Overview

The Invesco DB Commodity Index Tracking Fund aims to track the DBIQ Optimum Yield Diversified Commodity Index Excess Return (the Index). The Index is intended to reflect changes in the market value of 14 commodities that make up the index.

The Fund invests in futures contracts on those 14 commodities to track the performance of the Index. The value of the Fund’s shares is expected to fluctuate based on changes in the value of those futures contracts.

Key Financial Metrics

Metric	Q1 2024	Q1 2023
Net Asset Value Per Share	Increased 4.22%	Decreased 3.61%
Index Level	Increased 3.13%	Decreased 4.50%
Underlying Commodity Index Level	Increased 4.52%	Decreased 3.38%

Performance Details

Commodity Performance

In Q1 2024, the prices of 8 out of the 14 commodities in the Index increased, while 6 decreased. This led to a 3.13% increase in the Index level.

The strongest performers were:

• Brent Crude Oil: +10.65%
• RBOB Gasoline: +12.67%
  
• Gold: +7.80%

The weakest performers were:

• Natural Gas: -24.56%
• Wheat: -9.66%
• Aluminum: -2.51%

Fund Performance Drivers

Share Price

The market price of the Fund’s shares increased 4.13% in Q1 2024 compared to a decrease of 3.73% in Q1 2023. This was driven by the overall increase in commodity prices over the period.

Net Asset Value

The Net Asset Value (NAV) per share increased 4.22% in Q1 2024 compared to a decrease of 3.61% in Q1 2023. This was largely driven by the change in market value of the futures contracts held by the Fund.

Q1 2024 NAV benefited from $22.1 million in investment income, net realized losses of $2.6 million, net unrealized gains of $52.8 million, and expenses of $3.4 million.

Revenue and Profit Analysis

The Fund itself does not generate revenue or profit. Its financial performance aims to track the Index, which measures changes in the market value of the underlying commodities.

As an exchange-traded fund, the Fund generates proceeds from the issuance of shares to authorized participants, which are used to invest in the futures contracts to track the performance of the Index.

The Fund held $100 million in U.S. Treasuries and $324.6 million in affiliated investments as of March 31, 2024 which generate interest and dividend income. After deducting fees and expenses, this income contributes to the Fund’s ability to outperform the Index.

Strengths and Weaknesses

Strengths

• The Fund provides exposure to a diversified basket of commodities across energy, metals, and agriculture sectors. This diversification aims to reduce risk compared to investing in individual commodities.

• As an exchange-traded fund, the Fund provides daily liquidity for investors. Authorized participants can purchase new shares or redeem existing shares daily based on demand.

Weaknesses

• The Fund does not generate any excess return outside of interest/dividend income on its cash management holdings. It aims to closely track its Index without seeking to outperform.

• As a passively-managed fund, there is no active strategy to shift allocations or take defensive positions in declining markets. The Fund’s performance is entirely dependent on the price changes of the underlying commodity futures contracts.

Future Outlook

The near-term outlook for commodities remains constructive but mixed heading into Q2 2024. Energy prices are likely to remain supported by geopolitical tensions and a resilient U.S. economy. However, gains may moderate with an easing Federal Reserve and expectations for weaker global growth.

Industrial metals and grains face larger downside risks if demand falters. But low prices may curb supply and lead to some rebound.

The Fund will continue targeting exposure to the 14 commodities in its Index through futures contracts. Interest and dividend income generated on holdings after fees and expenses will determine the Fund’s ability to outperform the Index.

Summary

In Q1 2024, the overall increase in commodity prices led to a 4.22% gain in the Fund’s Net Asset Value per share and a 4.13% increase in market price per share. This outpaced the 3.13% increase in the level of the underlying Index.

The Fund provides diversified commodity exposure through an index-tracking strategy. Its performance will continue to be driven by changes in the prices of futures contracts on the 14 commodities that make up its Index.