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Stocks•11 June 2026•

2 min read

Invesco Income Fund Posts Positive Q1 Return Despite Treasury Yield Pressures

Key Facts

1The Invesco Income Fund achieved a positive absolute return in Q1 2026 but underperformed its benchmark index.

2The fund attributed the relative underperformance to rising short- and intermediate-maturity Treasury yields.

3The fund increased allocations to Agency MBS and non-Agency RMBS during the period.

Amid a challenging environment for fixed-income markets, the Invesco Income Fund reported positive absolute returns for the first quarter of 2026, though it underperformed its benchmark index. The fund attributed this relative weakness to the rise in short- and intermediate-maturity Treasury yields which pressured bond valuations. To navigate these headwinds, the fund strategically increased its exposure to Agency Mortgage-Backed Securities (MBS) and non-Agency Residential Mortgage-Backed Securities (RMBS).

This portfolio adjustment aligns with broader industry trends where fixed-income managers are seeking yield outside of traditional government debt; per market data, peer funds have similarly increased defensive positioning as the 2-year Treasury yield faced upward pressure in early 2026. Analysts note that the shift toward RMBS reflects a tactical move to capture credit spreads while mitigating the direct impact of interest rate volatility seen in the sovereign bond market.

Looking ahead, investors are focusing on labor market stability as a catalyst for future yield movements, following the U.S. Non-Farm Payrolls report which added 172k jobs on June 5, 2026. With the U.S. Unemployment Rate holding at 4.3% as of the June 5, 2026 close, the fund's performance will likely remain sensitive to Federal Reserve policy signals. Market participants should monitor upcoming inflation data to gauge the sustainability of current Treasury yield levels.