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Item 7. Management’s Discussion and Analysis

2025-02-26 compared with 2024-02-23 · 50 added, 38 removed, 904 unchanged (9% of the section changed)

90 unchanged sentences

The day on which a redemption order is settled is the redemption order settlement date.

As provided below, the redemption order settlement date may occur up to two business days after the redemption order date.

As provided below, the redemption order settlement date may occur up to one business day after the redemption order date.

Redemption orders are irrevocable.

3 unchanged sentences

Unless otherwise agreed to by the Managing Owner and the Authorized Participant as provided in the next sentence, by placing a redemption order, an Authorized Participant agrees to deliver the Creation Units to be redeemed through DTC’s book-entry system to the Fund no later than the redemption order settlement date as of 2:45 p.m., Eastern Time, on the business day immediately following the redemption order date.

Upon submission of a redemption order, the Authorized Participant may request the Managing Owner to agree to a redemption order settlement date up to two business days after the redemption order date.

Upon submission of a redemption order, the Authorized Participant may request the Managing Owner to agree to a redemption order settlement date up to one business day after the redemption order date.

By placing a redemption order, and prior to receipt of the redemption proceeds, an Authorized Participant’s DTC account is charged the non-refundable transaction fee due for the redemption order.

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This cash is used to invest in United States Treasury Obligations, money market mutual funds and T-Bill ETFs, if any, and to meet margin requirements as a result of the positions taken in futures contracts to match the fluctuations of the Index.

As of the date of this Report, each of ABN AMRO Clearing Chicago LLC, BMO Capital Markets Corp., BNP Paribas Securities Corp., BofA Securities, Inc., Cantor Fitzgerald & Co., Citadel Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co., Goldman Sachs Execution & Clearing LP, Interactive Brokers LLC, Jefferies LLC, JP Morgan Securities Inc., Merrill Lynch Professional Clearing Corp., Morgan Stanley & Co.

As of the date of this Report, each of ABN AMRO Clearing Chicago LLC, Bank of America Securities, BMO Capital Markets Corp., BNP Paribas Securities Corp., BofA Securities, Inc., Cantor Fitzgerald & Co., Citadel Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co., Goldman Sachs Execution & Clearing LP, Interactive Brokers LLC, Jane Street Capital LLC, Jefferies LLC, JP Morgan Securities Inc., Morgan Stanley & Co.

LLC, Nomura Securities International Inc., RBC Capital Markets LLC, SG Americas Securities LLC, UBS Securities LLC, Virtu Americas LLC and Virtu Financial Capital Markets LLC has executed a Participant Agreement and are the only Authorized Participants.

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

Shares traded at a low of $48.03 per Share (-4.00%) on February 14, 2024, and a high of $67.85 per Share (+35.62%) on October 29, 2024.

On December 27, 2024, the Fund paid a distribution of $2.55968 for each General Share and Share to holders of record as of December 23, 2024.

Therefore, the total return for the Fund on a market value basis was +26.30%.

Precious metals posted very strong performance in 2024 with the Fund returning over 20%.

In the first quarter, price gains were underpinned by expectations that the Federal Reserve would start easing interest rates imminently, strong central bank demand, robust Asian consumer demand, and the increased call for haven assets from escalating geopolitical conflicts.

Front month prices broke past all-time highs, even surpassing levels during the COVID-19 pandemic.

Silver also gained, riding the wave higher with industrial metals, though silver prices were further supported by robust solar, and improving industrial demand amid expectations for a fourth consecutive annual deficit.

While the bullion did face headwinds in the second quarter from the stall in Chinese central bank purchases and increased profit taking, the metal returned to strong gains in the third quarter when the Federal Reserve’s rate-cutting cycle began and exchange-traded product demand returned.

However, the sector did move lower to end the year on post-election profit taking, as some market participants purchased gold to weather US election uncertainty, which did not play out.

For the year ended December 31, 2023, the NYSE Arca market value of each Share increased from $48.00 per Share to $50.03 per Share.

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

Shares traded at a low of $46.15 per Share (-3.85%) on March 7, 2023, and a high of $53.42 per Share (+11.29%) on May 4, 2023.

15 unchanged sentences

Throughout the year, strong central bank demand, especially in China, also protected the metal’s downside.

For the year ended December 31, 2022, the NYSE Arca market value of each Share decreased from $49.02 per Share to $48.00 per Share.

The Share price low and high for the year ended December 31, 2022 and related change from the Share price on December 31, 2021 was as follows:

Shares traded at a low of $41.90 per Share (-14.52%) on September 26, 2022, and a high of $55.28 per Share (+12.77%) on March 8, 2022.

On December 23, 2022, the Fund paid a distribution of $0.21759 for each General Share and Share to holders of record as of December 20, 2022.

