments
|
(2,374,040 | ) | ||
|
Net change in unrealized depreciation on investments
|
7,421,326 | |||
|
Increase in foreign currency contracts
|
10,576 | |||
|
Increase in dividends and interest receivable and other assets
|
(88,191 | ) | ||
|
Decrease in interest payable
|
(91,777 | ) | ||
|
Increase in affiliates payable
|
46 | |||
|
Decrease in accrued expenses
|
(81,524 | ) | ||
|
Net cash provided by operating activities
|
2,736,239 | |||
|
Cash flows provided by (used in) financing activities: |
||||
|
Dividends paid
|
(2,624,831 | ) | ||
|
Repayments of bank borrowings
|
(750,000 | ) | ||
|
Change in foreign currencies overdraft
|
10,665 | |||
|
Net cash used for financing activities
|
(3,364,166 | ) | ||
|
Net increase (decrease) in cash
|
(627,927 | ) | ||
|
Cash at the beginning of the period
|
627,927 | |||
|
Cash at the end of the period
|
$ | — | ||
|
Supplemental disclosures of cash flow information |
||||
|
Cash paid during the period for interest and facilities fees
|
$ | 100,246 | ||
Notes
to Financial Statements
August 31,
2011
(Unaudited)
NOTE 1—Significant
Accounting Policies
Invesco Van Kampen High Income Trust II (the
“Trust”) is registered under the Investment Company
Act of 1940, as amended (the “1940 Act”), as a
diversified, closed-end management investment company.
The Trust’s investment objective is to provide
high current income, while seeking to preserve
shareholders’ capital through investment in a
professionally managed diversified portfolio of income
producing, fixed income securities.
The following is a summary of the significant
accounting policies followed by the Trust in the preparation of
its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. | |
| A security listed or traded on an exchange (except convertible bonds) 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 ask 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 ask prices. For purposes of determining net asset value 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”). |
17 Invesco
Van Kampen High Income Trust II
| 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. | ||
| Debt obligations (including convertible bonds) 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, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
| Foreign securities (including foreign exchange contracts) 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 are significant and make the closing price unreliable, the Trust 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 trade is not the current value as of the close of the NYSE. Foreign securities 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 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 economical 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 are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value. | ||
| Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s 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 is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes. | |
| The Trust may periodically participate in litigation related to Trust investments. As such, the Trust 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 Trust’s net asset value and, accordingly, they reduce the Trust’s 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 Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Trust 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 issuer’s 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 Trust declares and pays monthly dividends from net investment income to common shareholders. Distributions from net realized capital gain, if any, are generally paid annually and are distributed on a pro rata basis to common and preferred shareholders. The Trust may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. | |
| E. | Federal Income Taxes — The Trust intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Trust’s taxable earnings to shareholders. As such, the Trust 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. |
18 Invesco
Van Kampen High Income Trust II
| The Trust files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Trust 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 Trust 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 Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts, including the Trust’s servicing agreements that contain a variety of indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust 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 Trust 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 Trust’s 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 Trust 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. | ||
| I. | Foreign Currency Contracts — The Trust may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Trust may also enter into 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. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Trust 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 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. | Cash and Cash Equivalents — For the purposes of the Statement of Cash Flows the Trust defines Cash and Cash Equivalents as cash (including foreign currency), money market funds and other investments held in lieu of cash and excludes investments made with cash collateral received. | |
| K. | Interest and Facilities Fees — Interest and Facilities Fees include interest and related borrowing costs such as commitment fees and other expenses associated with lines of credit. |
NOTE 2—Advisory
Fees and Other Fees Paid to Affiliates
The Trust 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 Trust pays an advisory fee to the
Adviser based on the annual rate 0.70% of the Trust’s
average daily net assets including bank borrowings entered into
to retire preferred shares of the Trust.
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 Australia
Limited, Invesco Hong Kong Limited, Invesco Senior Secured
Management, Inc. and Invesco Canada Ltd. (collectively, the
“Affiliated
Sub-Advisers”)
the Adviser, not the Trust, may 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 Trust based on the percentage of assets allocated to such
Sub-Adviser(s).
The Adviser has contractually agreed, through at
least June 30, 2012, to waive advisory fees
and/or
reimburse expenses to the extent necessary to limit the
Trust’s expenses (excluding certain items discussed below)
to 2.02%. In determining the Adviser’s obligation to waive
advisory fees
and/or
reimburse expenses, the following expenses are not taken into
account, and could cause the Trust’s expenses to exceed the
limit reflected above: (1) interest and facilities fees;
(2) taxes; (3) dividend expense on short sales;
(4) extraordinary or non-routine items; and
(5) expenses that the Trust has incurred but did not
actually pay because of an expense offset arrangement. Unless
the Board of Trustees and Invesco mutually agree to amend or
continue the fee waiver agreement, it will terminate on
June 30, 2012.
