What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2024-11-07 · 59 added, 94 removed, 259 unchanged (37% 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 Index is composed of notional amounts 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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Copper-Grade A

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 is 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 $9.4 million and $62.8 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 $(8.9) million and $1.3 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, $74.0 million was paid to purchase United States Treasury Obligations and $57.0 million was received from sales and maturing United States Treasury Obligations.

During the nine months ended September 30, 2023, $202.8 million was paid to purchase United States Treasury Obligations and $296.0 million was received from sales and maturing United States Treasury Obligations.

$152.6 million was received from sales of affiliated investments and $127.6 million was paid to purchase affiliated investments during the nine months ended September 30, 2024.

$417.8 million was received from sales of

affiliated investments and $339.0 million was paid to purchase affiliated investments during the nine months ended September 30, 2023.

During the three months ended March 31, 2025, there were no purchases or sales of United States Treasury Obligations.

During the three months ended March 31, 2024, $6.0 million was received from sales and maturing United States Treasury Obligations.

$16.4 million was received from sales of affiliated investments and $13.3 million was paid to purchase affiliated investments during the three months ended March 31, 2025.

$4.6 million was received from sales of affiliated investments and $10.0 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 $12.6 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 $(9.4) million and $(64.8) million during the nine months ended September 30, 2024 and 2023, respectively.

This included $91.2 million and $79.9 million from Shares purchased by Authorized Participants and $(100.2) million and $(144.7) 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 $0.4 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 $8.9 million and $(1.3) million during the three months ended March 31, 2025 and 2024, respectively.

This included $15.6 million and $3.5 million from Shares purchased by Authorized Participants and $6.6 million and $4.4 million from Shares redeemed by Authorized Participants during the three months ended March 31, 2025 and 2024, respectively.

During the three months ended March 31, 2025 and 2024, distributions paid to Shareholders were $0 and $0.4 million, respectively.

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-OY Industrial Metals 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 levels 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 assurance that the price of the Shares or the Fund’s NAV will exceed the Index levels.

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

No representation is being made that the Index will or is likely to achieve closing levels consistent with or similar to those set forth herein.

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COMPARISON OF MARKET, NAV AND DBIQ-OY INDUSTRIAL METALS ER

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.

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,

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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 DBIQ-OY Industrial Metals TR are not necessarily indicative of future changes, positive or negative, in the closing levels of the DBIQ-OY Industrial Metals TR.

The section “Summary of the DBIQ-OY Industrial Metals 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-OY Industrial Metals 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-OY Industrial Metals 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-OY Industrial Metals 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-OY Industrial Metals TR), and the Fund does not attempt to outperform or underperform the Index.

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Summary of the DBIQ-OY Industrial Metals TR and Underlying Index Commodity

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

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

AGGREGATE RETURNS FOR INDICES IN THE DBIQ-OY INDUSTRIAL METALS TR

Three Months Ended

Nine Months Ended

September 30,

Underlying Index

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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 $20.11 per Share to $20.80 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 $18.09 per Share (-10.07%) on August 7, 2024 and a high of $20.99 per Share (+4.35%) on September 26, 2024.

The total return for the Fund on a market value basis was +3.43%.

Industrial metals performed positively in the third quarter of 2024.

While China’s stalled economy continued to paint a more pessimistic backdrop, anticipation leading into the first Federal Reserve interest rate cut and China’s optimistic stimulus announcement provided a boost for the complex to end the quarter.

The kickoff of the Federal Reserve's easing of interest rates and the surprise hike in Japanese rates also weighed on the US dollar.

Commodity-wise, zinc was the strongest performer supported by persisting concentrate supply tightness.

For the three months ended September 30, 2023, the NYSE Arca market value of each Share increased from $17.97 per Share to $19.15 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 $17.69 per Share (-1.59%) on August 16, 2023 and a high of $19.22 per Share (+6.93%) on July 31, 2023.

The total return for the Fund on a market value basis was +6.57%.

Base metals posted positive performance in the third quarter of 2023, though most of it was attributed to the improving macro sentiment.

Despite the Federal Reserve’s commitment to its higher-for-longer narrative, confidence that the tightening was near an end grew.

However, China continued to be a key headwind with the steady stream of disappointing economic data and lack of clarity around additional stimulus measures driving the growth in bearish positions and capping the upside.

Aluminum and zinc both surged to end September as LME stocks once again fell towards historically low levels due to large withdrawals in Asia, which led to a round of short covering among bearish investors which helped to push prices even higher.

Copper, on the other hand, remained pressured as inventories continued to recover amid the China gloom.

US dollar strength also pressured prices.

Fund Share Net Asset Performance

For the three months ended September 30, 2024, the NAV of each Share increased from $20.16 per Share to $20.81 per Share.