Therefore, the total return for the Fund on a market value basis was -1.62%.

The Fund ended 2022 in negative territory.

While the sector was supported by rising safe haven and inflation hedging demand in the first quarter of the year amid heightened tensions leading up to Russia’s invasion of Ukraine, rising treasury yields and a strengthening U.S.

Dollar in the second and third quarters due to aggressive rate hike expectations and recession fears wiped out all of its earlier gains, leaving it in negative territory.

Weak investor demand further weighed on prices with holdings in gold-backed ETFs falling every week from mid-June to mid-November.

In addition to the pressures gold faced, silver prices were also weighed down by weak Chinese demand outlooks given their commitment to the zero-COVID policy.

However, both metals reversed sharply in the last quarter, with the Fund gaining over 11%, amid expectations for a moderation in Federal Reserve rate hikes and growing optimism for a Chinese reopening in 2023.

Fund Share Net Asset Performance

For the year ended December 31, 2024, the NAV of each Share increased from $49.99 per Share to $60.72 per Share.

Rising commodity future contracts prices for gold were partially offset by falling commodity future contracts prices for silver during the year ended December 31, 2023 contributing to an overall 4.60% increase in the level of the Index and to a 10.11% increase in the level of the DBIQ-OY Precious Metals TR.

Rising commodity future contracts prices for gold and silver during the year ended December 31, 2024 contributing to an overall 21.16% increase in the level of the Index and to a 27.52% increase in the level of the DBIQ-OY Precious Metals TR.

On December 27, 2024, the Fund paid a distribution of $2.55968 for each General Share and Share to holders of record as of December 23, 2024.

1 unchanged sentence

Net income (loss) for the year ended December 31, 2024 was $36.3 million, resulting from $8.1 million of income, net realized gains (losses) of $38.6 million, net change in unrealized gains (losses) of $(9.2) million and net operating expenses of $1.1 million.

For the year ended December 31, 2022, the NAV of each Share decreased from $48.98 per Share to $47.89 per Share.

Falling commodity future contracts prices for gold and silver during the year ended December 31, 2022 contributed to an overall 2.46% decrease in the level of the Index and to a 0.46% decrease in the level of the DBIQ-OY Precious Metals TR.

For the year ended December 31, 2023, the NAV of each Share increased from $47.89 per Share to $49.99 per Share.

Rising commodity future contracts prices for gold were partially offset by falling commodity future contracts prices for silver during the year ended December 31, 2023 contributed to an overall 4.60% increase in the level of the Index and to a 10.11% increase in the level of the DBIQ-OY Precious Metals TR.

On December 22, 2023, the Fund paid a distribution of $2.23426 for each General Share and Share to holders of record as of December 20, 2023.

142 unchanged sentences

Affiliated investments, at value (cost $ 100,206,985 and $ 94,240,094 , respectively)

Cash held by custodian

Other investments:

Variation margin receivable- Commodity Futures Contracts

Receivable for:

2 unchanged sentences

Variation margin payable- Commodity Futures Contracts

Due to custodian

Management fee

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investment adviser that is under common control of Invesco Ltd.

(d) Effective after the close of markets on August 25, 2023, the fund's name changed from Invesco Treasury Collateral ETF to Invesco Short Term Treasury ETF.

(d) All or a portion of the value was pledged as collateral to cover margin requirements for open future contracts.

(e) The rate shown is the 7-day SEC standardized yield as of December 31, 2024 .

16 unchanged sentences

United States Treasury Obligations (a)

Treasury Bill, 3.340 % due January 5, 2023

Treasury Bill, 4.285 % due March 2, 2023

Treasury Bill, 5.240 % due May 30, 2024 (b)

Total United States Treasury Obligations (cost $ 53,793,547 )

1 unchanged sentence

Exchange-Traded Fund

Invesco Treasury Collateral ETF (cost $ 21,504,074 ) (b)(c)

Invesco Short Term Treasury ETF (cost $ 21,504,074 ) (b)(c)

Money Market Mutual Fund

5 unchanged sentences

The interest rate shown represents the discount rate at the most recent auction date of the security prior to period end.

(b) Affiliated issuer.

(b) United States Treasury Obligations of $ 24,477,500 are on deposit with the Commodity Broker and held as maintenance margin for open futures contracts.

The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd.

(d) The rate shown is the 7-day SEC standardized yield as of December 31, 2022 .

(d) Effective after the close of markets on August 25, 2023, the fund’s name changed from Invesco Treasury Collateral ETF to Invesco Short Term Treasury ETF.

(e) The rate shown is the 7-day SEC standardized yield as of December 31, 2023 .

