What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2024-11-07 · 55 added, 90 removed, 193 unchanged (43% of the section changed)

9 unchanged sentences

There can be no assurance that the forward-looking statements included in this Report will prove to be accurate.

Factors that could cause results to differ from those expressed in the forward-looking statements are subject to a number of risks, uncertainties and other factors, including those described in the “Risk Factors” section of the Fund’s Prospectus and elsewhere in the Prospectus and in other SEC filings by the Fund, such as its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as well as the following:

• Risks related to market volatility and fluctuations in the price of assets held by the Fund, including the imposition of trading limitations or trading halts, and the potential loss of investment;

• Risks related to market volatility and fluctuations in the price of assets held by the Fund, including as a result of global trade, macroeconomic events, the imposition of trading limitations or trading halts, and the potential loss of investment;

• Risks that the market price of Shares will not correspond to NAV;

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• Risks related to the impact of regulatory actions, such as position limits, accountability levels and daily limits;

• Risks and uncertainty related to public health emergencies and other adverse public health developments;

• Risks related to geopolitical conflict, including the on-going hostilities in Ukraine, the conflict in Israel and surrounding areas, the possible expansion of such conflicts and potential geopolitical consequences, acts of terrorism, mass casualty events, social unrest, civil disturbance or disobedience.

• Risks and uncertainty related to public health emergencies and other adverse public health developments, geopolitical conflict, acts of terrorism, mass casualty events, social unrest, civil disturbance or disobedience.

You should not place undue reliance on any forward-looking statements.

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The notional amounts of each Index Commodity included in the Index are broadly in proportion to historic levels of the world’s production and stocks of the Index Commodities.

The Fund also holds United States Treasury Obligations and T-Bill ETFs, if any, for deposit with Morgan Stanley & Co.

The Fund also holds United States Treasury Obligations, T-Bill ETFs and cash, if any, for deposit with Morgan Stanley & Co.

LLC, the Fund’s commodity broker (the “Commodity Broker”) as margin, to the extent permissible under CFTC rules and United States Treasury Obligations, cash, money market mutual funds and T-Bill ETFs (affiliated or otherwise), if any, on deposit with The Bank of New York Mellon (the “Custodian”), for cash management purposes.

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The composition of the Index may be adjusted in the event that the Index Sponsor is not able to calculate the closing prices of the Index Commodities.

The following table reflects the Fund weights of each Index Commodity or related futures contracts, as applicable, as of September 30, 2024:

The following table reflects the Fund weights of each Index Commodity or related futures contracts, as applicable, as of March 31, 2025:

Index Commodity

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Kansas City Wheat

Closing Level as of September 30, 2024:

Closing Level as of March 31, 2025:

Please see http://www.invesco.com/ETFs with respect to the most recently available weighted composition of the Fund and the composition of the Index.

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The counterparty for futures contracts traded on United States and on most foreign futures exchanges is the clearing house associated with the particular exchange.

In general, clearing houses are backed by their corporate members who may be required to share in the financial burden resulting from the nonperformance by one of their members and, as such, is designed to disperse and mitigate the credit risk posed by any other one member.

In cases where the clearing house is not backed by the clearing members (i.e., some foreign exchanges), it may be backed by a consortium of banks or other financial institutions.

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The Fund in turn allocates its net assets to commodity futures trading.

A significant portion of the NAV is held in United States Treasury Obligations, which may be used as margin for the Fund’s trading in commodity futures contracts and United States Treasury Obligations, money market mutual funds, cash and T-Bill ETFs, if any, which may be used for cash management purposes.

A significant portion of the NAV may be held in United States Treasury Obligations or cash, which may be used as margin for the Fund’s trading in commodity futures contracts and United States Treasury Obligations, money market mutual funds, cash and T-Bill ETFs, if any, which may be used for cash management purposes.

The amount of cash and/or United States Treasury Obligations on deposit with the Commodity Broker may exceed the amount of margin required to be on deposit, depending on market conditions and comparative yields available from United States Treasury Obligations, money market funds, T-Bill ETFs and cash held on deposit with Commodity Broker.