Rising commodity futures contract prices for aluminum, zinc and copper during the three months September 30, 2024 contributed to an overall 2.04% increase in the level of the Index and to a 3.40% increase in the level of the DBIQ-OY Industrial Metals TR.

The total return for the Fund on a NAV basis was +3.22%.

Net income (loss) for the three months ended September 30, 2024 was $2.0 million, primarily resulting from $1.7 million of income, net realized gain (loss) of $0.2 million, net change in unrealized gain of $0.4 million and net operating expenses of $0.3 million.

For the three months ended September 30, 2023, the NAV of each Share increased from $17.95 per Share to $19.12 per Share.

Rising commodity futures contract prices for aluminum, zinc and copper during the three months ended September 30, 2023 contributed to an overall 5.31% increase in the level of the Index and to a 6.73% increase in the level of the DBIQ-OY Industrial Metals TR.

The total return for the Fund on a NAV basis was +6.52%.

Net income (loss) for the three months ended September 30, 2023 was $10.1 million, primarily resulting from $2.3 million of income, net realized gain (loss) of $(10.4) million, net change in unrealized gain (loss) of $18.6 million and net operating expenses of $0.3 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 $18.31 per Share to $20.80 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 $16.80 per Share (-8.25%) on February 9, 2024, and a high of $21.65 per Share (+18.25%) on May 21, 2024.

For the three months ended March 31, 2025 the NYSE Arca market value of each Share increased from $18.84 per Share to $19.20 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 $18.56 per Share (-1.49%) on January 3, 2025 and a high of $19.93 per Share (+5.79%) on March 17, 2025.

The total return for the Fund on a market value basis was +1.91%.

Industrial metals ended the first three quarters of 2024 in positive territory with all three metals included in the Fund posting gains.

Copper and zinc were supported by shortfalls in concentrate supplies and plunging treatment and refining charges i.e., the profit for smelters to refine the metal, forcing cutbacks in refined metal supply.

Aluminum was the weakest of the three but still gained significantly on tightening physical fundamentals.

Adding to this, the US and United Kingdom issued fresh sanctions on Russian copper, aluminum, and nickel in April.

Furthermore, an improving macro backdrop, bolstered by expectations for a soft landing in the US and brighter Chinese outlook, underpinned stronger prices especially in the third quarter.

The kickoff of the Federal Reserve's easing cycle and China’s surprise stimulus in September marked a key shift in sentiment.

For the nine months ended September 30, 2023, the NYSE Arca market value of each Share decreased from $19.57 per Share to $19.15 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 $17.50 per Share (-10.58%) on May 25, 2023, and a high of $22.28 per Share (+13.82%) on January 26, 2023.

Industrial metals experienced mixed performance in the first quarter of 2025, though the Fund's positive performance was largely attributable to gains in Copper.

Front month Copper prices rallied over 10%, initially supported by Chinese restocking and anticipation of stimulus, followed by tariff angst, leading to a spur of frontloading into the U.S., sending prices in both the U.S.

and London soaring.

From a broader perspective, the performance of base metals was further supported by increased infrastructure and defense spending plans in Europe, a weaker U.S.

dollar, and the anticipation of increased metals demand to rebuild Ukraine and Gaza as peace talks began.

Zinc and Aluminum were both pressured by mounting economic growth concerns amid tariff uncertainties.

For the three months ended March 31, 2024, the NYSE Arca market value of each Share decreased from $18.31 per Share to $17.95 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 $16.80 per Share (-8.25%) on February 9, 2024 and a high of $18.17 per Share (-0.76%) on March 15, 2024.

The total return for the Fund on a market value basis was -1.97%.

Industrial metals ended the first three quarters of 2023 down slightly.

For the first quarter, while all of the Fund’s components rallied in January, continuing its China and “Fed-pivot” driven rally from year-end 2022, prices eased through February and the first half of March, pressured by hotter-than-expected labor data, resilient US inflation and a lack of bullish data out of China to support the reopening story.

A broader risk-off move triggered by the turmoil in the banking sector also pressured commodities in general, to end the quarter.

In the second quarter, continued disappointing Chinese data, coupled with expectations for smelter restarts amid weaker energy prices and easing supply concerns, dealt a heavy blow to the commodity sector.

While the sector recovered a bit in the third quarter on improving macro sentiment and renewed supply concerns, triggering a short covering rally, it still fell short of reversing second quarter losses.

Industrial metals were mixed in the first quarter of 2024.

Copper managed to lock in gains and aluminum was slightly lower, while Zinc prices continued to plunge.

Copper prices were supported by the severe shortfalls in concentrate supplies and expanded Chinese smelter capacity, leading to plunging treatment and refining charges (i.e., the profit for smelters to refine the metal, and hence forcing cutbacks in refined metal supply).