Further, the Adviser has contractually agreed,
through at least June 30, 2012, to waive the advisory fee
payable by the Trust in an amount equal to 100% of the net
advisory fees the Adviser receives from the affiliated money
market funds on investments by the Trust of uninvested cash in
such affiliated money market funds.
19 Invesco
Van Kampen High Income Trust II
For the six months ended August 31, 2011, the
Adviser waived advisory fees of $1,084.
The Trust has entered into a master administrative
services agreement with Invesco pursuant to which the Trust has
agreed to pay Invesco for certain administrative costs incurred
in providing accounting services to the Trust. For the six
months ended August 31, 2011, expenses incurred under this
agreement are shown in the Statement of Operations as
administrative services fees.
Certain officers and trustees of the Trust are
officers and directors of Invesco.
NOTE 3—Additional
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 investment’s 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 Trust’s 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, 2011. 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.
During the six months ended August 31, 2011,
there were no significant transfers between investment levels.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
|
Corporate Bonds
|
$ | — | $ | 80,248,254 | $ | — | $ | 80,248,254 | ||||||||
|
Equity Securities
|
1,278,652 | 311,997 | — | 1,590,649 | ||||||||||||
| $ | 1,278,652 | $ | 80,560,251 | $ | — | $ | 81,838,903 | |||||||||
|
Foreign Currency Contracts*
|
— | (104,478 | ) | — | (104,478 | ) | ||||||||||
|
Total Investments
|
$ | 1,278,652 | $ | 80,455,773 | $ | — | $ | 81,734,425 | ||||||||
| * | Unrealized appreciation (depreciation). |
NOTE 4—Derivative
Investments
The Trust has implemented the required disclosures about
derivative instruments and hedging activities in accordance with
GAAP. This disclosure is intended to improve financial reporting
about derivative instruments and hedging activities by requiring
enhanced disclosures to enable investors to better understand
their effects on an entity’s financial position and
financial performance. The enhanced disclosure has no impact on
the results of operations reported in the financial statements.
Value of
Derivative Instruments at Period-End
The table below summarizes the value of the Trust’s
derivative instruments, detailed by primary risk exposure, held
as of August 31, 2011:
| Value | ||||||||
| Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
|
Currency risk
|
||||||||
|
Foreign currency contracts
|
$ | 0 | $ | (104,478 | ) | |||
Effect of
Derivative Instruments for the six months ended August 31,
2011
The table below summarizes the gains (losses) on derivative
instruments, detailed by primary risk exposure, recognized in
earnings during the period:
| Location of Gain (Loss) on Statement of Operations | ||||
|
Foreign Currency
|
||||
| Contracts* | ||||
|
Realized Gain (Loss)
|
||||
|
Currency risk
|
$ | (332,500 | ) | |
|
Change in Unrealized Appreciation (Depreciation)
|
||||
|
Currency risk
|
1,551 | |||
|
Total
|
$ | (330,949 | ) | |
| * | The average notional value of foreign currency contracts outstanding during the period was $7,705,475. |
20 Invesco
Van Kampen High Income Trust II
| Open Foreign Currency Contracts | ||||||||||||||||||||||
|
Settlement |
Contract to |
Unrealized |
||||||||||||||||||||
| Date | Counterparty | Deliver | Receive | Value | Appreciation | |||||||||||||||||
|
11/17/2011
|
SAL SBAR | GBP | 710,000 | USD | 1,174,616 | $ | 1,151,872 | $ | 22,744 | |||||||||||||
|
Unrealized |
||||||||||||||||||||||
|
Settlement |
Contract to |
Appreciation |
||||||||||||||||||||
| Date | Counterparty | Deliver | Receive | Value | (Depreciation) | |||||||||||||||||
|
11/09/2011
|
RBC Dain Rausch | EUR | 4,947,000 | USD | 6,975,483 | $ | 7,102,705 | $ | (127,222 | ) | ||||||||||||
|
Total open foreign currency contracts
|
$ | (104,478 | ) | |||||||||||||||||||
|
Currency Abbreviations:
|
||
|
EUR
|
– Euro | |
|
GBP
|
– British Pound Sterling | |
|
USD
|
– U.S. Dollar | |
NOTE 5—Trustees’
and Officers’ Fees and Benefits
“Trustees’ and Officers’ Fees and Benefits”
include amounts accrued by the Trust to pay remuneration to
certain Trustees and Officers of the Trust.
During the six months ended August 31, 2011,
the Trust paid legal fees of $7,147 for services rendered by
Skadden, Arps, Slate, Meagher & Flom LLP as counsel to
the Independent Trustees. A member of that firm is a Trustee of
the Trust.
NOTE 6—Cash
Balances and Borrowings
The Trust is permitted to temporarily carry a negative or
overdrawn balance in its account with The State Street Bank and
Trust Company, the custodian bank. To compensate the
custodian bank for such overdrafts, the overdrawn Trust 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.