The percentage that United States Treasury Obligations bear to the total net assets will vary from period to period as the market values of the Fund’s commodity interests change.

A portion of the Fund’s United States Treasury Obligations are held for deposit with the Commodity Broker to meet margin requirements.

All remaining cash, money market mutual funds, T-Bill ETFs, if any, and United States Treasury Obligations are on deposit with the Custodian.

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Operating Activities

Net cash flow provided by (used in) operating activities was $124.7 million and $319.4 million for the nine months ended September 30, 2024 and 2023, respectively.

These amounts primarily include net income (loss), net purchases and sales of money market mutual funds and net purchases and sales of United States Treasury Obligations and affiliated investments.

The Fund invests in United States Treasury Obligations, money market mutual funds and T-Bill ETFs (affiliated or otherwise), if any, for margin and/or cash management purposes.

Net cash flow provided by (used in) operating activities was $(56.3) million and $41.2 million for the three months ended March 31, 2025 and 2024, respectively.

These amounts primarily include net income (loss), net purchases and sales of money market mutual funds and net purchases and sales of United States Treasury Obligations, affiliated investments and net deposits to/from the Commodity Broker.

The Fund invests in United States Treasury Obligations, money market mutual funds, T-Bill ETFs (affiliated or otherwise) and cash, if any, for margin and/or cash management purposes.

While the Fund's performance reflects the appreciation and depreciation of those holdings, the Fund's performance, whether positive or negative, is driven primarily by its strategy of trading futures contracts with the aim of seeking to track the Index.

During the nine months ended September 30, 2024, $292.1 million was paid to purchase United States Treasury Obligations and $350.0 million was received from sales and maturing United States Treasury Obligations.

During the nine months ended September 30, 2023, $760.8 million was paid to purchase United States Treasury Obligations and $1,000.0 million was received from sales and maturing United States Treasury Obligations.

$659.0 million was received from sales of affiliated investments and $744.5 million was paid to purchase affiliated investments during the nine months ended September 30, 2024.

$1,336.8 million was received

from sales of affiliated investments and $1,305.4 million was paid to purchase affiliated investments during the nine months ended September 30, 2023.

During the three months ended March 31, 2025, $0 was paid to purchase United States Treasury Obligations and $0 was received from sales and maturing United States Treasury Obligations.

During the three months ended March 31, 2024, $0 was paid to purchase United States Treasury Obligations and $25.0 million was received from sales and maturing United States Treasury Obligations.

$299.8 million was received from sales of affiliated investments and $199.6 million was paid to purchase affiliated investments during the three months ended March 31, 2025.

$110.5 million was received from sales of affiliated investments and $204.9 million was paid to purchase affiliated investments during the three months ended March 31, 2024.

During the three months ended March 31, 2025, net deposits to/from the Commodity Broker was $148.4 million.

There were no net deposits to/from the Commodity Broker during the three months ended March 31, 2024.

Financing Activities

The Fund’s net cash flow provided by (used in) financing activities was $(129.4) million and $(319.4) million during the nine months ended September 30, 2024 and 2023, respectively.

This included $96.4 million and $95.5 million from Shares purchased by Authorized Participants and $225.4 million and $414.9 million from Shares redeemed by Authorized Participants during the nine months ended September 30, 2024 and 2023, respectively.

During the nine months ended September 30, 2024, distributions paid to Shareholders were $0.3 million.

No distributions were paid to Shareholders during the nine months ended September 30, 2023.

The Fund’s net cash flow provided by (used in) financing activities was $42.8 million and $(46.0) million during the three months ended March 31, 2025 and 2024, respectively.

This included $97.0 million and $12.9 million from Shares purchased by Authorized Participants and $54.2 million and $58.5 million from Shares redeemed by Authorized Participants during the three months ended March 31, 2025 and 2024, respectively.

No distributions were paid to Shareholders during the three months ended March 31, 2025.

During the three months ended March 31, 2024, distributions paid to Shareholders were $0.3 million.

