MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
−Removed: The following discussion and analysis was prepared to supplement information contained in the accompanying financial statements and is intended to explain certain items regarding the Trust's financial condition as of December 31, 2019, and its results of operations for the fiscal year ended December 31, 2019, the two months ended December 31, 2018 and the fiscal year ended October 31, 2018.
+Added: The following discussion and analysis was prepared to supplement information contained in the accompanying financial statements and is intended to explain certain items regarding the Trust's financial condition as of December 31, 2020, and its results of operations for the fiscal years ended December 31, 2020 and December 31, 2019.
It should be read in conjunction with the “Selected Financial Data” and the accompanying audited financial statements and related notes thereto contained in this report.
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As a result, the only ordinary expense of the Trust during the period covered by this report was the Sponsor’s fee.
−Removed: Each month the Depository deposits into the secondary deposit account accrued but unpaid interest, if any, and the Trustee withdraws Australian Dollars from the secondary deposit account to pay the accrued Sponsor’s fee for the previous month plus other Trust expenses, if any.
+Added: Each month the Depository deposits into the secondary deposit account accrued but unpaid interest, if any, and the Trustee withdraws Australian Dollars from the secondary deposit account to pay the accrued Sponsor’s fee for the previous month plus other Trust expenses (including, without limitation, expenses resulting from negative interest rates), if any.
When the interest deposited, if any, exceeds the sum of the Sponsor’s fee for the prior month plus other Trust expenses, if any, the Trustee converts the excess into USD at the prevailing market rate and distributes the USD as promptly as practicable to Shareholders on a pro-rata basis (in accordance with the number of Shares that they own).
−Removed: Distributions paid during the current reporting period follow (annualized yield reflects the estimated annual yield an investor would receive if a monthly distribution stayed the same for the entire year going forward, and is calculated by annualizing the monthly distribution and dividing by the Trust NAV for the dates listed below):
−Removed: FXA Distribution History
−Removed: Annualized Yield
+Added: The Trust did not pay any distributions during the quarter ended December 31, 2020.
Results of Operations
−Removed: For the year ended December 31, 2019, the two months ended December 31, 2018 and the year ended October 31, 2018
+Added: For the year ended December 31, 2020 and the year ended December 31, 2019
During the year ended December 31, 2020, an additional 1,150,000 Shares were created in exchange for 114,776,341 Australian Dollars and 400,000 Shares were redeemed in exchange for 39,913,155 Australian Dollars.
−Removed: In addition, 11,848 Australian Dollars were withdrawn to pay the portion of the Sponsor’s fee that exceeded interest earned.
+Added: In addition, 529,228 Australian Dollars were withdrawn to pay the Sponsor’s fee and the interest expense on currency deposits, due to the negative interest rate.
As of December 31, 2020, the number of Australian Dollars owned by the Trust was 204,323,450, resulting in a redeemable capital Share value of $157,611,098.
−Removed: During the two months ended December 31, 2018, an additional 100,000 Shares were created in exchange for 10,000,000 Australian Dollars and 150,000 Shares were redeemed in exchange for 15,000,000 Australian Dollars.
+Added: During the year ended December 31, 2019, an additional 200,000 Shares were created in exchange for 20,000,018 Australian Dollars and 550,000 Shares were redeemed in exchange for 54,998,678 Australian Dollars.
+Added: In addition, 11,848 Australian Dollars were withdrawn to pay the portion of the Sponsor’s fee that exceeded interest earned.
As of December 31, 2019, the number of Australian Dollars owned by the Trust was 129,989,492, resulting in a redeemable capital Share value of $91,378,070.
−Removed: During the year ended October 31, 2018, an additional 250,000 Shares were created in exchange for 25,000,000 Australian Dollars and 400,000 Shares were redeemed in exchange for 40,000,000 Australian Dollars.
−Removed: As of October 31, 2018, the number of Australian Dollars owned by the Trust was 170,000,000, resulting in a redeemable capital Share value of $120,594,430.
−Removed: A decrease in the Trust’s redeemable capital Share value from $116,248,970 at December 31, 2018 to $91,378,070 at December 31, 2019, was primarily the result of a decrease in the number of Shares outstanding from 1,650,000 at December 31, 2018 to 1,300,000 at December 31, 2019, coupled with a decrease in the Closing Spot Rate from 0.7040 at December 31, 2018 to 0.7029 at December 31, 2019.
−Removed: A decrease in the Trust’s redeemable capital Share value from $120,594,430 at October 31, 2018 to $116,248,970 at December 31, 2018, was primarily the result of a decrease in the number of Shares outstanding from 1,700,000 at October 31, 2018 to 1,650,000 at December 31, 2018, coupled with a decrease in the Closing Spot Rate from 0.7087 at October 31, 2018 to 0.7040 at December 31, 2018.
−Removed: Interest income decreased from $1,735,658 for the year ended October 31, 2018 to $885,616 for the year ended December 31, 2019, attributable primarily to a decrease in the annual nominal interest rate paid by the Depository, as set forth in the FXA Daily Rate chart above and coupled with a decrease in the weighted-average Australian Dollars in the Trust.