The Trust entered into a $30 million annual
revolving credit agreement. This revolving credit agreement is
secured by the assets on the Trust. In connection with this
agreement, for the six months ended August 31, 2011, the
Trust incurred fees of approximately $100,246 as disclosed on
the Statement of Operations. For the six months ended
August 31, 2011, the average daily balance of borrowings
under the credit agreement was $25,929,348 with a weighted
average interest rate of 0.15%.
NOTE 7—Tax
Information
The amount and character of income and gains to be distributed
are determined in accordance with income tax regulations, which
may differ from generally accepted accounting principles.
Reclassifications are made to the Trust’s 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 Trust’s 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 Trust to utilize. The
ability to utilize capital loss carryforward in the future may
be limited under the Internal Revenue Code and related
regulations based on the results of future transactions. Under
these limitation rules, the Trust is limited to utilizing
$34,365,229 of capital loss carryforward in the fiscal year
ending February 29, 2012.
The Trust had a capital loss carryforward as of
February 28, 2011 which expires as follows:
|
Capital Loss |
||||
| Expiration | Carryforward* | |||
|
February 29, 2012
|
$ | 875,105 | ||
|
February 28, 2013
|
565,263 | |||
|
February 28, 2014
|
4,400,827 | |||
|
February 28, 2015
|
47,559 | |||
|
February 29, 2016
|
9,476,998 | |||
|
February 28, 2017
|
18,999,477 | |||
|
Total capital loss carryforward
|
$ | 34,365,229 | ||
| * | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
21 Invesco
Van Kampen High Income Trust II
NOTE 8—Investment
Securities
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 Trust during the
six months ended August 31, 2011 was $33,701,238 and
$33,342,408, respectively. Cost of investments 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 Investment Securities on a Tax Basis | ||||
|
Aggregate unrealized appreciation of investment securities
|
$ | 1,208,375 | ||
|
Aggregate unrealized (depreciation) of investment securities
|
(3,454,065 | ) | ||
|
Net unrealized appreciation (depreciation) of investment
securities
|
$ | (2,245,690 | ) | |
| Cost of investments for tax purposes is $84,084,593. | ||||
NOTE 9—Common
Shares of Beneficial Interest
Transactions in common shares of beneficial interest were as
follows:
|
Six Months
Ended |
Two Months
Ended |
Year Ended |
||||||||||
|
August 31, |
February 28, |
December 31, |
||||||||||
| 2011 | 2011 | 2010 | ||||||||||
|
Beginning shares
|
3,770,265 | 3,770,265 | 3,770,265 | |||||||||
|
Shares repurchased
|
— | — | — | |||||||||
|
Ending shares
|
3,770,265 | 3,770,265 | 3,770,265 | |||||||||
NOTE 10—Preferred
Shares of Beneficial Interest
During the year ended December 31, 2010, the Trust retired
all of its outstanding Auction Preferred Shares (APS). The APS
were redeemable at the option of the Trust in whole or in part
at the liquidation value of $25,000 per share plus accumulated
and unpaid dividends. Historically, the Trust paid annual fees
equivalent to 0.25% of the preferred liquidation value for the
remarketing efforts associated with the preferred auction.
Effective March 19, 2009, the Trust had decreased this
amount to 0.15% due to auction failures.
22 Invesco
Van Kampen High Income Trust II
NOTE 11—Financial
Highlights
The following schedule presents financial highlights for a share
of the Trust outstanding throughout the periods indicated.
|
Six months |
Two months |
|||||||||||||||||||||||||||
|
ended |
ended |
|||||||||||||||||||||||||||
|
August 31, |
February 28, |
Year ended December 31, | ||||||||||||||||||||||||||
| 2011 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||
|
Net asset value, beginning of period
|
$ | 16.63 | $ | 16.16 | $ | 15.38 | $ | 10.45 | $ | 20.40 | $ | 21.45 | $ | 21.40 | ||||||||||||||
|
Net investment
income(a)
|
0.68 | 0.24 | 1.61 | 1.83 | 2.45 | 2.55 | 2.45 | |||||||||||||||||||||
|
Net realized and unrealized gain (loss)
|
(1.42 | ) | 0.46 | 0.73 | 4.93 | (9.90 | ) | (1.00 | ) | 0.25 | ||||||||||||||||||
|
Distributions paid to preferred shareholders:
|
||||||||||||||||||||||||||||
|
Net investment income
|
— | — | (0.01 | ) | (0.42 | ) | (1.00 | ) | (0.95 | ) | (0.85 | ) | ||||||||||||||||
|
Total income (loss) from investment operations
