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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number |  | 811-05769

Invesco High Income Trust II
(Exact name of registrant as specified in charter)
1555 Peachtree Street, N.E., Suite 1800 Atlanta, Georgia 30309
(Address of principal executive offices) (Zip code)
Sheri Morris 1555 Peachtree Street, N.E., Suite 1800 Atlanta, Georgia 30309
(Name and address of agent for service)

Registrant’s telephone number, including area code: |  | (713) 626‑1919 |  |

Date of fiscal year end: |  | 2/28 |  |

Date of reporting period: |  | 2/28/23 |  |

ITEM 1. | REPORTS TO STOCKHOLDERS.

(a) The Registrant’s annual report transmitted to shareholders pursuant to Rule 30e‑1 under the Investment Company Act of 1940 is as follows:

Annual Report to Shareholders |  | February 28, 2023

Invesco High Income Trust II
NYSE: VLT

2 |  | Managed Distribution Plan Disclosure
3 |  | Management’s Discussion
3 |  | Performance Summary
5 |  | Long-Term Trust Performance
7 |  | Supplemental Information
7 |  | Notice of Important Change
10 |  | Dividend Reinvestment Plan
12 |  | Schedule of Investments
18 |  | Financial Statements
22 |  | Financial Highlights
23 |  | Notes to Financial Statements
30 |  | Report of Independent Registered Public Accounting Firm
31 |  | Distribution Notice
33 |  | Tax Information
34 |  | Additional Information
T-1 |  | Trustees and Officers

Managed Distribution Plan Disclosure
The Board of Trustees (the “Board”) of Invesco High Income Trust II (the “Trust”) approved a Managed Distribution Plan (the “Plan”) whereby the Trust increased its monthly dividend to common shareholders to a stated fixed monthly distribution amount based on a distribution rate of 8.5 percent of the closing market price per share as of August 1, 2018, the effective date of the Plan.
The Plan is intended to provide shareholders with a consistent, but not guaranteed, periodic cash payment from the Trust, regardless of when or whether income is earned or capital gains are realized. If sufficient investment income is not available for a monthly distribution, the Trust will distribute long-term capital gains and/or return of capital in order to maintain its managed distribution level under the Plan. A return of capital
may occur, for example, when some or all of the money that shareholders invested in the Trust is paid back to them. A return of capital distribution does not necessarily reflect the Trust’s investment performance and should not be confused with “yield” or “income.” No conclusions should be drawn about the Trust’s investment performance from the amount of the Trust’s distributions or from the terms of the Plan. The Plan will be subject to periodic review by the Board, and the Board may amend the terms of the Plan or terminate the Plan at any time without prior notice to the Trust’s shareholders. The amendment or termination of the Plan could have an adverse effect on the market price of the Trust’s common shares.
The Trust will provide its shareholders of record on each distribution record date with a
Section 19 Notice disclosing the sources of its dividend payment when a distribution includes anything other than net investment income. The amounts and sources of distributions reported in Section 19 Notices are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Trust’s investment experience during its full fiscal year and may be subject to changes based on tax regulations. The Trust will send shareholders a Form 1099-DIV for the calendar year that will tell them how to report these distributions for federal income tax purposes. Please refer to “Distributions” under Note 1 of the Notes to Financial Statements for information regarding the tax character of the Trust’s distributions.
2 Invesco High Income Trust II

Management’s Discussion of Trust Performance

Performance summary
For the fiscal year ended February 28, 2023, Invesco High Income Trust II (the Trust), at net asset value (NAV), underperformed its style-specific benchmark, the Bloomberg U.S. Corporate High Yield 2% Issuer Cap Index. The Trust’s return can be calculated based on either the market price or the NAV of its shares. NAV per share is determined by dividing the value of the Trust’s portfolio securities, cash and other assets, less all liabilities, by the total number of shares outstanding. Market price reflects the supply and demand for Trust shares. As a result, the two returns can differ, as they did during the fiscal year.
Performance |  |
Total returns, 2/28/22 to 2/28/23 |  |
Trust at NAV |  | -7.50%
Trust at Market Value |  | -4.64
Bloomberg U.S. Corporate High Yield 2% Issuer Cap Indexq (Style-Specific Index) |  | -5.45
Market Price Discount to NAV as of 2/28/23 |  | -5.87
Source(s): qRIMES Technologies Corp. |  |
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Investment return, NAV and market price will fluctuate so that you may have a gain or loss when you sell shares. Please visit invesco.com/us for the most recent month-end performance. Performance figures reflect Trust expenses, the reinvestment of distributions (if any) and changes in 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.

Market conditions and your Trust
The first half of 2022 was a challenging environment for global markets given the economic backdrop. The year began with fears that inflation would remain at elevated levels. These fears were realized when Russia invaded Ukraine driving a surge in energy and commodity prices leading to inflation reaching the highest levels seen in 40 years. Many developed economies experienced a slowdown, as developed central banks continued to tighten monetary conditions. In addition, China’s economic growth experienced a serious negative impact from a COVID-19 wave that resulted in further shutdowns.
Developed central banks took steps to tighten monetary policy during the fiscal year, as inflation remained elevated. The Bank of Canada raised its benchmark interest rate by the largest amount in more than 20 years. Even the Swiss National Bank made a surprise decision in June 2022 to tighten monetary policy, as the era of relaxed monetary policy ended.
Towards the end of the fiscal year, short‑term yields increased more than yields on longer dated maturities, while rates remained elevated across all maturities on the yield curve. The two-year Treasury rates increased from 1.44% to 4.81% during the fiscal year, while 10-year Treasury rates increased from 1.83% to 4.01%.1 At the same time inflation appeared to peak in some Western economies,
including the US and Canada, causing risk assets to rally as investors got more clarity around the rate hike cycle.
In the last few months of 2022, we saw a continuation of monetary policy tightening by developed central banks, although many reduced the size of their rate hikes. As the tightening was absorbed by markets, the two-to 10-year Treasury yield curve inverted more deeply, which historically has signaled a recession. The US dollar weakened against other major currencies in the fourth quarter of 2022. Anticipation of a US Federal Reserve (the Fed) pause in the near future, along with expectations of other central banks becoming more hawkish in relative terms, contributed to the US dollar’s relative softening against the dollar index.
The end of 2022 offered a reprieve for global fixed income, with major asset classes posting positive returns. Credit assets rallied throughout this time, headlined by attractive yields and an improving economy. Inflationary pressures are likely to stay elevated in the near term, but recent economic data suggests that inflation is slowing. Declining inflation, we believe, will ease pressure on the Fed to continue tightening monetary policy to further control inflation. If the Fed achieves its goal of taming inflation the economy could see a soft landing.
In the first two months of 2023, consumption was primarily driven by income growth, which we expect to remain buoyant. Real
disposable income fell sharply in early 2022 because of high inflation and lower fiscal transfers to households. But as inflation fell and jobs grew, real disposable income also grew, and has been the main support to the economy. Strong household finances and low levels of leverage also provide a buffer for consumers to absorb higher interest rates and other shocks. We believe the worst of inflation is behind us, and we expect inflation to moderate further this calendar year. However, continued growth, strong labor markets and some persistence in inflation mean the Fed will likely keep policy tight in 2023. This strength has led some Federal Open Market Committee participants to argue for a few more rate hikes in the coming meetings. Monetary policy has tightened over the past fiscal year and some of the impact of policy on the economy is ahead of us. Still, with financial conditions fairly tight, real rates positive, and inflation coming down from its highs, the Fed is arguably not behind the curve anymore.
Against this backdrop, the team believes extending into triple-C and speculative situations would require an improvement in valuations, better visibility around a Fed pivot and the peaking of the default cycle. That said, since the high yield curve is inverted, the short end of the curve seems opportunistic, in our view. Within the energy sector, we have shifted some exposure from oil producers to natural gas producers. This is based on what we perceive to be a structural shift in demand for US natural gas, caused by Europe’s rapid and permanent pivot away from Russian natural gas. High-yield bond and leveraged loan default rates are now hovering at a two‑year high: including distressed exchanges, the par weighted US high-yield bond and loan default rates increased 38 basis points and 44 basis points month-over-month to 2.12% and 2.26%, respectively at the end of the fiscal year.2
The Bloomberg U.S. Corporate High Yield 2% Issuer Cap Index, which measures the performance of the US high yield bond market and is the Trust’s style-specific index, generated a negative return for the fiscal year.3 Likewise, the Trust, at NAV, generated a negative return for the fiscal year.
During the fiscal year, the Trust had an overweight allocation to oil field services and retailers, relative to the style-specific index, which contributed positively to returns. An off-benchmark allocation to loans was also beneficial to relative performance. The Trust benefited from its security selection in the financial institutions sector, specifically the REITs sub-sector while selection in the technology and wirelines sectors detracted from performance relative to the style-specific index.
One key factor affecting the Trust’s performance relative to its style-specific benchmark was the Trust’s use of financial leverage through bank borrowings. For the fiscal year,
3 Invesco High Income Trust II

the use of leverage contributed to Trust performance relative to its style-specific benchmark. At the close of the fiscal year, leverage accounted for about 28% of the Trust’s total assets. The Trust uses leverage because we believe that, over time, leveraging can provide opportunities for additional income and total return for shareholders. However, use of leverage also can expose shareholders to additional volatility. For example, as the securities prices held by a trust decline, the negative impact of these valuation changes on share NAV and total return is magnified by leverage. Conversely, leverage may enhance returns during periods when the prices of securities held by a trust generally are rising. For more information about the Trust’s use of leverage, see the Notes to Financial Statements later in this report.
We used foreign currency contracts during the fiscal year to hedge currency exposure of non-US dollar-denominated debt. The use of such contracts had a negligible impact on the Trust’s performance relative to its style-specific benchmark for the fiscal year. Forward foreign currency contracts expose the Trust to counterparty risk and do not always provide the hedging benefits anticipated. During the year, we also used derivatives to mitigate overall portfolio risk. These instruments include credit default swaps (CDX), options on CDX (known as swaptions) and total return swaps, which offer greater efficiency and lower transaction costs than cash bonds.
In 2023, we expect a pickup in consumer activity in China as we think the post-reopening wave of COVID-19 infections has peaked (in its most developed cities at least) and we expect robust consumer spending in the US but a notable increase in the number of people relying on credit to spend. We also believe the cost of living increase in Europe will be critical, where, if the UK government had not supported energy costs, inflation would have likely reached 14%, and even still, household fuel bills are up nearly 90% over the last calendar year with food inflation overall hitting almost 17%.4 While rate and currency volatility remain elevated, the entry point into bonds is now far more attractive, in our view, and could provide a cushion, even if interest rates rise a little further from current levels. US high yield has begun 2023 on solid fundamental footing after experiencing improvement last year. The ratings mix of high yield is extremely healthy with the number of BB‑rated† bonds at historical highs and CCC‑rated† bonds near all-time lows. Our base case outlook expects a mild recession that will likely cause defaults to rise but remain low compared to historical averages. We are cautious as we start the year, preferring higher quality names and being wary of certain consumer-facing and cyclical sectors. We continue to focus on finding compelling idiosyncratic opportunities, which should become more available in the first half of the calendar year 2023 as bond prices react to recessionary forces.
We wish to remind you that the Trust is subject to interest rate risk, meaning when
interest rates rise, the value of fixed income securities tends to fall. The degree to which the value of fixed income securities may decline due to rising interest rates may vary depending on the speed and magnitude of the increase in interest rates, as well as individual security characteristics, such as price, maturity, duration and coupon and market forces, such as supply and demand for similar securities. We are monitoring interest rates, and the market, economic and geopolitical factors that may impact the direction, speed, and magnitude of changes to interest rates across the maturity spectrum, including the potential impact of monetary policy changes by the Fed and certain foreign central banks. If interest rates rise or fall faster than expected, markets may experience increased volatility, which may affect the value and/or liquidity of certain of the Trust’s investments or the market price of the Trust’s shares.
Thank you for investing in Invesco High Income Trust II and for sharing our long-term investment horizon.

1 | Source: US Department of the Treasury

2 | Source: JP Morgan Markets

3 | Source: Bloomberg LP

4 | Source: Invesco, UK Office for National Statistics. Data as of Feb. 15, 2023

† Sources: A credit rating is an assessment provided by a 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. For more information on rating methodology, please visit www.spglobal.com and select “Understanding Credit Ratings” under About Ratings on the homepage; www.fitchratings.com and select “Understanding Credit Ratings” from the drop‑down menu on the homepage; and www.moodys.com and select “Methodology,” then “Rating Methodologies” under Research Type on the left-hand side.
Portfolio manager(s):
Niklas Nordenfelt
Rahim Shad
Philip Susser
The views and opinions expressed in management’s discussion of Trust performance are those of Invesco Advisers, Inc. and its affiliates. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Trust. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
See important Trust and, if applicable, index disclosures later in this report.
4 Invesco High Income Trust II

Your Trust’s Long-Term Performance
Results of a $10,000 Investment
Trust and index data from 2/28/13

1 | Source: RIMES Technologies Corp.

Past performance cannot guarantee future results.
Performance shown in the chart does not reflect deduction of taxes a shareholder would pay on Trust distributions or sale of Trust shares.
5 Invesco High Income Trust II

Average Annual Total Returns |
As of 2/28/23 |  |  |  |  |
|  | NAV |  |  | Market |
10 Years |  |  | 4.37 | % |  |  | 3.44 | %
5 Years |  |  | 2.40 |  |  |  | 3.79 |
1 Year |  |  | -7.50 |  |  |  | -4.64 |

The performance data quoted represent past performance and cannot guarantee future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance.
Performance figures do not reflect deduction of taxes a shareholder would pay on Trust distributions or sale of Trust shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.
6 Invesco High Income Trust II

Supplemental Information

∎ |  | Unless otherwise stated, information presented in this report is as of February 28, 2023, and is based on total net assets.

∎ |  | Unless otherwise noted, all data is provided by Invesco.

∎ |  | To access your Trust’s reports, visit invesco.com/fundreports.

About indexes used in this report

∎ |  | The Bloomberg U.S. Corporate High Yield 2% Issuer Cap Index is an unmanaged index considered representative of the US high-yield, fixed-rate corporate bond market. 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) described 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. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Changes to the Trust’s Governing Documents
At a meeting held on September 19-20, 2022, the Trust’s Board of Trustees (the “Board”) approved changes to the Trust’s Amended and Restated Agreement and Declaration of Trust (the “Declaration of Trust”) and the Trust’s Amended and Restated Bylaws (the “Bylaws”). Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Declaration of Trust or Bylaws, as applicable. The following is a summary of certain of these changes. This information may not reflect all of the changes that have occurred since you purchased the Trust.
Declaration of Trust
The Trust’s Declaration of Trust was amended to provide as follows:

∎ |  | “Majority Trustee Vote” means: (a) with respect to a vote of the Board, a vote of the majority of the Trustees then in office, and, if there is one or more Continuing Trustees, a separate vote of a majority of the Continuing Trustees; and (b) with respect to a vote of a committee or sub-committee of the Board, a vote of the majority of the members of such committee or subcommittee, and, if there is one or more Continuing Trustees on such committee or sub-committee, a separate vote of a majority of the Continuing Trustees that are members of such committee or sub-committee.

∎ |  | “Management Trustee” is a Trustee who has present or former associations with the Trust’s Investment Adviser as causes such person to be an Interested Person of the Trust or its Investment Adviser.

∎ |  | If a pre-suit demand upon the Board to bring a derivative action is not required under Section 2.4(a) of the Declaration of Trust, Shareholders eligible to bring such derivative action under the Delaware Act who hold at least 10% of the outstanding Shares of the Trust shall join in the demand for the Board to commence such action.

∎ |  | Shareholders who hold at least 10% of the outstanding Shares of the Trust and have obtained authorization from the Trustees can bring or maintain a direct action or claim for monetary damages against the Trust or the Trustees predicated upon an express or implied right of action under the Declaration of Trust or the 1940 Act.

∎ |  | With respect to any direct actions or claims, the Board shall be entitled to retain counsel or other advisors in considering the merits of any request for authorization to bring a direct action and may require an undertaking by the Shareholders making such request to reimburse the Trust for the fees and expense of any such counsel or other advisors and other out of pocket expenses of the Trust, in the event that the Board determines not to bring such action.

∎ |  | The Trust is permitted to redeem or repurchase Shares of any Shareholder liable to the Trust under Section 2.5 of the Declaration of Trust at a value determined by the Board in accordance with the 1940 Act and other applicable law, and to set off against and retain any distributions otherwise payable to any Shareholder liable to the Trust under Section 2.5 of the Declaration of Trust, in payment of amounts due under Section 2.5 of the Declaration of Trust.

∎ |  | For purposes of Section 2.5 of the Declaration of Trust, the Board may designate a committee of one Trustee to consider a Shareholder request for authorization to bring a direct action if necessary to create a committee with a majority of Trustees who are “independent trustees” (as such term in defined in the Delaware Act).

∎ |  | The term of any Trustee standing for re-election who fails to receive sufficient votes to be elected to office due to a lack of quorum or a failure of such Trustee or any successor Trustee to such Trustee to receive the required Shareholder vote set forth in the Declaration of Trust shall continue until the annual meeting held in the third succeeding year and until a successor Trustee to such Trustee is duly elected and shall have qualified.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE
7 Invesco High Income Trust II

∎ |  | In the event that any Trust Property is held by the Trustees, the right, title and interest of the Trustees in the Trust Property shall vest automatically in each Person who may hereafter become a Trustee.

∎ |  | Without limiting the Section 4.1 of the Declaration of the Trust and subject to any applicable limitation in the Governing Instrument or applicable law, the Trustees shall have power and authority, [among others], to establish one or more committees or sub-committees, to delegate any of the powers of the Trustees to said committees or sub-committees and to adopt a written charter for one or more of such committees or subcommittees governing its membership, duties and operations and any other characteristics as the Trustees may deem proper, each of which committees of shall be comprised of one or more members as determined by the Trustees and sub-committees shall be comprised of one or more members as determined by the committee or such subcommittee (which may be less than the whole number of Trustees then in office), and may be empowered to act for and bind the Trustees and the Trust as if the acts of such committee or sub-committee were the acts of all the Trustees then in office.

∎ |  | In accordance with Section 3804(e) of the Delaware Act, any suit, action or proceeding brought by or in the right of any Shareholder or any person claiming any interest in any Shares seeking to enforce any provision of, or based on any matter arising out of, or in connection with, the Declaration of Trust or the Trust, any class or any Shares, including any claim of any nature against the Trust, any Class, the Trustees or officers of the Trust, shall be brought exclusively in the Court of Chancery of the State of Delaware to the extent there is subject matter jurisdiction in such court for the claims asserted or, if not, then in the Superior Court of the State of Delaware, provided, however, that unless the Trust consents in writing to the selection of an alternative forum, the United States District Court for the Southern District of New York shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the federal securities laws, and all Shareholders and other such Persons hereby irrevocably consent to the jurisdiction of such courts (and the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waive, to the fullest extent permitted by law, any objection they may make now or hereafter have to the laying of the venue of any such suit, action or proceeding in such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum and further, IN CONNECTION WITH ANY SUCH SUIT, ACTION, OR PROCEEDING BROUGHT IN ANY SUCH COURT, ALL SHAREHOLDERS AND ALL OTHER SUCH PERSONS HEREBY IRREVOCABLY WAIVE THE RIGHT TO A TRIAL BY JURY TO THE FULLEST EXTENT PERMITTED BY LAW.

Bylaws
The Trust’s Bylaws were amended to provide as follows:

∎ |  | The Board may, by resolution passed by a Majority Trustee Vote, establish one or more sub-committees of each such Committee, and the membership, duties and operations of each such sub-committee shall be set forth in the written Charter of the applicable Committee. The Board may, by resolution passed by a Majority Trustee Vote, designate one or more additional committees, including ad hoc committees to address specified issues, each of which may, if deemed advisable by the Board of Trustees, have a written charter.

∎ |  | The Trustees may, in their sole discretion, determine that a meeting of Shareholders may be held partly or solely by means of remote communications. If authorized by the Trustees, in their sole discretion, and subject to such guidelines and procedures as the Trustees may adopt, Shareholders and proxyholders not physically present at a meeting of Shareholders may, by means of remote communications: (a) participate in a meeting of Shareholders; and (b) be deemed present in person and vote at a meeting of Shareholders whether such meeting is to be held at a designated place or solely by means of remote communications, provided that: (i) the Trust shall implement such measures as the Trustees deem to be reasonable (A) to verify that each person deemed present and permitted to vote at the meeting by means of remote communications is a Shareholder or proxyholder; and (B) to provide such Shareholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the Shareholders; and (ii) if any Shareholder or proxyholder votes or takes other action at the meeting by means of remote communications, a record of such vote or other action shall be maintained by the Trust. The Trustees may, in their sole discretion, notify Shareholders of any postponement, adjournment or a change of the place of a meeting of Shareholders (including a change to hold the meeting solely by means of remote communications) by a document publicly filed by the Trust with the Commission without the requirement of any further notice under the Bylaws.

∎ |  | Any Shareholder desiring to nominate any person or persons (as the case may be) for election as a Trustee or Trustees of the Trust shall deliver, as part of such Shareholder Notice, a statement in writing with respect to the person or persons to be nominated, together with any persons to be designated as a proposed substitute nominee in the event that a proposed nominee is unwilling or unable to serve, including by reason of any disqualification (a “Proposed Nominee”) and any Proposed Nominee Associated Person setting forth all information required by the Bylaws, including:

– information required by the Bylaws with respect to any Proposed Nominee Associated Person;
– information to establish to the satisfaction of the Board of Trustees that the Proposed Nominee satisfies the trustee qualifications as set out in the Declaration of Trust;
– any other information relating to such Proposed Nominee or Proposed Nominee Associated Person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of trustees in an election contest pursuant to Section 14 of the Exchange Act (even if an election contest is not involved); and
– written and signed certification of each Proposed Nominee that (i) all information regarding such Proposed Nominee included in and/or accompanying the shareholder notice is true, complete and accurate, (ii) such Proposed Nominee is not, and will not become a party to, any agreement, arrangement or understanding (whether written or oral) with any person other than the Trust in connection with service or action as a Trustee of the Trust that has not been disclosed to the Trust, (iii) the Proposed Nominee satisfies the qualifications of persons nominated or seated as trustees as set forth in the Declaration of Trust at the time of their nomination, and (iv) such Proposed Nominee will continue to satisfy the qualifications of persons nominated or seated as trustees as set forth in the Declaration of Trust at the time of their election, if elected.

∎ |  | Any Shareholder who gives a Shareholder Notice of any matter proposed to be brought before the meeting or to elect Proposed Nominees shall deliver, as part of such Shareholder Notice, all statements and representations required by the Bylaws, including:

– any other information relating to such Shareholder, such beneficial owner, or any Shareholder Associated Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies by such Person with respect to the proposed business to be brought by such Person before the annual meeting pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, whether or not such Person intends to deliver a proxy statement or solicit proxies;
– a statement in writing with respect to the Shareholder and the beneficial owner, if any, on whose behalf the proposal is being made setting forth, among other requirements, the name and address of such Shareholder, as they appear on the Trust’s books, and of such beneficial owner and of any Shareholder Associated Person; the number and class of Shares with respect to such Shares, which
8 Invesco High Income Trust II

are owned beneficially and of record by such Shareholder, such beneficial owner, and any Shareholder Associated Person; the name of each nominee holder of Shares owned beneficially but not of record by such Shareholder, beneficial owner, or any Shareholder Associated Person, and the number and class of such Shares; and other information related to the foregoing as required by the Bylaws;
– a description of any agreement, arrangement or understanding, whether written or oral (including any derivative or short positions, profit interests, options or similar rights and borrowed or loaned shares) that has been entered into as of the date of the Shareholder Notice by, or on behalf of, such Shareholder, such beneficial owners, or any Shareholder Associated Person (i) the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power or pecuniary or economic interest of such Shareholder or, such beneficial owner, or any Shareholder Associated Person; or (ii) related to such proposal; and
– a description of all agreements, arrangements, or understandings (whether written or oral) between or among such Shareholder, such beneficial owners, or any Shareholder Associated Person, and any other person or persons (including their names) in connection with the proposal of such business and any material interest of such person or any Shareholder Associated Person, in such business, including any anticipated benefit therefrom to such person, or any Shareholder Associated Person.

∎ |  | A Shareholder providing notice of any nomination or other business proposed to be brought before an annual meeting of Shareholders shall further update and supplement such notice, if necessary, so that, with respect to nominations of persons for election as a Trustee, any additional information reasonably requested by the Board to determine that each person whom the Shareholder proposes to nominate for election as a Trustee is qualified to act as a Trustee, including information reasonably requested by the Board to determine that such proposed candidate has met the trustee qualifications as set out in the Declaration of Trust, is provided, and such update and supplement shall be received by the Secretary at the principal executive offices of the Trust not later than five (5) business days after the request by the Board for additional information regarding trustee qualifications has been delivered to, or mailed and received by, such Shareholder providing notice of any nomination.

∎ |  | Notwithstanding the foregoing provisions of this Article and without limiting the generality of any other requirements herein, unless otherwise required by law, a Shareholder shall be disqualified from bringing any business proposed to be brought before a meeting if any of the information in such Shareholder’s notice, or provided in connection therewith, is not correct and complete or if such Shareholder does not comply fully with the representations in such notice.

For the purposes of the foregoing changes, a “Proposed Nominee Associated Person” of any Proposed Nominee shall mean (A) any person acting in concert with such Proposed Nominee, (B) any direct or indirect beneficial owner of Shares owned of record or beneficially by such Proposed Nominee or person acting in concert with the Proposed Nominee and (C) any person controlling, controlled by or under common control with such Proposed Nominee or a Proposed Nominee Associated Person.
For the purposes of the foregoing changes, a “Shareholder Associated Person” of any beneficial or record shareholder shall mean (A) any person acting in concert with such shareholder, (B) any direct or indirect beneficial owner of Shares owned of record or beneficially by such shareholder or any person acting in concert with such shareholder, (C) any person controlling, controlled by or under common control with such shareholder or a Shareholder Associated Person and (D) any member of the immediate family of such shareholder or Shareholder Associated Person.
The Trust’s Declaration of Trust and Bylaws contain other provisions, including all requirements for the conduct of shareholder meetings, and are available in their entirety upon request to the Trust’s Secretary, c/o Invesco Advisers, Inc., 11 Greenway Plaza, Suite 1000 Houston, TX 77046.
Application of Control Share Provisions
Effective August 1, 2022, the Trust became automatically subject to newly enacted control share acquisition provisions within the Delaware Statutory Trust Act (the “Control Share Provisions”). In general, the Control Share Provisions limit the ability of holders of “control beneficial interests” to vote their shares of a fund above various threshold levels that start at 10% unless the other shareholders of such fund vote to reinstate those rights. “Control beneficial interests” are aggregated to include the holdings of related parties and shares acquired before the effective date of the Control Share Provisions. A fund’s board of trustees may exempt acquisitions from the application of the Control Share Provisions.
The Control Share Provisions require shareholders to disclose any control share acquisition to the Trust within 10 days of such acquisition and, upon request, to provide any related information that the Trust’s Board reasonably believes is necessary or desirable.
The foregoing is only a summary of certain aspects of the Control Share Provisions. Shareholders should consult their own legal counsel with respect to the application of the Control Share Provisions to their beneficial interests of the Trust and any subsequent acquisitions of beneficial interests.
9 Invesco 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 Invesco closed-end Trust (the Trust). Under the Plan, the money you earn from Distributions will be reinvested automatically in more shares of the 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

∎ |  | Add to your account:

You may increase your shares in your Trust easily and automatically with the Plan.

∎ |  | Low transaction costs:

Shareholders who participate in the Plan may be 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.

∎ |  | 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/closed-end.

∎ |  | Safekeeping:

The Agent will hold the shares it has acquired for you in safekeeping.
Who can participate in the Plan
If you own shares in your own name, your purchase will automatically enroll you 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
If you haven’t participated in the Plan in the past or chose to opt out, you are still eligible to participate. Enroll by visiting invesco.com/closed-end, by calling toll-free 800 341 2929 or by notifying us in writing at Invesco Closed-End Funds, Computer-share Trust Company, N.A., P.O. Box 505000, Louisville, KY 40233-5000. If you are writing to us, please include the 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 may 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 its 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 the 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 US 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, by visiting invesco.com/closed-end or by writing to Invesco Closed-End Funds, Computershare Trust Company, N.A., P.O. Box 505000, Louisville, KY 40233-5000. 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 sign 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, including per share fees such as any applicable brokerage commissions the Agent is required to pay.

| 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 fees. 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.