Open Commodity Futures Contracts

1 unchanged sentence

Expiration Date

Unrealized Appreciation (Depreciation) (e)

Unrealized Appreciation (Depreciation) (f)

Long Futures Contracts

December-2024

Total Commodity Futures Contracts

(e) Unrealized Appreciation (Depreciation) and Value are presented above, net by contract.

(f) Unrealized Appreciation (Depreciation) and Value are presented above, net by contract.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

15 unchanged sentences

Affiliated Investments

Capital gain distributions from Affiliated Investments

Commodity Futures Contracts

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Net Increase (Decrease) due to Share Transactions

Return of Capital Distributions

Net Income (Loss)

18 unchanged sentences

( 107,354,424

( 176,229,440

Proceeds from securities sold and matured

20 unchanged sentences

Redemption of Shares

Increase (Decrease) in payable for amount due to custodian

Net cash provided by (used for) financing activities

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In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are issued.

Segment Reporting

In November 2023, the FASB issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ ASU 2023-07 ”), with the intent of improving reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment's profit or loss and assess potential future cash flows for each reportable segment and the entity as a whole thereby enabling better understanding of how an entity's segments impact overall performance.

The Fund represents a single operating segment.

Subject to the oversight and, when applicable, approval of the Board of Managers, the Fund's Managing Owner acts as the Fund's chief operating decision maker (“CODM”), assessing performance and making decisions about resource allocation within the Fund.

The CODM monitors the operating results as a whole and the Fund's long-term strategic asset allocation is determined in accordance with the terms of its prospectus based on a defined investment strategy.

The financial information provided to and reviewed by the CODM is consistent with that presented in the Fund's financial statements.

Adoption of the new standard impacted the Fund's financial statement note disclosures only and did not affect the Fund's financial position or the results of its operations.

Investment Valuations

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Realized gains or losses from the sale or disposition of securities or derivatives are determined on a specific identification basis and recognized in the Statements of Income and Expenses in the period in which the contract is closed or the sale or disposition occurs, respectively.

Interest income on United States Treasury Obligations is recognized on an accrual basis when earned.

Interest income on United States Treasury Obligations is

recognized on an accrual basis when earned.

Premiums and discounts are amortized or accreted over the life of the United States Treasury Obligations.

98 unchanged sentences

to serve as the index sponsor (the “Index Sponsor”).

On February 1, 2021, the provision of index sponsor services transferred back to the Index Sponsor from DWS Investment Management Americas, Inc., to whom the Index Sponsor had previously assigned such responsibility.

The Index Sponsor calculates and publishes the daily index levels and the indicative intraday index levels.

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Total Investments in Securities

Other Investments - Assets (a)

Commodity Futures Contracts

Other Investments - Liabilities (a)

Commodity Futures Contracts

Total Other Investments

Total Investments

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Commodity Futures Contracts

Other Investments - Liabilities (a)

Commodity Futures Contracts

Total Other Investments

Total Investments

77 unchanged sentences

( 244,587,227

(a) Includes $ 1,939 of capital gains distributions from Invesco Treasury Collateral ETF.

Note 9 – Share Purchases and Redemptions

7 unchanged sentences

Cash settlement occurs at the creation order settlement date.

As provided below, the creation order settlement date may occur up to two business days after the creation order date.

As provided below, the creation order settlement date may occur up to one business day after the creation order date.

By placing a creation order, and prior to delivery of such Creation Units, an Authorized Participant’s Depository Trust Company (“DTC”) account is charged the non-refundable transaction fee due for the creation order.

Unless otherwise agreed to by the Managing Owner and the Authorized Participant as provided in the next sentence, Creation Units are issued on the creation order settlement date as of 2:45 p.m., Eastern Time, on the business day immediately following the creation order date at the applicable NAV per Share as of the closing time of the NYSE Arca or the last to close of the exchanges on which its futures contracts are traded, whichever is later, on the creation order date, but only if the required payment has been timely received.

Upon submission of a creation order, the Authorized Participant may request the Managing Owner to agree to a creation order settlement date up to two business days after the creation order date.

Upon submission of a creation order, the Authorized Participant may request the Managing Owner to agree to a creation order settlement date up to one business day after the creation order date.

(b) Redemptions

4 unchanged sentences

Cash settlement occurs at the redemption order settlement date.

As provided below, the redemption order settlement date may occur up to two business days after the redemption order date.

As provided below, the redemption order settlement date may occur up to one business day after the redemption order date.

The redemption procedures allow Authorized Participants to redeem Creation Units.

2 unchanged sentences

Upon submission of a redemption order, the Authorized Participant may request the Managing Owner to agree to a redemption order settlement date up to one business day after the redemption order date.

By placing a redemption order, and prior to receipt of the redemption proceeds, an Authorized Participant’s DTC account is charged the non-refundable transaction fee due for the redemption order.

45 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-K

Item 7. Management’s Discussion and Analysis