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

The overall commodity complex performed positively in Q1 2024, supported by an improving economic backdrop and rising geopolitical tensions.

Energy commodities were the top contributors, with gains in crude oil, diesel, and gasoline futures. Natural gas was weaker due to high inventories and reduced seasonal heating demand.

Precious metals performed strongly as well, particularly gold, helped by expectations of easing interest rates and increased demand for safe haven assets.

Industrial metals staged a modest comeback late in the quarter as low prices led to supply curtailments.

Grain prices remained under pressure due to ample global supplies.

Fund Performance Drivers

Q1 2024

Rising futures prices for 8 out of 14 commodities contributed to Index gains. Treasury income, money market income, and T-Bill ETF income also supported Fund performance.

The Fund’s market value per share increased 4.13% and its net asset value per share increased 4.22%.

Q1 2023

Falling energy prices, especially for natural gas and diesel fuel, detracted from performance. Grain prices also weakened on improved supply outlooks.

Sugar and gold prices increased, partially offsetting losses elsewhere.

The Fund’s market value per share decreased 3.73% and its net asset value per share decreased 3.61%.

Revenue and Profit Analysis

The Fund had $22.1 million in investment income for Q1 2024 compared to $26.8 million in Q1 2023. Lower average assets under management led to decreased income from collateral holdings (Treasuries, money market funds, T-bills).

Realized gains/losses on futures positions switched from a $70.3 million loss in Q1 2023 to a $2.6 million loss in Q1 2024.

Unrealized gains/losses on futures positions improved from a $47.2 million loss in Q1 2023 to a $52.8 million gain in Q1 2024, reflecting the change in commodity price trends.

Overall net income was $69.0 million in Q1 2024 compared to a net loss of $95.6 million in Q1 2023.

Strengths and Weaknesses

Strengths

• Solid investment process focused on tracking the Index using futures contracts
• Managing Owner has specialized expertise in commodity futures investing
• Index aims to mitigate issues like contango that impact commodity performance

Weaknesses

• Performance highly dependent on volatile commodity price trends
• Futures trading involves leverage and can increase losses
  
• Investor flows and interest can fluctuate significantly

Outlook

The near-term outlook for commodities remains positive, although performance across sectors may diverge.

Energy prices could stay elevated due to geopolitical issues and tight inventories. Industrial metal demand could slow if global growth decelerates.

Precious metals may continue to find support from a weakening dollar and high inflation.

The Fund is positioned to track the Index if the commodity bull market persists. But performance will vary based on supply/demand trends for individual commodities.