The Trust and Computershare Trust Company, N.A. may amend or terminate the Plan at any time. Participants will receive at least 30 days written notice before the effective date of any amendment. In the case of termination, Participants will receive at least 30 days written notice before the record date for the payment of any such Distributions by the Trust. In the case of amendment or termination necessary or appropriate to comply with applicable law or the rules and policies of the Securities and Exchange Commission or any other regulatory authority, such written notice will not be required.
To obtain a complete copy of the current Dividend Reinvestment Plan, please call our Client Services department at 800 341 2929 or visit invesco.com/closed-end.
10 Invesco High Income Trust II

Fund Information
Portfolio Composition†

By credit quality |  | % of total investments
BBB |  |  |  | 1.99 | %
BB |  |  |  | 32.43 |
B |  |  |  | 51.35 |
CCC |  |  |  | 10.16 |
CC |  |  |  | 0.62 |
D |  |  |  | 0.05 |
Cash |  |  |  | 3.40 |

† Source: Standard & 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 & Poor’s rating methodology, please visit standardandpoors.com and select “Understanding Ratings” under Rating Resources on the homepage.
Top Five Debt Issuers*

|  |  |  | % of total net assets
1. |  | CCO Holdings LLC/CCO Holdings Capital Corp. |  |  |  | 2.79 | %
2. |  | Aethon United BR L.P./Aethon United Finance Corp. |  |  |  | 2.46 |
3. |  | Service Properties Trust |  |  |  | 2.43 |
4. |  | Ford Motor Credit Co. LLC |  |  |  | 2.23 |
5. |  | Allison Transmission, Inc. |  |  |  | 2.20 |

The Trust’s holdings are subject to change, and there is no assurance that the Trust will continue to hold any particular security.

* | Excluding money market fund holdings, if any.

Data presented here are as of February 28, 2023.
11 Invesco High Income Trust II

Schedule of Investments(a)
February 28, 2023

|  | Principal Amount |  |  | Value
U.S. Dollar Denominated Bonds & Notes–128.05%(b)
Advertising–1.45% |  |  |  |  |  |
Clear Channel Outdoor Holdings, Inc., 5.13%, 08/15/2027(c) |  | $ | 295,000 |  |  | $ 263,569
Lamar Media Corp., |  |  |  |  |  |
4.00%, 02/15/2030 |  |  | 25,000 |  |  | 21,523
3.63%, 01/15/2031 |  |  | 978,000 |  |  | 806,405
|  |  | 1,091,497
Aerospace & Defense–1.73% |  |  |
TransDigm UK Holdings PLC, 6.88%, 05/15/2026 |  |  | 1,071,000 |  |  | 1,049,955
TransDigm, Inc., 6.75%, 08/15/2028(c) |  |  | 253,000 |  |  | 252,051
|  |  | 1,302,006
Airlines–2.75% |  |  |
American Airlines, Inc./AAdvantage Loyalty IP Ltd., 5.50%, 04/20/2026(c) |  |  | 1,086,000 |  |  | 1,058,077
Delta Air Lines, Inc./SkyMiles IP Ltd., 4.50%, 10/20/2025(c) |  |  | 1,042,164 |  |  | 1,012,834
|  |  | 2,070,911
Alternative Carriers–0.36% |  |  |
Lumen Technologies, Inc., Series P, 7.60%, 09/15/2039 |  |  | 547,000 |  |  | 271,638
Aluminum–0.70% |  |  |
Novelis Corp., 3.25%, 11/15/2026(c) |  |  | 599,000 |  |  | 528,644
Apparel Retail–0.69% |  |  |
Gap, Inc. (The), 3.63%, 10/01/2029(c) |  |  | 706,000 |  |  | 518,532
Application Software–1.41% |  |  |
NCR Corp., 5.75%, 09/01/2027(c) |  |  | 555,000 |  |  | 538,507
SS&C Technologies, Inc., 5.50%, 09/30/2027(c) |  |  | 554,000 |  |  | 521,889
|  |  |  |  |  | 1,060,396
Auto Parts & Equipment–2.14% |  |  |
Clarios Global L.P., 6.75%, 05/15/2025(c) |  |  | 149,000 |  |  | 148,290
Clarios Global L.P./Clarios US Finance Co., 8.50%, 05/15/2027(c) |  |  | 657,000 |  |  | 653,881
NESCO Holdings II, Inc., 5.50%, 04/15/2029(c) |  |  | 908,000 |  |  | 810,190
|  |  |  |  |  | 1,612,361
Automobile Manufacturers–6.48% |  |  |
Allison Transmission, Inc., |  |  |  |  |  |
4.75%, 10/01/2027(c) |  |  | 957,000 |  |  | 888,649
3.75%, 01/30/2031(c) |  |  | 924,000 |  |  | 768,112
Ford Motor Co., 4.75%, 01/15/2043 |  |  | 633,000 |  |  | 462,467
Ford Motor Credit Co. LLC, |  |  |  |  |  |
4.13%, 08/04/2025 |  |  | 200,000 |  |  | 188,506
4.39%, 01/08/2026 |  |  | 1,299,000 |  |  | 1,223,384
4.95%, 05/28/2027 |  |  | 282,000 |  |  | 263,043

|  | Principal Amount |  |  | Value
Automobile Manufacturers–(continued)
J.B. Poindexter & Co., Inc., 7.13%, 04/15/2026(c) |  | $ | 1,118,000 |  |  | $ 1,078,596
|  |  |  |  |  | 4,872,757
Automotive Retail–5.52% |  |  |
Asbury Automotive Group, Inc., |  |  |  |  |  |
4.50%, 03/01/2028 |  |  | 161,000 |  |  | 144,220
4.63%, 11/15/2029(c) |  |  | 441,000 |  |  | 383,919
Group 1 Automotive, Inc., 4.00%, 08/15/2028(c) |  |  | 1,272,000 |  |  | 1,093,449
LCM Investments Holdings II LLC, 4.88%, 05/01/2029(c) |  |  | 1,501,000 |  |  | 1,221,352
Lithia Motors, Inc., 3.88%, 06/01/2029(c) |  |  | 939,000 |  |  | 785,516
Sonic Automotive, Inc., 4.63%, 11/15/2029(c) |  |  | 635,000 |  |  | 524,500
|  |  |  |  |  | 4,152,956
Cable & Satellite–8.88% |  |  |  |  |  |
CCO Holdings LLC/CCO Holdings Capital Corp., |  |  |  |  |  |
5.50%, 05/01/2026(c) |  |  | 881,000 |  |  | 851,095
5.13%, 05/01/2027(c) |  |  | 620,000 |  |  | 574,309
5.00%, 02/01/2028(c) |  |  | 740,000 |  |  | 671,328
CSC Holdings LLC, |  |  |  |  |  |
6.50%, 02/01/2029(c) |  |  | 922,000 |  |  | 782,571
5.75%, 01/15/2030(c) |  |  | 696,000 |  |  | 399,410
4.50%, 11/15/2031(c) |  |  | 314,000 |  |  | 223,252
5.00%, 11/15/2031(c) |  |  | 200,000 |  |  | 106,695
DISH DBS Corp., 5.13%, 06/01/2029 |  |  | 903,000 |  |  | 534,463
DISH Network Corp., Conv., 3.38%, 08/15/2026 |  |  | 1,053,000 |  |  | 678,216
Gray Escrow II, Inc., 5.38%, 11/15/2031(c) |  |  | 731,000 |  |  | 543,610
Sirius XM Radio, Inc., |  |  |  |  |  |
3.13%, 09/01/2026(c) |  |  | 730,000 |  |  | 646,143
4.00%, 07/15/2028(c) |  |  | 156,000 |  |  | 133,520
VZ Secured Financing B.V. (Netherlands), 5.00%, 01/15/2032(c) |  |  | 650,000 |  |  | 535,224
|  |  |  |  |  | 6,679,836
Casinos & Gaming–5.58% |  |  |  |  |  |
CCM Merger, Inc., 6.38%, 05/01/2026(c) |  |  | 555,000 |  |  | 533,123
Codere Finance 2 (Luxembourg) S.A. (Spain), 11.63% PIK Rate, 2.00% Cash Rate, 11/30/2027 (Acquired 11/30/2021; Cost $64,573)(c)(d)(e) |  |  | 64,573 |  |  | 36,161
Everi Holdings, Inc., 5.00%, 07/15/2029(c) |  |  | 626,000 |  |  | 551,139
Melco Resorts Finance Ltd. (Hong Kong), 5.38%, 12/04/2029(c) |  |  | 982,000 |  |  | 816,051
MGM China Holdings Ltd. (Macau), 4.75%, 02/01/2027(c) |  |  | 382,000 |  |  | 336,513
Mohegan Tribal Gaming Authority, 8.00%, 02/01/2026(c) |  |  | 604,000 |  |  | 566,407

See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 Invesco High Income Trust II

|  | Principal Amount |  |  | Value
Casinos & Gaming–(continued) |  |  |  |  |  |
Studio City Finance Ltd. (Macau), 5.00%, 01/15/2029(c) |  | $ | 1,070,000 |  |  | $ 825,221
Wynn Resorts Finance LLC/Wynn Resorts Capital Corp., 5.13%, 10/01/2029(c) |  |  | 594,000 |  |  | 532,004
|  |  |  |  |  | 4,196,619
Commodity Chemicals–1.14% |  |  |  |  |  |
Mativ Holdings, Inc., 6.88%, 10/01/2026(c) |  |  | 928,000 |  |  | 856,015
Construction & Engineering–1.13% |  |  |
Howard Midstream Energy Partners LLC, 6.75%, 01/15/2027(c) |  |  | 891,000 |  |  | 849,377
Consumer Finance–1.43% |  |  |  |  |  |
FirstCash, Inc., 5.63%, 01/01/2030(c) |  |  | 587,000 |  |  | 520,067
OneMain Finance Corp., |  |  |  |  |  |
7.13%, 03/15/2026 |  |  | 330,000 |  |  | 321,120
3.88%, 09/15/2028 |  |  | 37,000 |  |  | 29,452
5.38%, 11/15/2029 |  |  | 245,000 |  |  | 206,662
|  |  |  |  |  | 1,077,301
Data Processing & Outsourced Services–1.14%
Clarivate Science Holdings Corp., 4.88%, 07/01/2029(c) |  |  | 996,000 |  |  | 861,485
Department Stores–1.43%
Macy’s Retail Holdings LLC, |  |  |  |  |  |
5.88%, 03/15/2030(c) |  |  | 160,000 |  |  | 141,248
4.50%, 12/15/2034 |  |  | 1,137,000 |  |  | 827,003
4.30%, 02/15/2043 |  |  | 179,000 |  |  | 110,230
|  |  |  |  |  | 1,078,481
Diversified Metals & Mining–0.70%
Hudbay Minerals, Inc. (Canada), |  |  |  |  |  |
4.50%, 04/01/2026(c) |  |  | 304,000 |  |  | 273,252
6.13%, 04/01/2029(c) |  |  | 288,000 |  |  | 254,557
|  |  |  |  |  | 527,809
Diversified Support Services–1.10%
Ritchie Bros. Auctioneers, Inc. (Canada), 5.38%, 01/15/2025(c) |  |  | 826,000 |  |  | 827,136
Electric Utilities–1.79%
NRG Energy, Inc., 4.45%, 06/15/2029(c) |  |  | 623,000 |  |  | 555,023
Vistra Operations Co. LLC, |  |  |  |  |  |
5.63%, 02/15/2027(c) |  |  | 220,000 |  |  | 208,719
5.00%, 07/31/2027(c) |  |  | 625,000 |  |  | 581,250
|  |  |  |  |  | 1,344,992
Electrical Components & Equipment–1.29%
EnerSys, 4.38%, 12/15/2027(c) |  |  | 875,000 |  |  | 795,159
Sensata Technologies B.V., 4.00%, 04/15/2029(c) |  |  | 200,000 |  |  | 176,619
|  |  |  |  |  | 971,778

|  | Principal Amount |  |  | Value
Electronic Components–1.27% |  |  |  |  |  |
Sensata Technologies, Inc., |  |  |  |  |  |
4.38%, 02/15/2030(c) |  | $ | 178,000 |  |  | $ 157,700
3.75%, 02/15/2031(c) |  |  | 955,000 |  |  | 797,055
|  |  |  |  |  | 954,755
Food Distributors–1.82% |  |  |
American Builders & Contractors Supply Co., Inc., 4.00%, 01/15/2028(c) |  |  | 927,000 |  |  | 830,546
United Natural Foods, Inc., 6.75%, 10/15/2028(c) |  |  | 569,000 |  |  | 539,095
|  |  |  |  |  | 1,369,641
Gold–0.66% |  |  |
New Gold, Inc. (Canada), 7.50%, 07/15/2027(c) |  |  | 573,000 |  |  | 494,304
Health Care Facilities–2.86% |  |  |
Encompass Health Corp., 4.50%, 02/01/2028 |  |  | 612,000 |  |  | 562,447
HCA, Inc., 3.50%, 09/01/2030 |  |  | 604,000 |  |  | 519,820
Tenet Healthcare Corp., 4.88%, 01/01/2026 |  |  | 1,122,000 |  |  | 1,069,638
|  |  |  |  |  | 2,151,905
Health Care REITs–3.10% |  |  |
CTR Partnership L.P./CareTrust Capital Corp., 3.88%, 06/30/2028(c) |  |  | 642,000 |  |  | 546,070
Diversified Healthcare Trust, |  |  |  |  |  |
4.75%, 05/01/2024 |  |  | 304,000 |  |  | 272,305
4.38%, 03/01/2031 |  |  | 1,101,000 |  |  | 764,364
MPT Operating Partnership L.P./MPT Finance Corp., 3.50%, 03/15/2031 |  |  | 1,087,000 |  |  | 746,204
|  |  |  |  |  | 2,328,943
Health Care Services–2.71% |  |  |
Community Health Systems, Inc., |  |  |  |  |  |
8.00%, 03/15/2026(c) |  |  | 584,000 |  |  | 570,118
5.25%, 05/15/2030(c) |  |  | 502,000 |  |  | 402,358
4.75%, 02/15/2031(c) |  |  | 335,000 |  |  | 259,183
DaVita, Inc., 3.75%, 02/15/2031(c) |  |  | 367,000 |  |  | 277,502
Select Medical Corp., 6.25%, 08/15/2026(c) |  |  | 554,000 |  |  | 529,704
|  |  |  |  |  | 2,038,865
Health Care Supplies–0.70% |  |  |
Medline Borrower L.P., 3.88%, 04/01/2029(c) |  |  | 628,000 |  |  | 523,988
Hotel & Resort REITs–2.43% |  |  |
Service Properties Trust, |  |  |  |  |  |
7.50%, 09/15/2025 |  |  | 142,000 |  |  | 140,893
5.50%, 12/15/2027 |  |  | 1,097,000 |  |  | 989,700
4.95%, 10/01/2029 |  |  | 421,000 |  |  | 332,555
4.38%, 02/15/2030 |  |  | 473,000 |  |  | 361,923
|  |  |  |  |  | 1,825,071
Hotels, Resorts & Cruise Lines–0.83% |  |  |
Carnival Corp., 4.00%, 08/01/2028(c) |  |  | 622,000 |  |  | 526,467
Royal Caribbean Cruises Ltd., 4.25%, 07/01/2026(c) |  |  | 109,000 |  |  | 95,201
|  |  |  |  |  | 621,668

See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 Invesco High Income Trust II

|  | Principal Amount |  |  | Value
Household Products–0.68% |  |  |  |  |  |
Prestige Brands, Inc., 3.75%, 04/01/2031(c) |  | $ | 632,000 |  |  | $ 514,148
Independent Power Producers & Energy Traders–2.50%
Calpine Corp., 3.75%, 03/01/2031(c) |  |  | 648,000 |  |  | 526,721
Clearway Energy Operating LLC, 4.75%, 03/15/2028(c) |  |  | 589,000 |  |  | 541,158
TransAlta Corp. (Canada), 7.75%, 11/15/2029 |  |  | 796,000 |  |  | 814,671
|  |  |  |  |  | 1,882,550
Industrial Machinery–1.79%
EnPro Industries, Inc., 5.75%, 10/15/2026 |  |  | 855,000 |  |  | 816,833
Roller Bearing Co. of America, Inc., 4.38%, 10/15/2029(c) |  |  | 615,000 |  |  | 532,344
|  |  |  |  |  | 1,349,177
Insurance Brokers–0.48%
Alliant Holdings Intermediate LLC/Alliant Holdings Co-Issuer, 6.75%, 04/15/2028(c) |  |  | 366,000 |  |  | 358,316
Integrated Oil & Gas–1.73%
Occidental Petroleum Corp., |  |  |  |  |  |
6.13%, 01/01/2031 |  |  | 777,000 |  |  | 783,597
6.45%, 09/15/2036 |  |  | 72,000 |  |  | 72,458
6.20%, 03/15/2040 |  |  | 457,000 |  |  | 446,192
|  |  |  |  |  | 1,302,247
Integrated Telecommunication Services–5.23%
Altice France S.A. (France), |  |  |  |  |  |
8.13%, 02/01/2027(c) |  |  | 277,000 |  |  | 259,244
5.13%, 07/15/2029(c) |  |  | 985,000 |  |  | 764,390
5.50%, 10/15/2029(c) |  |  | 725,000 |  |  | 568,171
Embarq Corp., 8.00%, 06/01/2036 |  |  | 926,000 |  |  | 399,435
Iliad Holding S.A.S. (France), 6.50%, 10/15/2026(c) |  |  | 614,000 |  |  | 574,446
Iliad Holding S.A.S.U. (France), 7.00%, 10/15/2028(c) |  |  | 789,000 |  |  | 725,741
Level 3 Financing, Inc., 3.75%, 07/15/2029(c) |  |  | 1,020,000 |  |  | 642,600
|  |  |  |  |  | 3,934,027
Interactive Media & Services–0.70%
Match Group Holdings II LLC, 4.63%, 06/01/2028(c) |  |  | 591,000 |  |  | 525,491
Internet Services & Infrastructure–0.71%
Cogent Communications Group, Inc., 7.00%, 06/15/2027(c) |  |  | 554,000 |  |  | 536,494
IT Consulting & Other Services–1.27%
Gartner, Inc., |  |  |  |  |  |
4.50%, 07/01/2028(c) |  |  | 572,000 |  |  | 525,641
3.63%, 06/15/2029(c) |  |  | 306,000 |  |  | 264,913
3.75%, 10/01/2030(c) |  |  | 195,000 |  |  | 165,287
|  |  |  |  |  | 955,841
Leisure Facilities–1.44%
Carnival Holdings Bermuda Ltd., 10.38%, 05/01/2028(c) |  |  | 519,000 |  |  | 555,797

|  | Principal Amount |  |  | Value
Leisure Facilities–(continued) |  |  |  |  |  |
VOC Escrow Ltd., 5.00%, 02/15/2028(c) |  | $ | 602,000 |  |  | $ 530,874
|  |  |  |  |  | 1,086,671
Life Sciences Tools & Services–0.36%
Syneos Health, Inc., 3.63%, 01/15/2029(c) |  |  | 332,000 |  |  | 273,983
Marine–0.71%
NCL Corp. Ltd., 5.88%, 02/15/2027(c) |  |  | 577,000 |  |  | 535,721
Mortgage REITs–0.70%
Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp., 4.75%, 06/15/2029(c) |  |  | 647,000 |  |  | 526,880
Movies & Entertainment–0.69%
WMG Acquisition Corp., 3.75%, 12/01/2029(c) |  |  | 613,000 |  |  | 518,026
Oil & Gas Drilling–4.87%
Nabors Industries Ltd., |  |  |  |  |  |
7.25%, 01/15/2026(c) |  |  | 52,000 |  |  | 49,546
7.50%, 01/15/2028(c) |  |  | 360,000 |  |  | 332,631
Nabors Industries, Inc., 7.38%, 05/15/2027(c) |  |  | 157,000 |  |  | 151,467
Rockies Express Pipeline LLC, |  |  |  |  |  |
4.95%, 07/15/2029(c) |  |  | 559,000 |  |  | 486,777
4.80%, 05/15/2030(c) |  |  | 80,000 |  |  | 69,251
6.88%, 04/15/2040(c) |  |  | 268,000 |  |  | 219,783
Transocean, Inc., |  |  |  |  |  |
7.25%, 11/01/2025(c) |  |  | 282,000 |  |  | 266,752
7.50%, 01/15/2026(c) |  |  | 576,000 |  |  | 529,295
8.75%, 02/15/2030(c) |  |  | 269,000 |  |  | 274,032
7.50%, 04/15/2031 |  |  | 625,000 |  |  | 489,841
Valaris Ltd., |  |  |  |  |  |
12.00% PIK Rate, 8.25% Cash Rate, 04/30/2028(c)(d) |  |  | 380,000 |  |  | 388,417
Series 1145, 12.00% PIK Rate, 8.25% Cash Rate, 04/30/2028(d) |  |  | 400,000 |  |  | 408,860
|  |  |  |  |  | 3,666,652
Oil & Gas Equipment & Services–1.86%
Enerflex Ltd. (Canada), 9.00%, 10/15/2027(c) |  |  | 814,000 |  |  | 804,102
Weatherford International Ltd., 8.63%, 04/30/2030(c) |  |  | 597,000 |  |  | 596,889
|  |  |  |  |  | 1,400,991
Oil & Gas Exploration & Production–9.17%
Aethon United BR L.P./Aethon United Finance Corp., 8.25%, 02/15/2026(c) |  |  | 1,924,000 |  |  | 1,852,988
Apache Corp., |  |  |  |  |  |
7.75%, 12/15/2029 |  |  | 525,000 |  |  | 543,836
4.25%, 01/15/2030 |  |  | 297,000 |  |  | 262,788
Ascent Resources Utica Holdings LLC/ARU Finance Corp., 7.00%, 11/01/2026(c) |  |  | 526,000 |  |  | 511,022
Callon Petroleum Co., |  |  |  |  |  |
8.00%, 08/01/2028(c) |  |  | 294,000 |  |  | 288,583
7.50%, 06/15/2030(c) |  |  | 247,000 |  |  | 232,279

See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 Invesco High Income Trust II

|  | Principal Amount |  |  | Value
Oil & Gas Exploration & Production–(continued)
Comstock Resources, Inc., 6.75%, 03/01/2029(c) |  | $ | 571,000 |  |  | $ 526,019
Genesis Energy L.P./Genesis Energy Finance Corp., |  |  |  |  |  |
6.25%, 05/15/2026 |  |  | 725,000 |  |  | 687,989
8.00%, 01/15/2027 |  |  | 140,000 |  |  | 137,061
7.75%, 02/01/2028 |  |  | 308,000 |  |  | 295,187
Hilcorp Energy I L.P./Hilcorp Finance Co., |  |  |  |  |  |
6.00%, 04/15/2030(c) |  |  | 421,000 |  |  | 382,508
6.25%, 04/15/2032(c) |  |  | 159,000 |  |  | 144,386
SM Energy Co., 6.75%, 09/15/2026 |  |  | 795,000 |  |  | 767,920
Strathcona Resources Ltd. (Canada), 6.88%, 08/01/2026(c) |  |  | 321,000 |  |  | 263,521
|  |  |  |  |  | 6,896,087
Oil & Gas Refining & Marketing–0.70%
Parkland Corp. (Canada), 4.50%, 10/01/2029(c) |  |  | 629,000 |  |  | 529,049
Oil & Gas Storage & Transportation–5.22%
Crestwood Midstream Partners L.P./Crestwood Midstream Finance Corp., 8.00%, 04/01/2029(c) |  |  | 777,000 |  |  | 773,838
Delek Logistics Partners L.P./Delek Logistics Finance Corp., 7.13%, 06/01/2028(c) |  |  | 906,000 |  |  | 798,114
EQM Midstream Partners L.P., |  |  |  |  |  |
7.50%, 06/01/2027(c) |  |  | 185,000 |  |  | 181,487
6.50%, 07/01/2027(c) |  |  | 367,000 |  |  | 348,022
Global Partners L.P./GLP Finance Corp., 7.00%, 08/01/2027 |  |  | 584,000 |  |  | 555,378
Martin Midstream Partners L.P./Martin Midstream Finance Corp., 11.50%, 02/15/2028(c) |  |  | 541,000 |  |  | 534,402
NGL Energy Partners L.P./NGL Energy Finance Corp., |  |  |  |  |  |
6.13%, 03/01/2025 |  |  | 116,000 |  |  | 107,163
7.50%, 04/15/2026 |  |  | 175,000 |  |  | 158,565
Summit Midstream Holdings LLC/Summit Midstream Finance Corp., |  |  |  |  |  |
5.75%, 04/15/2025 |  |  | 241,000 |  |  | 208,147
8.50%, 10/15/2026(c) |  |  | 273,000 |  |  | 259,534
|  |  |  |  |  | 3,924,650
Other Diversified Financial Services–2.48%
Jane Street Group/JSG Finance, Inc., 4.50%, 11/15/2029(c) |  |  | 606,000 |  |  | 532,565
Jefferies Finance LLC/JFIN Co-Issuer Corp., 5.00%, 08/15/2028(c) |  |  | 622,000 |  |  | 525,885
Scientific Games Holdings L.P./Scientific Games US FinCo, Inc., 6.63%, 03/01/2030(c) |  |  | 914,000 |  |  | 804,789
|  |  |  |  |  | 1,863,239
Pharmaceuticals–2.00%
Bausch Health Cos., Inc., 4.88%, 06/01/2028(c) |  |  | 1,276,000 |  |  | 797,500
Catalent Pharma Solutions, Inc., 3.50%, 04/01/2030(c) |  |  | 123,000 |  |  | 106,958
Par Pharmaceutical, Inc., 7.50%, 04/01/2027(c)(f) |  |  | 797,000 |  |  | 600,739
|  |  |  |  |  | 1,505,197

|  | Principal Amount |  |  | Value
Research & Consulting Services–1.00%
Dun & Bradstreet Corp. (The), 5.00%, 12/15/2029(c) |  | $ | 910,000 |  |  | $ 753,649
Restaurants–3.51%
1011778 BC ULC/New Red Finance, Inc. (Canada), |  |  |  |  |  |
3.88%, 01/15/2028(c) |  |  | 313,000 |  |  | 278,807
3.50%, 02/15/2029(c) |  |  | 597,000 |  |  | 506,918
Papa John’s International, Inc., 3.88%, 09/15/2029(c) |  |  | 1,282,000 |  |  | 1,071,989
Yum! Brands, Inc., 5.38%, 04/01/2032 |  |  | 847,000 |  |  | 785,809
|  |  |  |  |  | 2,643,523
Retail REITs–1.12%
NMG Holding Co., Inc./Neiman Marcus Group LLC, 7.13%, 04/01/2026(c) |  |  | 873,000 |  |  | 843,336
Semiconductor Equipment–0.70%
Entegris Escrow Corp., 4.75%, 04/15/2029(c) |  |  | 576,000 |  |  | 524,254
Specialized Consumer Services–1.49%
Carriage Services, Inc., 4.25%, 05/15/2029(c) |  |  | 1,391,000 |  |  | 1,119,533
Specialized REITs–1.07%
SBA Communications Corp., 3.88%, 02/15/2027 |  |  | 886,000 |  |  | 802,622
Specialty Chemicals–0.88%
Braskem Idesa S.A.P.I. (Mexico), |  |  |  |  |  |
7.45%, 11/15/2029(c) |  |  | 538,000 |  |  | 415,913
6.99%, 02/20/2032(c) |  |  | 352,000 |  |  | 245,481
|  |  |  |  |  | 661,394
Specialty Stores–0.07%
B2W Digital Lux S.a.r.l. (Brazil), 4.38%, 12/20/2030(c)(f) |  |  | 309,000 |  |  | 55,218
Steel–0.72%
SunCoke Energy, Inc., 4.88%, 06/30/2029(c) |  |  | 639,000 |  |  | 543,152
Systems Software–2.42%
Camelot Finance S.A., 4.50%, 11/01/2026(c) |  |  | 1,390,000 |  |  | 1,276,057
Crowdstrike Holdings, Inc., 3.00%, 02/15/2029 |  |  | 649,000 |  |  | 547,304
|  |  |  |  |  | 1,823,361
Trading Companies & Distributors–2.10%
Fortress Transportation and Infrastructure Investors LLC, |  |  |  |  |  |
6.50%, 10/01/2025(c) |  |  | 455,000 |  |  | 444,320
5.50%, 05/01/2028(c) |  |  | 1,271,000 |  |  | 1,136,512
|  |  |  |  |  | 1,580,832
Wireless Telecommunication Services–2.46%
Vmed O2 UK Financing I PLC (United Kingdom), 4.75%, 07/15/2031(c) |  |  | 968,000 |  |  | 802,569

