Invesco DB Base Metals Fund Quarterly Report for March 31, 2024
Invesco DB Base Metals Fund Quarterly Report for March 31, 2024
In the first quarter of 2024, Invesco DB Base Metals Fund reported a net asset value of $6.6 million and discussed financial condition and results of operations in their management’s discussion. They also addressed market risk, controls and procedures, legal proceedings, risk factors, unregistered sales of equity securities, defaults on senior securities, mine safety disclosures, and other information.
Company Overview
Invesco DB Base Metals Fund is a commodity pool that trades futures contracts on aluminum, copper, and zinc with the goal of tracking the DBIQ Optimum Yield Industrial Metals Index. The Fund was formed in 2006 and is structured as a series of Invesco DB Multi-Sector Commodity Trust, a Delaware statutory trust.
Fund Performance
First Quarter 2024
- The Fund’s net asset value (NAV) per share fell from $18.28 to $17.94, a decrease of 1.86%. This was driven by declining aluminum and zinc futures prices, partially offset by rising copper prices.
- The Fund’s market price per share dropped from $18.31 to $17.95, a decrease of 1.97%.
- The benchmark DBIQ Optimum Yield Industrial Metals Index fell 2.98%, reflecting lower aluminum and zinc prices.
First Quarter 2023
- The Fund’s NAV per share climbed from $19.50 to $20.21, an increase of 3.64%, as futures prices rose for all three industrial metals.
- The market price per share gained 3.17%.
- The DBIQ Index rose 2.27% with higher prices across all three industrial metals.
Table 1. Key Performance Metrics
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| NAV per Share | -1.86% | +3.64% |
| Market Price per Share | -1.97% | +3.17% |
| DBIQ Optimum Yield Industrial Metals Index | -2.98% | +2.27% |
Financial Position
The Fund meets daily margin requirements by holding U.S. Treasuries, money market funds, and ETFs. The Fund has no long-term debt obligations.
As of March 31, 2024, the Fund had total net assets of $XXX million. This included:
- $XXX million in cash and cash equivalents
- $XXX million in U.S. Treasury Obligations
- $XXX million in receivables/payables for futures contracts
Investment Strategy
- The Fund aims to track the DBIQ Optimum Yield Industrial Metals Index by trading futures contracts on aluminum (33%), copper (36%), and zinc (31%).
- The index aims to mitigate the negative effects of contango and maximize the positive effects of backwardation.
- The Fund may trade other commodity futures contracts if unable to gain full exposure to an index commodity.
Outlook
- Industrial metal prices face uncertainty in 2024 due to conflicting economic forces:
- Potential weaker demand from a slowing global economy
- Tight supplies with low inventories and production disruptions
- Geopolitical tensions around the Russia-Ukraine conflict may continue to provide price support.
- The Fund aims to closely track benchmark performance regardless of price direction.
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