|
(0.74 | ) | 0.70 | 2.33 | 6.34 | (8.45 | ) | 0.60 | 1.85 | |||||||||||||||||||
|
Distributions paid to common shareholders:
|
||||||||||||||||||||||||||||
|
Net investment income
|
(0.70 | ) | (0.23 | ) | (1.55 | ) | (1.41 | ) | (1.50 | ) | (1.65 | ) | (1.80 | ) | ||||||||||||||
|
Net asset value, end of period
|
$ | 15.19 | $ | 16.63 | $ | 16.16 | $ | 15.38 | $ | 10.45 | $ | 20.40 | $ | 21.45 | ||||||||||||||
|
Market value, end of period
|
$ | 16.11 | $ | 16.52 | $ | 16.02 | $ | 14.48 | $ | 8.90 | $ | 18.15 | $ | 20.10 | ||||||||||||||
|
Total return at net asset
value(b)
|
(4.74 | )% | 4.37 | % | 15.55 | % | ||||||||||||||||||||||
|
Total return at market
value(c)
|
1.70 | % | 4.59 | % | 21.67 | % | 83.40 | % | (45.03 | )% | (1.71 | )% | 6.02 | % | ||||||||||||||
|
Net assets applicable to common shareholders, end of period
(000’s omitted)
|
$ | 57,270 | $ | 62,711 | $ | 60,916 | $ | 57,997 | $ | 39,414 | $ | 76,998 | $ | 81,081 | ||||||||||||||
|
Portfolio turnover
rate(d)
|
39 | % | 18 | % | 135 | % | 58 | % | 46 | % | 37 | % | 48 | % | ||||||||||||||
|
Ratios/supplemental data based on average net assets applicable to common shares: |
||||||||||||||||||||||||||||
|
Ratio of expenses:
|
||||||||||||||||||||||||||||
|
With fee waivers
and/or
expense
reimbursements(e)
|
2.44 | %(f) | 2.44 | %(j) | 2.57 | % | 2.31 | % | 1.94 | % | 1.84 | % | 2.00 | % | ||||||||||||||
|
With fee waivers
and/or
expense reimbursements excluding interest, facilities and
maintenance
expense(e)(i)
|
2.12 | %(f) | 1.71 | %(j) | 1.74 | % | ||||||||||||||||||||||
|
Without fee waivers
and/or
expense
reimbursements(e)
|
2.44 | %(f) | 2.44 | %(j) | 2.61 | % | 2.40 | % | 2.04 | % | 1.93 | % | 2.05 | % | ||||||||||||||
|
Ratio of net investment income before preferred share dividends
|
8.32 | %(f) | 8.93 | %(j) | 10.34 | % | 14.13 | % | 14.65 | % | 12.06 | % | 11.69 | % | ||||||||||||||
|
Preferred share dividends
|
— | — | 0.03 | % | ||||||||||||||||||||||||
|
Ratio of net investment income after preferred share dividends
|
8.32 | %(f) | 8.93 | %(j) | 10.31 | % | 10.90 | % | 8.56 | % | 7.61 | % | 7.70 | % | ||||||||||||||
|
Senior securities: |
||||||||||||||||||||||||||||
|
Total preferred shares outstanding
|
N/A | N/A | N/A | 176 | 1,296 | 2,616 | 2,616 | |||||||||||||||||||||
|
Total amount of preferred shares outstanding (000’s omitted)
|
N/A | N/A | N/A | $ | 4,400 | $ | 32,400 | $ | 65,400 | $ | 65,400 | |||||||||||||||||
|
Asset coverage per $1,000 unit of senior
indebtedness(g)
|
$ | 3,268 | $ | 3,412 | ||||||||||||||||||||||||
|
Asset coverage per preferred
share(h)
|
N/A | N/A | N/A | $ | 354,600 | $ | 55,444 | $ | 54,487 | $ | 56,040 | |||||||||||||||||
|
Liquidating preference per preferred share
|
N/A | N/A | N/A | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | |||||||||||||||||
|
Total borrowings outstanding (000’s omitted)
|
$ | 25,250 | $ | 26,000 | $ | 26,000 | $ | 28,000 | N/A | N/A | N/A | |||||||||||||||||
| (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. Does not include sales charges and is not annualized for periods less than one year. | |
| (c) | Total return assumes an investment at the common share market price at the beginning of the period indicated, reinvestment of all distributions for the period in accordance with the Trust’s dividend reinvestment plan, and sale of all shares at the closing common share market price at the end of the period indicated. | |
| (d) | Portfolio turnover is not annualized for periods less than one year, if applicable. | |
| (e) | Ratios do not reflect the effect of dividend payments to preferred shareholders. | |
| (f) | Ratios are annualized and based on average net assets applicable to common shares (000’s omitted) of $61,506. | |
| (g) | Calculated by subtracting the Trust’s total liabilities (not including the preferred shares and the borrowings) from the Trust’s total assets and dividing by the total number of senior indebtedness units, where one unit equals $1,000 of senior indebtedness. | |
| (h) | Calculated by subtracting the Trust’s total liabilities (not including the preferred shares) from the Trust’s total assets and dividing this by the number of preferred shares outstanding. | |
| (i) | For the years ended December 31, 2010 and prior, ratio does not exclude facilities and maintenance fees. | |
| (j) | Ratios are annualized. |
N/A=Not Applicable.
