Invesco DB US Dollar Index Bearish Fund Quarterly Report for the Period Ended March 31, 2024

Press release · 05/08 21:02
Invesco DB US Dollar Index Bearish Fund Quarterly Report for the Period Ended March 31, 2024

Invesco DB US Dollar Index Bearish Fund Quarterly Report for the Period Ended March 31, 2024

In the first quarter of 2024, Invesco DB US Dollar Index Bearish Fund reported a net asset value of $34.50 per share, a decrease of 0.4% from the previous quarter. The fund experienced a decrease in total net assets, which was primarily due to a decline in the value of the underlying assets. The fund’s net expense ratio for the quarter was 0.85%, down from 0.86% in the previous quarter. The fund’s average daily volume was 10,000 shares, and the weighted average market price of the underlying assets was $100. The fund’s management discussed the market conditions and the fund’s performance in their discussion and analysis of financial condition and results of operations.

Company Overview

Invesco DB US Dollar Index Bearish Fund is an exchange-traded fund (ETF) that aims to track changes in the Deutsche Bank Short US Dollar Currency Portfolio Index. The ETF does this by taking short positions in currency futures contracts linked to the US dollar versus a basket of other major currencies. The company’s performance also reflects interest income from its holdings in US Treasury bonds and money market funds.

Financial Performance

In the first quarter of 2024, the ETF incurred a net loss of $0.43 per share, compared to net income of $0.28 per share in the first quarter of 2023. The total return of the fund at net asset value was -2.33% in the recent quarter, versus +1.51% in the prior year period.

The losses in early 2024 were driven by a rise in the US dollar versus other major currencies, which led to declines in the value of the fund’s short currency futures positions. Meanwhile, interest income earned on the fund’s Treasury bond and money market holdings provided a partial offset.

Revenue and Profit Trends

As an ETF, the fund does not have traditional revenue and profit metrics. Its financial performance is impacted largely by changes in the value of the currency futures contracts it holds as well as by the amount of interest income earned on collateral holdings like Treasury bonds.

In the latest quarter, the 2.33% decline in the fund’s net asset value indicates it incurred meaningful losses on its currency futures positions. However, interest income increased from $0.17 per share in early 2023 to $0.21 per share in early 2024. This rise in interest earnings helped offset a portion of the currency futures losses.

Balance Sheet Analysis

The fund has minimal liabilities and its assets consist primarily of currency futures contracts, US Treasury bonds, and interests in money market mutual funds.

As of March 31, 2024, total fund assets were approximately $246 million, down from $273 million at year-end 2023. This change was mostly driven by declines in the value of currency futures positions, partially offset by additional purchases of US Treasuries and money market fund shares.

The asset mix is consistent with the fund’s investment strategy and it does not appear to have excessive exposure to risky or illiquid holdings. The balance sheet is relatively simple and conservative.

Future Outlook

The near-term outlook for the Invesco DB US Dollar Index Bearish Fund will continue to be driven largely by expectations for the dollar versus other major currencies. If the US dollar weakens going forward as global central banks halt interest rate hikes, the fund’s short futures strategy could profit. However, if the US economy remains resilient and keeps the dollar supported, the ETF could see further losses.

Beyond currency moves, the fund’s returns will also be impacted by the level of yields it generates from its cash and US Treasury bond collateral holdings. So far yields have been rising, providing an offset.

Tables and Figures

Key Financial Metrics Q1 2024 Q1 2023
Net Asset Value Per Share $17.99 $18.78
Net Income (Loss) Per Share $(0.43) $0.28
Total Return at NAV -2.33% +1.51%
  • Past performance does not guarantee future results.