See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 Invesco High Income Trust II

|  | Principal Amount |  |  | Value
Wireless Telecommunication Services–(continued)
Vodafone Group PLC (United Kingdom), 4.13%, 06/04/2081(g) |  |  | $1,315,000 |  |  | $ 1,044,820
|  |  |  |  |  | 1,847,389
Total U.S. Dollar Denominated Bonds & Notes (Cost $105,459,380) |  |  | 96,345,367
Variable Rate Senior Loan Interests–3.64%(h)(i)
Commodity Chemicals–0.98%
Mativ Holdings, Inc., Term Loan B, |  |  |  |  |  |
8.44% (1 mo. USD LIBOR + 3.75%), 04/20/2028(j) |  |  | 752,975 |  |  | 740,739
Hotels, Resorts & Cruise Lines–0.76%
IRB Holding Corp., Term Loan, 7.69% (3 mo. SOFR + 3.00%), 12/15/2027 |  |  | 580,437 |  |  | 573,649
Integrated Telecommunication Services–0.47%
Patagonia Holdco LLC, 1.00%, 08/01/2029 |  |  | 412,000 |  |  | 355,350
Pharmaceuticals–0.66%
Endo Luxembourg Finance Co. I S.a.r.l., Term Loan, 6.05% (1 mo. PRIME + 6.00%), 03/27/2028 |  |  | 627,062 |  |  | 498,320
Specialty Stores–0.77%
PetSmart LLC, Term Loan, 8.47% (3 mo. USD LIBOR + 3.75%), 02/11/2028 |  |  | 576,494 |  |  | 575,713
Total Variable Rate Senior Loan Interests (Cost $2,859,157) |  |  | 2,743,771
Non-U.S. Dollar Denominated Bonds & Notes–2.69%(k)
Casinos & Gaming–0.18%
Codere Finance 2 (Luxembourg) S.A. (Spain), 3.00% PIK Rate, 8.00% Cash Rate, 09/30/2026 (Acquired 07/24/2020-09/30/2022; Cost $159,453)(c)(d)(e) |  | EUR | 138,521 |  |  | 132,082

|  |  |  | Principal Amount |  |  | Value |
Food Retail–1.71% |  |  |  |  |  |  |  |  |  |
Bellis Acquisition Co. PLC (United Kingdom), 3.25%, 02/16/2026(c) |  | GBP |  |  | 554,000 |  |  | $ | 554,642 |
Casino Guichard Perrachon S.A. (France), |  |  |  |  |  |  |  |  |  |
6.63%, 01/15/2026(c) |  | EUR |  |  | 662,000 |  |  |  | 395,349 |
3.99%(c)(g)(l) |  | EUR |  |  | 1,700,000 |  |  |  | 337,142 |
|  |  |  |  |  |  |  |  | 1,287,133 |
Pharmaceuticals–0.80% |  |  |  |  |
Nidda Healthcare Holding GmbH (Germany), 7.50%, 08/21/2026(c) |  | EUR |  |  | 582,000 |  |  |  | 604,424 |
Total Non-U.S. Dollar Denominated Bonds & Notes (Cost $1,497,807) |  |  |  | 2,023,639 |
|  |  |  | Shares |  |  |  |
Common Stocks & Other Equity Interests–0.16% |
Cable & Satellite–0.16% |  |  |  |  |
Altice USA, Inc., Class A (Cost $332,202)(m) |  |  |  |  | 30,000 |  |  |  | 118,800 |
Money Market Funds–2.19% |  |  |  |  |
Invesco Government & Agency Portfolio, Institutional Class, 4.51%(n)(o) |  |  |  |  | 575,999 |  |  |  | 575,999 |
Invesco Liquid Assets Portfolio, Institutional Class, 4.64%(n)(o) |  |  |  |  | 412,677 |  |  |  | 412,760 |
Invesco Treasury Portfolio, Institutional Class, 4.50%(n)(o) |  |  |  |  | 658,284 |  |  |  | 658,284 |
Total Money Market Funds (Cost $1,647,071) |  |  |  | 1,647,043 |
TOTAL INVESTMENTS IN SECURITIES-136.73% (Cost $111,795,617) |  |  |  | 102,878,620 |
BORROWINGS-(40.60)% |  |  |  | (30,550,000 | )
OTHER ASSETS LESS LIABILITIES–3.87% |  |  |  | 2,911,222 |
NET ASSETS-100.00% |  |  | $ | 75,239,842 |

Investment Abbreviations:
Conv. |  | - Convertible
EUR |  | - Euro
GBP |  | - British Pound Sterling
LIBOR |  | - London Interbank Offered Rate
PIK |  | - Pay-in-Kind
REIT |  | - Real Estate Investment Trust
SOFR |  | - Secured Overnight Financing Rate
USD |  | - U.S. Dollar

See accompanying Notes to Financial Statements which are an integral part of the financial statements.
16 Invesco High Income Trust II

Notes to Schedule of Investments:

(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

(b) | Calculated as a percentage of net assets. Amounts in excess of 100% are due to the Trust’s use of leverage.

(c) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the “1933 Act”). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at February 28, 2023 was $74,334,394, which represented 98.80% of the Trust’s Net Assets.

(d) | All or a portion of this security is Pay-in-Kind. Pay-in-Kind securities pay interest income in the form of securities.

(e) | Restricted security. The aggregate value of these securities at February 28, 2023 was $168,243, which represented less than 1% of the Trust’s Net Assets.

(f) | Defaulted security. Currently, the issuer is in default with respect to principal and/or interest payments. The aggregate value of these securities at February 28, 2023 was $655,957, which represented less than 1% of the Trust’s Net Assets.

(g) | Security issued at a fixed rate for a specific period of time, after which it will convert to a variable rate.

(h) | Variable rate senior loan interests often require prepayments from excess cash flow or permit the borrower to repay at its election. The degree to which borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with any accuracy. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. However, it is anticipated that the variable rate senior loan interests will have an expected average life of three to five years.

(i) | Variable rate senior loan interests are, at present, not readily marketable, not registered under the 1933 Act and may be subject to contractual and legal restrictions on sale. Variable rate senior loan interests in the Trust’s portfolio generally have variable rates which adjust to a base, such as the London Interbank Offered Rate (“LIBOR”), on set dates, typically every 30 days, but not greater than one year, and/or have interest rates that float at margin above a widely recognized base lending rate such as the Prime Rate of a designated U.S. bank.

(j) | Security valued using significant unobservable inputs (Level 3). See Note 3.

(k) | Foreign denominated security. Principal amount is denominated in the currency indicated.

(l) | Perpetual bond with no specified maturity date.

(m) | Non-income producing security.

(n) | Affiliated issuer. The issuer and/or the Trust is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Trust’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended February 28, 2023.

|  | Value February 28, 2022 |  | Purchases at Cost |  | Proceeds from Sales |  |  | Change in Unrealized Appreciation |  |  | Realized Gain |  |  | Value February 28, 2023 |  | Dividend Income
Investments in Affiliated Money Market Funds: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Invesco Government & Agency Portfolio, Institutional Class |  |  |  | $ 802,454 |  |  |  | $16,461,236 |  | $ | (16,687,691 | ) |  |  | $ - |  |  |  | $ ‑ |  |  | $ 575,999 |  | $19,213
Invesco Liquid Assets Portfolio, Institutional Class |  |  |  | 574,302 |  |  |  | 11,758,026 |  |  | (11,919,780 | ) |  |  | 116 |  |  |  | 96 |  |  | 412,760 |  | 15,554
Invesco Treasury Portfolio, Institutional Class |  |  |  | 917,091 |  |  |  | 18,812,841 |  |  | (19,071,648 | ) |  |  | - |  |  |  | - |  |  | 658,284 |  | 23,840
Total |  |  |  | $2,293,847 |  |  |  | $47,032,103 |  | $ | (47,679,119 | ) |  |  | $116 |  |  |  | $96 |  |  | $1,647,043 |  | $58,607

(o) | The rate shown is the 7-day SEC standardized yield as of February 28, 2023.

Open Forward Foreign Currency Contracts
Settlement Date |  |  |  |  |  |  |  |  |  |  | Unrealized Appreciation
|  |  | Contract to |
| Counterparty |  |  |  | Deliver |  |  | Receive |
Currency Risk |  |  |  |  |  |  |  |  |  |  |  |  |  |
05/17/2023 |  |  |  | Goldman Sachs & Co. |  |  |  |  | GBP 384,000 |  |  |  | USD 467,491 |  |  | $ 4,926
05/17/2023 |  |  |  | State Street Bank & Trust Co. |  |  |  |  | EUR 1,574,000 |  |  |  | USD 1,699,133 |  |  | 26,963
Total Forward Foreign Currency Contracts |  |  |  |  |  |  |  |  |  | $31,889

Open Centrally Cleared Credit Default Swap Agreements(a) |
Reference Entity |  | Buy/Sell Protection |  |  | (Pay)/ Receive Fixed Rate |  |  | Payment Frequency |  |  | Maturity Date |  |  | Implied Credit Spread(b) |  |  | Notional Value |  |  | Upfront Payments Paid (Received) |  |  | Value |  |  | Unrealized Appreciation |
Credit Risk |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Markit CDX North America High Yield Index, Series 39, Version 1 |  |  | Buy |  |  |  | (5.00)% |  |  |  | Quarterly |  |  |  | 12/20/2027 |  |  |  | 4.596% |  |  |  | USD 5,100,000 |  |  |  | $(73,489) |  |  |  | $(70,609) |  |  |  | $2,880 |

(a) | Centrally Cleared Swap Agreements collateralized by $317,980 cash held with Bank of America Merrill Lynch.

(b) | Implied credit spreads represent the current level, as of February 28, 2023, at which protection could be bought or sold given the terms of the existing credit default swap agreement and serve as an indicator of the current status of the payment/performance risk of the credit default swap agreement. An implied credit spread that has widened or increased since entry into the initial agreement may indicate a deteriorating credit profile and increased risk of default for the reference entity. A declining or narrowing spread may indicate an improving credit profile or decreased risk of default for the reference entity. Alternatively, credit spreads may increase or decrease reflecting the general tolerance for risk in the credit markets generally.

Abbreviations:
EUR –Euro
GBP –British Pound Sterling
USD –U.S. Dollar
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
17 Invesco High Income Trust II

Statement of Assets and Liabilities
February 28, 2023

Assets: |  |  |  |
Investments in unaffiliated securities, at value (Cost $110,148,546) |  | $ | 101,231,577 |
Investments in affiliated money market funds, at value (Cost $1,647,071) |  |  | 1,647,043 |
Other investments: |  |  |  |
Variation margin receivable-centrally cleared swap agreements |  |  | 113,742 |
Unrealized appreciation on forward foreign currency contracts outstanding |  |  | 31,889 |
Deposits with brokers: |  |  |  |
Cash collateral – centrally cleared swap agreements |  |  | 317,980 |
Cash |  |  | 14,819 |
Foreign currencies, at value (Cost $88,753) |  |  | 87,912 |
Receivable for: |  |  |  |
Investments sold |  |  | 3,310,970 |
Dividends |  |  | 3,779 |
Interest |  |  | 1,645,505 |
Investment for trustee deferred compensation and retirement plans |  |  | 22,529 |
Other assets |  |  | 674 |
Total assets |  |  | 108,428,419 |
Liabilities: |  |  |  |
Payable for: |  |  |  |
Borrowings |  |  | 30,550,000 |
Investments purchased |  |  | 2,253,238 |
Dividends |  |  | 22,360 |
Accrued fees to affiliates |  |  | 33,186 |
Accrued interest expense |  |  | 228,940 |
Accrued trustees’ and officers’ fees and benefits |  |  | 1,468 |
Accrued other operating expenses |  |  | 75,752 |
Trustee deferred compensation and retirement plans |  |  | 23,633 |
Total liabilities |  |  | 33,188,577 |
Net assets applicable to common shares |  | $ | 75,239,842 |

Net assets applicable to common shares consist of: |  |  |  |
Shares of beneficial interest – common shares |  | $ | 107,814,087 |
Distributable earnings (loss) |  |  | (32,574,245 | )
|  | $ | 75,239,842 |
Common shares outstanding, no par value, with an unlimited number of common shares authorized: |  |  |  |
Common shares outstanding |  |  | 6,498,037 |
Net asset value per common share |  | $ | 11.58 |
Market value per common share |  | $ | 10.90 |

See accompanying Notes to Financial Statements which are an integral part of the financial statements.
18 Invesco High Income Trust II

Statement of Operations
For the year ended February 28, 2023

Investment income: |  |  |  |
Interest |  | $ | 6,468,255 |
Dividends |  |  | 19,760 |
Dividends from affiliated money market funds |  |  | 58,607 |
Total investment income |  |  | 6,546,622 |
Expenses: |  |  |  |
Advisory fees |  |  | 768,457 |
Administrative services fees |  |  | 11,326 |
Custodian fees |  |  | 6,799 |
Interest, facilities and maintenance fees |  |  | 1,109,993 |
Transfer agent fees |  |  | 35,866 |
Trustees’ and officers’ fees and benefits |  |  | 16,204 |
Registration and filing fees |  |  | 21,250 |
Reports to shareholders |  |  | 15,250 |
Professional services fees |  |  | 96,179 |
Other |  |  | 4,735 |
Total expenses |  |  | 2,086,059 |
Less: Fees waived |  |  | (3,017 | )
Net expenses |  |  | 2,083,042 |
Net investment income |  |  | 4,463,580 |
Realized and unrealized gain (loss) from: |  |  |  |
Net realized gain (loss) from: |  |  |  |
Unaffiliated investment securities |  |  | (6,271,332 | )
Affiliated investment securities |  |  | 96 |
Foreign currencies |  |  | 6,990 |
Forward foreign currency contracts |  |  | (29,795 | )
Swap agreements |  |  | 54,653 |
|  |  | (6,239,388 | )
Change in net unrealized appreciation (depreciation) of: |  |  |  |
Unaffiliated investment securities |  |  | (5,879,604 | )
Affiliated investment securities |  |  | 116 |
Foreign currencies |  |  | 2,257 |
Forward foreign currency contracts |  |  | 24,335 |
Swap agreements |  |  | 2,880 |
|  |  | (5,850,016 | )
Net realized and unrealized gain (loss) |  |  | (12,089,404 | )
Net increase (decrease) in net assets resulting from operations applicable to common shares |  | $ | (7,625,824 | )

See accompanying Notes to Financial Statements which are an integral part of the financial statements.
19 Invesco High Income Trust II

Statement of Changes in Net Assets
For the years ended February 28, 2023 and 2022

|  | 2023 |  |  | 2022 |
Operations: |  |  |  |  |  |  |  |
Net investment income |  | $ | 4,463,580 |  |  | $ | 4,727,349 |
Net realized gain (loss) |  |  | (6,239,388 | ) |  |  | 1,862,038 |
Change in net unrealized appreciation (depreciation) |  |  | (5,850,016 | ) |  |  | (6,080,186 | )
Net increase (decrease) in net assets resulting from operations applicable to common shares |  |  | (7,625,824 | ) |  |  | 509,201 |
Distributions to common shareholders from distributable earnings |  |  | (4,934,108 | ) |  |  | (5,510,463 | )
Return of capital applicable to common shares |  |  | (2,582,821 | ) |  |  | (2,004,737 | )
Total distributions |  |  | (7,516,929 | ) |  |  | (7,515,200 | )
Net increase in common shares of beneficial interest |  |  | – |  |  |  | 19,684 |
Net increase (decrease) in net assets applicable to common shares |  |  | (15,142,753 | ) |  |  | (6,986,315 | )
Net assets applicable to common shares: |
Beginning of year |  |  | 90,382,595 |  |  |  | 97,368,910 |
End of year |  | $ | 75,239,842 |  |  | $ | 90,382,595 |

See accompanying Notes to Financial Statements which are an integral part of the financial statements.
20 Invesco High Income Trust II

Statement of Cash Flows
For the year ended February 28, 2023

Cash provided by operating activities: |  |  |  |
Net increase (decrease) in net assets resulting from operations applicable to common shares |  | $ | (7,625,824 | )
Adjustments to reconcile the change in net assets applicable to common shares from operations to net cash provided by operating activities: |  |  |  |
Purchases of investments |  |  | (88,799,955 | )
Proceeds from sales of investments |  |  | 91,201,200 |
Proceeds from sales of short-term investments, net |  |  | 33,644 |
Amortization of premium on investment securities |  |  | 427,418 |
Accretion of discount on investment securities |  |  | (426,260 | )
Net realized loss from investment securities |  |  | 6,271,332 |
Net change in unrealized depreciation on investment securities |  |  | 5,879,604 |
Net change in unrealized appreciation of forward foreign currency contracts |  |  | (24,335 | )
Change in operating assets and liabilities: |  |  |  |
Decrease in receivables and other assets |  |  | 53,532 |
Increase in accrued expenses and other payables |  |  | 231,334 |
Net change in transactions in swap agreements |  |  | (113,742 | )
Net cash provided by operating activities |  |  | 7,107,948 |
Cash provided by (used in) financing activities: |  |  |  |
Dividends paid to common shareholders from distributable earnings |  |  | (4,936,924 | )
Return of capital |  |  | (2,582,821 | )
Net cash provided by (used in) financing activities |  |  | (7,519,745 | )
Net decrease in cash and cash equivalents |  |  | (411,797 | )
Cash and cash equivalents at beginning of period |  |  | 2,479,551 |
Cash and cash equivalents at end of period |  | $ | 2,067,754 |
Non-cash financing activities: |  |  |  |
Supplemental disclosure of cash flow information: |  |  |  |
Cash paid during the period for taxes |  | $ | 1,433 |
Cash paid during the period for interest, facilities and maintenance fees |  | $ | 904,577 |

See accompanying Notes to Financial Statements which are an integral part of the financial statements.
21 Invesco High Income Trust II

Financial Highlights
The following schedule presents financial highlights for a share of the Trust outstanding throughout the periods indicated.

|  | Years Ended February 28, |  |  | Year Ended February 29, |  |  | Year Ended February 28, |
|  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |
Net asset value per common share, beginning of period |  | $ | 13.91 |  |  | $ | 14.99 |  |  | $ | 14.94 |  |  | $ | 15.46 |  |  | $ | 15.95 |
Net investment income(a) |  |  | 0.69 |  |  |  | 0.73 |  |  |  | 0.93 |  |  |  | 0.92 |  |  |  | 0.92 |
Net gains (losses) on securities (both realized and unrealized) |  |  | (1.86 | ) |  |  | (0.65 | ) |  |  | 0.28 |  |  |  | (0.28 | ) |  |  | (0.33 | )
Total from investment operations |  |  | (1.17 | ) |  |  | 0.08 |  |  |  | 1.21 |  |  |  | 0.64 |  |  |  | 0.59 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dividends paid to common shareholders from net investment income |  |  | (0.76 | ) |  |  | (0.89 | ) |  |  | (1.00 | ) |  |  | (1.03 | ) |  |  | (1.03 | )
Return of capital |  |  | (0.40 | ) |  |  | (0.27 | ) |  |  | (0.16 | ) |  |  | (0.13 | ) |  |  | (0.05 | )
Total distributions |  |  | (1.16 | ) |  |  | (1.16 | ) |  |  | (1.16 | ) |  |  | (1.16 | ) |  |  | (1.08 | )
Net asset value per common share, end of period |  | $ | 11.58 |  |  | $ | 13.91 |  |  | $ | 14.99 |  |  | $ | 14.94 |  |  | $ | 15.46 |
Market value per common share, end of period |  | $ | 10.90 |  |  | $ | 12.70 |  |  | $ | 13.56 |  |  | $ | 13.53 |  |  | $ | 14.26 |
Total return at net asset value(b) |  |  | (7.50 | )% |  |  | 0.58 | % |  |  | 10.16 | % |  |  | 4.72 | % |  |  | 4.92 | %
Total return at market value(c) |  |  | (4.64 | )% |  |  | 1.52 | % |  |  | 10.04 | % |  |  | 2.81 | % |  |  | 9.94 | %
Net assets applicable to common shares, end of period (000’s omitted) |  | $ | 75,240 |  |  | $ | 90,383 |  |  | $ | 97,369 |  |  | $ | 97,007 |  |  | $ | 125,500 |
Portfolio turnover rate(d) |  |  | 86 | % |  |  | 89 | % |  |  | 101 | % |  |  | 41 | % |  |  | 38 | %
Ratios/supplemental data based on average net assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ratio of expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With fee waivers and/or expense reimbursements |  |  | 2.63 | % |  |  | 1.55 | % |  |  | 1.63 | % |  |  | 2.41 | % |  |  | 2.37 | %
With fee waivers and/or expense reimbursements excluding interest, facilities and maintenance fees |  |  | 1.23 | % |  |  | 1.12 | % |  |  | 1.20 | % |  |  | 1.24 | % |  |  | 1.23 | %
Without fee waivers and/or expense reimbursements |  |  | 2.63 | % |  |  | 1.55 | % |  |  | 1.63 | % |  |  | 2.42 | % |  |  | 2.37 | %
Ratio of net investment income to average net assets |  |  | 5.63 | % |  |  | 4.92 | % |  |  | 6.68 | % |  |  | 5.93 | % |  |  | 5.97 | %
Senior securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset coverage per $1,000 unit of senior indebtedness(e) |  | $ | 3,463 |  |  | $ | 3,959 |  |  | $ | 4,187 |  |  | $ | 3,280 |  |  | $ | 3,639 |
Total borrowings (000’s omitted) |  | $ | 30,550 |  |  | $ | 30,550 |  |  | $ | 30,550 |  |  | $ | 42,550 |  |  | $ | 47,550 |

(a) | Calculated using average shares outstanding.

(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Not annualized for periods less than one year, if applicable.

(c) | Total return assumes an investment at the 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. Not annualized for periods less than one year, if applicable.

(d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.

(e) | Calculated by subtracting the Trust’s total liabilities (not including 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.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.
22 Invesco High Income Trust II

Notes to Financial Statements
February 28, 2023
NOTE 1–Significant Accounting Policies
Invesco High Income Trust II (the “Trust”) is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, closed-end management investment company.
The Trust’s investment objective is to provide its common shareholders high current income, while seeking to preserve shareholders’ capital, through investment in a professionally managed, diversified portfolio of high-income producing fixed-income securities.
The Trust is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services - Investment Companies.
The following is a summary of the significant accounting policies followed by the Trust in the preparation of its financial statements.

A. | Security Valuations - Securities, including restricted securities, are valued according to the following policy.

Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a trust may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Variable rate senior loan interests are fair valued using quotes provided by an independent pricing service. Quotes provided by the pricing service may reflect appropriate factors such as ratings, tranche type, industry, company performance, spread, individual trading characteristics, institution-size trading in similar groups of securities and other market data.
A security listed or traded on an exchange is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. U.S. exchange-traded options are valued at the mean between the last bid and asked prices from the exchange on which they are principally traded. Non-U.S. exchange-traded options are valued at the final settlement price set by the exchange on which they trade. Options not listed on an exchange and swaps generally are valued using pricing provided from independent pricing services.
Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.
Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board-approved policies and related Adviser procedures (“Valuation Procedures”). Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.
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 may be used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. Issuer specific events, market trends, bid/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Trust may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Trust investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.
The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used. Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.

B. | Securities Transactions and Investment Income – Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Pay-in-kind interest income

23 Invesco High Income Trust II

| and non-cash dividend income received in the form of securities in-lieu of cash are recorded at the fair value of the securities received. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.

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 the Statement of Changes in Net Assets, or the net investment income per share and the ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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 has adopted a Managed Distribution Plan (the “Plan”) whereby the Trust will pay a monthly dividend to common shareholders at a stated fixed monthly distribution amount based on a distribution rate of 8.5% of the market price per share on August 1, 2018, the date the Plan became effective. The Plan is intended to provide shareholders with a consistent, but not guaranteed, periodic cash payment from the Trust, regardless of when or whether income is earned or capital gains are realized. If sufficient income is not available for a monthly distribution, the Trust will distribute long-term capital gains and/or return of capital in order to maintain its managed distribution level under the Plan. Distributions from net investment income are declared and paid monthly, and recorded on the ex-dividend date. The Plan may be amended or terminated at any time by the Board.

E. | Federal Income Taxes - The Trust intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”) necessary to qualify as a regulated investment company and to distribute substantially all of the 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.

The Trust recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Trust’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The 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. | Interest, Facilities and Maintenance Fees - Interest, Facilities and Maintenance Fees include interest and related borrowing costs such as commitment fees, administrative expenses and other expenses associated with establishing and maintaining the line of credit.

G. | 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.

H. | 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 the 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.

I. | 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.

J. | Securities Purchased on a When-Issued and Delayed Delivery Basis - The Trust may purchase and sell interests in corporate loans and corporate debt securities and other portfolio securities on a when-issued and delayed delivery basis, with payment and delivery scheduled for a future date. No income accrues to the Trust on such interests or securities in connection with such transactions prior to the date the Trust actually takes delivery of such interests or securities. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Trust will generally purchase these securities with the intention of acquiring such securities, they may sell such securities prior to the settlement date.

K. | 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. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Trust invests and are shown in the Statement of Operations.

L. | Forward Foreign Currency Contracts - The Trust may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis, or through forward foreign currency contracts, to manage or minimize currency or exchange rate risk.

The Trust may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical exchange of the two
24 Invesco High Income Trust II

currencies on the settlement date, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards).
A forward foreign currency contract is an obligation between two parties (“Counterparties”) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts for hedging 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 forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

M. | Bank Loan Risk - Although the resale, or secondary market for floating rate loans has grown substantially over the past decade, both in overall size and number of market participants, there is no organized exchange or board of trade on which floating rate loans are traded. Instead, the secondary market for floating rate loans is a private, unregulated interdealer or interbank resale market. Such a market may therefore be subject to irregular trading activity, wide bid/ask spreads, and extended trade settlement periods, which may impair the Trust’s ability to sell bank loans within its desired time frame or at an acceptable price and its ability to accurately value existing and prospective investments. Extended trade settlement periods may result in cash not being immediately available to the Trust. As a result, the Trust may have to sell other investments or engage in borrowing transactions to raise cash to meet its obligations. Similar to other asset classes, bank loan funds may be exposed to counterparty credit risk, or the risk that an entity with which the Trust has unsettled or open transactions may fail to or be unable to perform on its commitments. The Trust seeks to manage counterparty credit risk by entering into transactions only with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.

N. | LIBOR Risk - The Trust may have investments in financial instruments that utilize the London Interbank Offered Rate (“LIBOR”) as the reference or benchmark rate for variable interest rate calculations. LIBOR is intended to measure the rate generally at which banks can lend and borrow from one another in the relevant currency on an unsecured basis. The UK Financial Conduct Authority (“FCA”), the regulator that oversees LIBOR, announced that the majority of LIBOR rates would cease to be published or would no longer be representative on January 1, 2022. Although the publication of most LIBOR rates ceased at the end of 2021, a selection of widely used USD LIBOR rates continues to be published until June 2023 to allow for an orderly transition away from these rates.

There remains uncertainty and risks relating to the continuing LIBOR transition and its effects on the Trust and the instruments in which the Trust invests. There can be no assurance that the composition or characteristics of any alternative reference rates (“ARRs”) or financial instruments in which the Trust invests that utilize ARRs will be similar to or produce the same value or economic equivalence as LIBOR or that these instruments will have the same volume or liquidity. Additionally, there remains uncertainty and risks relating to certain “legacy” USD LIBOR instruments that were issued or entered into before December 31, 2021 and the process by which a replacement interest rate will be identified and implemented into these instruments when USD LIBOR is ultimately discontinued. The effects of such uncertainty and risks in “legacy” USD LIBOR instruments held by the Trust could result in losses to the Trust.

O. | Leverage Risk - The Trust utilizes leverage to seek to enhance the yield of the Trust by borrowing. There are risks associated with borrowing in an effort to increase the yield and distributions on the shares, including that the costs of the financial leverage may exceed the income from investments purchased with such leverage proceeds, the higher volatility of the net asset value of the shares, and that fluctuations in the interest rates on the borrowing may affect the yield and distributions to the shareholders. There can be no assurance that the Trust’s leverage strategy will be successful.