23 Invesco
Van Kampen High Income Trust II
NOTE 12—Legal
Proceedings
Terms used in the Legal Proceedings Note are defined terms
solely for the purpose of this note.
On January 17, 2011, a Consolidated Amended Shareholder
Derivative Complaint entitled Clifford Rotz, et al. v.
Van Kampen Asset Management et al., was filed on behalf of
Invesco Van Kampen High Income Trust II, Invesco Van Kampen
Advantage Municipal Income Trust II, Invesco Van Kampen
Municipal Opportunity Trust, Invesco Van Kampen Municipal Trust
and Invesco Van Kampen Senior Income Trust (the
“Trusts”) against Van Kampen Asset Management, Morgan
Stanley and certain current and former executive officers of the
Trusts (collectively, the “Defendants”) alleging that
they breached their fiduciary duties to common shareholders by
causing the Trusts to redeem Auction Rate Preferred Securities
(“ARPS”) at their liquidation value. Specifically, the
shareholders claim that the Board and officers had no obligation
to provide liquidity to the ARPS shareholders, the redemptions
were improperly motivated to benefit the prior adviser by
preserving business relationships with the ARPS holders, i.e.,
institutional investors, and the market value and fair value of
the ARPS were less than par at the time they were redeemed. The
Complaint alleges that the redemption of the ARPS occurred at
the expense of the Trusts and their common shareholders. This
Complaint amends and consolidates two separate complaints that
were filed by Clifford T. Rotz, Jr., Robert Fast and Gene
Turban on July 22, 2010, and by Harry Suleski, Leon
McDermott, Marilyn Morrison and John Johnson on August 3,
2010. Each of the Trusts initially received a demand letter from
the plaintiffs on April 8, 2010. Plaintiffs seek judgment
that: 1) orders Defendants to refrain from redeeming any
ARPS at their liquidation value using Trust assets;
2) awards monetary damages against all Defendants,
individually, jointly or severally, in favor of the Trusts, for
all losses and damages allegedly suffered as a result of the
redemptions of ARPS at their liquidation value; 3) grants
appropriate equitable relief to remedy the Defendants’
breaches of fiduciary duties; and 4) awards to Plaintiffs
the costs and disbursements of the action. The Board formed a
Special Litigation Committee (“SLC”) to investigate
these claims and to make a recommendation to the Board regarding
whether pursuit of these claims is in the best interests of the
Trusts. After reviewing the findings of the SLC’s, the
Board announced on June 24, 2011, that it had adopted the
SLC’s recommendation to seek dismissal of the action. On
October 4, 2011, Invesco filed a motion to dismiss. This
matter is pending. The Trust has incurred $175,574 in expenses
relating to these matters during the period ended
August 31, 2011.
Management of Invesco and the Trust believe that the
outcome of the proceedings described above will have no material
adverse effect on the Trust or on the ability of Invesco to
provide ongoing services to the Trust.
NOTE 13—Dividends
The Fund declared the following dividends from net investment
income subsequent to August 31, 2011:
| Declaration Date | Amount Per Share | Record Date | Payable Date | |||||||||
|
September 1, 2011
|
$ | 0.116 | September 15, 2011 | September 30, 2011 | ||||||||
|
September 30, 2011
|
$ | 0.116 | October 14, 2011 | October 31, 2011 | ||||||||
24 Invesco
Van Kampen High Income Trust II
Approval
of Investment Advisory and
Sub-Advisory
Contracts
The Board of Trustees (the Board) of Invesco Van Kampen High
Income Trust II (the Fund) is required under the Investment
Company Act of 1940, as amended, to approve annually the renewal
of the investment advisory agreement with Invesco Advisers, Inc.
(Invesco Advisers) and the Master Intergroup
Sub-Advisory
Contract (the
sub-advisory
contracts) with Invesco Asset Management Deutschland GmbH,
Invesco Asset Management Limited, Invesco Asset Management
(Japan) Limited, Invesco Australia Limited, Invesco Hong Kong
Limited, Invesco Senior Secured Management, Inc. and Invesco
Canada Ltd. (collectively, the Affiliated
Sub-Advisers).
During contract renewal meetings held on May 8, 2011, the
Board as a whole, and the disinterested or
“independent” Trustees, who comprise more than 75% of
the Board, voting separately, approved the continuance of the
Fund’s investment advisory agreement and the
sub-advisory
contracts for another year, effective July 1, 2011. In
doing so, the Board considered the process that it follows in
reviewing and approving the Fund’s investment advisory
agreement and
sub-advisory
contracts and the information that it is provided. The Board
determined that the Fund’s investment advisory agreement
and the
sub-advisory
contracts are in the best interests of the Fund and its
shareholders and the compensation to Invesco Advisers and the
Affiliated
Sub-Advisers
under the agreements is fair and reasonable.
