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

Press release · 05/08 19:42
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 1.2% from the previous quarter. The fund experienced a decrease in net assets resulting from a decline in the value of the underlying assets and a decrease in the net asset value of the fund’s investments. The fund’s total assets were $3,450,000, and its total liabilities were $3,448,750, resulting in net assets of $1,250. The fund’s net asset flow was negative, with outflows of $10 million.

Company Overview

The Invesco DB US Dollar Index Bearish Fund is an exchange-traded fund that aims to track the Deutsche Bank Short USD Currency Portfolio Index. The Fund takes short positions in currency futures contracts linked to the US dollar in order to profit from a decline in the dollar’s value relative to other major currencies.

Fund Performance Overview

In the first quarter of 2024, the Fund’s share price fell 2.39% on a market value basis. This reflected a positive performance for the US dollar, which led to losses for the Fund.

In the first quarter of 2023, the Fund’s share price rose 1.51% on a market value basis. This reflected a weaker US dollar, which led to gains for the Fund.

Revenue and Profit Analysis

The Fund aims to generate returns from two main sources:

  1. Gains/losses from its currency futures trading strategy
  2. Interest income from its cash and Treasury bond collateral holdings

In Q1 2024, the Fund had a net loss on investments of $0.64 per share. This was driven by the previously mentioned rise in the US dollar.

In Q1 2023, the Fund had a net gain on investments of $0.11 per share, reflecting the weaker dollar.

Net Investment Income

The Fund also generates net investment income from the Treasury bonds and cash instruments it holds. This provides an offset to losses on the currency futures trading strategy.

In Q1 2024, net investment income was $0.21 per share.

In Q1 2023, net investment income was $0.17 per share.

Balance Sheet Analysis

The Fund has strong liquidity, with the majority of assets held in cash and Treasury bonds. This collateral backs the currency futures positions and provides liquidity for Fund operations.

As of March 31, 2024, the Fund held:

  • $xxx million in Treasury Obligations
  • $xxx million in affiliated investments such as money market funds
  • $xxx million in cash equivalents

Future Outlook

The future performance of the Fund will depend on trends in the US dollar. If the US dollar continues to show resilience and rise against other major currencies, this will negatively impact the Fund. However, if dollar weakness resumes, the Fund is likely to benefit.

The Fund aims to maintain its strategy of taking short positions in currency futures contracts linked to the US dollar in order to profit from declines in the dollar’s value. It will also seek to generate additional income from its cash and bond collateral holdings to offset losses during periods of dollar strength.