Results of Operations

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

The following graphs illustrate the percentage changes in (i) the market price of the Shares (as reflected by the line “Market”), (ii) the Fund’s NAV (as reflected by the line “NAV”), and (iii) the closing levels of the Index (as reflected by the line “DBIQ Diversified Agriculture Index ER”).

Whenever the Treasury Income, Money Market Income and T-Bill ETF Income, if any, earned by the Fund exceeds Fund expenses, the price of the Shares generally exceeds the level of the Index primarily because the Share price reflects Treasury Income, Money Market Income and T-Bill ETF Income from the Fund’s collateral holdings whereas the Index does not consider such income.

Whenever the Treasury Income, Money Market Income and T-Bill ETF Income, if any, earned by the Fund exceeds Fund expenses, the price of the Shares generally exceeds the level of the Index primarily because the Share price reflects Treasury Income, Money Market Income and T-Bill ETF Income, if any, from the Fund’s collateral holdings whereas the Index does not consider such income.

There can be no assurances that the price of the Shares or the Fund’s NAV will exceed the Index levels.

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COMPARISON OF MARKET, NAV AND DBIQ DIVERSIFIED AGRICULTURE INDEX ER TM

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

NEITHER THE PAST PERFORMANCE OF THE FUND NOR THE PRIOR INDEX LEVELS AND CHANGES, POSITIVE OR NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE FUND’S FUTURE PERFORMANCE.

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

NEITHER THE PAST PERFORMANCE OF THE FUND NOR THE PRIOR INDEX LEVELS AND CHANGES, POSITIVE OR NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE FUND’S FUTURE PERFORMANCE.

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Performance Summary

This Report covers the three and nine months ended September 30, 2024 and 2023.

This Report covers the three months ended March 31, 2025 and 2024.

Past performance of the Fund is not necessarily indicative of future performance.

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Past results of the Index and the DBIQ Diversified Agriculture TR are not necessarily indicative of future changes, positive or negative.

The section “Summary of the DBIQ Diversified Agriculture TR and Underlying Index Commodity Returns for the Three and Nine Months Ended September 30, 2024 and 2023” below provides an overview of the changes in the closing levels of the DBIQ Diversified Agriculture TR by disclosing the change in market value of each underlying component Index Commodity through a “surrogate” (and analogous) index that also reflects 3-month United States Treasury Obligations returns.

The section “Summary of the DBIQ Diversified Agriculture TR and Underlying Index Commodity Returns for the Three Months Ended March 31, 2025 and 2024” below provides an overview of the changes in the closing levels of the DBIQ Diversified Agriculture TR by disclosing the change in market value of each underlying component Index Commodity through a “surrogate” (and analogous) index that also reflects 3-month United States Treasury Obligations returns.

Please note also that the Fund’s objective is to track the Index (not the DBIQ Diversified Agriculture TR) and the Fund does not attempt to outperform or underperform the Index.

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Summary of the DBIQ Diversified Agriculture TR and Underlying Index

Commodity Returns for the Three and Nine Months Ended September 30, 2024 and 2023

Commodity Returns for the Three Months Ended March 31, 2025 and 2024

AGGREGATE RETURNS FOR INDICES IN THE DBIQ AGRICULTURE TR

Three Months Ended

Nine Months Ended

September 30,

Underlying Index

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Consequently, the Fund’s aggregate return is expected to outperform the Excess Return Index by the amount of the excess, if any, of the Fund’s Treasury Income, Money Market Income and T-Bill ETF Income over its fees and expenses.

As a result of the Fund’s fees and expenses, however, the aggregate return on the Fund is expected to underperform the

Total Return Index.

As a result of the Fund’s fees and expenses, however, the aggregate return on the Fund is expected to underperform the Total Return Index.

If the Fund’s fees and expenses were to exceed the Fund’s Treasury Income, Money Market Income and T-Bill ETF Income, if any, the aggregate return on an investment in the Fund is expected to underperform the Excess Return Index.