Nickel prices gained mostly in February and early March as low prices started to feed into its cost curve leading to output cuts.

Iron Ore and Zinc, both heavily linked to China’s property sector, continued to suffer.

Fund Share Net Asset Performance

For the nine months ended September 30, 2024, the NAV of each Share increased from $18.28 per Share to $20.81 per Share.

Rising commodity futures contract prices for aluminum, zinc and copper during the nine months ended September 30, 2024 contributed to an overall 10.09% increase in the level of the Index and to a 14.56% increase in the level of the DBIQ-OY Industrial Metals TR.

For the three months ended March 31, 2025, the NAV of each Share increased from $18.79 per Share to $19.19 per Share.

Rising commodity futures contract prices for copper were partially offset by falling commodity futures contract prices for aluminum and zinc during the three months March 31, 2025 contributing to an overall 1.27% increase in the level of the Index and to a 2.35% increase in the level of the DBIQ-OY Industrial Metals TR.

The total return for the Fund on a NAV basis was +2.13%.

Net income (loss) for the nine months ended September 30, 2024 was $14.4 million, primarily resulting from $5.4 million of income, net realized gain (loss) of $6.8 million, net change in unrealized gain (loss) of $3.0 million and net operating expenses of $0.8 million.

For the nine months ended September 30, 2023, the NAV of each Share decreased from $19.50 per Share to $19.12 per Share.

Falling commodity futures contract prices for aluminum and zinc were partially offset by rising commodity for copper during the nine months ended September 30, 2023, contributing to an overall 5.70% decrease in the level of the Index and to a 2.04% decrease in the level of the DBIQ-OY Industrial Metals TR.

Net income (loss) for the three months ended March 31, 2025 was $2.1 million, primarily resulting from $1.2 million of income, net realized gain (loss) of $(0.1) million, net change in unrealized gain of $1.2 million and net operating expenses of $0.2 million.

For the three months ended March 31, 2024, the NAV of each Share decreased from $18.28 per Share to $17.94 per Share.

Falling commodity futures contract prices for aluminum and zinc were partially offset by rising commodity futures contract prices for copper during the three months ended March 31, 2024 contributing to an overall 2.98% decrease in the level of the Index and to a 1.69% decrease in the level of the DBIQ-OY Industrial Metals TR.

The total return for the Fund on a NAV basis was -1.86%.

Net income (loss) for the nine months ended September 30, 2023 was $(8.5) million, primarily resulting from $9.0 million of income, net realized gain (loss) of $(53.3) million, net change in unrealized gain (loss) of $36.9 million and net operating expenses of $1.1 million.

Net income (loss) for the three months ended March 31, 2024 was $(2.2) million, primarily resulting from $1.6 million of income, net realized gain (loss) of $(0.1) million, net change in unrealized gain (loss) of $(3.5) million and net operating expenses of $0.2 million.

Critical Accounting Estimates

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The following quantitative disclosures regarding the Fund’s market risk exposures contain “forward-looking statements” within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act and Section 21E of the Exchange Act).

All quantitative disclosures in this section are deemed to be forward-looking statements for purposes of the safe harbor, except for statements of historical fact (such as the dollar amount of maintenance margin required for market risk sensitive instruments held at the end of the reporting period).

All quantitative disclosures in this section are deemed to be forward-looking statements for purposes of the safe harbor, except for statements of historical fact (such as the U.S.

dollar amount of maintenance margin required for market risk sensitive instruments held at the end of the reporting period).

Value at Risk (“VaR”) is a statistical measure of the value of losses that would not be expected to be exceeded over a given time horizon and at a given probability level arising from movement of underlying risk factors.

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The Fund calculates VaR using the actual historical market movements of the Fund’s net assets.

The following table indicates the trading VaR associated with the Fund’s net assets as of September 30, 2024.

For the Nine Months Ended

September 30, 2024

The following table indicates the trading VaR associated with the Fund’s net assets as of March 31, 2025.

For the Three Months Ended

March 31, 2025

Daily Volatility

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Investors may lose all or substantially all of their investment in the Fund.

The following were the primary trading risk exposures of the Fund as of September 30, 2024 by Index Commodity:

The following were the primary trading risk exposures of the Fund as of March 31, 2025 by Index Commodity:

The price of aluminum is volatile.

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Under ordinary circumstances, the Managing Owner’s exercise of discretionary power is limited to determining whether the Fund will make a distribution.

Under emergency or extraordinary circumstances, the Managing Owner’s use of its discretionary powers may increase.

Under emergency or extraordinary circumstances, the Managing Owner’s use of its discretionary

powers may increase.

These special circumstances, for example, include the unavailability of the Index or certain natural or man-made disasters.

2 unchanged sentences

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