The Board’s
Fund Evaluation Process
The Board, acting directly and through its committees, meets
throughout the year to review the performance of the Invesco Van
Kampen funds. Over the course of each year, the Board, acting
directly and through its committees, meets with portfolio
managers for the funds and other members of management to review
the performance, investment objective(s), policies, strategies
and limitations and investment risks of the funds. The Board
meets regularly and at designated contract renewal meetings each
year to conduct a review of the performance, fees, expenses and
other matters related to the funds.
During the contract renewal process, the Trustees
receive comparative performance and fee data regarding the funds
prepared by Invesco Advisers and an independent company, Lipper,
Inc. (Lipper). The independent Trustees are assisted in their
annual evaluation of the funds’ investment advisory
agreements by fund counsel.
In evaluating the fairness and reasonableness of the
Fund’s investment advisory agreement and
sub-advisory
contracts, the Board considered, among other things, the factors
discussed below. The Trustees recognized that the advisory fees
for the Invesco Van Kampen funds reflect the results of years of
review and negotiation between the Trustees and Van Kampen Asset
Management, the funds’ predecessor investment adviser. The
Trustees’ deliberations and conclusions in a particular
year may be based in part on their deliberations and conclusions
regarding these same arrangements throughout the year and in
prior years. The Board noted the willingness of Invesco Advisers
personnel to engage in open and candid discussions with the
Board. One Trustee may have weighed a particular piece of
information differently than another Trustee.
The discussion below is a summary of the
Board’s evaluation with respect to the Fund’s
investment advisory agreement as well as a discussion of the
material factors and related conclusions that formed the basis
for the Board’s approval of the Fund’s investment
advisory agreement and
sub-advisory
contracts. Unless otherwise stated, this information is current
as of May 8, 2011, and may not reflect consideration of
factors that became known to the Board after that date,
including, for example, changes to the Fund’s performance,
advisory fees, expense limitations
and/or fee
waivers.
Factors and
Conclusions
| A. | Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers |
The Board reviewed the advisory services provided to the Fund by
Invesco Advisers under the Fund’s investment advisory
agreement, the performance of Invesco Advisers in providing
these services, and the credentials and experience of the
officers and employees of Invesco Advisers who provide these
services. Based on their meetings throughout the year with the
Fund’s portfolio manager, the Board concluded that these
individuals are competent and able to continue to carry out
their responsibilities under the Fund’s investment advisory
agreement or
sub-advisory
contracts, as applicable. The Board’s review of the
qualifications of Invesco Advisers to provide advisory services
included the Board’s consideration of Invesco
Advisers’ performance and investment process oversight,
independent credit analysis and investment risk management.
In determining whether to continue the Fund’s
investment advisory agreement, the Board considered the prior
relationship between Invesco Advisers (and previously Van Kampen
Asset Management) and the Fund, as well as the Board’s
knowledge of Invesco Advisers’ operations, and concluded
that it is beneficial to maintain the current relationship, in
part, because of such knowledge. The Board also considered
services that Invesco Advisers and its affiliates provide to the
Invesco Van Kampen funds such as various back office support
functions, equity and fixed income trading operations, internal
audit and legal and compliance. The Board concluded that the
nature, extent and quality of the services provided to the Fund
by Invesco Advisers are appropriate and satisfactory and the
advisory services are provided in accordance with the terms of
the Fund’s investment advisory agreement.
The Board reviewed the services provided by the
Affiliated
Sub-Advisers
under the
sub-advisory
contracts and the credentials and experience of the officers and
employees of the Affiliated
Sub-Advisers
who provide these services. The Board concluded that the
sub-advisory
contracts benefit the Fund and its shareholders by permitting
Invesco Advisers to use the resources and talents of the
Affiliated
Sub-Advisers
in managing the Fund. The Board concluded that the nature,
extent and quality of the services provided by the Affiliated
Sub-Advisers
are appropriate and satisfactory and in accordance with the
terms of the Fund’s
sub-advisory
contracts.
| B. | Fund Performance |
The Board considered Fund performance as a relevant factor in
considering whether to approve the investment advisory
agreement. The Board did not view Fund performance as a relevant
factor in considering whether to approve the
sub-advisory
contracts for the Fund, as no Affiliated
Sub-Adviser
currently manages assets of the Fund.
The Board compared the Fund’s performance
during the past one, three and five calendar years to the
performance of funds in the Fund’s Lipper performance
universe and against the Barclays Capital U.S. Corporate
High Yield 2% Issuer Cap Index. The Board noted that the
Fund’s performance was in the fourth quintile of its
performance universe for the one, three and five year periods
(the first quintile being the best performing funds and the
fifth quintile being the worst performing funds). The Board
noted that the Fund’s performance was below the performance
of the Index for the one year period and above the performance
of the Index for the three and five year periods. When
considering a fund’s performance, the Board places emphasis
on trends and longer term returns.
| C. | Advisory and Sub-Advisory Fees and Fee Waivers |
The Board compared the Fund’s contractual advisory fee rate
to the contractual advisory fee rates of funds in the
Fund’s Lipper expense group at a common asset level. The
Board noted that the Fund’s contractual advisory fee rate
was below the
25 Invesco
Van Kampen High Income Trust II
median contractual advisory fee rate of funds in its expense
group. The Board also reviewed the methodology used by Lipper in
providing expense group information, which includes using
audited financial data from the most recent annual report of
each fund in the expense group that was publicly available as of
the end of the past calendar year and including only one fund
per investment adviser. The Board noted that comparative data is
as of varying dates, which may affect the comparability of data
during times of market volatility.