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2023

Fund Share Price Performance

For the three months ended September 30, 2024, the NYSE Arca market value of each Share increased from $23.81 per Share to $26.10 per Share.

The Share price low and high for the three months ended September 30, 2024 and related change from the Share price on June 30, 2024 was as follows:

Shares traded at a low of $23.26 per Share (-2.31%) on August 1, 2024, and a high of $26.56 per Share (+11.55%) on September 27, 2024.

The total return for the Fund on a market value basis was +9.62%.

Agricultural commodities continued to move higher in the third quarter of 2024, however the bifurcation between grains and soft commodities continued.

Cocoa and coffee were the top contributors, supported by persisting supply shortfalls.

In contrast, for grains, while there were pockets of adverse weather, specifically in Europe and the US, the markets largely expected there to be enough cushion to weather those losses, keeping prices capped.

Soybeans and corn were the largest detractors in the quarter, followed by feeder and live cattle, which fell on the availability of cheaper alternatives.

For the three months ended September 30, 2023, the NYSE Arca market value of each Share increased from $21.08 per Share to $21.40 per Share.

The Share price low and high for the three months ended September 30, 2023 and related change from the Share price on June 30, 2023 was as follows:

Shares traded at a low of $21.09 per Share (+0.05%) on August 15, 2023, and a high of $22.37 per Share (+6.12%) on July 25, 2023.

The total return for the Fund on a market value basis was +1.52%.

Agricultural commodities posted slight positive performance in the third quarter of 2023, with most of the gains coming from sugar.

Front month sugar prices rose nearly 15% over the quarter as concerns over a domestic supply shortfall rose with India, the world’s second largest sugar exporter, closing in on an export ban.

Cocoa also rose on deteriorating crops in West Africa but fell sharply to end the quarter.

While grains gained in July after Russia pulled out of the Black Sea Grain Initiative (BSGI) and escalated attacks on Ukraine’s grain export infrastructure, prices retreated starting the last week of July.

Improving weather outlooks across the US Midwest, another bumper Russian wheat harvest, strong corn and soybean harvests in Brazil and the availability of alternative shipping routes all helped ease the blow from escalating tensions in Ukraine.

US grains remained largely uncompetitive on global markets, sending prices even lower in September.

Fund Share Net Asset Performance

For the three months ended September 30, 2024, the NAV of each Share increased from $23.92 per Share to $26.05 per Share.

Rising commodity futures contract prices for Cocoa, Coffee, Cotton, Lean Hogs, Live Cattle, Sugar and Wheat were partially offset by falling commodity futures contract prices of Corn, Feeder Cattle, Kansas City Wheat and Soybeans during the three months ended September 30, 2024, contributing to an overall 7.67% increase in the level of the Index and to a 9.09% increase in the level of the DBIQ Diversified Agriculture Index TR.

The total return for the Fund on a NAV basis was +8.90%.

Net income (loss) for the three months ended September 30, 2024 was $59.8 million, primarily resulting from $9.2 million of income, net realized gain (loss) of $(33.5) million, net change in unrealized gain (loss) of $85.7 million and net operating expenses of $1.6 million.

For the three months ended September 30, 2023, the NAV of each Share increased from $21.10 per Share to $21.42 per Share.

Rising commodity futures contract prices for Cocoa, Cotton, Feeder Cattle, Lean Hogs, Live Cattle and Sugar were partially offset by falling commodity futures contract prices of Coffee, Corn, Kansas City Wheat, Soybeans and Wheat during the three months ended September 30, 2023, contributing to an overall 0.42% increase in the level of the Index and to a 1.78% increase in the level of the DBIQ Diversified Agriculture Index TR.

The total return for the Fund on a NAV basis was +1.52%.

Net income (loss) for the three months ended September 30, 2023 was $13.2 million, primarily resulting from $11.2 million of income, net realized gain (loss) of $13.0 million, net change in unrealized gain (loss) of $(9.2) million and net operating expenses of $1.8 million.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2023

FOR THE THREE MONTHS ENDED MARCH 31, 2025 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2024

Fund Share Price Performance

For the nine months ended September 30, 2024, the NYSE Arca market value of each Share increased from $20.73 per Share to $26.10 per Share.

