Invesco DB Commodity Index Tracking Fund Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarter Ended March 31, 2024

Press release · 05/08 23:05
Invesco DB Commodity Index Tracking Fund Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarter Ended March 31, 2024

Invesco DB Commodity Index Tracking Fund Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarter Ended March 31, 2024

In the first quarter of 2024, Invesco DB Commodity Index Tracking Fund reported a net asset value of $74.7 million. The fund’s financial statements show an increase in revenue and a decrease in expenses, leading to a higher net income. The management discussed the market conditions and the fund’s performance, highlighting the risks associated with the commodity market. The company also disclosed legal proceedings and risk factors that could impact the business.

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 Returns Increased 4.52% Decreased 3.38%

Performance Details

Commodity Returns

In Q1 2024, 8 out of the 14 commodities in the Index had positive returns, led by gains in energy commodities like Brent crude oil, RBOB gasoline, and ultra-low sulfur diesel.

Precious metals like gold and silver also performed well, supported by expectations of interest rate cuts by the Federal Reserve.

On the downside, natural gas continued to lag due to high inventories and reduced winter heating demand. Grains remained under pressure from ample global supplies.

Fund Share Price

The market price of the Fund’s shares increased 4.13% in Q1 2024 compared to a 3.73% decrease in Q1 2023.

Driving the increase was improved investor risk appetite supported by a resilient U.S. economy and expectations for Fed easing.

In Q1 2023, losses were largely driven by declines in energy commodities like natural gas and diesel.

Fund Net Asset Value

The Net Asset Value (NAV) per share increased 4.22% in Q1 2024 compared to a 3.61% decrease in Q1 2023. This was driven by the commodity futures price changes described above.

Q1 2024 net income was $69 million compared to a net loss of $95.6 million in Q1 2023.

Strengths and Weaknesses

Strengths

  • Solid performance from energy commodities like crude oil and ULSD
  • Precious metals like gold boosted by rate cut expectations
  • Good investor risk appetite supported by economic outlook

Weaknesses

  • Poor returns from natural gas due to high inventories
  • Grains remained under pressure from ample supplies
  • Industrial metals lagged but showed signs of improvement

Outlook

The macroeconomic backdrop of steady U.S. growth and expected Fed easing sets up reasonable conditions for commodity investments in the near term.

Energy commodities seem well-positioned if geopolitical tensions persist. Industrial metals could see a lift if low prices spur supply cuts.

However, grains remain vulnerable to any improvement in global inventories. Natural gas also seems set to continue struggling with high stockpiles.

The path of Fed policy and economic growth will be key drivers to monitor going forward.