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%.
• The Fund’s market price per share dropped from $18.31 to $17.95, a decline of 1.97%.
• The benchmark DBIQ Optimum Yield Industrial Metals Index that the Fund aims to track fell 2.98%.
• The decline in the Fund’s value was driven mainly by falling aluminum and zinc futures prices, partially offset by rising copper futures.

First Quarter 2023

• The Fund’s NAV per share climbed from $19.50 to $20.21, an increase of 3.64%.
  
• The Fund’s market price per share rose from $19.57 to $20.19, a gain of 3.17%.
• The DBIQ Index rose 2.27% over the same period.
  
• The Fund’s gains were fueled by rising futures prices for all three industrial metals that make up the index.

Financial Condition

• As of March 31, 2024, the Fund had total net assets of $XXX million.
• Approximately XX% of net assets were held in U.S. Treasury bills and money market funds to meet margin requirements on futures positions.
• The Fund appears to have adequate capitalization and liquidity to meet its obligations.
• The Fund has no long-term debt or off-balance sheet arrangements.

Revenue and Profit Trends

• For the first quarter of 2024, the Fund had total income of $1.6 million, mostly from interest on its cash holdings.

• Net realized and unrealized losses on futures trading totaled $3.6 million.
  

• After expenses, the Fund had a net loss of $2.2 million for the first quarter.

• In the first quarter of 2023, the Fund earned income of $3.6 million and had net realized and unrealized gains of $2.6 million.

• After expenses, the Fund’s net income was $5.8 million.

Strengths and Weaknesses

Strengths

• The Fund provides efficient exposure to industrial metals futures with low cost and liquidity.
• Futures tracking and rebalancing methodology seeks to minimize effects of contango.
• Strong sponsor and index provider.

Weaknesses

• Exposure concentrated in three industrial metals.
• Futures trading carries high risk and volatility.
• Sensitive to economic cycles and commodity price swings.
  

Future Outlook

• Industrial metal fundamentals appear supportive in 2024 due to constrained mine supplies.
• Chinese infrastructure initiatives could boost metals demand.
  
• However, a global economic slowdown would likely pressure prices.
• Geopolitics, trade wars, and supply disruptions add uncertainty to price outlook.