P. | Other Risks - The Trust invests in lower-quality debt securities, i.e., “junk bonds”. Investments in lower-rated securities or unrated securities of comparable quality tend to be more sensitive to economic conditions than higher rated securities. Junk bonds involve a greater risk of default by the issuer because such securities are generally unsecured and are often subordinated to other creditors’ claim.

Increases in the federal funds and equivalent foreign rates or other changes to monetary policy or regulatory actions may expose fixed income markets to heightened volatility and reduced liquidity for certain fixed income investments, particularly those with longer maturities. It is difficult to predict the impact of interest rate changes on various markets. In addition, decreases in fixed income dealer market-making capacity may also potentially lead to heightened volatility and reduced liquidity in the fixed income markets. As a result, the value of the Trust’s investments and share price may decline. Changes in central bank policies could also result in higher than normal redemptions by shareholders, which could potentially increase the Trust’s portfolio turnover rate and transaction costs.
Policy changes by the U.S. government or its regulatory agencies and political events within the U.S. and abroad may, among other things, affect investor and consumer confidence and increase volatility in the financial markets, perhaps suddenly and to a significant degree, which may adversely impact the Trust’s operations, universe of potential investment options, and return potential.

Q. | COVID-19 Risk - The COVID-19 strain of coronavirus has resulted in instances of market closures and dislocations, extreme volatility, liquidity constraints and increased trading costs. Efforts to contain its spread have resulted in travel restrictions, disruptions of healthcare systems, business operations (including business closures) and supply chains, layoffs, lower consumer demand and employee availability, and defaults and credit downgrades, among other significant economic impacts that have disrupted global economic activity across many industries. Such economic impacts may exacerbate other pre-existing political, social and economic risks locally or globally and cause general concern and uncertainty. The full economic impact and ongoing effects of COVID-19 (or other future epidemics or pandemics) at the macro-level and on individual businesses are unpredictable and may result in significant and prolonged effects on the Trust’s performance.

NOTE 2–Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Trust accrues daily and pays monthly an advisory fee to the Adviser based on the annual rate of 0.70% of the Trust’s average daily managed assets. Managed assets for this purpose means the Trust’s net assets, plus assets attributable to outstanding preferred shares and the amount of any borrowings incurred for the purpose of leverage (whether or not such borrowed amounts are reflected in the Trust’s financial statements for purposes of GAAP).
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Trust, will pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Trust based on the percentage of assets allocated to such Affiliated Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2024, 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.
For the year ended February 28, 2023, the Adviser waived advisory fees of $3,017.
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 year ended February 28, 2023, expenses incurred under this agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Trust. Pursuant to a custody agreement with the Trust, SSB also serves as the Trust’s custodian.
Certain officers and trustees of the Trust are officers and directors of Invesco.
25 Invesco High Income Trust II

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. 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 Adviser’s 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 February 28, 2023. 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.

|  | Level 1 |  |  |  | Level 2 |  |  |  | Level 3 |  |  |  | Total
Investments in Securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Dollar Denominated Bonds & Notes |  | $ – |  |  |  | $ 96,345,367 |  |  |  |  |  | $ | – |  |  |  |  | $ 96,345,367
Variable Rate Senior Loan Interests |  | – |  |  |  | 2,003,032 |  |  |  |  |  |  | 740,739 |  |  |  |  | 2,743,771
Non-U.S. Dollar Denominated Bonds & Notes |  | – |  |  |  | 2,023,639 |  |  |  |  |  |  | – |  |  |  |  | 2,023,639
Common Stocks & Other Equity Interests |  | 118,800 |  |  |  | – |  |  |  |  |  |  | – |  |  |  |  | 118,800
Money Market Funds |  | 1,647,043 |  |  |  | – |  |  |  |  |  |  | – |  |  |  |  | 1,647,043
Total Investments in Securities |  | 1,765,843 |  |  |  | 100,372,038 |  |  |  |  |  |  | 740,739 |  |  |  |  | 102,878,620
Other Investments - Assets* |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward Foreign Currency Contracts |  | – |  |  |  | 31,889 |  |  |  |  |  |  | – |  |  |  |  | 31,889
Swap Agreements |  | – |  |  |  | 2,880 |  |  |  |  |  |  | – |  |  |  |  | 2,880
Total Other Investments |  | – |  |  |  | 34,769 |  |  |  |  |  |  | – |  |  |  |  | 34,769
Total Investments |  | $1,765,843 |  |  |  | $100,406,807 |  |  |  |  |  | $ | 740,739 |  |  |  |  | $102,913,389

* | Unrealized appreciation.

A reconciliation of Level 3 investments is presented when the Trust had a significant amount of Level 3 investments at the beginning and/or end of the reporting period in relation to net assets.
The following is a reconciliation of the fair valuations using significant unobservable inputs (Level 3) during the year ended February 28, 2023:

|  | Value 02/28/22 |  |  | Purchases at Cost |  | Proceeds from Sales |  |  | Accrued Discounts/ Premiums |  | Realized Gain (Loss) |  |  | Change in Unrealized Appreciation |  |  | Transfers into Level 3 |  | Transfers out of Level 3 |  | Value 02/28/23
Variable Rate Senior Loan Interests |  | $ | 1,264,380 |  |  | $– |  | $ | (525,856 | ) |  | $– |  | $ | (5,981 | ) |  | $ | 8,196 |  |  | $– |  | $– |  | $740,739
Common Stocks & Other Equity Interests |  |  | 0 |  |  | – |  |  | 0 |  |  | – |  |  | – |  |  |  | – |  |  | – |  | – |  | –
Total |  | $ | 1,264,380 |  |  | $– |  | $ | (525,856 | ) |  | $– |  | $ | (5,981 | ) |  | $ | 8,196 |  |  | $– |  | $– |  | $740,739

Securities determined to be Level 3 at the end of the reporting period were valued primarily by utilizing evaluated prices from a third-party vendor pricing service. A significant change in third-party pricing information could result in a lower or higher value in Level 3 investments.
NOTE 4–Derivative Investments
The Trust may enter into an International Swaps and Derivatives Association Master Agreement (“ISDA Master Agreement”) under which a trust may trade OTC derivatives. An OTC transaction entered into under an ISDA Master Agreement typically involves a collateral posting arrangement, payment netting provisions and close-out netting provisions. These netting provisions allow for reduction of credit risk through netting of contractual obligations. The enforceability of the netting provisions of the ISDA Master Agreement depends on the governing law of the ISDA Master Agreement, among other factors.
For financial reporting purposes, the Trust does not offset OTC derivative assets or liabilities that are subject to ISDA Master Agreements in the Statement of Assets and Liabilities.
26 Invesco High Income Trust II

Value of Derivative Investments at Period-End
The table below summarizes the value of the Trust’s derivative investments, detailed by primary risk exposure, held as of February 28, 2023:

|  | Value |
Derivative Assets |  | Credit Risk |  |  |  |  |  | Currency Risk |  |  |  |  |  | Total |
Unrealized appreciation on swap agreements – Centrally Cleared |  |  | $2,880 |  |  |  |  |  |  |  | $ – |  |  |  |  |  |  |  | $ 2,880 |
Unrealized appreciation on forward foreign currency contracts outstanding |  |  | – |  |  |  |  |  |  |  | 31,889 |  |  |  |  |  |  |  | 31,889 |
Total Derivative Assets |  |  | 2,880 |  |  |  |  |  |  |  | 31,889 |  |  |  |  |  |  |  | 34,769 |
Derivatives not subject to master netting agreements |  |  | (2,880 | ) |  |  |  |  |  |  | – |  |  |  |  |  |  |  | (2,880 | )
Total Derivative Assets subject to master netting agreements |  |  | $ – |  |  |  |  |  |  |  | $31,889 |  |  |  |  |  |  |  | $31,889 |

Offsetting Assets and Liabilities
The table below reflects the Trust’s exposure to Counterparties subject to either an ISDA Master Agreement or other agreement for OTC derivative transactions as of February 28, 2023.

|  | Financial Derivative Assets |  |  |  |  |  |  |  | Collateral (Received)/Pledged |  |  |  |  |  |
Counterparty |  | Forward Foreign Currency Contracts |  |  |  | Net Value of Derivatives |  |  |  | Non-Cash |  | Cash |  |  |  |  | Net Amount |
Goldman Sachs & Co. |  | $ 4,926 |  |  |  | $ 4,926 |  |  |  | $– |  | $– |  |  |  |  |  | $ | 4,926 |
State Street Bank & Trust Co. |  | 26,963 |  |  |  | 26,963 |  |  |  | – |  | – |  |  |  |  |  |  | 26,963 |
Total |  | $31,889 |  |  |  | $31,889 |  |  |  | – |  | $– |  |  |  |  |  | $ | 31,889 |

Effect of Derivative Investments for the year ended February 28, 2023
The table below summarizes the gains (losses) on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:

|  | Location of Gain (Loss) on Statement of Operations |
|  | Credit Risk |  |  |  |  |  | Currency Risk |  |  |  |  |  | Total |
Realized Gain (Loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward foreign currency contracts |  | $ | - |  |  |  |  |  |  | $ | (29,795 | ) |  |  |  |  |  | $ | (29,795 | )
Swap agreements |  |  | 54,653 |  |  |  |  |  |  |  | - |  |  |  |  |  |  |  | 54,653 |
Change in Net Unrealized Appreciation: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward foreign currency contracts |  |  | - |  |  |  |  |  |  |  | 24,335 |  |  |  |  |  |  |  | 24,335 |
Swap agreements |  |  | 2,880 |  |  |  |  |  |  |  | - |  |  |  |  |  |  |  | 2,880 |
Total |  | $ | 57,533 |  |  |  |  |  |  | $ | (5,460 | ) |  |  |  |  |  | $ | 52,073 |

The table below summarizes the average notional value of derivatives held during the period.

|  | Forward Foreign Currency Contracts |  |  |  | Swap Agreements |
Average notional value |  | $1,035,093 |  |  |  | $ | 4,030,648 |

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. Trustees have the option to defer compensation payable by the Trust, and “Trustees’ and Officers’ Fees and Benefits” includes amounts accrued by the Trust to fund such deferred compensation amounts.
NOTE 6–Cash Balances and Borrowings
Effective November 10, 2022, the Trust entered into a $35 million credit agreement, which will expire on November 9, 2023. Prior to November 10, 2022, the credit agreement permitted borrowings up to $45 million. This credit agreement is secured by the assets of the Trust. The Trust is subject to certain covenants relating to the credit agreement. Failure to comply with these restrictions could cause the acceleration of the repayment of the amount outstanding under the credit agreement.
During the year ended February 28, 2023, the average daily balance of borrowing under the credit agreement was $30,550,000 with an average interest rate of 3.57%. The carrying amount of the Trust’s payable for borrowings as reported on the Statement of Assets and Liabilities approximates its fair value. Expenses under the credit agreement are shown in the Statement of Operations as Interest, facilities and maintenance fees.
Additionally, the Trust is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. Such balances, if any at period-end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn 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.
27 Invesco High Income Trust II

NOTE 7–Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended February 28, 2023 and 2022:

|  | 2023 |  |  | 2022 |
Ordinary income* |  | $ | 4,934,108 |  |  | $ | 5,510,463 |
Return of capital |  |  | 2,582,821 |  |  |  | 2,004,737 |
Total distributions |  | $ | 7,516,929 |  |  | $ | 7,515,200 |

* | Includes short-term capital gain distributions, if any.

Tax Components of Net Assets at Period-End:

|  | 2023 |
Net unrealized appreciation (depreciation) – investments |  | $ | (9,429,558 | )
Net unrealized appreciation – foreign currencies |  |  | 181 |
Temporary book/tax differences |  |  | (20,086 | )
Late-Year ordinary loss deferral |  |  | (53,560 | )
Capital loss carryforward |  |  | (23,071,222 | )
Shares of beneficial interest |  |  | 107,814,087 |
Total net assets |  | $ | 75,239,842 |

The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Trust’s net unrealized appreciation (depreciation) difference is attributable primarily to amortization and accretion on debt securities.
The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Trust’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.
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.
The Trust has a capital loss carryforward as of February 28, 2023, as follows:

Capital Loss Carryforward*
Expiration |  | Short‑Term |  |  |  | Long-Term |  |  |  |  |  | Total
Not subject to expiration |  | $5,795,793 |  |  |  | $17,275,429 |  |  |  |  |  | $23,071,222

* | Capital loss carryforward is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization.

NOTE 8–Investment Transactions
The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Trust during the year ended February 28, 2023 was $90,578,982 and $93,657,786, respectively. Cost of investments, including any derivatives, on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investments on a Tax Basis |
Aggregate unrealized appreciation of investments |  | $ | 1,299,730 |
Aggregate unrealized (depreciation) of investments |  |  | (10,729,288 | )
Net unrealized appreciation (depreciation) of investments |  | $ | (9,429,558 | )

Cost of investments for tax purposes is $112,342,947.
NOTE 9–Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of return of capital distributions and amortization and accretion on debt securities, on February 28, 2023, undistributed net investment income was increased by $2,954,902, undistributed net realized gain (loss) was decreased by $372,082 and shares of beneficial interest was decreased by $2,582,820. This reclassification had no effect on the net assets of the Trust.
NOTE 10–Common Shares of Beneficial Interest
Transactions in common shares of beneficial interest were as follows:

|  | Year Ended February 28, |  |  |  |  |  | Year Ended February 28, |
|  | 2023 |  |  |  |  |  | 2022 |
Beginning shares |  |  | 6,498,037 |  |  |  |  |  |  |  | 6,494,743 |
Shares issued through dividend reinvestment |  |  | – |  |  |  |  |  |  |  | 3,294 |
Ending shares |  |  | 6,498,037 |  |  |  |  |  |  |  | 6,498,037 |

The Trust may, when appropriate, purchase shares in the open market or in privately negotiated transactions at a price not above market value or net asset value, whichever is lower at the time of purchase.
28 Invesco High Income Trust II

NOTE 11–Dividends
The Trust declared the following dividends to common shareholders from net investment income subsequent to February 28, 2023:

Declaration Date |  | Amount per Share |  |  |  | Record Date |  |  |  |  | Payable Date
March 1, 2023 |  | $0.0964 |  |  |  | March 15, 2023 |  |  |  |  |  | March 31, 2023
April 3, 2023 |  | $0.0964 |  |  |  | April 17, 2023 |  |  |  |  |  | April 28, 2023

29 Invesco High Income Trust II

Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of Invesco High Income Trust II
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Invesco High Income Trust II (the “Trust”) as of February 28, 2023, the related statements of operations and cash flows for the year ended February 28, 2023, the statement of changes in net assets for each of the two years in the period ended February 28, 2023, including the related notes, and the financial highlights for each of the five years in the period ended February 28, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust as of February 28, 2023, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period ended February 28, 2023 and the financial highlights for each of the five years in the period ended February 28, 2023 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on the Trust’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 28, 2023 by correspondence with the custodian, transfer agent, brokers and agent banks; when replies were not received from brokers and agent banks, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP
Houston, Texas
April 21, 2023

We have served as the auditor of one or more of the investment companies in the Invesco group of investment companies since at least 1995. We have not been able to determine the specific year we began serving as auditor.
30 Invesco High Income Trust II

DISTRIBUTION NOTICE
March 2023
INVESCO HIGH INCOME TRUST II - Common Shares - Cusip: 46131F101
Form 1099-DIV for the calendar year will report distributions for US federal income tax purposes. The Fund’s annual report to shareholders will include information regarding the tax character of Fund distributions for the fiscal year. This Notice is sent to comply with certain U.S. Securities and Exchange Commission requirements.
Effective August 1, 2018, the Board of Invesco High Income Trust II (NYSE: VLT) approved a Managed Distribution Plan (the “VLT Plan”) for the Fund, whereby the Fund increased its monthly dividend to common shareholders to a stated fixed monthly distribution amount based on a distribution rate of 8.5 percent of the closing market price per share as of August 1, 2018, the date the VLT Plan became effective.
The following tables set forth the estimated amounts of the current distribution and the cumulative distributions paid this fiscal year to date from the sources indicated. Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the terms of the Plan. All amounts are expressed per common share. The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution is estimated to be a return of capital. A return of capital may occur, for example, when some or all of the money that shareholders invested in a Fund is paid back. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” The amounts and sources of distributions reported in this 19(a) Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend on the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send shareholders a Form 1099-DIV for the calendar year that will tell shareholders how to report these distributions for federal income tax purposes.

Fund |  | March 2023 |
| Net Investment Income |  | Net Realized Capital Gains |  |  | Estimated Return of Principal (or Other Capital Source) |  |  | Total Current Distribution (common share) |
| Per Share Amount |  |  | % of Current Distribution |  | Per Share Amount |  |  | % of Current Distribution |  |  | Per Share Amount |  |  | % of Current Distribution |
Invesco High Income Trust II |  | $ | 0.0515 |  |  | 53.42% |  | $ | 0.0000 |  |  |  | 0.0000 | % |  | $ | 0.0449 |  |  |  | 46.58 | % |  | $ | 0.0964 |

Fund |  | CUMULATIVE FISCAL YEAR-TO-DATE (YTD) February 28, 2023* |
| Net Investment Income |  | Net Realized Capital Gains |  |  | Return of Principal (or Other Capital Source) |  |  | Total FYTD Distribution (common share) |
| Per Share Amount |  |  | % of 2023 Distribution |  | Per Share Amount |  |  | % of 2023 Distribution |  |  | Per Share Amount |  |  | % of 2023 Distribution |
Invesco High Income Trust II |  | $ | 0.6406 |  |  | 55.38% |  | $ | 0.0000 |  |  |  | 0.0000 | % |  | $ | 0.5162 |  |  |  | 44.62 | % |  | $ | 1.1568 |

* Form 1099-DIV for the calendar year will report distributions for federal income tax purposes. The final determination of the source and tax characteristics of all distributions in 2023 will be made after the end of the year.
The monthly distributions are based on estimates and terms of the Fund’s Plan. Monthly distribution amounts may vary from these estimates based on a multitude of factors. Changes in portfolio and market conditions may cause deviations from estimates. These estimates should not be taken as indication of a Fund’s earnings and performance. The actual amounts and its sources may be subject to additional adjustments and will be reported after year end.
The Fund’s Performance and Distribution Rate Information disclosed in the table below is based on the Fund’s net asset value per share (NAV). Shareholders should take note of the relationship between the Fiscal Year-to-date Cumulative Total Return with the Fund’s Cumulative Distribution Rate and the Average Annual Total Return with the Fund’s Current Annualized Distribution Rate. The Fund’s NAV is calculated as the total market value of all the securities and other assets held by the Fund minus the total liabilities, divided by the total number of shares outstanding. NAV performance may be indicative of a Fund’s investment performance. The value of a shareholder’s investment in the Fund is determined by the Fund’s market price, which is based on the supply and demand for the Fund’s shares in the open market.
31 Invesco High Income Trust II

Fund Performance and Distribution Rate Information:

|  | Fiscal Year‑to‑date March 1, 2022 to February 28, 2023 |  | Five‑year period ending February 28, 2023
Fund |  | FYTD Cumulative Total Return1 |  | Cumulative Distribution Rate2 |  | Current Annualized Distribution Rate3 |  | Average Annual Total Return4
Invesco High Income Trust II |  | -7.50% |  | 9.99% |  | 9.99% |  | 2.40%

1 | Fiscal year-to-date Cumulative Total Return assumes reinvestment of distributions. This is calculated as the percentage change in the Fund’s NAV over the fiscal year-to-date time period including distributions paid and reinvested.

2 | Cumulative Distribution Rate for the Fund’s current fiscal period (March 1, 2022 to February 28, 2023) is calculated as the dollar value of distributions in the fiscal year-to-date period as a percentage of the Fund’s NAV as of February 28, 2023.

3 | The Current Annualized Distribution Rate is the current fiscal period’s distribution rate annualized as a percentage of the Fund’s NAV as of February 28, 2023.

4 | Average Annual Total Return represents the compound average of the annual NAV Total Returns of the Fund for the five-year period ending February 28, 2023. Annual NAV Total Return is the percentage change in the Fund’s NAV over a year including distributions paid and reinvested.

The Plan will be subject to periodic review by the Fund’s Board, and a Fund’s Board may terminate or amend the terms of its Plan at any time without prior notice to the Fund’s shareholders. The amendment or termination of a Fund’s Plan could have an adverse effect on the market price of such Fund’s common shares.
The amount of dividends paid by the Fund may vary from time to time. Past amounts of dividends are no guarantee of future payment amounts. Investing involves risk and it is possible to lose money on any investment in the Funds.
For additional information, shareholders of the closed end fund may call Invesco at 800-341-2929.
About Invesco Ltd.
Invesco Ltd. is a global independent investment management firm dedicated to delivering an investment experience that helps people get more out of life. Our distinctive investment teams deliver a comprehensive range of active, passive and alternative investment capabilities. With offices in more than 20 countries, Invesco managed $1.4 trillion in assets on behalf of clients worldwide as of December 31, 2022.
For more information, visit www.invesco.com.
Invesco Distributors, Inc. is the US distributor for Invesco Ltd. It is an indirect, wholly owned, subsidiary of Invesco Ltd.
Note: There is no assurance that a closed-end fund will achieve its investment objective. Shares are bought on the secondary market and may trade at a discount or premium to NAV. Regular brokerage commissions apply.
NOT A DEPOSIT | NOT FDIC INSURED | NOT GUARANTEED BY THE BANK | MAY LOSE VALUE | NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
–Invesco–
32 Invesco High Income Trust II

Tax Information
Form 1099-DIV, Form 1042-S and other year–end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.
The Trust designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended February 28, 2023:

| Federal and State Income Tax |  |  |  |
| Qualified Dividend Income* |  |  | 0.00 | %
| Corporate Dividends Received Deduction* |  |  | 0.00 | %
| U.S. Treasury Obligations* |  |  | 0.00 | %
| Qualified Business Income* |  |  | 0.00 | %
| Business Interest Income* |  |  | 94.80 | %

| * | The above percentages are based on ordinary income dividends paid to shareholders during the Trust’s fiscal year.

| Non-Resident Alien Shareholders |  |  |  |
| Qualified Interest Income** |  |  | 78.04 | %

**The above percentage is based on income dividends paid to shareholders during the Trust’s fiscal year.
33 Invesco High Income Trust II

Additional Information
Investment Objective, Policies and Principal Risks of the Trust
Recent Changes
During the Trust’s most recent fiscal year, there were no material changes in the Trust’s investment objectives or policies that have not been approved by shareholders or in the principal risk factors associated with investment in the Trust, except that disclosure was updated to clarify that the Trust may also invest in Real Estate Investment Trusts (“REITS”). This information may not reflect all of the changes that have occurred since you purchased the Trust.
Investment Objective
The investment objective of Invesco High Income Trust II (the “Trust”) is to provide to its common shareholders high current income, while seeking to preserve shareholders’ capital, through investment in a professionally managed, diversified portfolio of high-income producing fixed-income securities. The investment objective is fundamental and may not be changed without approval of a majority of the Trust’s outstanding voting securities, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”).
Investment Policies of the Trust
The Trust will invest primarily in high income producing fixed-income securities rated in the medium and lower categories by established rating agencies, or unrated securities determined by Invesco Advisers, Inc. (the “Adviser”) to be of comparable quality. Medium and lower grade securities are those rated BB or lower by S&P Global Ratings (“S&P”) or Ba or lower by Moody’s Investors Service, Inc. (“Moody’s”) or an equivalent rating by another nationally recognized statistical rating organization (“NRSRO”), or securities that are not rated but are believed by the Adviser to be of comparable quality.1 Lower-grade securities are commonly referred to as “junk bonds.” No limitation exists as to the rating category in which the Trust may invest. If two or more NRSROs have assigned different ratings to a security, the Adviser uses the lowest rating assigned.
High income producing fixed-income securities are generally corporate fixed-income securities rated between BB/Ba and C/C by S&P and Moody’s and are frequently issued by corporations in the growth stage of their development. Securities which are rated BB, B, CCC, CC and C are regarded by S&P, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation.
In normal market conditions, at least 65% of the Trust’s assets will be invested in fixed-income securities. The fixed-income securities in which the Trust will invest will consist primarily of debt securities. “Fixed-income securities” which may be acquired by the Trust include all types of debt obligations having varying terms with respect to security or credit support, subordination, purchase price, interest payments and maturity. Such obligations may include, for example, bonds, debentures, notes and obligations issued or guaranteed by the United States government or any of its political subdivisions, agencies or instrumentalities. Most debt securities in which the Trust will invest will bear interest at fixed rates.
However, the Trust reserves the right to invest without limitation in fixed-income securities that have variable rates of interest or involve equity features, such as contingent interest or participation based on revenues, sales or profits. Fixed-income securities which may be acquired also include preferred stocks that have cumulative or non-cumulative dividend rights. Fixed-income securities also include convertible securities and zero coupon.
The Trust may invest up to 35% of its total assets in securities rated higher than BB by S&P or higher than Ba by Moody’s or unrated securities of comparable quality and may invest a higher percentage, up to 100% of its total assets, in such higher rated securities (i) when the difference in yields between quality classifications is relatively narrow, (ii) when, consistent with seeking to maintain the dollar-weighted average maturity of the Trust’s portfolio of up to 12 years, high income producing fixed-income securities of appropriate maturities are unavailable or are available only at prices that the Adviser deems are unfavorable or (iii) when the Adviser determines that market conditions warrant a temporary, defensive policy.
The Trust will seek to preserve capital through portfolio diversification and by limiting investments to fixed-income securities which the Adviser believes entail reasonable credit risk. The Trust has a non-fundamental investment policy of maintaining a dollar-weighted average portfolio maturity of up to 12 years, with no limitation on the maturity of individual securities that it may acquire. Subject to the Trust’s policy of maintaining a dollar-weighted average portfolio maturity of up to 12 years, the Adviser may seek to adjust the portfolio’s maturity based on its assessment of current and projected market conditions and all factors that the Adviser deems relevant. Any decisions as to the targeted maturity of the Trust’s portfolio or any particular category of investments or of the Trust’s portfolio generally will be made based on all pertinent market factors at any given time.
Convertible Securities. Fixed-income securities in which the Trust may invest include convertible securities, which are securities that generally pay interest and may be converted into common stock. In selecting convertible securities for the Trust, the following factors, among others, will be considered by the Adviser: (1) the Adviser’s own evaluations of the creditworthiness of the issuers of the securities; (2) the interest or dividend income generated by the securities; (3) the potential for capital appreciation of the securities and the underlying common stock; (4) the prices of the securities relative to the underlying common stocks; (5) the prices of the securities relative to other comparable securities; (6) whether the securities are entitled to the benefits of sinking funds or other protective conditions; (7) diversification of the Trust’s portfolio as to issuers and industries; and (8) whether the securities are rated by Moody’s and/or S&P and, if so, the ratings assigned.
Zero Coupon Securities. Fixed-income securities also include zero coupon securities issued by corporations and other private entities. The Trust is permitted to invest up to 10% of its total assets in
zero coupon securities. Zero coupon securities are debt securities that do not entitle the holder to any periodic payment of interest prior to maturity or a specified date when the securities begin paying current interest.
Loans. Consistent with the Trust’s strategy of investing in income securities, the Trust may invest up to 20% of its total assets in fixed and floating rate loans. Loans are typically arranged through private negotiations between the borrower and one or more lenders. Loans generally have a more senior claim in the borrower’s capital structure relative to corporate bonds or other subordinated debt. The loans in which the Trust invests are generally in the form of loan assignments and participations of all or a portion of a loan from another lender. In the case of an assignment, the Trust acquires direct rights against the borrower on the loan, however, the Trust’s rights and obligations as the purchaser of an assignment may differ from, and be more limited than, those held by the assigning lender. In the case of a participation, the Trust typically has the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the participation and only upon receipt by the lender of the payments from the borrower. In the event of insolvency of the lender selling the participation, the Trust may be treated as a general creditor of the lender and may not benefit from any setoff between the lender and the borrower.
Rule 144A Securities and Other Exempt Securities; Restricted and Illiquid Securities. The Trust may invest up to 20% of its total assets in fixed-income securities that are not readily marketable, including securities restricted as to resale such as those contained in Rule 144A promulgated under the Securities Act of 1933, as amended. No security that is not readily marketable will be acquired unless the Adviser believes such security to be of comparable quality to publicly-traded securities in which the Trust may invest. Certain fixed-income securities are somewhat liquid and may become more liquid as secondary markets for these securities continue to develop. These securities will be included in, or excluded from, the 20% limitation on a case-by-case basis by the Adviser depending on the perceived liquidity of the security and market involved.
Non-Dollar Denominated Securities. The Trust may invest a portion or all of its total assets in securities issued by foreign governments or foreign corporations; provided, however, that the Trust may not invest more than 30% of its total assets in non-U.S. dollar denominated securities. The same quality levels currently permitted by the Trust for all investments, will apply to foreign investments. The Trust may invest in securities of issuers determined by the Adviser to be in developing or emerging market countries.
The foregoing percentage and rating limitations apply at the time of acquisition of a security based on the last previous determination of the Trust’s net asset value. Any subsequent change in any rating by a rating service or change in percentages resulting from market fluctuations or other changes in the Trust’s total assets will not require elimination of any security from the Trust’s portfolio.
34 Invesco High Income Trust II

