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 euro 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 euro 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: The Trust did not make any distributions during the quarter ended December 31, 2019 .
+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
−Removed: During the year ended December 31, 2019, an additional 2,750,000 Shares were created in exchange 261,604,378 euro and 2,950,000 Shares were redeemed in exchange for 281,022,381 euro.
+Added: For the year ended December 31, 2020 and the year ended December 31, 2019
+Added: During the year ended December 31, 2020, an additional 4,550,000 Shares were created in exchange for 428,947,584 euro and 4,400,000 Shares were redeemed in exchange for 414,936,856 euro.
In addition, 2,238,467 euro 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 euro owned by the Trust was 267,879,731, resulting in a redeemable capital Share value of $327,516,510.
−Removed: During the two months ended December 31, 2018, an additional 950,000 shares were created in exchange for 90,835,045 euro and 350,000 shares were redeemed in exchange for 33,462,989 euro.
+Added: During the year ended December 31, 2019, an additional 2,750,000 Shares were created in exchange 261,604,378 euro and 2,950,000 Shares were redeemed in exchange for 281,022,381 euro.
In addition, 1,798,500 euro 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, 2019, the number of euro owned by the Trust was 256,107,470, resulting in a redeemable capital Share value of $287,263,846.
−Removed: During the year ended October 31, 2018, an additional 4,700,000 Shares were created in exchange for 452,105,092 euro and 5,900,000 Shares were redeemed in exchange for 567,626,747 euro.
−Removed: In addition, 2,091,880 euro were withdrawn to pay the Sponsor's fee and the interest expense on currency deposits, due to the negative interest rate.
−Removed: As of October 31, 2018, the number of euro owned by the Trust was 220,249,413, resulting in a redeemable capital Share value of $249,392,523.
−Removed: A decrease in the Trust’s redeemable capital Share value from $316,828,837 at December 31, 2018 to $287,263,846 at December 31, 2019, was primarily the result of a decrease in the number of Shares outstanding from 2,900,000 at December 31, 2018 to 2,700,000 at December 31, 2019 coupled with a decrease in the Closing Spot Rate from 1.1432 at December 31, 2018 to 1.1225 at December 31, 2019.
−Removed: An increase in the Trust’s redeemable capital Share value from $249,392,523 at October 31, 2018 to $316,828,837 at December 31, 2018, was primarily the result of an increase in the number of Shares outstanding from 2,300,000 at October 31, 2018 to 2,900,000 at December 31, 2018, coupled with an increase in the Closing Spot Rate from 1.1330 at October 31, 2018 to 1.1432 at December 31, 2018.
−Removed: No interest income was earned during the years ended December 31, 2019 and October 31, 2018 and the two months ended December 31, 2018 and 2017, due to an annual nominal interest rate which remained below 0.00% through those periods, as set forth in the FXE Daily Rate chart above.
−Removed: The Sponsor’s fee accrues daily at an annual nominal rate of 0.40% of the euro in the Trust.
−Removed: Due primarily to a decrease in the weighted-average euro in the Trust, the Sponsor’s fee decreased from $1,202,350 for the year ended October 31, 2018 to $986,693 for the year ended December 31, 2019.
−Removed: Due primarily to a decrease in the weighted-average euro in the Trust, interest expense on currency deposits decreased from $1,235,224 for the year ended October 31, 2018 to $1,051,500 for the year ended December 31, 2019.
−Removed: The only expenses of the Trust during the year ended December 31, 2019 were the Sponsor’s fee and interest expense on currency deposits.
+Added: An increase in the Trust’s redeemable capital Share value from $287,263,846 at December 31, 2019 to $327,516,510 at December 31, 2020, was primarily the result of an increase in the number of Shares outstanding from 2,700,000 at December 31, 2019 to 2,850,000 at December 31, 2020 coupled with an increase in the Closing Spot Rate from 1.1225 at December 31, 2019 to 1.2235 at December 31, 2020.
+Added: No interest income was earned during the years ended December 31, 2020 and December 31, 2019, due to an annual nominal interest rate which remained below 0.00% through those periods, as set forth in the FXE Daily Rate chart above.
The Sponsor’s fee accrues daily at an annual nominal rate of 0.40% of the euro in the Trust.
−Removed: Due primarily to a decrease in the weighted-average euro in the Trust, the Sponsor’s fee decreased from $207,841 for the two months ended December 31, 2017 to $184,126 for the two months ended December 31, 2018.
−Removed: Due primarily to a decrease in the weighted-average euro in the Trust, interest expense on currency deposits decreased from $214,973 for the two months ended December 31, 2017 to $185,602 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 loss for the year ended December 31, 2019 was $2,038,193, due to the Sponsor’s fee of $986,693 and interest expense on currency deposits of $1,051,500 exceeding interest income of $0.
−Removed: The Trust’s net comprehensive loss for the year ended October 31, 2018 was $2,437,574, due to the Sponsor’s fee of $1,202,350 and interest expense on currency deposits of $1,235,224 exceeding interest income of $0.
−Removed: Cash dividends were not paid by the Trust in the years ended December 31, 2019 and October 31, 2018 as the Trust’s interest income did not exceed the Trust’s expenses during those periods.
−Removed: The Trust’s net comprehensive loss for the two months ended December 31, 2018 was $369,728, due to the Sponsor’s fee of $184,126 and interest expense on currency deposits of $185,602 exceeding interest income of $0.
−Removed: The Trust’s net comprehensive loss for the two months ended December 31, 2017 was $422,814, due to the Sponsor’s fee of $207,841 and interest expense on currency deposits of $214,973 exceeding interest income of $0.
−Removed: Cash dividends were not paid by the Trust in the two months ended December 31, 2018 and 2017 as the Trust’s interest income did not exceed the Trust’s expenses during those periods.
+Added: Due primarily to an increase in the weighted-average euro in the Trust, the Sponsor’s fee increased from $986,693 for the year ended December 31, 2019 to $1,136,286 for the year ended December 31, 2020.
+Added: Due primarily to an increase in the weighted-average euro in the Trust, interest expense on currency deposits increased from $1,051,500 for the year ended December 31, 2019 to $1,435,575 for the year ended December 31, 2020.
+Added: The only expenses of the Trust during the years ended December 31, 2020 and December 31, 2019 were the Sponsor’s fee and interest expense on currency deposits.
+Added: The Trust’s net comprehensive income (loss) for the year ended December 31, 2020 was $(2,571,861), due to the Sponsor’s fee of $1,136,286 and interest expense on currency deposits of $1,435,575 exceeding interest income of $0.
+Added: The Trust’s net comprehensive income (loss) for the year ended December 31, 2019 was $(2,038,193), due to the Sponsor’s fee of $986,693 and interest expense on currency deposits of $1,051,500 exceeding interest income of $0.
+Added: Cash dividends were not paid by the Trust in the years ended December 31, 2020 and December 31, 2019 as the Trust’s interest income did not exceed the Trust’s expenses during those periods.
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.