The Board also compared the Fund’s effective
fee rate (the advisory fee after advisory fee waivers and before
expense limitations/waivers) to the advisory fee rates of other
funds advised by Invesco Advisers and its affiliates with
investment strategies comparable to those of the Fund. The Board
reviewed not only the advisory fees but other fees and expenses
(whether paid to Invesco Advisers, its affiliates or others) and
the Fund’s overall expense ratio.
The Board also considered the fees charged by
Invesco Advisers and the Affiliated
Sub-Advisers
to other client accounts with investment strategies comparable
to those of the Fund. The Board noted that Invesco Advisers or
the Affiliated
Sub-Advisers
may charge lower fees to large institutional clients solely for
investment management services. Invesco Advisers reviewed with
the Board the significantly greater scope of services it
provides to the Invesco Van Kampen funds relative to other
client accounts. These additional services include provision of
administrative services, officers and office space, oversight of
service providers, preparation of shareholder reports, efforts
to support secondary market trading of the Fund’s shares,
preparation of financial information and regulatory compliance
under the Investment Company Act of 1940, as amended, and stock
exchange listing standards, including preparation for,
coordinating the solicitation of proxies for, and conducting
annual shareholder meetings. The Board noted that
sub-advisory
fees charged by the Affiliated
Sub-Advisers
to manage the Invesco Funds and to manage other client accounts
were often more comparable. The Board concluded that the
aggregate services provided to the Fund were sufficiently
different from those provided to institutional clients, and the
Board not place significant weight on these fee comparisons.
The Board noted that Invesco Advisers has
contractually agreed to waive fees
and/or limit
expenses of the Fund through at least June 30, 2012 in an
amount necessary to limit total annual operating expenses to a
specified percentage of average daily net assets for each class
of the Fund. The Board also considered the effect this fee
waiver would have on the Fund’s total estimated expenses.
The Board also considered the services provided by
the Affiliated
Sub-Advisers
pursuant to the
sub-advisory
contracts, as well as the allocation of fees between Invesco
Advisers and the Affiliated
Sub-Advisers
pursuant to the
sub-advisory
contracts. The Board noted that Invesco Advisers provides
services to
sub-advised
Invesco Van Kampen funds, including oversight of the Affiliated
Sub-Advisers
as well as the additional services described above other than
day-to-day
portfolio management. The Board also noted that the
sub-advisory
fees have no direct effect on the Fund or its shareholders, as
they are paid by Invesco Advisers to the Affiliated
Sub-Advisers.
Based upon the information and considerations
described above, the Board concluded that the Fund’s
advisory and
sub-advisory
fees are fair and reasonable.
| D. | Economies of Scale and Breakpoints |
The Board considered the extent to which there are economies of
scale in the provision of advisory services to the Fund. The
Board noted that most closed-end funds do not have fund level
breakpoints because closed-end funds generally do not experience
substantial asset growth after the initial public offering. The
Board noted that although the Fund does not benefit from
economies of scale through contractual breakpoints, the Fund
does share directly in economies of scale through lower fees
charged by third party service providers based on the combined
size of the Invesco Van Kampen funds and other clients advised
by Invesco Advisers.
| E. | Profitability and Financial Resources |
The Board reviewed information from Invesco Advisers concerning
the costs of the advisory and other services that Invesco
Advisers and its affiliates provide to the Fund and the
profitability of Invesco Advisers and its affiliates in
providing these services. The Board reviewed with Invesco
Advisers the methodology used to prepare the profitability
information. The Board considered the profitability of Invesco
Advisers in connection with managing the Fund and the Invesco
Van Kampen funds. The Board noted that Invesco Advisers
continues to operate at a net profit from services Invesco
Advisers and its subsidiaries provide to the Fund and the
Invesco Van Kampen funds. The Board concluded that the level of
profits realized by Invesco Advisers and its affiliates from
providing services to the Fund is not excessive given the
nature, quality and extent of the services provided to the
Invesco Funds. The Board considered whether Invesco Advisers and
each Affiliated
Sub-Adviser
are financially sound and have the resources necessary to
perform their obligations under the investment advisory
agreement and
sub-advisory
contracts. The Board concluded that Invesco Advisers and each
Affiliated
Sub-Adviser
have the financial resources necessary to fulfill these
obligations.
| F. | Collateral Benefits to Invesco Advisers and its Affiliates |
The Board considered various other benefits received by Invesco
Advisers and its affiliates from the relationship with the Fund,
including the fees received for their provision of
administrative services to the Fund. The Board considered the
performance of Invesco Advisers and its affiliates in providing
these services and the organizational structure employed to
provide these services. The Board also considered that the
services are required for the operation of the Fund; that
Invesco Advisers and its affiliates can provide services, the
nature and quality of which are at least equal to those provided
by others offering the same or similar services; and that the
fees for such services are fair and reasonable in light of the
usual and customary charges by others for services of the same
nature and quality.
The Board considered that the Fund’s uninvested
cash and cash collateral from any securities lending
arrangements may be invested in money market funds advised by
Invesco Advisers pursuant to procedures approved by the Board.
The Board noted that Invesco Advisers receives advisory fees
from these affiliated money market funds attributable to such
investments, although Invesco Advisers has contractually agreed
to waive through varying periods the advisory fees payable by
the Invesco Van Kampen Funds. The waiver is in an amount equal
to 100% of the net advisory fee Invesco Advisers receives from
the affiliated money market funds with respect to the
Fund’s investment in the affiliated money market funds of
uninvested cash, but not cash collateral. The Board concluded
that the Fund’s investment of uninvested cash and cash
collateral from any securities lending arrangements in the
affiliated money market funds is in the best interests of the
Fund and its shareholders.
26 Invesco
Van Kampen High Income Trust II
Proxy
Results
An Annual Meeting (“Meeting”) of Shareholders of
Invesco Van Kampen High Income Trust II was held on
June 17, 2011. The Meeting was held for the following
purpose:
| (1) | Elect four Class I Trustees, each by the holders of Common Shares of the Fund, each of whom will serve for a three year term or until a successor has been duly elected and qualified. |
The results of the voting on the above matter were as follows:
|
Votes |
||||||||||||||||||
| Matter | Votes For | Withheld | ||||||||||||||||
|
(1)
|
David C. Arch | 3,290,426 | 97,858 | |||||||||||||||
| Howard J Kerr | 3,269,645 | 118,639 | ||||||||||||||||
| Jerry Choate | 3,287,112 | 101,172 | ||||||||||||||||
| Suzanne Woolsey | 3,276,277 | 112,007 | ||||||||||||||||
27 Invesco
Van Kampen High Income Trust II
Correspondence information
Send general correspondence to Computershare, P.O. Box 43078, Providence, RI 02940-3078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your transactions and your account records. We take
very seriously the obligation to keep that information confidential and private.
Invesco collects nonpublic personal information about you from account applications or other forms you complete and from
your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers
or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by
law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses
and tax forms.
Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your
information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural
safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your
communications with us on our website. More detail is available to you at invesco.com/privacy.
Trust holdings and proxy voting information
The Trust 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 Trust’s semiannual and annual reports to shareholders. For the first and third quarters, the
Trust files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. Shareholders can also look up the Trust’s
Forms N-Q on the SEC website at sec.gov. Copies of the Trust’s Forms N-Q 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 Trust is 811-05769.
A description of the policies and procedures that the Trust 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 Trust voted proxies related to its portfolio securities during the 12
months ended June 30, 2011, is available at invesco.com/proxysearch. In addition, this information
is available on the SEC website at sec.gov.
Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual
and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor
for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds.
Both are wholly owned, indirect subsidiaries of Invesco Ltd.
| VK-CE-HINC2-SAR-1 | Invesco Distributors, Inc. |
| ITEM 2. | CODE OF ETHICS. |
There were no amendments to the Code of Ethics (the “Code”) that applies to the
Registrant’s Principal Executive Officer (“PEO”) and Principal Financial Officer
(“PFO”) during the period covered by the report. The Registrant did not grant any
waivers, including implicit waivers, from any provisions of the Code to the PEO or
PFO during the period covered by this report.
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
Not applicable.
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Not applicable.
| 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 September 16, 2011, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), to assess the effectiveness of the Registrant’s 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 Registrant’s officers, including the PEO and PFO, concluded that, as of September 16, 2011, the Registrant’s 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 Registrant’s 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 Registrant’s internal control over financial reporting. |
| ITEM 12. | EXHIBITS. |
| 12(a) (1) | Not applicable. | |
| 12(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. | |
| 12(a) (3) | Not applicable. | |
| 12(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 Van Kampen High Income Trust II |
||||
| By: | /s/ Colin D. Meadows | |||
| Colin D. Meadows | ||||
| Principal Executive Officer | ||||
Date: November 7, 2011
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/ Colin D. Meadows | |||
| Colin D. Meadows | ||||
| Principal Executive Officer | ||||
Date: November 7, 2011
| By: | /s/ Sheri Morris | |||
| Sheri Morris | ||||
| Principal Financial Officer | ||||
Date: November 7, 2011
EXHIBIT INDEX
| 12(a) (1) | Not applicable. | |
| 12(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. | |
| 12(a) (3) | Not applicable. | |
| 12(b) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. |