The Trust may purchase and sell foreign currency on a spot (i.e., cash) basis in connection with the settlement of transactions in securities traded in such foreign currency.
Derivatives. The Trust can invest in derivative instruments, including swap contracts (including credit default swaps, total return swaps, interest rate swaps and volatility swaps), options (including interest rate options, credit default swap options and swaptions), futures contracts (including interest rate futures) and forward foreign currency contracts. The Trust can use swap contracts, including interest rate swaps, to hedge or adjust its exposure to interest rates, and credit default swaps to create long or short exposure to corporate or sovereign debt securities. The Trust can further use total return swaps to gain exposure to a reference asset and volatility swaps to adjust the volatility profile of the Trust. The Trust can use options, including credit default swap options, to gain the right to enter into a credit default swap at a specified future date and swaptions (options on swaps) to manage interest rate risk. The Trust can also use options on bond or interest rate futures contracts to increase or reduce its exposure to interest rate changes. The Trust can engage in forward foreign currency contracts, currency futures and currency options to mitigate the risk of foreign currency exposure.
Real Estate Investment Trusts (“REITS”). The Fund may also invest in real estate investment trusts (REITs).
Borrowing. The Trust currently utilizes leverage in the form of borrowings in an effort to maximize returns. The amount of borrowings outstanding from time to time may vary, depending on the Adviser’s analysis of market conditions and interest rate movements.
Money Market Funds. To the extent permitted by applicable law and the Trust’s investment objectives, policies, and restrictions, the Trust may invest all or some of its short-term cash investments in money market funds, including money market fund advised or managed by the Adviser or its affiliates. When the Trust purchases shares of another investment company, including an affiliated money market fund, the Trust will indirectly bear its proportionate share of the advisory fees and other operating expenses of such investment company and will be subject to the risks associated with the portfolio investments of the underlying investment company.
Temporary Defensive Investments. The Trust may invest up to 100% of its assets in investments that may be inconsistent with the Trust’s principal investment strategies for temporary defensive purposes in anticipation of or in response to adverse market, economic, political or other conditions, or other atypical circumstances. As a result, the Trust may not achieve its investment objective.
Investment Process. In selecting securities for the Trust’s portfolio, the Adviser focuses on securities that it believes have favorable prospects for high current income and the possibility of growth of capital. The Adviser conducts a bottom-up fundamental analysis of an issuer before its securities are purchased by the Trust. The fundamental analysis involves an evaluation by a team of credit analysts of an issuer’s financial statements in order to assess its financial condition. The credit analysts also assess the ability of an issuer to reduce its leverage (i.e., the amount of borrowed debt). The credit research process utilized by the Trust to implement its investment strategy in pursuit of its investment
objective considers factors that may include, but are not limited to, an issuer’s operations, capital structure and environmental, social and governance (“ESG”) considerations. Credit quality analysis for certain issuers therefore may consider whether any ESG factors pose a material financial risk or opportunity to an issuer. The Adviser may determine that ESG considerations are not material to certain issuers or types of investments held by the Trust and not all issuers or Trust investments may undergo a credit quality analysis that considers ESG factors. The bottom-up fundamental analysis is supplemented by an ongoing review of the securities’ relative value compared with other similar rated bonds, and a top-down analysis of sector and macro-economic trends, such as changes in interest rates. The portfolio managers attempt to control the Trust’s risk by limiting the portfolio’s assets that are invested in any one security, and by diversifying the portfolio’s holdings over a number of different industries.
Although the Trust is actively managed, it is reviewed regularly against its style-specific benchmark index (the Bloomberg U.S. Corporate High Yield 2% Issuer Cap Index) and its peer group index (the Lipper High Current Yield Bond Funds Index) to assess the portfolio’s relative risk and its positioning.
Decisions to purchase or sell securities are determined by the relative value considerations of the portfolio managers that factor in economic and credit-related fundamentals, market supply and demand, market dislocations and situation-specific opportunities. The purchase or sale of securities may be related to a decision to alter the Trust’s macro risk exposure (such as duration, yield curve positioning and sector exposure), a need to limit or reduce the Trust’s exposure to a particular security or issuer, degradation of an issuer’s credit quality, or general liquidity needs of the Trust.
Principal Risks of Investing in the Trust
As with any fund investment, loss of money is a risk of investing. The risks associated with an investment in the Trust can increase during times of significant market volatility. The principal risks of investing in the Trust are:
Market Risk. The market values of the Trust’s investments, and therefore the value of the Trust’s shares, will go up and down, sometimes rapidly or unpredictably. Market risk may affect a single issuer, industry or section of the economy, or it may affect the market as a whole. The value of the Trust’s investments may go up or down due to general market conditions that are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, or adverse investor sentiment generally. The value of the Trust’s investments may also go up or down due to factors that affect an individual issuer or a particular industry or sector, such as changes in production costs and competitive conditions within an industry. In addition, natural or environmental disasters, widespread disease or other public health issues, war, military conflict, acts of terrorism, economic crisis or other events may have a significant impact on the value of the Trust’s investments, as well as the financial markets and global economy generally. Such circumstances may also impact the ability of the Adviser to effectively implement the Trust’s investment strategy. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets
perform well, there can be no assurance that specific investments held by the Trust will rise in value.
COVID-19. The “COVID-19” strain of coronavirus has resulted in instances of market closures and dislocations, extreme volatility, liquidity constraints and increased trading costs. Efforts to contain its spread have resulted in travel restrictions, disruptions of healthcare systems, business operations (including business closures) and supply chains, layoffs, lower consumer demand and employee availability, and defaults and credit downgrades, among other significant economic impacts that have disrupted global economic activity across many industries. Such economic impacts may exacerbate other pre-existing political, social and economic risks locally or globally and cause general concern and uncertainty. The full economic impact and ongoing effects of COVID-19 (or other future epidemics or pandemics) at the macro-level and on individual businesses are unpredictable and may result in significant and prolonged effects on the Trust’s performance.
Market Disruption Risks Related to Russia-Ukraine Conflict. Following Russia’s invasion of Ukraine in late February 2022, various countries, including the United States, as well as North Atlantic Treaty Organization (NATO) member countries and the European Union, issued broad-ranging economic sanctions against Russia. The war in Ukraine (and the potential for further sanctions in response to Russia’s continued military activity) may escalate. These and other corresponding events, have had, and could continue to have, severe negative effects on regional and global economic and financial markets, including increased volatility, reduced liquidity, and overall uncertainty. The negative impacts may be particularly acute in certain sectors including, but not limited to, energy and financials. Russia may take additional countermeasures or retaliatory actions (including cyberattacks), which could exacerbate negative consequences on global financial markets. The duration of the conflict and corresponding sanctions and related events cannot be predicted. The foregoing may result in a negative impact on Trust performance and the value of an investment in the Trust, even beyond any direct investment exposure the Trust may have to Russian issuers or the adjoining geographic regions.
High Yield Debt Securities (Junk Bond) Risk. The Trust’s investments in high yield debt securities (commonly referred to as “junk bonds”) and other lower-rated securities will subject the Trust to substantial risk of loss. These securities are considered to be speculative with respect to the issuer’s ability to pay interest and principal when due and are more susceptible to default or decline in market value due to adverse economic, regulatory, political or company developments than higher rated or investment grade securities. Prices of high yield debt securities tend to be very volatile. These securities are less liquid than investment grade debt securities and may be difficult to sell at a desirable time or price, particularly in times of negative sentiment toward high yield securities.
Debt Securities Risk. The prices of debt securities held by the Trust will be affected by changes in interest rates, the creditworthiness of the issuer and other factors. An increase in prevailing interest rates typically causes the value of existing debt securities to fall and often has a greater impact on longer-duration debt securities and higher quality debt securities. Falling interest rates will cause the
35 Invesco High Income Trust II

Trust to reinvest the proceeds of debt securities that have been repaid by the issuer at lower interest rates. Falling interest rates may also reduce the Trust’s distributable income because interest payments on floating rate debt instruments held by the Trust will decline. The Trust could lose money on investments in debt securities if the issuer or borrower fails to meet its obligations to make interest payments and/or to repay principal in a timely manner. If an issuer seeks to restructure the terms of its borrowings or the Trust is required to seek recovery upon a default in the payment of interest or the repayment of principal, the Trust may incur additional expenses. Changes in an issuer’s financial strength, the market’s perception of such strength or in the credit rating of the issuer or the security may affect the value of debt securities. The Adviser’s credit analysis may fail to anticipate such changes, which could result in buying a debt security at an inopportune time or failing to sell a debt security in advance of a price decline or other credit event.
Credit Risk. The issuers of instruments in which the Trust invests may be unable to meet interest and/or principal payments. This risk is increased to the extent the Trust invests in junk bonds, which may cause the Trust to incur higher expenses to protect its interests. The credit risks and market prices of lower-grade securities generally are more sensitive to negative issuer developments, such as reduced revenues or increased expenditures, or adverse economic conditions, such as a recession, than are higher-grade securities. An issuer’s securities may decrease in value if its financial strength weakens, which may reduce its credit rating and possibly its ability to meet its contractual obligations. In the event that an issuer of securities held by the Trust experiences difficulties in the timely payment of principal and interest and such issuer seeks to restructure the terms of its borrowings, the Trust may incur additional expenses and may determine to invest additional assets with respect to such issuer or the project or projects to which the Trust’s securities relate. Further, the Trust may incur additional expenses to the extent that it is required to seek recovery upon a default in the payment of interest or the repayment of principal on its portfolio holdings and the Trust may be unable to obtain full recovery on such amounts.
Changing Fixed Income Market Conditions Risk. Increases in the federal funds and equivalent foreign rates or other changes to monetary policy or regulatory actions may expose fixed income markets to heightened volatility and reduced liquidity for certain fixed income investments, particularly those with longer maturities. It is difficult to predict the impact of interest rate changes on various markets. In addition, decreases in fixed income dealer market-making capacity may persist in the future, potentially leading to heightened volatility and reduced liquidity in the fixed income markets. As a result, the value of the Fund’s investments and share price may decline. Changes in central bank policies could also result in higher than normal redemptions by shareholders, which could potentially increase the Fund’s portfolio turnover rate and transaction costs and potentially lower the Fund’s performance returns.
Interest Rate Risk. Interest rate risk is the risk that rising interest rates, or an expectation of rising interest rates in the near future, will cause the values of the Trust’s investments to decline. The values of debt securities usually change when prevailing interest rates change. When interest rates rise, the
values of outstanding debt securities generally fall, and those securities may sell at a discount from their face amount. When interest rates rise, the decrease in values of outstanding debt securities may not be offset by higher income from new investments. When interest rates fall, the values of already-issued debt securities generally rise. However, when interest rates fall, the Trust’s investments in new securities may be at lower yields and may reduce the Trust’s income. The values of longer-term debt securities usually change more than the values of shorter-term debt securities when interest rates change; thus, interest rate risk is usually greater for securities with longer maturities or durations. “Zero-coupon” or “stripped” securities may be particularly sensitive to interest rate changes.
Market Discount from Net Asset Value Risk. Shares of closed-end investment companies like the Trust frequently trade at prices lower than their net asset value. Because the market price of the Trust’s common shares is determined by factors such as relative market supply and demand, general market and economic circumstances, and other factors beyond the control of the Trust, the Trust cannot predict whether its shares of common stock will trade at, below or above net asset value. This characteristic is a risk separate and distinct from the risk that the Trust’s net asset value could decrease as a result of investment activities. Common shareholders bear a risk of loss to the extent that the price at which they sell their shares is lower than at the time of purchase.
Income Risk. The income you receive from the Trust is based primarily on prevailing interest rates, which can vary widely over the short and long term. If interest rates decrease, your income from the Trust may decrease as well.
Call Risk. If interest rates fall, it is possible that issuers of securities with high interest rates will prepay or call their securities before their maturity dates. In this event, the proceeds from the called securities would likely be reinvested by the Trust in securities bearing the new, lower interest rates, resulting in a possible decline in the Trust’s income and distributions to shareholders.
Convertible Securities Risk. The market value of a convertible security performs like that of a regular debt security; that is, if market interest rates rise, the value of a convertible security usually falls. In addition, convertible securities are subject to the risk that the issuer will not be able to pay interest or dividends when due, and their market value may change based on changes in the issuer’s credit rating or the market’s perception of the issuer’s creditworthiness. Convertible securities can be converted into or exchanged for a set amount of common stock of an issuer within a particular period of time at a specified price or according to a price formula. Convertible debt securities pay interest and convertible preferred stocks pay dividends until they mature or are converted, exchanged or redeemed. Some convertible debt securities may be considered “equity equivalents” because of the feature that makes them convertible into common stock. Since a convertible security derives a portion of its value from the common stock into which it may be converted, a convertible security is also subject to the same types of market and issuer risks as apply to the underlying common stock. In addition, certain convertible securities are subject to involuntary conversions and may undergo principal write-downs upon the occurrence of certain triggering events. These convertible securities are subject to an
increased risk of loss and are generally subordinate in rank to other debt obligations of the issuer. Convertible securities may be rated below investment grade, and therefore considered to have more speculative characteristics and greater susceptibility to default or decline in market value than investment grade securities.
Derivatives Risk. The value of a derivative instrument depends largely on (and is derived from) the value of an underlying security, currency, commodity, interest rate, index or other asset (each referred to as an underlying asset). In addition to risks relating to the underlying assets, the use of derivatives may include other, possibly greater, risks, including counterparty, leverage and liquidity risks. Counterparty risk is the risk that the counterparty to the derivative contract will default on its obligation to pay the Trust the amount owed or otherwise perform under the derivative contract. Derivatives create leverage risk because they do not require payment up front equal to the economic exposure created by holding a position in the derivative. As a result, an adverse change in the value of the underlying asset could result in the Trust sustaining a loss that is substantially greater than the amount invested in the derivative or the anticipated value of the underlying asset, which may make the Trust’s returns more volatile and increase the risk of loss. Derivative instruments may also be less liquid than more traditional investments and the Trust may be unable to sell or close out its derivative positions at a desirable time or price. This risk may be more acute under adverse market conditions, during which the Trust may be most in need of liquidating its derivative positions. Derivatives may also be harder to value, less tax efficient and subject to changing government regulation that could impact the Trust’s ability to use certain derivatives or their cost. Derivatives strategies may not always be successful. For example, derivatives used for hedging or to gain or limit exposure to a particular market segment may not provide the expected benefits, particularly during adverse market conditions.
Forward Foreign Currency Contracts Risk. Forward foreign currency contracts are used to lock in the U.S. dollar price of a security denominated in a foreign currency or protect against possible losses from changes in the relative value of the U.S. dollar against a foreign currency. They are subject to the risk that anticipated currency movements will not be accurately predicted or do not correspond accurately to changes in the value of the Trust’s holdings, which could result in losses and additional transaction costs. The use of forward contracts could reduce performance if there are unanticipated changes in currency prices. A contract to sell a foreign currency would limit any potential gain that might be realized if the value of the currency increases. A forward foreign currency contract may also result in losses in the event of a default or bankruptcy of the counterparty.
Liquidity Risk. The Trust may be unable to sell illiquid investments at the time or price it desires and, as a result, could lose its entire investment in such investments. An investment may be illiquid due to a lack of trading volume in the investment or if the investment is privately placed and not traded in any public market or is otherwise restricted from trading. Consequently, the Trust may have to accept a lower price to sell an investment or continue to hold it or keep the position open, sell other investments to raise cash or abandon an investment opportunity, any of which could have a negative effect on the Trust’s
36 Invesco High Income Trust II

performance. Liquid securities can become illiquid during periods of market stress.
Restricted Securities Risk. Limitations on the resale of restricted securities may have an adverse effect on their marketability, and may prevent the Trust from disposing of them promptly at reasonable prices. There can be no assurance that a trading market will exist at any time for any particular restricted security. Transaction costs may be higher for restricted securities. Also, restricted securities may be difficult to value because market quotations may not be readily available, and the securities may have significant volatility. In addition, the Trust may get only limited information about the issuer of a restricted security and therefore may be less able to predict a loss.
Rule 144A Securities and Other Exempt Securities Risk. The Trust may invest in Rule 144A securities and other types of exempt securities, which are not registered for sale pursuant to an exemption from registration under the Securities Act of 1933, as amended. These securities are also known as privately issued securities, and typically may be resold only to qualified institutional buyers, or in a privately negotiated transaction, or to a limited number of purchasers, or in limited quantities after they have been held for a specified period of time and other conditions are met for an exemption from registration. If there are an insufficient number of qualified institutional buyers interested in purchasing such securities at a particular time, the Trust may have difficulty selling such securities at a desirable time or price. As a result, the Trust’s investment in such securities may be subject to increased liquidity risk. In addition, the issuers of Rule 144A securities may require their qualified institutional buyers (such as the Trust) to keep certain offering information confidential, which could adversely affect the ability of the Trust to sell such securities.
Unrated Securities Risk. Because the Trust purchases securities that are not rated by any nationally recognized statistical rating organization, the Adviser may internally assign ratings to those securities, after assessing their credit quality and other factors, in categories similar to those of nationally recognized statistical rating organizations. There can be no assurance, nor is it intended, that the Adviser’s credit analysis process is consistent or comparable with the credit analysis process used by a nationally recognized statistical rating organization. Unrated securities are considered “investment-grade” or “below-investment-grade” if judged by the Adviser to be comparable to rated investment-grade or below-investment-grade securities. The Adviser’s rating does not constitute a guarantee of the credit quality. In addition, some unrated securities may not have an active trading market or may trade less actively than rated securities, which means that the Trust might have difficulty selling them promptly at an acceptable price. In evaluating the credit quality of a particular security, whether rated or unrated, the Adviser will normally take into consideration a number of factors such as, if applicable, the financial resources of the issuer, the underlying source of funds for debt service on a security, the issuer’s sensitivity to economic conditions and trends, any operating history of the facility financed by the obligation, the degree of community support for the financed facility, the capabilities of the issuer’s management, and regulatory factors affecting the issuer or the particular facility. A reduction in the rating of a security after the Trust buys it will not
require the Trust to dispose of the security. However, the Adviser will evaluate such downgraded securities to determine whether to keep them in the Trust’s portfolio.
Borrowing Risk. Borrowing money to buy securities exposes the Trust to leverage because the Trust seeks to achieve a return on a capital base larger than the assets that shareholders have contributed to the Trust. Borrowing will cause the Trust’s share price to be more volatile because leverage will exaggerate the effect of any increase or decrease in the value of the Trust’s portfolio securities. The Trust may also be required to liquidate positions when it may not be advantageous to do so in order to repay borrowed money when due. In addition, the Trust will incur interest expenses and other fees on borrowed money. There can be no assurance that the Trust’s borrowing strategy will enhance and not reduce the Trust’s returns.
Foreign Securities Risk. The value of the Trust’s foreign investments may be adversely affected by political and social instability in the home countries of the issuers of the investments, by changes in economic or taxation policies in those countries, or by the difficulty in enforcing obligations in those countries. Foreign investments also involve the risk of the possible seizure, nationalization or expropriation of the issuer or foreign deposits (in which the Trust could lose its entire investments in a certain market) and the possible adoption of foreign governmental restrictions such as exchange controls. Foreign companies generally may be subject to less stringent regulations than U.S. companies, including financial reporting requirements and auditing and accounting controls, and may therefore be more susceptible to fraud or corruption. Also, there may be less publicly available information about companies in certain foreign countries than about U.S. companies making it more difficult for the Adviser to evaluate those companies. The laws of certain countries may put limits on the Trust’s ability to recover its assets held at a foreign bank if the foreign bank, depository or issuer of a security, or any of their agents, goes bankrupt. Trading in many foreign securities may be less liquid and more volatile than U.S. securities due to the size of the market or other factors. Unless the Trust has hedged its foreign currency risk, foreign securities risk also involves the risk of negative foreign currency rate fluctuations, which may cause the value of securities denominated in such foreign currency (or other instruments through which the Trust has exposure to foreign currencies) to decline in value. Currency exchange rates may fluctuate significantly over short periods of time. Currency hedging strategies, if used, are not always successful. For instance, the use of currency forward contracts, if used by the Trust, could reduce performance if there are unanticipated changes in currency exchange rates.
Foreign Credit Exposure Risk. U.S. dollar-denominated securities carrying foreign credit exposure may be affected by unfavorable political, economic or governmental developments that could affect payments of principal and interest.
Emerging Markets Securities Risk. Emerging markets (also referred to as developing markets) are generally subject to greater market volatility, political, social and economic instability, uncertain trading markets and more governmental limitations on foreign investment than more developed markets. In addition, companies operating in emerging markets may be subject to lower trading volume and
greater price fluctuations than companies in more developed markets. Such countries’ economies may be more dependent on relatively few industries or investors that may be highly vulnerable to local and global changes. Companies in emerging market countries generally may be subject to less stringent regulatory, disclosure, financial reporting, accounting, auditing and recordkeeping standards than companies in more developed countries. As a result, information, including financial information, about such companies may be less available and reliable, which can impede the Trust’s ability to evaluate such companies. Securities law and the enforcement of systems of taxation in many emerging market countries may change quickly and unpredictably, and the ability to bring and enforce actions (including bankruptcy, confiscatory taxation, expropriation, nationalization of a company’s assets, restrictions on foreign ownership of local companies, restrictions on withdrawing assets from the country, protectionist measures and practices such as share blocking), or to obtain information needed to pursue or enforce such actions, may be limited. In addition, the ability of foreign entities to participate in privatization programs of certain developing or emerging market countries may be limited by local law. Investments in emerging market securities may be subject to additional transaction costs, delays in settlement procedures, unexpected market closures, and lack of timely information.
Risk of Investing in Loans. There are a number of risks associated with an investment in loans including credit risk, interest rate risk, liquidity risk and prepayment risk. Lack of an active trading market, restrictions on resale, irregular trading activity, wide bid/ask spreads and extended trade settlement periods may impair the Trust’s ability to sell loans within its desired time frame or at an acceptable price and its ability to accurately value existing and prospective investments. Extended trade settlement periods may result in cash not being immediately available to the Trust. As a result, the Trust may have to sell other investments or engage in borrowing transactions to raise cash to meet its obligations. The risk of holding bank loans is also directly tied to the risk of insolvency or bankruptcy of the borrower. If the borrower defaults on its obligation to pay, there is the possibility that the collateral securing a loan, if any, may be difficult to liquidate or be insufficient to cover the amount owed under the loan. The value of loans can be affected by and sensitive to changes in government regulation and to economic downturns in the United States and abroad. These risks could cause the Trust to lose income or principal on a particular investment, which in turn could affect the Trust’s returns.
Environmental, Social and Governance (ESG) Considerations Risk. The ESG considerations that may be assessed as part of a credit research process to implement the Trust’s investment strategy in pursuit of its investment objective may vary across types of eligible investments and issuers, and not every ESG factor may be identified or evaluated for every investment, and not every investment or issuer may be evaluated for ESG considerations. The incorporation of ESG factors as part of a credit analysis may affect the Trust’s exposure to certain issuers or industries and may not work as intended. Information used to evaluate such factors may not be readily available, complete or accurate, and may vary across providers and issuers. There is no guarantee
37 Invesco High Income Trust II

that the incorporation of ESG considerations will be additive to the Trust’s performance
Preferred Securities Risk. Preferred securities are subject to issuer-specific and market risks applicable generally to equity securities. Preferred securities also may be subordinated to bonds or other debt instruments in an issuer’s capital structure, subjecting them to a greater risk of non-payment than these more senior securities. For this reason, the value of preferred securities will usually react more strongly than bonds and other debt securities to actual or perceived changes in the company’s financial condition or prospects. Preferred securities may be less liquid than many other securities, such as common stocks, and generally offer no voting rights with respect to the issuer.
REIT Risk/Real Estate Risk. Investments in real estate related instruments may be adversely affected by economic, legal, cultural, environmental or technological factors that affect property values, rents or occupancies. Shares of real estate related companies, which tend to be small- and mid-cap companies, may be more volatile and less liquid than larger companies. If a real estate related company defaults on certain types of debt obligations held by the Trust the Trust may acquire real estate directly, which involves additional risks such as environmental liabilities; difficulty in valuing and selling the real estate; and economic or regulatory changes.
Zero Coupon or Pay-In-Kind Securities Risk. Zero coupon and pay-in-kind securities may be subject to greater fluctuation in value and less liquidity in the event of adverse market conditions than comparably rated securities paying cash interest at regular interest payment periods. Prices on non-cash-paying instruments may be more sensitive to changes in the issuer’s financial condition, fluctuation in interest rates and market demand/supply imbalances than cash-paying securities with similar credit ratings, and thus may be more speculative. Investors may purchase zero coupon and pay-in-kind securities at a price below the amount payable at maturity. Because such securities do not entitle the holder to any periodic payments of interest prior to maturity, this prevents any reinvestment of interest payments at prevailing interest rates if prevailing interest rates rise. The higher yields and interest rates on pay-in-kind securities reflect the payment deferral and increased credit risk associated with such instruments and that such investments may represent a higher credit risk than coupon loans. Pay-in-kind securities may have a potential variability in valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of any associated collateral. Special tax considerations are associated with investing in certain lower-grade securities, such as zero coupon or pay-in-kind securities.
U.S. Government Obligations Risk. Government agencies and authorities receive varying levels of support and may not be backed by the full faith and credit of the U.S. Government, which could affect the Trust’s ability to recover should they default. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.
Financial Markets Regulatory Risk. Policy changes by the U.S. government or its regulatory agencies and political events within the U.S. and abroad, changes to the monetary policy by the Federal Reserve or other regulatory actions, the U.S.
government’s inability at times to agree on a long-term budget and deficit reduction plan or other legislation aimed at addressing financial or economic conditions, the threat of a federal government shutdown, and threats not to increase or suspend the federal government’s debt limit, may affect investor and consumer confidence, increase volatility in the financial markets, perhaps suddenly and to a significant degree, result in higher interest rates, and even raise concerns about the U.S. government’s credit rating and ability service its debt. Such changes and events may adversely impact the Trust’s operations, universe of potential investment options, and return potential.
Money Market Fund Risk. Although money market funds generally seek to preserve the value of an investment at $1.00 per share, the Trust may lose money by investing in money market funds. A money market fund’s sponsor has no legal obligation to provide financial support to the money market fund. The credit quality of a money market fund’s holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the money market fund’s share price. A money market fund’s share price can also be negatively affected during periods of high redemption pressures, illiquid markets and/or significant market volatility.
Distribution Risk. The Board has adopted a Managed Distribution Plan (the “Plan”) for the Trust whereby the Trust seeks to pay a stated fixed monthly distribution amount to common shareholders. The Plan is intended to provide common shareholders with a consistent, but not guaranteed, periodic cash payment from the Trust, regardless of when or whether income is earned or capital gains are realized. If sufficient investment income is not available for a monthly distribution, the Trust will distribute long-term capital gains and/or return of capital in order to maintain its managed distribution level under the Plan. The Plan is subject to periodic review by the Board, and the Board may amend the terms of the Plan or terminate the Plan at any time without prior notice to the Trust’s shareholders. The amendment or termination of the Plan could have an adverse effect on the market price of the Trust’s common shares. Please see “Managed Distribution Plan Disclosure” in this report for additional information regarding the Plan.
Management Risk. The Trust is actively managed and depends heavily on the Adviser’s judgment about markets, interest rates or the attractiveness, relative values, liquidity, or potential appreciation of particular investments made for the Trust’s portfolio. The Trust could experience losses if these judgments prove to be incorrect. There can be no guarantee that the Adviser’s investment techniques or investment decisions will produce the desired results. Additionally, legislative, regulatory, or tax developments may affect the investments or investment strategies available to the Adviser in connection with managing the Trust, which may also adversely affect the ability of the Trust to achieve its investment objective.

1 | 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. For more information on rating methodology, please visit www.spglobal.com and select “Understanding Credit Ratings” under About Ratings on the homepage; www.fitchratings.com and select “Understanding Credit Ratings” from the drop-down menu on the homepage; and www.moodys.com and select “Methodology,” then “Rating Methodologies” under Research Type on the left-hand side.

38 Invesco High Income Trust II

Trustees and Officers
The address of each trustee and officer is 1331 Spring Street NW, Suite 2500, Atlanta, Georgia 30309. Generally, each trustee serves for a three year term or until his or her successor has been duly elected and qualified, and each officer serves for a one year term or until his or her successor has been duly elected and qualified. Column two below includes length of time served with predecessor entities, if any.

Name, Year of Birth and Position(s) Held with the Trust |  | Trustee and/or Officer Since |  | Principal Occupation(s) During Past 5 Years |  | Number of Funds in Fund Complex Overseen by Trustee |  | Other Directorship(s) Held by Trustee During Past 5 Years
Interested Trustee |  |  |  |  |  |  |  |
Martin L. Flanagan1 - 1960 Trustee and Vice Chair |  | 2014 |  | Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Trustee and Vice Chair, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Chairman and Chief Executive Officer, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, Invesco Holding Company (US), Inc. (formerly IVZ Inc.) (holding company), Invesco Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization) |  | 175 |  | None

1 | Mr. Flanagan is considered an interested person (within the meaning of Section 2(a)(19) of the 1940 Act) of the Trust because he is an officer of the Adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the Adviser.

T-1 Invesco High Income Trust II

Trustees and Officers–(continued)

Name, Year of Birth and Position(s) Held with the Trust |  | Trustee and/or Officer Since |  | Principal Occupation(s) During Past 5 Years |  | Number of Funds in Fund Complex Overseen by Trustee |  | Other Directorship(s) Held by Trustee During Past 5 Years
Independent Trustees |  |  |  |  |  |  |  |
Beth Ann Brown - 1968 Trustee (2019) and Chair (August 2022) |  | 2019 |  | Independent Consultant Formerly: Head of Intermediary Distribution, Managing Director, Strategic Relations, Managing Director, Head of National Accounts, Senior Vice President, National Account Manager and Senior Vice President, Key Account Manager, Columbia Management Investment Advisers LLC; Vice President, Key Account Manager, Liberty Funds Distributor, Inc.; and Trustee of certain Oppenheimer Funds |  | 175 |  | Director, Board of Directors of Caron Engineering Inc.; Advisor, Board of Advisors of Caron Engineering Inc.; President and Director, Acton Shapleigh Youth Conservation Corps (non-profit) Formerly: President and Director Director of Grahamtastic Connection (non-profit)
Cynthia Hostetler - 1962 Trustee |  | 2017 |  | Non-Executive Director and Trustee of a number of public and private business corporations Formerly: Director, Aberdeen Investment Funds (4 portfolios); Director, Artio Global Investment LLC (mutual fund complex); Director, Edgen Group, Inc. (specialized energy and infrastructure products distributor); Director, Genesee & Wyoming, Inc. (railroads); Head of Investment Funds and Private Equity, Overseas Private Investment Corporation; President, First Manhattan Bancorporation, Inc.; and Attorney, Simpson Thacher & Bartlett LLP |  | 175 |  | Resideo Technologies, Inc. (smart home technology); Vulcan Materials Company (construction materials company); Trilinc Global Impact Fund; Textainer Group Holdings, (shipping container leasing company); Investment Company Institute (professional organization); and Independent Directors Council (professional organization)
Eli Jones - 1961 Trustee |  | 2016 |  | Professor and Dean Emeritus, Mays Business School - Texas A&M University Formerly: Dean of Mays Business School-Texas A&M University; Professor and Dean, Walton College of Business, University of Arkansas and E.J. Ourso College of Business, Louisiana State University; and Director, Arvest Bank |  | 175 |  | Insperity, Inc. (formerly known as Administaff) (human resources provider); Board Member of the regional board, First Financial Bank Texas; and Boad Member, First Financial Bankshares, Inc. Texas (FFIN)
Elizabeth Krentzman - 1959 Trustee |  | 2019 |  | Formerly: Principal and Chief Regulatory Advisor for Asset Management Services and U.S. Mutual Fund Leader of Deloitte & Touche LLP; General Counsel of the Investment Company Institute (trade association); National Director of the Investment Management Regulatory Consulting Practice, Principal, Director and Senior Manager of Deloitte & Touche LLP; Assistant Director of the Division of Investment Management - Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission and various positions with the Division of Investment Management – Office of Regulatory Policy of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP; and Trustee of certain Oppenheimer Funds |  | 175 |  | Formerly: Member of the Cartica Funds Board of Directors (private investment fund); Trustee of the University of Florida National Board Foundation; and Member of the University of Florida Law Center Association, Inc. Board of Trustees, Audit Committee and Membership Committee
Anthony J. LaCava, Jr. - 1956 Trustee |  | 2019 |  | Formerly: Director and Member of the Audit Committee, Blue Hills Bank (publicly traded financial institution) and Managing Partner, KPMG LLP |  | 175 |  | Blue Hills Bank; Member and Chairman, Bentley University, Business School Advisory Council; and Nominating Committee, KPMG LLP
Prema Mathai-Davis - 1950 Trustee |  | 2014 |  | Retired Formerly: Co-Founder & Partner of Quantalytics Research, LLC, (a FinTech Investment Research Platform for the Self-Directed Investor); Trustee of YWCA Retirement Fund; CEO of YWCA of the USA; Board member of the NY Metropolitan Transportation Authority; Commissioner of the NYC Department of Aging; and Board member of Johns Hopkins Bioethics Institute |  | 175 |  | Member of Board of Positive Planet US (non-profit) and HealthCare Chaplaincy Network (non-profit)

T-2 Invesco High Income Trust II

Trustees and Officers–(continued)

Name, Year of Birth and Position(s) Held with the Trust |  | Trustee and/or Officer Since |  | Principal Occupation(s) During Past 5 Years |  | Number of Funds in Fund Complex Overseen by Trustee |  | Other Directorship(s) Held by Trustee During Past 5 Years
Independent Trustees–(continued) |  |  |  |  |  |
Joel W. Motley - 1952 Trustee |  | 2019 |  | Director of Office of Finance, Federal Home Loan Bank System; Managing Director of Carmona Motley Inc. (privately held financial advisor); Member of the Council on Foreign Relations and its Finance and Budget Committee; Chairman Emeritus of Board of Human Rights Watch and Member of its Investment Committee; and Member of Investment Committee Board of Historic Hudson Valley (non-profit cultural organization); Member of the Board, Blue Ocean Acquisition Corp.; and Member of the Vestry and the Investment Committee of Trinity Church Wall Street. Formerly: Managing Director of Public Capital Advisors, LLC (privately held financial advisor); Managing Director of Carmona Motley Hoffman, Inc. (privately held financial advisor); Trustee of certain Oppenheimer Funds; and Director of Columbia Equity Financial Corp. (privately held financial advisor) |  | 175 |  | Member of Board of Trust for Mutual Understanding (non‑profit promoting the arts and environment); Member of Board of Greenwall Foundation (bioethics research foundation) and its Investment Committee; Member of Board of Friends of the LRC (non- profit legal advocacy); and Board Member and Investment Committee Member of Pulitzer Center for Crisis Reporting (non-profit journalism)
Teresa M. Ressel - 1962 Trustee |  | 2017 |  | Non-executive director and trustee of a number of public and private business corporations Formerly: Chief Executive Officer, UBS Securities LLC (investment banking); Chief Operating Officer, UBS AG Americas (investment banking); Sr. Management Team Olayan America, The Olayan Group (international investor/commercial/industrial); and Assistant Secretary for Management & Budget and Designated Chief Financial Officer, U.S. Department of Treasury |  | 175 |  | None
Robert C. Troccoli - 1949 Trustee |  | 2016 |  | Retired Formerly: Adjunct Professor, University of Denver – Daniels College of Business; and Managing Partner, KPMG LLP |  | 175 |  | None
Daniel S. Vandivort - 1954 Trustee |  | 2019 |  | President, Flyway Advisory Services LLC (consulting and property management) Formerly: President and Chief Investment Officer, previously Head of Fixed Income, Weiss Peck and Greer/Robeco Investment Management; Trustee and Chair, Weiss Peck and Greer Funds Board; and various capacities at CS First Boston including Head of Fixed Income at First Boston Asset Management. |  | 175 |  | Formerly: Trustee and Governance Chair, Oppenheimer Funds; Treasurer, Chairman of the Audit and Finance Committee, Huntington Disease Foundation of America

T-3 Invesco High Income Trust II

Trustees and Officers–(continued)

Name, Year of Birth and Position(s) Held with the Trust |  | Trustee and/or Officer Since |  | Principal Occupation(s) During Past 5 Years |  | Number of Funds in Fund Complex Overseen by Trustee |  | Other Directorship(s) Held by Trustee During Past 5 Years
Officers |  |  |  |  |  |
Sheri Morris - 1964 President and Principal Executive Officer |  | 2010 |  | Director, Invesco Trust Company; Head of Global Fund Services, Invesco Ltd.; President and Principal Executive Officer, The Invesco Funds; Vice President, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust; and Vice President, OppenheimerFunds, Inc. Formerly: Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco AIM Advisers, Inc., Invesco AIM Capital Management, Inc. and Invesco AIM Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds; Vice President and Assistant Vice President, Invesco Advisers, Inc.; Assistant Vice President, Invesco AIM Capital Management, Inc. and Invesco AIM Private Asset Management, Inc.; Treasurer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust and Invesco Actively Managed Exchange-Traded Fund Trust; and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) |  | N/A |  | N/A
Melanie Ringold - 1975 Senior Vice President, Chief Legal Officer and Secretary |  | 2023 |  | Head of Legal of the Americas, Invesco Ltd.; Senior Vice President and Secretary, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Secretary, Invesco Investment Advisers LLC, Invesco Capital Markets, Inc.; Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust;Secretary and Vice President, Harbourview Asset Management Corporation; Secretary and Senior Vice President, OppenheimerFunds, Inc. and Invesco Managed Accounts, LLC; Secretary and Senior Vice President, OFI SteelPath, Inc.; Secretary and Senior Vice President, Oppenheimer Acquisition Corp.; Secretary, SteelPath Funds Remediation LLC; and Secretary and Senior Vice President, Trinity Investment Management Corporation Formerly: Assistant Secretary, Invesco Distributors, Inc.; Invesco Advisers, Inc. Invesco Investment Services, Inc., Invesco Capital Markets, Inc., Invesco Capital Management LLC and Invesco Investment Advisers LLC; and Assistant Secretary and Investment Vice President, Invesco Funds |  | N/A |  | N/A
Andrew R. Schlossberg - 1974 Senior Vice President |  | 2019 |  | Senior Vice President, Invesco Group Services, Inc.; Head of the Americas and Senior Managing Director, Invesco Ltd.; Director and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) (registered transfer agent); Senior Vice President, The Invesco Funds; and Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management) Formerly: Director, President and Chairman, Invesco Insurance Agency, Inc.; Director, Invesco UK Limited; Director and Chief Executive, Invesco Asset Management Limited and Invesco Fund Managers Limited; Assistant Vice President, The Invesco Funds; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director and Chief Executive, Invesco Administration Services Limited and Invesco Global Investment Funds Limited; Director, Invesco Distributors, Inc.; Head of EMEA, Invesco Ltd.; President, Invesco Actively Managed Exchange-Traded Commodity Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II and Invesco India Exchange-Traded Fund Trust; and Managing Director and Principal Executive Officer, Invesco Capital Management LLC |  | N/A |  | N/A

T-4 Invesco High Income Trust II

Trustees and Officers–(continued)

Name, Year of Birth and Position(s) Held with the Trust |  | Trustee and/or Officer Since |  | Principal Occupation(s) During Past 5 Years |  | Number of Funds in Fund Complex Overseen by Trustee |  | Other Directorship(s) Held by Trustee During Past 5 Years
Officers–(continued) |  |  |  |  |  |
John M. Zerr - 1962 Senior Vice President |  | 2010 |  | Chief Operating Officer of the Americas; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director and Vice President, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.) Senior Vice President, The Invesco Funds; Managing Director, Invesco Capital Management LLC; Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Senior Vice President, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Manager, Invesco Indexing LLC; Manager, Invesco Specialized Products, LLC; Member, Invesco Canada Funds Advisory Board; Director, President and Chief Executive Officer, Invesco Corporate Class Inc. (corporate mutual fund company); and Director, Chairman, President and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); President, Invesco, Inc.; President, Invesco Global Direct Real Estate Feeder GP Ltd.; President, Invesco IP Holdings (Canada) Ltd; President, Invesco Global Direct Real Estate GP Ltd.; President, Invesco Financial Services Ltd. / Services Financiers Invesco Ltée; and Director and Chairman, Invesco Trust Company Formerly: President, Trimark Investments Ltd/Services Financiers Invesco Ltee; Director and Senior Vice President, Invesco Insurance Agency, Inc.; Director and Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco AIM Management Group, Inc.); Secretary, Invesco Investment Services, Inc. (formerly known as Invesco AIM Investment Services, Inc.); Chief Legal Officer and Secretary, The Invesco Funds; Secretary and General Counsel, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.); Chief Legal Officer, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust; Secretary, Invesco Indexing LLC; Director, Secretary, General Counsel and Senior Vice President, Van Kampen Exchange Corp.; Director, Vice President and Secretary, IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Director and Vice President, Van Kampen Advisors Inc.; Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; Director and Secretary, Invesco Distributors, Inc. (formerly known as Invesco AIM Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco AIM Advisers, Inc. and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco AIM Capital Management, Inc.; and Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser) |  | N/A |  | N/A
Gregory G. McGreevey - 1962 Senior Vice President |  | 2012 |  | Senior Managing Director, Invesco Ltd.; Director, Chairman, President, and Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Invesco Mortgage Capital, Inc. and Invesco Senior Secured Management, Inc.; Senior Vice President, The Invesco Funds; President, SNW Asset Management Corporation and Invesco Managed Accounts, LLC; Chairman and Director, Invesco Private Capital, Inc.; Chairman and Director, INVESCO Private Capital Investments, Inc.; Chairman and Director, INVESCO Realty, Inc.; and Senior Vice President, Invesco Group Services, Inc. Formerly: Senior Vice President, Invesco Management Group, Inc. and Invesco Advisers, Inc.; Assistant Vice President, The Invesco Funds |  | N/A |  | N/A
Adrien Deberghes - 1967 Principal Financial Officer, Treasurer and Vice President |  | 2020 |  | Head of the Fund Office of the CFO and Fund Administration; Vice President, Invesco Advisers, Inc.; Principal Financial Officer, Treasurer and Vice President, The Invesco Funds; Vice President, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust and Invesco Exchange-Traded Self-Indexed Fund Trust Formerly: Senior Vice President and Treasurer, Fidelity Investments |  | N/A |  | N/A
Crissie M. Wisdom - 1969 Anti-Money Laundering Compliance Officer |  | 2013 |  | Anti-Money Laundering and OFAC Compliance Officer for Invesco U.S. entities including: Invesco Advisers, Inc. and its affiliates, Invesco Capital Markets, Inc., Invesco Distributors, Inc., Invesco Investment Services, Inc., The Invesco Funds, Invesco Capital Management, LLC, Invesco Trust Company; and Fraud Prevention Manager for Invesco Investment Services, Inc. |  | N/A |  | N/A

T-5 Invesco High Income Trust II

Trustees and Officers–(continued)

Name, Year of Birth and Position(s) Held with the Trust |  | Trustee and/or Officer Since |  | Principal Occupation(s) During Past 5 Years |  | Number of Funds in Fund Complex Overseen by Trustee |  | Other Directorship(s) Held by Trustee During Past 5 Years
Officers–(continued) |  |  |  |  |  |
Todd F. Kuehl - 1969 Chief Compliance Officer and Senior Vice President |  | 2020 |  | Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser); and Chief Compliance Officer and Senior Vice President, The Invesco Funds Formerly: Managing Director and Chief Compliance Officer, Legg Mason (Mutual Funds); Chief Compliance Officer, Legg Mason Private Portfolio Group (registered investment adviser) |  | N/A |  | N/A
James Bordewick, Jr. - 1959 Senior Vice President and Senior Officer |  | 2022 |  | Senior Vice President and Senior Officer, The Invesco Funds Formerly: Chief Legal Officer, KingsCrowd, Inc. (research and analytical platform for investment in private capital markets); Chief Operating Officer and Head of Legal and Regulatory, Netcapital (private capital investment platform); Managing Director, General Counsel of asset management and Chief Compliance Officer for asset management and private banking, Bank of America Corporation; Chief Legal Officer, Columbia Funds and BofA Funds; Senior Vice President and Associate General Counsel, MFS Investment Management; Chief Legal Officer, MFS Funds; Associate, Ropes & Gray; and Associate, Gaston Snow & Ely Bartlett |  | N/A |  | N/A

Office of the Fund |  | Investment Adviser |  | Auditors |  | Custodian
1331 Spring Street NW, Suite 2500 Atlanta, GA 30309 |  | Invesco Advisers, Inc. 1331 Spring Street NW, Suite 2500 Atlanta, GA 30309 |  | PricewaterhouseCoopers LLP 1000 Louisiana Street, Suite 5800 Houston, TX 77002-5021 |  | State Street Bank and Trust Company 225 Franklin Street Boston, MA 02110-2801
Counsel to the Fund |  | Counsel to the Independent Trustees |  | Transfer Agent |  |
Stradley Ronon Stevens & Young, LLP 2005 Market Street, Suite 2600 Philadelphia, PA 19103-7018 |  | Sidley Austin LLP 787 Seventh Avenue New York, NY 10019 |  | Computershare Trust Company, N.A 250 Royall Street Canton, MA 02021 |  |

T-6 Invesco High Income Trust II

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Correspondence information
Send general correspondence to Computershare Trust Company, N.A., P.O. Box 505000, Louisville, KY 40233-5000.
Trust holdings and proxy voting information
The Trust provides a complete list of its portfolio holdings four times each fiscal year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Trust’s semiannual and annual reports to shareholders. For the first and third quarters, the Trust files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/us. Shareholders can also look up the Trust’s Form N-PORT filings on the SEC website at sec.gov. The SEC file number for the Trust is shown below.
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/corporate/about-us/esg. 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 most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

SEC file number(s): 811‑05769 |  |  |  | VK‑CE‑HINC2‑AR‑1

(b) Not applicable.

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.

The Board of Trustees has determined that the Registrant has at least one audit committee financial expert serving on its Audit Committee. The Audit Committee financial experts are Cynthia Hostetler, Anthony J. LaCava, Jr., and Robert C. Troccoli. Cynthia Hostetler, Anthony J. LaCava, Jr., and Robert C. Troccoli are “independent” within the meaning of that term as used in Form N-CSR.

ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Pursuant to PCAOB Rule 3526, Communication with Audit Committees Concerning Independence, PricewaterhouseCoopers LLC (“PwC”) advised the Registrant’s Audit Committee of the following two matters identified since the previous annual Form N-CSR filing that may be reasonably thought to bear on PwC’s independence. PwC advised the Audit Committee that one PwC Partner held a financial interest directly in an investment company within the complex that includes the Funds as well as all registered investment companies advised by the Adviser and its affiliates, including other subsidiaries of the Adviser’s parent company, Invesco Ltd. (collectively the “Invesco Funds Investment Company Complex”) that was inconsistent with the requirements of Rule 2-01(c)(1) of SEC Regulation S-X. In reporting the matter to the Audit Committee, PwC noted, among other things, that the impermissible holding was disposed of by the individual, the individual was not in the chain of command of the audit or the audit partners of the Funds, the financial interest was not material to the net worth of the individual or his or her respective immediate family members and the Funds’ audit engagement team was unaware of the impermissible holdings until after the matter was confirmed to be an independence exception . In addition, PwC considered that the PwC Partner provided non-audit services that were not relied upon by the audit engagement team in the audits of the financial statements of the Funds. Based on the mitigating factors noted above, PwC advised the Audit Committee that it concluded that its objectivity and impartiality with respect to all issues encompassed within the audit engagement has not been impaired and it believes that a reasonable investor with knowledge of all relevant facts and circumstances for the violations would conclude PwC is capable of exercising objective and impartial judgment on all issues encompassed within the audits of the financial statements of the Funds in the Registrant for the impacted periods.

(a) to (d)

Fees Billed by PwC Related to the Registrant

PwC billed the Registrant aggregate fees for services rendered to the Registrant for the last two fiscal years as shown in the following table. The Audit Committee pre-approved all audit and non-audit services provided to the Registrant.

|  | Fees Billed for Services Rendered to the Registrant for fiscal year end 2023 |  | Fees Billed for Services Rendered to the Registrant for fiscal year end 2022
Audit Fees |  | $ 38,942 |  | $ 37,625
Audit-Related Fees |  | $ 0 |  | $ 0
Tax Fees(1) |  | $ 15,053 |  | $ 16,020
All Other Fees |  | $ 0 |  | $ 0
Total Fees |  | $ 53,995 |  | $ 53,645

| (1) | Tax Fees for the fiscal years ended February 28, 2023 and February 28, 2022 includes fees billed for preparation of U.S. Tax Returns and Taxable Income calculations, including excise tax and year-to-date estimates for various book-to-tax differences.

Fees Billed by PwC Related to Invesco and Invesco Affiliates

PwC billed Invesco Advisers, Inc. (“Invesco”), the Registrant’s adviser, and any entity controlling, controlled by or under common control with Invesco that provides ongoing services to the Registrant (“Invesco Affiliates”) aggregate fees for pre-approved non-audit services rendered to Invesco and Invesco Affiliates for the last two fiscal years as shown in the following table. The Audit Committee pre-approved all non-audit services provided to Invesco and Invesco Affiliates that were required to be pre-approved.

|  | Fees Billed for Non-Audit Services Rendered to Invesco and Invesco Affiliates for fiscal year end 2023 That Were Required to be Pre-Approved by the Registrant’s Audit Committee |  | Fees Billed for Non-Audit Services Rendered to Invesco and Invesco Affiliates for fiscal year end 2022 That Were Required to be Pre-Approved by the Registrant’s Audit Committee
Audit-Related Fees(1) |  | $ 874,000 |  | $ 801,000
Tax Fees |  | $ 0 |  | $ 0
All Other Fees |  | $ 0 |  | $ 0
Total Fees |  | $ 874,000 |  | $ 801,000

(1) | Audit-Related Fees for the fiscal years ended 2023 and 2022 include fees billed related to reviewing controls at a service organization.

(e)(1)

PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES

POLICIES AND PROCEDURES

As adopted by the Audit Committees

of the Invesco Funds (the “Funds”)

Last Amended March 29, 2017

| I. | Statement of Principles

The Audit Committees (the “Audit Committee”) of the Boards of Trustees of the Funds (the “Board”) have adopted these policies and procedures (the “Procedures”) with respect to the pre-approval of audit and non-audit services to be provided by the Funds’ independent auditor (the “Auditor”) to the Funds, and to the Funds’ investment adviser(s) and any entity controlling, controlled by, or under common control with the investment adviser(s) that provides ongoing services to the Funds (collectively, “Service Affiliates”).

Under Section 202 of the Sarbanes-Oxley Act of 2002, all audit and non-audit services provided to the Funds by the Auditor must be preapproved by the Audit Committee. Rule 2-01 of Regulation S-X requires that the Audit Committee also pre-approve a Service Affiliate’s engagement of the Auditor for non-audit services if the engagement relates directly to the operations and financial reporting of the Funds (a “Service Affiliate’s Covered Engagement”).

These Procedures set forth the procedures and the conditions pursuant to which the Audit Committee may pre-approve audit and non-audit services for the Funds and a Service Affiliate’s Covered Engagement pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”) and other organizations and regulatory bodies applicable to the Funds (“Applicable Rules”).1 They address both general pre-approvals without consideration of specific case-by-case services (“general pre-approvals”) and pre-approvals on a case-by-case basis (“specific pre-approvals”). Any services requiring pre-approval that are not within the scope of general pre-approvals hereunder are subject to specific pre-approval. These Procedures also address the delegation by the Audit Committee of pre-approval authority to the Audit Committee Chair or Vice Chair.

| II. | Pre-Approval of Fund Audit Services

The annual Fund audit services engagement, including terms and fees, is subject to specific pre-approval by the Audit Committee. Audit services include the annual financial statement audit and other procedures required to be performed by an independent auditor to be able to form an opinion on the Funds’ financial statements. The Audit Committee will receive, review and consider sufficient information concerning a proposed Fund audit engagement to make a reasonable evaluation of the Auditor’s qualifications and independence. The Audit Committee will oversee the Fund audit services engagement as necessary, including approving any changes in terms, audit scope, conditions and fees.

In addition to approving the Fund audit services engagement at least annually and specifically approving any changes, the Audit Committee may generally or specifically pre-approve engagements for other audit services, which are those services that only an independent auditor reasonably can provide. Other audit

1 Applicable Rules include, for example, New York Stock Exchange (“NYSE”) rules applicable to closed-end funds managed by Invesco and listed on NYSE.

| III. | General and Specific Pre-Approval of Non-Audit Fund Services

The Audit Committee will consider, at least annually, the list of General Pre-Approved Non-Audit Services which list may be terminated or modified at any time by the Audit Committee. To inform the Audit Committee’s review and approval of General Pre-Approved Non-Audit Services, the Funds’ Treasurer (or his or her designee) and Auditor shall provide such information regarding independence or other matters as the Audit Committee may request.

Any services or fee ranges that are not within the scope of General Pre-Approved Non-Audit Services have not received general pre-approval and require specific pre-approval. Each request for specific pre-approval by the Audit Committee for services to be provided by the Auditor to the Funds must be submitted to the Audit Committee by the Funds’ Treasurer (or his or her designee) and must include detailed information about the services to be provided, the fees or fee ranges to be charged, and other relevant information sufficient to allow the Audit Committee to consider whether to pre-approve such engagement, including evaluating whether the provision of such services will impair the independence of the Auditor and is otherwise consistent with Applicable Rules.

| IV. | Non-Audit Service Types

The Audit Committee may provide either general or specific pre-approval of audit-related, tax or other services, each as described in more detail below.

| a. | Audit-Related Services

“Audit-related services” are assurance and related services that are reasonably related to the performance of the audit or review of the Fund’s financial statements or that are traditionally performed by an independent auditor. Audit-related services include, among others, accounting consultations related to accounting, financial reporting or disclosure matters not classified as “Audit services”; assistance with understanding and implementing new accounting and financial reporting guidance from rulemaking authorities; services related to mergers, acquisitions or dispositions; compliance with ratings agency requirements and interfund lending activities; and assistance with internal control reporting requirements.

| b. | Tax Services

“Tax services” include, but are not limited to, the review and signing of the Funds’ federal tax returns, the review of required distributions by the Funds and consultations regarding tax matters such as the tax treatment of new investments or the impact of new regulations. The Audit Committee will not approve proposed services of the Auditor which the Audit Committee believes are to be provided in connection with a service or transaction initially recommended by the Auditor, the sole business purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committee will consult with the Funds’ Treasurer (or his or her designee) and may consult with outside counsel or advisers as necessary to ensure the consistency of tax services rendered by the Auditor with the foregoing policy. The Auditor shall not represent any Fund or any Service Affiliate before a tax court, district court or federal court of claims.

Each request to provide tax services under either the general or specific pre-approval of the Audit Committee will include a description from the Auditor in writing of (i) the scope of the service, the fee structure for the engagement, and any side letter or other amendment to the engagement letter, or any other agreement (whether oral, written, or otherwise) between the Auditor and the Funds, relating to the service; and (ii) any compensation arrangement or other agreement, such as a referral agreement, a referral fee or fee-sharing arrangement, between the Auditor (or an affiliate of the Auditor) and any

person (other than the Funds or Service Affiliates receiving the services) with respect to the promoting, marketing, or recommending of a transaction covered by the service. The Auditor will also discuss with the Audit Committee the potential effects of the services on the independence of the Auditor, and document the substance of its discussion with the Audit Committee.

| c. | Other Services

The Audit Committee may pre-approve other non-audit services so long as the Audit Committee believes that the service will not impair the independence of the Auditor. Appendix I includes a list of services that the Auditor is prohibited from performing by the SEC rules. Appendix I also includes a list of services that would impair the Auditor’s independence unless the Audit Committee reasonably concludes that the results of the services will not be subject to audit procedures during an audit of the Funds’ financial statements.

| V. | Pre-Approval of Service Affiliate’s Covered Engagements

Rule 2-01 of Regulation S-X requires that the Audit Committee pre-approve a Service Affiliate’s engagement of the Auditor for non-audit services if the engagement relates directly to the operations and financial reporting of the Funds, defined above as a “Service Affiliate’s Covered Engagement”.

The Audit Committee may provide either general or specific pre-approval of any Service Affiliate’s Covered Engagement, including for audit-related, tax or other services, as described above, if the Audit Committee believes that the provision of the services to a Service Affiliate will not impair the independence of the Auditor with respect to the Funds. Any Service Affiliate’s Covered Engagements that are not within the scope of General Pre-Approved Non-Audit Services have not received general pre-approval and require specific pre-approval.

Each request for specific pre-approval by the Audit Committee of a Service Affiliate’s Covered Engagement must be submitted to the Audit Committee by the Funds’ Treasurer (or his or her designee) and must include detailed information about the services to be provided, the fees or fee ranges to be charged, a description of the current status of the pre-approval process involving other audit committees in the Invesco investment company complex (as defined in Rule 2-201 of Regulation S-X) with respect to the proposed engagement, and other relevant information sufficient to allow the Audit Committee to consider whether the provision of such services will impair the independence of the Auditor from the Funds. Additionally, the Funds’ Treasurer (or his or her designee) and the Auditor will provide the Audit Committee with a statement that the proposed engagement requires pre-approval by the Audit Committee, the proposed engagement, in their view, will not impair the independence of the Auditor and is consistent with Applicable Rules, and the description of the proposed engagement provided to the Audit Committee is consistent with that presented to or approved by the Invesco audit committee.

Information about all Service Affiliate engagements of the Auditor for non-audit services, whether or not subject to pre-approval by the Audit Committee, shall be provided to the Audit Committee at least quarterly, to allow the Audit Committee to consider whether the provision of such services is compatible with maintaining the Auditor’s independence from the Funds. The Funds’ Treasurer and Auditor shall provide the Audit Committee with sufficiently detailed information about the scope of services provided and the fees for such services, to ensure that the Audit Committee can adequately consider whether the provision of such services is compatible with maintaining the Auditor’s independence from the Fund

| VI. | Pre-Approved Fee Levels or Established Amounts

Pre-approved fee levels or ranges for audit and non-audit services to be provided by the Auditor to the Funds, and for a Service Affiliate’s Covered Engagement, under general pre-approval or specific pre-approval will be set periodically by the Audit Committee. Any proposed fees exceeding 110% of the maximum pre-approved fee levels or ranges for such services or engagements will be promptly presented to the Audit Committee and will require specific pre-approval by the Audit Committee before payment of any additional fees is made.

| VII. | Delegation

The Audit Committee hereby delegates, subject to the dollar limitations set forth below, specific authority to its Chair, or in his or her absence, Vice Chair, to pre-approve audit and non-audit services proposed to be provided by the Auditor to the Funds and/or a Service Affiliate’s Covered Engagement, between Audit Committee meetings. Such delegation does not preclude the Chair or Vice Chair from declining, on a case by case basis, to exercise his or her delegated authority and instead convening the Audit Committee to consider and pre-approve any proposed services or engagements.

Notwithstanding the foregoing, the Audit Committee must pre-approve: (a) any non-audit services to be provided to the Funds for which the fees are estimated to exceed $500,000; (b) any Service Affiliate’s Covered Engagement for which the fees are estimated to exceed $500,000; or (c) any cost increase to any previously approved service or engagement that exceeds the greater of $250,000 or 50% of the previously approved fees up to a maximum increase of $500,000.

| VIII. | Compliance with Procedures

Notwithstanding anything herein to the contrary, failure to pre-approve any services or engagements that are not required to be pre-approved pursuant to the de minimis exception provided for in Rule 2-01(c)(7)(i)(C) of Regulation S-X shall not constitute a violation of these Procedures. The Audit Committee has designated the Funds’ Treasurer to ensure services and engagements are pre-approved in compliance with these Procedures. The Funds’ Treasurer will immediately report to the Chair of the Audit Committee, or the Vice Chair in his or her absence, any breach of these Procedures that comes to the attention of the Funds’ Treasurer or any services or engagements that are not required to be pre-approved pursuant to the de minimis exception provided for in Rule 2-01(c)(7)(i)(C) of Regulation S-X.

On at least an annual basis, the Auditor will provide the Audit Committee with a summary of all non-audit services provided to any entity in the investment company complex (as defined in section 2-01(f)(14) of Regulation S-X, including the Funds and Service Affiliates) that were not pre-approved, including the nature of services provided and the associated fees.

| IX. | Amendments to Procedures

All material amendments to these Procedures must be approved in advance by the Audit Committee. Non-material amendments to these Procedures may be made by the Legal and Compliance Departments and will be reported to the Audit Committee at the next regularly scheduled meeting of the Audit Committee.

Appendix I

Non-Audit Services That May Impair the Auditor’s Independence

The Auditor is not independent if, at any point during the audit and professional engagement, the Auditor provides the following non-audit services:

| ● |  | Management functions;

| ● |  | Human resources;

| ● |  | Broker-dealer, investment adviser, or investment banking services ;

| ● |  | Legal services;

| ● |  | Expert services unrelated to the audit;

| ● |  | Any service or product provided for a contingent fee or a commission;

| ● |  | Services related to marketing, planning, or opining in favor of the tax treatment of confidential transactions or aggressive tax position transactions, a significant purpose of which is tax avoidance;

| ● |  | Tax services for persons in financial reporting oversight roles at the Fund; and

| ● |  | Any other service that the Public Company Oversight Board determines by regulation is impermissible.

An Auditor is not independent if, at any point during the audit and professional engagement, the Auditor provides the following non-audit services unless it is reasonable to conclude that the results of the services will not be subject to audit procedures during an audit of the Funds’ financial statements:

| ● |  | Bookkeeping or other services related to the accounting records or financial statements of the audit client;

| ● |  | Financial information systems design and implementation;

| ● |  | Appraisal or valuation services, fairness opinions, or contribution-in-kind reports;

| ● |  | Actuarial services; and

| ● |  | Internal audit outsourcing services.

(e)(2) There were no amounts that were pre-approved by the Audit Committee pursuant to the de minimus exception under Rule 2-01 of Regulation S-X.

(f) Not applicable.

(g) In addition to the amounts shown in the tables above, PwC billed Invesco and Invesco Affiliates aggregate fees of $8,440,000 for the fiscal year ended February 28, 2023 and $5,931,000 for the fiscal year ended February 28, 2022. In total, PwC billed the Registrant, Invesco and Invesco Affiliates aggregate non-audit fees of $9,329,053 for the fiscal year ended February 28, 2023 and $6,748,020 for the fiscal year ended February 28, 2022.

PwC provided audit services to the Investment Company complex of approximately $32 million.

(h) The Audit Committee also has considered whether the provision of non-audit services that were rendered to Invesco and Invesco Affiliates that were not required to be pre-approved pursuant to SEC regulations, if any, is compatible with maintaining PwC’s independence.

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.

Invesco’s Policy Statement on Global
Corporate Governance and
Proxy Voting
Effective January 2023
1

I.
INTRODUCTION
Invesco Ltd. and its wholly owned investment adviser subsidiaries (collectively, “Invesco”, the “Company”, “our” or “we”) has adopted and implemented this Policy Statement on Global Corporate Governance and Proxy Voting (“Global Proxy Voting Policy” or “Policy”), which it believes describes policies and procedures reasonably designed to ensure that proxies are voted in the best interests of its clients. This Policy is intended to help Invesco’s clients understand our commitment to responsible investing and proxy voting, as well as the good governance principles that inform our approach to engagement and voting at shareholder meetings.
A. Our Commitment to Environmental, Social and Governance Investment Stewardship and
Proxy Voting
Our commitment to environmental, social and governance (ESG) principles is a core element of our ambition to be the most client-centric asset manager. We aspire to incorporate ESG considerations into all our investment capabilities in the context of financial materiality in the best interest of our clients. In our role as stewards of our clients’ investments, we regard our stewardship activities, including engagement and the exercise of proxy voting rights, as an essential component of our fiduciary duty to maximize long-term shareholder value. Our Global ESG team functions as a center of excellence, providing specialist insights on research, engagement, voting, integration, tools, and client and product solutions with investment teams implementing ESG approaches appropriate to asset class and investment style. Much of our work is rooted in fundamental research and frequent dialogue with companies during due diligence and monitoring of our investments.
Invesco views proxy voting as an integral part of its investment management responsibilities. The proxy voting process at Invesco focuses on protecting clients’ rights and promoting governance structures and practices that reinforce the accountability of corporate management and boards of directors to shareholders.
The voting decision lies with our portfolio managers and analysts with input and support from our Global ESG team. Our proprietary proxy voting platform (“PROXYintel”) facilitates implementation of voting decisions and rationales across global investment teams. Our good governance principles, governance structure and processes are designed to ensure that proxy votes are cast in accordance with clients’ best interests.
As a large active investor, Invesco is well placed to use our ESG expertise and beliefs to engage directly with portfolio companies or by collaborative means in ways which drive corporate change that we believe will enhance shareholder value. We take our responsibility as active owners very seriously and see engagement as an opportunity to encourage continual improvement and ensure that our clients’ interests are represented and protected. Dialogue with portfolio companies is a core part of the investment process. Invesco may engage with investee companies to discuss environmental, social and governance issues throughout the year or on specific ballot items to be voted on.
Our passive strategies and certain other client accounts managed in accordance with fixed income, money market and index strategies (including exchange-traded funds) will typically vote in line with the majority holder of the active-equity shares held by Invesco outside of those strategies. Invesco refers to this approach as “Majority Voting”. This process of Majority Voting ensures that our passive strategies benefit from the engagement and deep dialogue of our active investors, which Invesco believes benefits shareholders in passively-managed accounts. In the absence of overlap between the active and passive holders, the passive holders vote in line with our internally developed voting guidelines (as defined below). Portfolio managers and analysts for accounts employing Majority Voting retain full discretion to override Majority Voting and to vote the shares as they determine to be in the best interest of those accounts, absent certain types of conflicts of interest, which are discussed elsewhere in this Policy.
B. Applicability of Policy
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Invesco may be granted by its clients the authority to vote the proxies of securities held in client portfolios. Invesco’s investment teams vote proxies on behalf of Invesco-sponsored funds and both fund and non-fund advisory clients that have explicitly granted Invesco authority in writing to vote proxies on their behalf. In the case of institutional or sub-advised clients, Invesco will vote the proxies in accordance with this Policy unless the client agreement specifies that the client retains the right to vote or has designated a named fiduciary to direct voting.
This Policy applies to all entities in Exhibit A. Due to regional or asset-class specific considerations, certain entities may have local proxy voting guidelines or policies and procedures that differ from this Policy. In the event that local policies and the Global Policy differ, the local policy will apply. These entities are also listed in Exhibit A and include proxy voting guidelines specific to: Invesco Asset Management (Japan) Limited, Invesco Asset Management (India) Pvt. Ltd, Invesco Taiwan Ltd and Invesco Capital Markets, Inc. for Invesco Unit Investment Trusts.
II.
GLOBAL PROXY VOTING OPERATIONAL PROCEDURES
Invesco’s global proxy voting operational procedures are in place to implement the provisions of this Policy (the “Procedures”). At Invesco, proxy voting is conducted by our investment teams through PROXYintel. Our investment teams globally are supported by Invesco’s centralized team of ESG professionals and proxy voting specialists. Invesco’s Global ESG team oversees the proxy policy, operational procedures and implementation, inputs to analysis and research, vote execution oversight and leads the Global Invesco Proxy Advisory Committee (“Global IPAC”).
Invesco aims to vote all proxies where we have been granted voting authority in accordance with this Policy, as implemented by the Procedures. Our portfolio managers and analysts review voting items based on their individual merits and retain full discretion on vote execution conducted through our proprietary proxy voting platform. Invesco may supplement its internal research with information from independent third parties, such as proxy advisory firms.
A. Proprietary Proxy Voting Platform
Invesco’s proprietary proxy voting platform is supported by a dedicated team of internal proxy specialists. PROXYintel streamlines the proxy voting process by providing our investment teams globally with direct access to meeting information and proxies, external proxy research and ESG ratings, as well as related functions, such as management of conflicts of interest issues, significant votes, global reporting and record-keeping capabilities. Managing these processes internally, as opposed to relying on third parties, is designed to provide Invesco greater quality control, oversight and independence in the proxy administration process.
Historical proxy voting information is stored to build institutional knowledge across the Invesco complex with respect to individual companies and proxy issues. Certain investment teams also use PROXYintel to access third-party proxy research and ESG ratings.
Our proprietary systems facilitate internal control and oversight of the voting process. Invesco may choose to leverage this capability to automatically vote proxies based on its internally developed custom voting guidelines and in circumstances where Majority Voting applies.
B. Oversight of Voting Operations
Invesco’s Global ESG team provides oversight of the proxy voting verification processes which include: (i) the monthly global vote audit review of votes cast containing documented rationales of conflicts of interest votes, market and operational limitations; (ii) the quarterly sampling of proxy votes cast to determine that (a) Invesco is voting consistently with this Policy and (b) third-party proxy advisory firms’ methodologies in formulating the vote recommendation are consistent with their publicly disclosed guidelines; and (iii) quarterly review of rationales with the Global IPAC of occasions where a portfolio manager may take a position that may not be in accordance with Invesco’s good governance principles and our internally developed voting guidelines.
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To the extent material errors are identified in the proxy voting process, such errors are reviewed and reported to, as appropriate, the Global Head of ESG, Global Proxy Governance and Voting Manager, legal and compliance, the Global IPAC and relevant boards and clients, where applicable. Invesco’s Global Head of ESG and Proxy Governance and Voting Manager provide proxy voting updates and reporting to the Global IPAC, various boards and clients. Invesco’s global proxy governance and voting operations are subject to periodic review by Internal Audit and Compliance groups.
C. Disclosures and Recordkeeping
Unless otherwise required by local or regional requirements, Invesco maintains voting records in either electronic format or hard copy for at least six years. Invesco makes available its proxy voting records publicly in compliance with regulatory requirements and industry best practices in the regions below:
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In accordance with the US Securities and Exchange Commission regulations, Invesco will file a record of all proxy voting activity for the prior 12 months ending June 30th for each U.S. registered fund. That filing is made on or before August 31st of each year. Each year, the proxy voting records are made available on Invesco’s website here. Moreover, and to the extent applicable, the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including Department of Labor regulations and guidance thereunder, provide that the named fiduciary generally should be able to review not only the investment manager's voting procedure with respect to plan-owned stock, but also to review the actions taken in individual proxy voting situations. In the case of institutional and sub-advised Clients, Clients may contact their client service representative to request information about how Invesco voted proxies on their behalf. Absent specific contractual guidelines, such requests may be made on a semi-annual basis.
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In the UK and Europe, Invesco publicly discloses our proxy votes monthly in compliance with the UK Stewardship Code and for the European Shareholder Rights Directive annually here.
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In Canada, Invesco publicly discloses our annual proxy votes each year here by August 31st, covering the 12-month period ending June 30th in compliance with the National Instrument 81-106 Investment Fund Continuous Disclosure.
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In Japan, Invesco publicly discloses our proxy votes annually in compliance with the Japan Stewardship Code here.
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In India, Invesco publicly discloses our proxy votes quarterly here in compliance with The Securities and Exchange Board of India (“SEBI”) Circular on stewardship code for all mutual funds and all categories of Alternative Investment Funds in relation to their investment in listed equities. SEBI has implemented principles on voting for Mutual Funds through circulars dated March 15, 2010 and March 24, 2014, which prescribed detailed mandatory requirements for Mutual Funds in India to disclose their voting policies and actual voting by Mutual Funds on different resolutions of investee companies.
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In Hong Kong, Invesco Hong Kong Limited will provide proxy voting records upon request in compliance with the Securities and Futures Commission (“SFC”) Principles of Responsible Ownership.
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In Taiwan, Invesco publicly discloses our proxy voting policy and proxy votes annually in compliance with Taiwan’s Stewardship Principles for Institutional Investors here.
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In Australia, Invesco publicly discloses a summary of its proxy voting record annually here.
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In Singapore, Invesco Asset Management Singapore Ltd. will provide proxy voting records upon request in compliance with the Singapore Stewardship Principles for Responsible Investors.
D. Global Invesco Proxy Advisory Committee
Guided by its philosophy that investment teams should manage proxy voting, Invesco has created the Global IPAC. The Global IPAC is an investments-driven committee comprised of representatives from
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various investment management teams globally, Invesco’s Global Head of ESG and chaired by its Global Proxy Governance and Voting Manager. The Global IPAC provides a forum for investment teams to monitor, understand and discuss key proxy issues and voting trends within the Invesco complex, to assist Invesco in meeting regulatory obligations, to review votes not aligned with our good governance principles and to consider conflicts of interest in the proxy voting process, all in accordance with this Policy.
In fulfilling its responsibilities, the Global IPAC meets as necessary, but no less than semi-annually, and has the following responsibilities and functions: (i) acts as a key liaison between the Global ESG team and local proxy voting practices to ensure compliance with this Policy; (ii) provides insight on market trends as it relates to stewardship practices; (iii) monitors proxy votes that present potential conflicts of interest; (iv) the Conflict of Interest sub-committee will make voting decisions on submissions made by portfolio managers on conflict of interest issues to override the Policy; and (v) reviews and provides input, at least annually, on this Policy and related internal procedures and recommends any changes to the Policy based on, but not limited to, Invesco’s experience, evolving industry practices, or developments in applicable laws or regulations.
In addition to the Global IPAC, for some clients, third parties (e.g., U.S. fund boards) provide oversight of the proxy voting process.
E. Market and Operational Limitations
In the great majority of instances, Invesco will vote proxies. However, in certain circumstances, Invesco may refrain from voting where the economic or other opportunity costs of voting exceeds any benefit to clients. Moreover, ERISA fiduciaries, in voting proxies or exercising other shareholder rights, must not subordinate the economic interests of plan participants and beneficiaries to unrelated objectives. These matters are left to the discretion of the relevant portfolio manager. Such circumstances could include, for example:
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In some countries the exercise of voting rights imposes temporary transfer restrictions on the related securities (“share blocking”). Invesco generally refrains from voting proxies in share blocking countries unless Invesco determines that the benefit to the client(s) of voting a specific proxy outweighs the client’s temporary inability to sell the security.
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Some companies require a representative to attend meetings in person to vote a proxy, additional documentation or the disclosure of beneficial owner details to vote. Invesco may determine that the costs of sending a representative, signing a power-of-attorney or submitting additional disclosures outweigh the benefit of voting a particular proxy.
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Invesco may not receive proxy materials from the relevant fund or client custodian with sufficient time and information to make an informed independent voting decision.
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Invesco held shares on the record date but has sold them prior to the meeting date.
In some non-U.S. jurisdictions, although Invesco uses reasonable efforts to vote a proxy, proxies may not be accepted or may be rejected due to changes in the agenda for a shareholder meeting for which Invesco does not have sufficient notice, due to a proxy voting service not being offered by the custodian in the local market or due to operational issues experienced by third parties involved in the process or by the issuer or sub-custodian. In addition, despite the best efforts of Invesco and its proxy voting agent, there may be instances where our votes may not be received or properly tabulated by an issuer or the issuer’s agent.
F. Securities Lending
Invesco’s funds may participate in a securities lending program. In circumstances where shares are on loan, the voting rights of those shares are transferred to the borrower. If the security in question is on loan as part of a securities lending program, Invesco may determine that the benefit to the client of voting a particular proxy outweighs the benefits of securities lending. In those instances, Invesco may
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determine to recall securities that are on loan prior to the meeting record date, so that we will be entitled to vote those shares. There may be instances where Invesco may be unable to recall shares or may choose not to recall shares. The relevant portfolio manager will make these determinations.
G. Conflicts of Interest
There may be occasions where voting proxies may present a perceived or actual conflict of interest between Invesco, as investment manager, and one or more of Invesco’s clients or vendors.
Firm-Level Conflicts of interest
A conflict of interest may exist if Invesco has a material business relationship with either the company soliciting a proxy or a third party that has a material interest in the outcome of a proxy vote or that is actively lobbying for a particular outcome of a proxy vote. Such relationships may include, among others, a client relationship, serving as a vendor whose products / services are material or significant to Invesco, serving as a distributor of Invesco’s products, a significant research provider or broker to Invesco.
Invesco identifies potential conflicts of interest based on a variety of factors, including but not limited to the materiality of the relationship between the issuer or its affiliates to Invesco.
Material firm-level conflicts of interests are identified by individuals and groups within Invesco globally based on criteria established by the global ESG team. These criteria are monitored and updated periodically by the global ESG team so an updated view is available when conducting conflicts checks. Operating procedures and associated governance are designed to seek to ensure conflicts of interest are appropriately considered ahead of voting proxies. The Global IPAC Conflict of Interest Sub-committee maintains oversight of the process. Companies identified as conflicted will be voted in line with the principles below as implemented by Invesco’s internally developed voting guidelines. To the extent a portfolio manager disagrees with the Policy, our processes and procedures seek to ensure justification and rationales are fully documented and presented to the Global IPAC Conflict of Interest Sub-committee for approval by a majority vote.
As an additional safeguard, persons from Invesco’s marketing, distribution and other customer-facing functions may not serve on the Global IPAC. For the avoidance of doubt, Invesco may not consider Invesco Ltd.’s pecuniary interest when voting proxies on behalf of clients. To avoid any appearance of a conflict of interest, Invesco will not vote proxies issued by Invesco Ltd. that may be held in client accounts.
Personal Conflicts of Interest
A conflict also may exist where an Invesco employee has a known personal or business relationship with other proponents of proxy proposals, participants in proxy contests, corporate directors, or candidates for directorships. Under Invesco’s Global Code of Conduct, Invesco entities and individuals must act in the best interests of clients and must avoid any situation that gives rise to an actual or perceived conflict of interest.
All Invesco personnel with proxy voting responsibilities are required to report any known personal or business conflicts of interest regarding proxy issues with which they are involved. In such instances, the individual(s) with the conflict will be excluded from the decision-making process relating to such issues.
Voting Fund of Funds
There may be conflicts that arise from Invesco voting on matters when shares of Invesco-sponsored funds are held by other Invesco funds or entities. The scenarios below set out how Invesco votes in these instances.
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Proportional voting will be implemented in the following scenarios:
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When required by law or regulation, shares of an Invesco fund held by other Invesco funds will be voted in the same proportion as the votes of external shareholders of the
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underlying fund. If such proportional voting is not operationally possible, Invesco will not vote the shares.
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When required by law or regulation, shares of an unaffiliated registered fund held by one or more Invesco funds will be voted in the same proportion as the votes of external shareholders of the underlying fund. If such proportional voting is not operationally possible, Invesco will not vote the shares.
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For US fund of funds where proportional voting is not required by law or regulation, shares of Invesco funds will be voted in the same proportion as the votes of external shareholders of the underlying fund. If such proportional voting is not operationally possible, Invesco will vote in line with our internally developed voting guidelines (as defined below).
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Non-US fund of funds will not be voted proportionally, Invesco will vote in line with local policies as per Exhibit A. If no local policies exist, Invesco will vote non-US funds of funds in line with the firm level conflicts of interest process described above.
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For US fund of funds where proportional voting is not required by law, Invesco will still apply proportional voting. In the event this is not operationally possible, Invesco will vote in line with our internally developed voting guidelines (as defined below).
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For non-US fund of funds Invesco will vote in line with our above-mentioned firm-level conflicts of interest process unless local policies are in place as per Exhibit A.
H. Use of Third-Party Proxy Advisory Services
Invesco may supplement its internal research with information from independent third-parties, such as proxy advisory firms, to assist us in assessing the corporate governance of investee companies. Globally, Invesco leverages research from Institutional Shareholder Services Inc. (“ISS”) and Glass Lewis (“GL”). Invesco generally retains full and independent discretion with respect to proxy voting decisions.
ISS and GL both provide research reports, including vote recommendations, to Invesco and its portfolio managers and analysts. Invesco retains ISS to provide written analysis and recommendations based on Invesco’s internally developed custom voting guidelines. Updates to previously issued proxy research reports may be provided to incorporate newly available information or additional disclosure provided by the issuer regarding a matter to be voted on, or to correct factual errors that may result in the issuance of revised proxy vote recommendations. Invesco’s global ESG team may periodically monitor for these research alerts issued by ISS and GL that are shared with our investment teams. Invesco will generally endeavor to consider such information where such information is considered material provided it is delivered in a timely manner ahead of the vote deadline.
Invesco also retains ISS to assist in the implementation of certain proxy voting-related functions, including, but not limited to, operational and reporting services. These administrative services include receipt of proxy ballots, vote execution through PROXYintel and vote disclosure in Canada, the UK and Europe to meet regulatory reporting obligations.
As part of its fiduciary obligation to clients, Invesco performs extensive initial and ongoing due diligence on the proxy advisory firms it engages globally. This includes reviews of information regarding the capabilities of their research staff, methodologies for formulating voting recommendations, the adequacy and quality of personnel and technology, as applicable, and internal controls, policies and procedures, including those relating to possible conflicts of interest.
The proxy advisory firms Invesco engages globally complete an annual due diligence questionnaire submitted by Invesco, and Invesco conducts annual due diligence meetings in part to discuss their responses to the questionnaire. In addition, Invesco monitors and communicates with these firms and monitors their compliance with Invesco’s performance and policy standards. ISS and GL disclose
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conflicts to Invesco through a review of their policies, procedures and practices regarding potential conflicts of interests (including inherent internal conflicts) as well as disclosure of the work ISS and GL perform for corporate issuers and the payments they receive from such issuers. As part of our annual policy development process, Invesco engages with external proxy and governance experts to understand market trends and developments and to weigh in on the development of these policies at these firms, where appropriate. These meetings provide Invesco with an opportunity to assess the firms’ capabilities, conflicts of interest and service levels, as well as provide investment professionals with direct insight into the advisory firms’ stances on key governance and proxy topics and their policy framework/methodologies.
Invesco completes a review of the System and Organizational Controls (“SOC”) Reports for each proxy advisory firm to ensure the related controls operated effectively to provide reasonable assurance.
In addition to ISS and GL, Invesco may use regional third-party research providers to access regionally specific research.
I. Review of Policy
The Global IPAC and Invesco’s Global ESG team, compliance and legal teams annually communicate and review this Policy and our internally developed custom voting guidelines to seek to ensure that they remain consistent with clients’ best interests, regulatory requirements, investment team considerations, governance trends and industry best practices. At least annually, this Policy and our internally developed voting guidelines are reviewed by various groups within Invesco to ensure that they remain consistent with Invesco’s views on best practice in corporate governance and long-term investment stewardship.
III.
OUR GOOD GOVERNANCE PRINCIPLES
Invesco’s good governance principles outline our views on best practice in corporate governance and long-term investment stewardship. These principles have been developed by our global investment teams in collaboration with the Global ESG team. The broad philosophy and guiding principles in this section inform our approach to long-term investment stewardship and proxy voting. The principles and positions reflected in this Policy are designed to guide Invesco’s investment professionals in voting proxies; they are not intended to be exhaustive or prescriptive.
Our portfolio managers and analysts retain full discretion on vote execution in the context of our good governance principles and internally developed custom voting guidelines, except where otherwise specified in this Policy. The final voting decisions may consider the unique circumstances affecting companies, regional best practices and any dialogue we have had with company management. As a result, different Portfolio Management Teams may vote differently on particular votes for the same company. To the extent a portfolio manager chooses to vote a proxy in a way that is not aligned with the principles below, such manager’s rationales are fully documented.
The following guiding principles apply to operating companies. We apply a separate approach to open-end and closed-end investment companies and unit investment trusts. Where appropriate, these guidelines are supplemented by additional internal guidance that considers regional variations in best practices, disclosure and region-specific voting items. Invesco may vote on proposals not specifically addressed by these principles based on an evaluation of a proposal’s likelihood to enhance long-term shareholder value.
Our good governance principles are divided into six key themes that Invesco endorses:
A. Transparency
We expect companies to provide accurate, timely and complete information that enables investors to make informed investment decisions and effectively carry out their stewardship activities. Invesco supports the highest standards in corporate transparency and believes that these disclosures should be made available ahead of the voting deadlines for the Annual General Meeting or Extraordinary General Meeting to allow for timely decision-making.
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Financial reporting: Company accounts and reporting must accurately reflect the underlying economic position of a company. Arrangements that may constitute an actual or perceived conflict with this objective should be avoided.
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We will generally support proposals to accept the annual financial statements, statutory accounts and similar proposals unless these reports are not presented in a timely manner or significant issues are identified regarding the integrity of these disclosures.
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We will generally vote against the incumbent audit committee chair, or nearest equivalent, where the non-audit fees paid to the independent auditor exceed audit fees for two consecutive years or other problematic accounting practices are identified such as fraud, misapplication of audit standards or persistent material weaknesses/deficiencies in internal controls over financial reporting.
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We will generally not support the ratification of the independent auditor and/or ratification of their fees payable if non-audit fees exceed audit and audit related fees or there are significant auditing controversies or questions regarding the independence of the external auditor. We will consider an auditor’s length of service as a company’s independent auditor in applying this policy.
B. Accountability
Robust shareholder rights and strong board oversight help ensure that management adhere to the highest standards of ethical conduct, are held to account for poor performance and responsibly deliver value creation for stakeholders over the long-term. We therefore encourage companies to adopt governance features that ensure board and management accountability. In particular, we consider the following as key mechanisms for enhancing accountability to investors:
One share one vote: Voting rights are an important tool for investors to hold boards and management teams accountable. Unequal voting rights may limit the ability of investors to exercise their stewardship obligations.
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We generally do not support proposals that establish or perpetuate dual classes of voting shares, double voting rights or other means of differentiated voting or disproportionate board nomination rights.
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We generally support proposals to decommission differentiated voting rights.
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Where unequal voting rights are established, we expect these to be accompanied by reasonable safeguards to protect minority shareholders’ interests.
Anti-takeover devices: Mechanisms designed to prevent or unduly delay takeover attempts may unduly limit the accountability of boards and management teams to shareholders.
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We generally will not support proposals to adopt antitakeover devices such as poison pills. Exceptions may be warranted at entities without significant operations and to preserve the value of net operating losses carried forward or where the applicability of the pill is limited in scope and duration.
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In addition, we will generally not support capital authorizations or amendments to corporate articles or bylaws at operating companies that may be utilized for antitakeover purposes, for example, the authorization of classes of shares of preferred stock with unspecified voting, dividend, conversion or other rights (“blank check” authorizations).
Shareholder rights: We support the rights of shareholders to hold boards and management teams accountable for company performance. We generally support best practice aligned proposals to enhance shareholder rights, including but not limited to the following:
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Adoption of proxy access rights
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Rights to call special meetings
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Rights to act by written consent
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Reduce supermajority vote requirements
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Remove antitakeover provisions
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Requirement that directors are elected by a majority vote
In addition, we oppose practices that limit shareholders’ ability to express their views at a general meeting such as bundling unrelated proposals or several significant article or bylaw amendments into a single voting item. We will generally vote against these proposals unless we are satisfied that all the underlying components are aligned with our views on best practice.
Director Indemnification: Invesco recognizes that individuals may be reluctant to serve as corporate directors if they are personally liable for all related lawsuits and legal costs. As a result, reasonable limitations on directors’ liability can benefit a company and its shareholders by helping to attract and retain qualified directors while preserving recourse for shareholders in the event of misconduct by directors. Accordingly, unless there is insufficient information to make a decision about the nature of the proposal, Invesco will generally support proposals to limit directors’ liability and provide indemnification and/or exculpation, provided that the arrangements are reasonably limited in scope to directors acting in good faith and, in relation to criminal matters, limited in scope to directors having reasonable grounds for believing the conduct was lawful.
Responsiveness: Boards should respond to investor concerns in a timely fashion, including reasonable requests to engage with company representatives regarding such concerns, and address matters that receive significant voting dissent at general meetings of shareholders.
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We will generally vote against the lead independent director and/or the incumbent chair of the governance committee, or nearest equivalent, in cases where the board has not adequately responded to items receiving significant voting opposition from shareholders at an annual or extraordinary general meeting.
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We will generally vote against the lead independent director and/or incumbent chair of the governance committee, or nearest equivalent, where the board has not adequately responded to a shareholder proposal which has received significant support from shareholders.
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We will generally vote against the incumbent chair of the compensation committee if there are significant ongoing concerns with a company’s compensation practices that have not been addressed by the committee or egregious concerns with the company’s compensation practices for two years consecutively.
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We will generally vote against the incumbent compensation committee chair where there are ongoing concerns with a company’s compensation practices and there is no opportunity to express dissatisfaction by voting against an advisory vote on executive compensation, remuneration report (or policy) or nearest equivalent.
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Where a company has not adequately responded to engagement requests from Invesco or satisfactorily addressed issues of concern, we may oppose director nominations, including, but not limited to, nominations for the lead independent director and/or committee chairs.
Virtual shareholder meetings: Companies should hold their annual or special shareholder meetings in a manner that best serves the needs of its shareholders and the company. Shareholders should have an opportunity to participate in such meetings. Shareholder meetings provide an important mechanism by which shareholders provide feedback or raise concerns without undue censorship and hear from the board and management.
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We will generally support management proposals seeking to allow for the convening of hybrid
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shareholder meetings (allowing shareholders the option to attend and participate either in person or through a virtual platform).
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Management or shareholder proposals that seek to authorize the company to hold virtual-only meetings (held entirely through virtual platform with no corresponding in-person physical meeting) will be assessed on a case-by-case basis. Companies have a responsibility to provide strong justification and establish safeguards to preserve comparable rights and opportunities for shareholders to participate virtually as they would have during an in-person meeting. Invesco will consider, among other things, a company’s practices, jurisdiction and disclosure, including the items set forth below:
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meeting procedures and requirements are disclosed in advance of a meeting detailing the rationale for eliminating the in-person meeting;
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clear and comprehensive description of which shareholders are qualified to participate, how shareholders can join the virtual-only meeting, how and when shareholders submit and ask questions either in advance of or during the meeting;
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disclosure regarding procedures for questions received during the meeting, but not answered due to time or other restrictions; and
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description of how shareholder rights will be protected in a virtual-only meeting format including the ability to vote shares during the time the polls are open.
C. Board Composition and Effectiveness
Director election process: Board members should generally stand for election annually and individually.
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We will generally support proposals requesting that directors stand for election annually.
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We will generally vote against the incumbent governance committee chair or lead independent director if a company has a classified board structure that is not being phased out. We may make exceptions to this policy for non-operating companies (e.g., open-end and closed-end funds) or in regions where market practice is for directors to stand for election on a staggered basis.
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When a board is presented for election as a slate (e.g., shareholders are unable to vote against individual nominees and must vote for or against the entire nominated slate of directors) and this approach is not aligned with local market practice, we will generally vote against the slate in cases where we otherwise would vote against an individual nominee.
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Where market practice is to elect directors as a slate we will generally support the nominated slate unless there are governance concerns with several of the individuals included on the slate or we have broad concerns with the composition of the board such as a lack independence.
Board size: We will generally defer to the board with respect to determining the optimal number of board members given the size of the company and complexity of the business, provided that the proposed board size is sufficiently large to represent shareholder interests and sufficiently limited to remain effective.
Board assessment and succession planning: When evaluating board effectiveness, Invesco considers whether periodic performance reviews and skills assessments are conducted to ensure the board represents the interests of shareholders. In addition, boards should have a robust succession plan in place for key management and board personnel.
Definition of independence: Invesco considers local market definitions of director independence but applies a proprietary standard for assessing director independence considering a director’s status as a current or former employee of the business, any commercial or consulting relationships with the company, the level of shares beneficially owned or represented and familial relationships, among others.
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Board and committee independence: The board of directors, board committees and regional equivalents should be sufficiently independent from management, substantial shareholders and conflicts of interest. We consider local market practices in this regard and in general we look for a balance across the board of directors. Above all, we like to see signs of robust challenge and discussion in the boardroom.
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We will generally vote against one or more non-independent directors when a board is less than majority independent, but we will take into account local market practice with regards to board independence in limited circumstances where this standard is not appropriate.
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We will generally vote against non-independent directors serving on the audit committee.
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We will generally vote against non-independent directors serving on the compensation committee.
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We will generally vote against non-independent directors serving on the nominating committee.
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In relation to the board, compensation committee and nominating committee we will consider the appropriateness of significant shareholder representation in applying this policy. This exception will generally not apply to the audit committee.
Separation of Chair and CEO roles: We believe that independent board leadership generally enhances management accountability to investors. Companies deviating from this best practice should provide a strong justification and establish safeguards to ensure that there is independent oversight of a board’s activities (e.g., by appointing a lead or senior independent director with clearly defined powers and responsibilities).
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We will generally vote against the incumbent nominating committee chair where the board chair is not independent unless a lead independent or senior director is appointed.
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We will generally support shareholder proposals requesting that the board chair be an independent director.
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We will generally not vote against a CEO or executive serving as board chair solely on the basis of this issue, however, we may do so in instances where we have significant concerns regarding a company’s corporate governance, capital allocation decisions and/or compensation practices.
Attendance and over boarding: Director attendance at board and committee meetings is a fundamental part of their responsibilities and provides efficient oversight for the company and its investors. In addition, directors should not have excessive external board or managerial commitments that may interfere with their ability to execute the duties of a director.
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We will generally vote against directors who attend less than 75% of board and committee meetings held in the previous year unless an acceptable extenuating circumstance is disclosed, such as health matters or family emergencies.
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We will generally vote against directors who have more than four total mandates at public operating companies. We apply a lower threshold for directors with significant commitments such as executive positions and chairmanships.
Diversity: We encourage companies to continue to evolve diversity and inclusion practices. Boards should be comprised of directors with a variety of relevant skills and industry expertise together with a diverse profile of individuals of different genders, ethnicities, race, skills, tenures and backgrounds to provide robust challenge and debate. We consider diversity at the board level, within the executive management team and in the succession pipeline.
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We will generally vote against the incumbent nominating committee chair of a board where women constitute less than two board members or 25% of the board, whichever is lower, for two or more consecutive years, unless incremental improvements are being made to diversity practices.
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In addition, we will consider a company’s performance on broader types of diversity which may include diversity of skills, non-executive director tenure, ethnicity, race or other factors where appropriate and reasonably determinable. We will generally vote against the incumbent nominating committee chair if there are multiple concerns on diversity issues.
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We generally believe that an individual board’s nominating committee is best positioned to determine whether director term limits would be an appropriate measure to help achieve these goals and, if so, the nature of such limits. Invesco generally opposes proposals to limit the tenure of outside directors through mandatory retirement ages.
D. Long-Term Stewardship of Capital
Capital allocation: Invesco expects companies to responsibly raise and deploy capital towards the long-term, sustainable success of the business. In addition, we expect capital allocation authorizations and decisions to be made with due regard to shareholder dilution, rights of shareholders to ratify significant corporate actions and pre-emptive rights, where applicable.
Share issuance and repurchase authorizations: We generally support authorizations to issue shares up to 20% of a company’s issued share capital for general corporate purposes. Shares should not be issued at a substantial discount to the market price or be repurchased at a substantial premium to the market price.
Stock splits: We generally support management proposals to implement a forward or reverse stock split, provided that a reverse stock split is not being used to take a company private. In addition, we will generally support requests to increase a company’s common stock authorization if requested to facilitate a stock split.
Increases in authorized share capital: We will generally support proposals to increase a company’s number of authorized common and/or preferred shares, provided we have not identified concerns regarding a company’s historical share issuance activity or the potential to use these authorizations for antitakeover purposes. We will consider the amount of the request in relation to the company’s current authorized share capital, any proposed corporate transactions contingent on approval of these requests and the cumulative impact on a company’s authorized share capital, for example, if a reverse stock split is concurrently submitted for shareholder consideration.
Mergers, acquisitions, proxy contests, disposals and other corporate transactions: Invesco’s investment teams will review proposed corporate transactions including mergers, acquisitions, reorganizations, proxy contests, private placements, dissolutions and divestitures based on a proposal’s individual investment merits. In addition, we broadly approach voting on other corporate transactions as follows:
•
We will generally support proposals to approve different types of restructurings that provide the necessary financing to save the company from involuntary bankruptcy.
•
We will generally support proposals to enact corporate name changes and other proposals related to corporate transactions that we believe are in shareholders’ best interests.
•
We will generally support reincorporation proposals, provided that management have provided a compelling rationale for the change in legal jurisdiction and provided further that the proposal will not significantly adversely impact shareholders’ rights.
•
With respect to contested director elections, we consider the following factors, among others, when evaluating the merits of each list of nominees: the long-term performance of the company relative to its industry, management’s track record, any relevant background information related to the contest, the qualifications of the respective lists of director nominees, the strategic merits of the approaches proposed by both sides, including the likelihood that the proposed goals can be met, and positions of stock ownership in the company.
E. Environmental, Social and Governance Risk Oversight
13