−Removed: Interest income increased from $220,056 for the two months ended December 31, 2017 to $251,151 for the two months ended December 31, 2018, attributable primarily to an increase in the annual nominal interest rate paid by the Depository, as set forth in the chart above, but partially offset by a decrease in the weighted-average Australian Dollars in the Trust.
+Added: An increase in the Trust’s redeemable capital Share value from $91,378,070 at December 31, 2019 to $157,611,098 at December 31, 2020, was primarily the result of an increase in the number of Shares outstanding from 1,300,000 at December 31, 2019 to 2,050,000 at December 31, 2020, coupled with an increase in the Closing Spot Rate from 0.7029 at December 31, 2019 to 0.7717 at December 31, 2020.
+Added: Interest income decreased from $885,616 for the year ended December 31, 2019 to $84,292 for the year ended December 31, 2020, attributable primarily to a decrease in the annual nominal interest rate paid by the Depository, as set forth in the FXA Daily Rate chart above.
The Sponsor’s fee accrues daily at an annual nominal rate of 0.40% of the Australian Dollars in the Trust.
−Removed: Due primarily to a decrease in the weighted-average Australian Dollars in the Trust, the Sponsor’s fee decreased from $508,958 for the year ended October 31, 2018 to $412,925 for the year ended December 31, 2019.
+Added: Due primarily to an increase in the weighted-average Australian Dollars in the Trust, the Sponsor’s fee increased from $412,925 for the year ended December 31, 2019 to $464,501 for the year ended December 31, 2020.
+Added: Because the annual interest rate paid by the Depository fell briefly below 0.00% and remained at 0.00% during the year ended December 31, 2020 (as set forth in the chart above), the Trust incurred interest expense on currency deposits.
+Added: Due primarily to a decline in the interest rate (below 0.00%), interest expense on currency deposits increased from $0 for the year ended December 31, 2019 to $18,141 for the year ended December 31, 2020.
+Added: The only expenses of the Trust during the year ended December 31, 2020 were the Sponsor’s fee and interest expense on currency deposits.
The only expense of the Trust during the year ended December 31, 2019 was the Sponsor’s fee.
−Removed: The Sponsor’s fee accrues daily at an annual nominal rate of 0.40% of the Australian Dollars in the Trust.
−Removed: Due primarily to a decrease in the weighted-average Australian Dollars in the Trust, the Sponsor’s fee decreased from $87,443 for the two months ended December 31, 2017 to $77,937 for the two months ended December 31, 2018.
−Removed: Because the annual interest rate paid by the depository fell briefly below 0% at the end of December 31, 2018 (as set forth in the chart above), the Trust incurred interest expense on currency deposits.
−Removed: Due primarily to a decline in the interest rate (below 0%), interest expense on currency deposits increased from $0 for the two months ended December 31, 2017 to $198 for the two months ended December 31, 2018.
−Removed: The only expenses of the Trust during the two months ended December 31, 2018 were the Sponsor’s fee and interest expense on currency deposits.
−Removed: The Trust’s net comprehensive income for the year ended December 31, 2019 was $472,691 due to interest income of $885,616 exceeding the Sponsor’s fee of $412,925.
−Removed: The Trust’s net comprehensive income for the year ended October 31, 2018 was $1,226,700 due to interest income of $1,735,658 exceeding the Sponsor’s fee of $508,958.
−Removed: Cash dividends per Share de creased from $ 0.7 2 per Share for the year ended October 31, 2018 to $ 0.3 8 per Share for the year ended December 31, 2019.
−Removed: The de crease in cash dividends per Share was primarily the result of a de crease in the annual nominal interest rate paid by the Depository.
−Removed: The Trust’s net comprehensive income for the two months ended December 31, 2018 was $173,016 due to interest income of $251,151 exceeding the Sponsor’s fee of $77,937 and interest expense on currency deposits of $198.
−Removed: The Trust’s net comprehensive income for the two months ended December 31, 2017 was $132,613 due to interest income of $220,056 exceeding the Sponsor’s fee of $87,443.
−Removed: Cash dividends per Share increased from $0.10 per Share for the two months ended December 31, 2017 to $0.12 per Share for the two months ended December 31, 2018.
−Removed: The increase in cash dividends per Share was primarily the result of an increase in the annual nominal interest rate paid by the Depository.
+Added: The Trust’s net comprehensive income (loss) for the year ended December 31, 2020 was $(398,350) due to the Sponsor’s fee of $464,501 and interest expense on currency deposits of $18,141 exceeding interest income of $84,292.
+Added: The Trust’s net comprehensive income (loss) for the year ended December 31, 2019 was $472,691 due to interest income of $885,616 exceeding the Sponsor’s fee of $412,925.
+Added: Cash dividends per Share decreased from $0.38 per Share for the year ended December 31, 2019 to $0.02 per Share for the year ended December 31, 2020.
+Added: The decrease in cash dividends per Share was primarily the result of a decrease in the annual nominal interest rate paid by the Depository.
Critical Accounting Policies
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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.