The Share price low and high for the nine months ended September 30, 2024 and related change from the Share price on December 31, 2023 was as follows:

Shares traded at a low of $20.52 per Share (-1.01%) on January 8, 2024, and a high of $26.56 per Share (+28.13%) on September 27, 2024.

For the three months ended March 31, 2025, the NYSE Arca market value of each Share decreased from $26.59 per Share to $26.34 per Share.

The Share price low and high for the three months ended March 31, 2025 and related change from the Share price

on December 31, 2024 was as follows:

Shares traded at a low of $26.07 per Share (-1.96%) on March 3, 2025, and a high of $28.35 per Share (+6.62%) on February 18, 2025.

The total return for the Fund on a market value basis was -0.94%.

Agricultural commodities ended the first three quarters of 2024 with strong positive performance, though cocoa was the dominant driver.

Front month prices skyrocketed over 180% between the start of the year and its peak in mid-April, repeatedly surpassing all-time highs as crop-damaging disease and adverse weather in West Africa fueled worries for a global supply shortfall.

However, front month prices did ease in the second and end of third quarter on increased profit-taking.

The other contributors were coffee and livestock commodities which also faced supply concerns.

Grains, on the other hand, all retreated on ample global supplies and lacking US competitiveness.

While renewed weather concerns did take the market by surprise in April and May, sending wheat skyrocketing, the rally was short-lived.

Corn and soybeans led the losses year-to-date as the US is expected to have close to record yields due to favorable weather.

For the nine months ended September 30, 2023, the NYSE Arca market value of each Share increased from $20.15 per Share to $21.40 per Share.

The Share price low and high for the nine months ended September 30, 2023 and related change from the Share price on December 31, 2022 was as follows:

Shares traded at a low of $19.36 per Share (-3.92%) on January 19, 2023, and a high of $22.37 per Share (+11.02%) on July 25, 2023.

Agricultural commodities performed negatively in the first quarter of 2025 with the largest detractor being Cocoa.

Cocoa was the largest contributor to the sector's positive performance last year, but Cocoa was pressured by a weakening fundamental outlook due to demand concerns sparked by global trade concerns and the International Cocoa Organization’s forecast for the first global surplus in four years for 2024/2025.

These considerations caused front month Cocoa prices to plunge by more than 30%.

On the other hand, positive performance was led by Coffee, Live Cattle, and Sugar.

Coffee rallied nearly 20% year-to-date, spurred by renewed supply concerns as the two largest global Coffee growers, Brazil and Vietnam, faced a severe drought to start the year and persistent adverse weather, respectively.

Cattle and Sugar also rallied on supply-side concerns, with the former receiving an additional boost from strengthening demand, and a weaker U.S.

dollar was a tailwind for commodities overall.

For the three months ended March 31, 2024, the NYSE Arca market value of each Share increased from $20.73 per Share to $24.75 per Share.

The Share price low and high for the three months ended March 31, 2024 and related change from the Share price on December 31, 2023 was as follows:

Shares traded at a low of $20.52 per Share (-1.01%) on January 8, 2024, and a high of $24.75 per Share (+19.40%) on March 28, 2024.

The total return for the Fund on a market value basis was +19.39%.

Agricultural commodities remained in positive territory for the first three quarters of 2023, supported by gains in sugar, cocoa, live cattle, and feeder cattle.

The cocoa rally was driven by supply shortfalls in the Ivory Coast, the largest global exporter, while sugar prices rallied on Indian export uncertainty.

Live cattle and feeder cattle also added positive performance on dwindled herd counts, while grains (wheat, corn, soybeans) were all detractors.

Robust wheat harvests from Russia and Australia, projections for bumper Brazilian corn and soybeans harvests, as well as the continued extension of the Black Sea Grain Initiative (BSGI), continued to ease supply concerns through the first half of the year.