Director responsibility for risk oversight: The board of directors are ultimately responsible for overseeing management and ensuring that proper governance, oversight and control mechanisms are in place at the companies they oversee. Invesco may take voting action against director nominees in response to material governance or risk oversight failures that adversely affect shareholder value.
Invesco considers the adequacy of a company's response to material oversight failures when determining whether any voting action is warranted. In addition, Invesco will consider the responsibilities delegated to board subcommittees when determining if it is appropriate to hold certain director nominees accountable for these material failures.
Material governance or risk oversight failures at a company may include, without limitation:
i.
significant bribery, corruption or ethics violations;
ii.
events causing significant climate-related risks;
iii.
significant health and safety incidents; or
iv.
failure to ensure the protection of human rights.
Reporting of financially material ESG information: Companies should report on their environmental, social and governance opportunities and risks where material to their business operations.
•
Where Invesco finds significant gaps in management and disclosure of environmental, social and governance risk policies, we will generally vote against the annual reporting and accounts or an equivalent resolution.
•
Climate risk management: We encourage companies to report on material climate-related risks and opportunities and how these are considered within the company’s strategy, financial planning, governance structures and risk management frameworks in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”), or other relevant reporting frameworks. For companies in industries that materially contribute to climate change, we encourage comprehensive disclosure of greenhouse gas emissions and Paris-aligned emissions reduction targets, where appropriate. Invesco may take voting action at companies that fail to adequately address climate-related risks, including opposing director nominations in cases where we view the lack of effective climate transition risk management as potentially detrimental to long-term shareholder value.
Shareholder proposals addressing environmental and social risks: Invesco may support shareholder resolutions requesting that specific actions be taken to address environmental and social (“E&S”) issues or mitigate exposure to material E&S risks, including reputational risk, related to these issues. When considering such proposals, we will consider a company's track record on E&S issues, the efficacy of the proposal's request, whether the requested action is unduly burdensome, and whether we consider the adoption of such a proposal would promote long-term shareholder value. We will also consider company responsiveness to the proposal and any engagement on the issue when casting votes.
•
We generally do not support resolutions where insufficient information has been provided in advance of the vote or a lack of disclosure inhibits our ability to make fully informed voting decisions.
•
We will generally support shareholder resolutions requiring additional disclosure on material environmental, social and governance risks facing their businesses, provided that such requests are not unduly burdensome or duplicative with a company’s existing reporting. These may include, but are not limited to, reporting on the following: gender and racial diversity issues, political contributions and lobbying disclosure, information on data security, privacy, and internet practices, human capital and labor issues and the use of natural capital, and reporting on climate change-related risks.
14

Ratification of board and/or management acts: We will generally support proposals to ratify the actions of the board of directors, supervisory board and/or executive decision-making bodies, provided there are no material oversight failures as described above. When such oversight concerns are identified, we will consider a company’s response to any issues raised and may vote against ratification proposals instead of, or in addition to, director nominees.
F. Executive Compensation and Alignment
Invesco supports compensation polices and equity incentive plans that promote alignment between management incentives and shareholders’ long-term interests. We pay close attention to local market practice and may apply stricter or modified criteria where appropriate.
Advisory votes on executive compensation, remuneration policy and remuneration reports: We will generally not support compensation-related proposals where more than one of the following is present:
i.
there is an unmitigated misalignment between executive pay and company performance for at least two consecutive years;
ii.
there are problematic compensation practices which may include among others incentivizing excessive risk taking or circumventing alignment between management and shareholders’ interests via repricing of underwater options;
iii.
vesting periods for long-term incentive awards are less than three years;
iv.
the company “front loads” equity awards;
v.
there are inadequate risk mitigating features in the program such as clawback provisions;
vi.
excessive, discretionary one-time equity grants are awarded to executives;
vii.
less than half of variable pay is linked to performance targets, except where prohibited by law.
Invesco will consider company reporting on pay ratios as part of our evaluation of compensation proposals, where relevant.
Equity plans: Invesco generally supports equity compensation plans that promote the proper alignment of incentives with shareholders’ long-term interests, and generally votes against plans that are overly dilutive to existing shareholders, plans that contain objectionable structural features which may include provisions to reprice options without shareholder approval, plans that include evergreen provisions or plans that provide for automatic accelerated vesting upon a change in control.
Employee stock purchase plans: We generally support employee stock purchase plans that are reasonably designed to provide proper incentives to a broad base of employees, provided that the price at which employees may acquire stock represents a reasonable discount from the market price.
Severance Arrangements: Invesco considers proposed severance arrangements (sometimes known as “golden parachute” arrangements) on a case-by-case basis due to the wide variety among their terms. Invesco acknowledges that in some cases such arrangements, if reasonable, may be in shareholders’ best interests as a method of attracting and retaining high-quality executive talent. We generally vote in favor of proposals requiring shareholder ratification of senior executives’ severance agreements where the proposed terms and disclosure align with good market practice.
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Exhibit A
Harbourview Asset Management Corporation
Invesco Advisers, Inc.
Invesco Asset Management (India) Pvt. Ltd*1
Invesco Asset Management (Japan) Limited*1
Invesco Asset Management (Schweiz) AG
Invesco Asset Management Deutschland GmbH
Invesco Asset Management Limited 1
Invesco Asset Management Singapore Ltd
Invesco Australia Ltd
Invesco European RR L.P
Invesco Canada Ltd.1
Invesco Capital Management LLC
Invesco Capital Markets, Inc.*1
Invesco Hong Kong Limited
Invesco Investment Advisers LLC
Invesco Investment Management (Shanghai) Limited
Invesco Investment Management Limited
Invesco Loan Manager, LLC
Invesco Managed Accounts, LLC
Invesco Management S.A
Invesco Overseas Investment Fund Management (Shanghai) Limited
Invesco Pensions Limited
Invesco Private Capital, Inc.
Invesco Real Estate Management S.a.r.l 1
Invesco RR Fund L.P.
Invesco Senior Secured Management, Inc.
Invesco Taiwan Ltd*1
Invesco Trust Company
Oppenheimer Funds, Inc.
WL Ross & Co. LLC
* Invesco entities with specific proxy voting guidelines
1 Invesco entities with specific conflicts of interest policies
16

ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT COMPANIES.

As of February 28, 2023, the following individuals are jointly and primarily responsible for the day-to-day management of the Trust:

| ● |  | Niklas Nordenfelt, CFA, Portfolio Manager, who has been responsible for the Trust since 2020 and has been associated with Invesco and/or its affiliates since 2020. Prior to 2020, he was associated with Wells Fargo Asset Management where he served as a Managing Director, Senior Portfolio Manager and Co-Head of US High Yield.

| ● |  | Rahim Shad, Portfolio Manager, who has been responsible for the Trust since 2021 and has been associated with Invesco and/or its affiliates since 2009.

| ● |  | Philip Susser, Portfolio Manager, who has been responsible for the Trust since 2021 and has been associated with Invesco and/or its affiliates since 2021. From 2001 to 2020, he was associated with Wells Fargo Asset Management where he served as a Senior Portfolio Manager and co-head of US High Yield.

Portfolio Manager Fund Holdings and Information on Other Managed Accounts

Invesco’s portfolio managers develop investment models which are used in connection with the management of certain Invesco Funds as well as other mutual funds for which Invesco or an affiliate acts as sub-adviser, other pooled investment vehicles that are not registered mutual funds, and other accounts managed for organizations and individuals. The ‘Investments’ chart reflects the portfolio managers’ investments in the Fund(s) that they manage and includes investments in the Fund’s shares beneficially owned by a portfolio manager, as determined in accordance with Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, as amended (beneficial ownership includes ownership by a portfolio manager’s immediate family members sharing the same household). The ‘Assets Managed’ chart reflects information regarding accounts other than the Funds for which each portfolio manager has day-to-day management responsibilities. Accounts are grouped into three categories: (i) other registered investment companies; (ii) other pooled investment vehicles; and (iii) other accounts. To the extent that any of these accounts pay advisory fees that are based on account performance (performance-based fees), information on those accounts is specifically noted. In addition, any assets denominated in foreign currencies have been converted into U.S. dollars using the exchange rates as of the applicable date.

Investments

The following information is as of February 28, 2023 (unless otherwise noted):

Portfolio Managers |  | Dollar Range of Investments in the Fund
Invesco High Income Trust II
Niklas Nordenfelt |  | None
Rahim Shad |  | None
Philip Susser |  | None

Assets Managed

The following information is as of February 28, 2023 (unless otherwise noted):

Portfolio Managers |  | Other Registered Investment Companies Managed |  | Other Pooled Investment Vehicles Managed |  | Other Accounts Managed
|  | Number of Accounts |  | Assets (in millions) |  | Number of Accounts |  | Assets (in millions) |  | Number of Accounts |  | Assets (in millions)
Invesco High Income Trust II
Niklas Nordenfelt |  | 4 |  | $3,408.5 |  | 9 |  | $595.0 |  | None |  | None
Rahim Shad |  | 3 |  | $891.9 |  | 4 |  | $419.6 |  | None |  | None
Philip Susser |  | 3 |  | $891.9 |  | 4 |  | $419.6 |  | None |  | None

Potential Conflicts of Interest

Actual or apparent conflicts of interest may arise when a portfolio manager has day-to-day management responsibilities with respect to more than one Fund or other account. More specifically, portfolio managers who manage multiple Funds and/or other accounts may be presented with one or more of the following potential conflicts:

➣ | The management of multiple Funds and/or other accounts may result in a portfolio manager devoting unequal time and attention to the management of each Fund and/or other account. The Adviser and each Sub-Adviser seek to manage such competing interests for the time and attention of portfolio managers by having portfolio managers focus on a particular investment discipline. Most other accounts managed by a portfolio manager are managed using the same investment models that are used in connection with the management of the Funds.

➣ | If a portfolio manager identifies a limited investment opportunity which may be suitable for more than one Fund or other account, a Fund may not be able to take full advantage of that opportunity due to an allocation of filled purchase or sale orders across all eligible Funds and other accounts. To deal with these situations, the Adviser, each Sub-Adviser and the Funds have adopted procedures for allocating portfolio transactions across multiple accounts.

➣ | The Adviser and each Sub-Adviser determine which broker to use to execute each order for securities transactions for the Funds, consistent with its duty to seek best execution of the transaction. However, for certain other accounts (such as mutual funds for which Invesco or an affiliate acts as sub-adviser, other pooled investment vehicles that are not registered mutual funds, and other accounts managed for organizations and individuals), the Adviser and each Sub-Adviser may be limited by the client with respect to the selection of brokers or may be instructed to direct trades through a particular broker. In these cases, trades for a Fund in a particular security may be placed separately from, rather than aggregated with, such other accounts. Having separate transactions with respect to a security may temporarily affect the market price of the security or the execution of the transaction, or both, to the possible detriment of the Fund or other account(s) involved.

➣ | Finally, the appearance of a conflict of interest may arise where the Adviser or Sub-Adviser has an incentive, such as a performance-based management fee, which relates to the management of one Fund or account but not all Funds and accounts

| for which a portfolio manager has day-to-day management responsibilities. None of the Invesco Fund accounts managed have a performance fee.

The Adviser, each Sub-Adviser, and the Funds have adopted certain compliance procedures which are designed to address these types of conflicts. However, there is no guarantee that such procedures will detect each and every situation in which a conflict arises.

Description of Compensation Structure

For the Adviser and each Sub-Adviser

The Adviser and each Sub-Adviser seek to maintain a compensation program that is competitively positioned to attract and retain high-caliber investment professionals. Portfolio managers receive a base salary, an incentive cash bonus opportunity and a deferred compensation opportunity. Portfolio manager compensation is reviewed and may be modified each year as appropriate to reflect changes in the market, as well as to adjust the factors used to determine bonuses to promote competitive Fund performance. The Adviser and each Sub-Adviser evaluate competitive market compensation by reviewing compensation survey results conducted by an independent third party of investment industry compensation. Each portfolio manager’s compensation consists of the following three elements:

Base Salary. Each portfolio manager is paid a base salary. In setting the base salary, the Adviser and each Sub-Adviser’s intention is to be competitive in light of the particular portfolio manager’s experience and responsibilities.

Annual Bonus. The portfolio managers are eligible, along with other employees of the Adviser and each Sub-Adviser, to participate in a discretionary year-end bonus pool. The Compensation Committee of Invesco Ltd. reviews and approves the firm-wide bonus pool based upon progress against strategic objectives and annual operating plan, including investment performance and financial results. In addition, while having no direct impact on individual bonuses, assets under management are considered when determining the starting bonus funding levels. Each portfolio manager is eligible to receive an annual cash bonus which is based on quantitative (i.e. investment performance) and non-quantitative factors (which may include, but are not limited to, individual performance, risk management and teamwork).

Each portfolio manager’s compensation is linked to the pre-tax investment performance of the Funds/accounts managed by the portfolio manager as described in Table 1 below.

Table 1

Sub-Adviser |  | Performance time period1
Invesco 2 Invesco Canada2 Invesco Deutschland2 Invesco Hong Kong2 Invesco Asset Management2 Invesco India2 Invesco Listed Real Assets Division2 |  | One-, Three- and Five-year performance against Fund peer group
Invesco Senior Secured2, 3 Invesco Capital2,4 |  | Not applicable
Invesco Japan |  | One-, Three- and Five-year performance

High investment performance (against applicable peer group and/or benchmarks) would deliver compensation generally associated with top pay in the industry (determined by reference to the third-party provided compensation survey information) and poor investment performance (versus applicable peer group) would result in low bonus compared to the applicable peer group or no

1 | Rolling time periods based on calendar year-end.

2 | Portfolio Managers may be granted an annual deferral award that vests on a pro-rata basis over a four-year period.

3 | Invesco Senior Secured’s bonus is based on annual measures of equity return and standard tests of collateralization performance.

4 | Portfolio Managers for Invesco Capital base their bonus on Invesco results as well as overall performance of Invesco Capital.

bonus at all. These decisions are reviewed and approved collectively by senior leadership which has responsibility for executing the compensation approach across the organization.

With respect to Invesco Capital, there is no policy regarding, or agreement with, the Portfolio Managers or any other senior executive of the Adviser to receive bonuses or any other compensation in connection with the performance of any of the accounts managed by the Portfolio Managers.

Deferred / Long Term Compensation. Portfolio managers may be granted a deferred compensation award based on a firm-wide bonus pool approved by the Compensation Committee of Invesco Ltd. Deferred compensation awards may take the form of annual deferral awards or long-term equity awards. Annual deferral awards may be granted as an annual stock deferral award or an annual fund deferral award. Annual stock deferral awards are settled in Invesco Ltd. common shares. Annual fund deferral awards are notionally invested in certain Invesco Funds selected by the Portfolio Manager and are settled in cash. Long-term equity awards are settled in Invesco Ltd. common shares. Both annual deferral awards and long-term equity awards have a four-year ratable vesting schedule. The vesting period aligns the interests of the Portfolio Managers with the long-term interests of clients and shareholders and encourages retention.

Retirement and health and welfare arrangements. Portfolio managers are eligible to participate in retirement and health and welfare plans and programs that are available generally to all employees.

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 April 19, 2023, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the PEO and PFO, to assess the effectiveness of the 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 April 19, 2023, 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 period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

ITEM 12. | DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 13. | EXHIBITS.

13(a) (1) |  | Code of Ethics.
13(a) (2) |  | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940 and Section 302 of the Sarbanes-Oxley Act of 2002.
13(a) (3) |  | Not applicable.
13(a) (4) |  | Not applicable.
13(b) |  | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940 and Section 906 of the Sarbanes-Oxley Act of 2002.
13(c) |  | Pursuant to the Securities and Exchange Commission’s Order granting relief from Section 19(b) of the Investment Company Act of 1940, the Section 19(a) notices to shareholders are attached thereto.

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 High Income Trust II

By: |  | /s/ Sheri Morris
|  | Sheri Morris
|  | Principal Executive Officer
Date: |  | May 3, 2023

Pursuant to the requirements of the Securities and Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By: |  | /s/ Sheri Morris
|  | Sheri Morris
|  | Principal Executive Officer
Date: |  | May 3, 2023

By: |  | /s/ Adrien Deberghes
|  | Adrien Deberghes
|  | Principal Financial Officer
Date: |  | May 3, 2023