1 unchanged sentence
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, 2021, and its results of operations for the fiscal years ended December 31, 2021 and December 31, 2020.
−Removed: 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.
+Added: It should be read in conjunction with the audited financial statements and related notes thereto contained in this report.
Cautionary Statement Regarding Forward-Looking Information
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The following chart illustrates the movement in the price of the Shares based on (1) NAV per Share, (2) the “bid” and “ask” midpoint offered on NYSE Arca and (3) the Closing Spot Rate, expressed as a multiple of 100 Canadian Dollars:
−Removed: The Sponsor is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to the Trust’s liquidity needs.
+Added: Liquidity and Capital Resources
+Added: The Sponsor is not aware of any known trends, demands, commitments, events or uncertainties that will result in, or are reasonably likely to result in, material changes to the Trust’s liquidity and capital resources needs.
The Trust’s Depository, JPMorgan Chase Bank, N.A., London Branch, maintains two deposit accounts for the Trust, a primary deposit account that may earn interest and a secondary deposit account that does not earn interest.
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Results of Operations
−Removed: For the year ended December 31, 2020 and the year ended December 31, 2019
−Removed: During the year ended December 31, 2020, an additional 1,000,000 Shares were created in exchange for 98,523,433 Canadian Dollars and 600,000 Shares were redeemed in exchange for 59,135,871 Canadian Dollars.
−Removed: In addition, 439,240 Canadian Dollars were withdrawn to pay the portion of the Sponsor’s fee that exceeded interest earned.
−Removed: As of December 31, 2020, the number of Canadian Dollars owned by the Trust was 191,849,213, resulting in a redeemable capital Share value of $150,539,263.
−Removed: During the year ended December 31, 2019, an additional 850,000 Shares were created in exchange for 83,848,876 Canadian Dollars and 1,550,000 Shares were redeemed in exchange for 152,900,891 Canadian Dollars.
−Removed: As of December 31, 2019, the number of Canadian Dollars owned by the Trust was 152,900,891, resulting in a redeemable capital Share value of $117,963,792.
−Removed: An increase in the Trust’s redeemable capital Share value from $117,963,792 at December 31, 2019 to $150,539,263 at December 31, 2020 was primarily the result of an increase in the number of Shares outstanding from 1,550,000 at December 31, 2019 to 1,950,000 at December 31, 2020, coupled with an increase in the Closing Spot Rate from 0.7712 at December 31, 2019 to 0.7849 at December 31, 2020.
−Removed: Interest income decreased from $1,477,677 for the year ended December 31, 2019 to $298,875 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 FXC Daily Rate chart above, coupled with a decrease in the weighted-average Canadian Dollars in the Trust.
−Removed: The Sponsor’s fee accrues daily at an annual nominal rate of 0.40% of the Canadian Dollars in the Trust.
−Removed: Due primarily to a decrease in the weighted-average Canadian Dollars in the Trust, the Sponsor’s fee decreased from $505,651 for the year ended December 31, 2019 to $493,949 for the year ended December 31, 2020.
−Removed: The only expense of the Trust during the years ended December 31, 2020 and December 31, 2019 was the Sponsor’s fee.
−Removed: The Trust’s net comprehensive income (loss) for the year ended December 31, 2020 was $(195,074), due to the Sponsor’s fee of $493,949 exceeding interest income of $298,875.
−Removed: The Trust’s net comprehensive income (loss) for the year ended December 31, 2019 was $972,026, due to interest income of $1,477,677 exceeding the Sponsor’s fee of $505,651.
−Removed: Cash dividends per Share decreased from $0.58 per Share for the year ended December 31, 2019 to $0.15 per Share for the year ended December 31, 2020.
−Removed: This decrease in cash dividends per Share was primarily the result of a decrease in the annual nominal interest rate paid by the Depository.
−Removed: Critical Accounting Policies
+Added: During the years ended December 31, 2021 and 2020, the Trust’s net comprehensive income (loss) was, in part, impacted by market volatility and uncertainty caused by the novel coronavirus known as COVID-19, which is considered to be an unusual or infrequent event.
+Added: Although the full and direct impact of COVID-19 on the Trust’s net comprehensive income (loss) during the years ended December 31, 2021 and 2020 cannot be known, it is believed that COVID-19 has impacted the Closing Spot Rate, the interest rate paid by the Depository, and the global economy and markets generally, including the number of Shares created and redeemed by the Trust.
+Added: 2021 was a positive year for the Canadian Dollar (CAD/USD), closing out as the only G10 currency to have advanced against the U.S.
+Added: Dollar, which posted its best year since 2015.
+Added: CAD/USD strength was bolstered by the Canadian economy's strong economic rebound and market expectations that the Bank of Canada would be one of the most aggressive among the G10 countries in tightening monetary policy in 2022, potentially even surpassing the Federal Reserve System (the Fed).
+Added: Strengthening energy prices throughout the year also provided a boost for the currency pair, as oil is one of Canada’s major exports.
+Added: The Canadian Dollar (CAD/USD) ended 2020 with a positive performance, recovering significantly after plunging to an almost 4-year low at the onset of the COVID-19 pandemic in March 2020.
+Added: Most of the CAD/USD appreciation, however, was drawn from widespread weakness in the U.S.
+Added: An increasingly positive outlook for the Canadian recovery compared to other countries and rebounding commodity prices added further support for the currency pair.
+Added: Additionally, the interest rate paid by the Depository has generally trended downward over the past several years to the current interest rate of 0.00%, as set forth in the FXC Rate Chart above.
+Added: As long as the Sponsor’s fee and the interest expense on currency deposits, if any, exceed interest income, the Trust will incur a net comprehensive loss.
+Added: Critical Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Sponsor’s management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period covered by this report.
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.