While Russia did pull out of the BSGI in July, the impact was mitigated given strong Russian wheat exports and the availability of alternative shipping routes.

US grains were also largely uncompetitive on global markets, adding further pressure.

Agricultural commodities ended the first quarter of 2024 significantly higher though Cocoa was largely the sole driver.

Front month prices skyrocketed over 130%, repeatedly surpassing all-time highs as crop damaging disease and adverse weather in West Africa fueled worries for a global supply shortfall.

The other positive contributors were coffee, cotton, sugar, and livestock commodities, which also faced supply concerns.

Grains, on the other hand, all retreated on ample global supplies and lack of U.S.

competitiveness.

Fund Share Net Asset Performance

For the nine months ended September 30, 2024, the NAV of each Share increased from $20.74 per Share to $26.05 per Share.

Rising commodity futures contract prices for Cocoa, Coffee, Feeder Cattle, Lean Hogs, Live Cattle and Sugar were partially offset by falling commodity futures contract prices of Corn, Cotton, Kansas City Wheat, Soybeans and Wheat during the nine months ended September 30, 2024, contributing to an overall 21.53% increase in the level of the Index and to a 26.47% increase in the level of the DBIQ Diversified Agriculture Index TR.

For the three months ended March 31, 2025, the NAV of each Share decreased from $26.60 per Share to $26.33 per Share.

Falling commodity futures contract prices for Cocoa, Corn, Cotton, Lean Hogs and Wheat were partially offset by rising commodity futures contract prices of Coffee, Feeder Cattle, Kansas City Wheat, Live Cattle, Soybeans and Sugar during the three months ended March 31, 2025, contributing to an overall 1.76% decrease in the level of the Index and to a 0.72% decrease in the level of the DBIQ Diversified Agriculture Index TR.

The total return for the Fund on a NAV basis was -1.01%.

Net income (loss) for the nine months ended September 30, 2024 was $162.2 million, primarily resulting from $28.9 million of income, net realized gain (loss) of $92.0 million, net change in unrealized gain (loss) of $46.2 million and net operating expenses of $4.8 million.

For the nine months ended September 30, 2023, the NAV of each Share increased from $20.16 per Share to $21.42 per Share.

Rising commodity futures contract prices for Cocoa, Cotton, Feeder Cattle, Live Cattle and Sugar, were partially offset by falling commodity futures contract prices of Coffee, Corn, Kansas City Wheat, Lean Hogs, Soybeans and Wheat during the nine months ended September 30, 2023, contributing to an overall 3.11% increase in the level of the Index and to a 7.10% increase in the level of the DBIQ Diversified Agriculture Index TR.

Net income (loss) for the three months ended March 31, 2025 was $(11.3) million, primarily resulting from $8.6 million of income, net realized gain (loss) of $83.7 million, net change in unrealized gain (loss) of $(101.8) million and net operating expenses of $1.8 million.

For the three months ended March 31, 2024, the NAV of each Share increased from $20.74 per Share to $24.76 per Share.

Rising commodity futures contract prices for Cocoa, Coffee, Cotton, Feeder Cattle, Lean Hogs, Live Cattle and Sugar were partially offset by falling commodity futures contract prices of Corn, Kansas City Wheat, Soybeans and Wheat during the three months ended March 31, 2024, contributing to an overall 18.16% increase in the level of the Index and to a 19.74% increase in the level of the DBIQ Diversified Agriculture Index TR.

The total return for the Fund on a NAV basis was +19.38%.

Net income (loss) for the nine months ended September 30, 2023 was $49.9 million, primarily resulting from $32.5 million of income, net realized gain (loss) of $31.3 million, net change in unrealized gain (loss) of $(8.0) million and net operating expenses of $5.9 million.

Net income (loss) for the three months ended March 31, 2024 was $129.0 million, primarily resulting from $9.4 million of income, net realized gain (loss) of $44.4 million, net change in unrealized gain (loss) of $76.7 million and net operating expenses of $1.5 million.

Critical Accounting Estimates

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis