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Item 2. Management’s Discussion and Analysis

2026-05-07 compared with 2025-11-07 · 22 added, 40 removed, 60 unchanged (51% of the section changed)

7 unchanged sentences

These factors include fluctuations in the price of the Swiss Franc, as the value of the Shares relates directly to the value of the Swiss Francs held by the Trust and price fluctuations could materially adversely affect an investment in the Shares.

Readers are urged to review the “Risk Factors” section contained in the Trust’s most recent Annual Report on Form 10-K, together with the modified risk factor included in Item 1A of this report, for a description of other risks and uncertainties that may affect an investment in the Shares.

Readers are urged to review the “Risk Factors” section contained in the Trust’s most recent Annual Report on Form 10-K, for a description of other risks and uncertainties that may affect an investment in the Shares.

Neither Invesco Specialized Products, LLC (the “Sponsor”) nor any other person assumes responsibility for the accuracy or completeness of forward-looking statements contained in this report.

34 unchanged sentences

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.

The Trust’s Depository, JPMorgan Chase Bank, N.A., London Branch, primarily 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.

Interest on the primary deposit account, if any, accrues daily and is paid monthly.

The interest rate in effect as of September 30, 2025 was an annual nominal rate of -0.15%.

The following chart provides the daily rate paid by the Depository since September 30, 2020:

The interest rate in effect as of March 31, 2026 was an annual nominal rate of -0.15%.

The following chart provides the daily rate paid by the Depository since March 31, 2021:

In exchange for a fee, the Sponsor bears most of the expenses incurred by the Trust.

2 unchanged sentences

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).

The Trust did not make any distributions during the quarter ended September 30, 2025.

The Trust did not make any distributions during the quarter ended March 31, 2026.

Critical Accounting Estimates

2 unchanged sentences

These estimates and assumptions affect the Trust’s application of accounting policies.

In addition, please refer to Note 3 to the financial statements of the Trust for further discussion of the Trust’s accounting policies and Item 7 – Management’s Discussions and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates included in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 26, 2025.

In addition, please refer to Note 3 to the financial statements of the Trust for further discussion of the Trust’s accounting policies and Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 2, 2026.

There were no material estimates, which involve a significant level of estimation uncertainty and had or are reasonably likely to have had a material impact on the Trust’s financial condition, used in the preparation of these financial statements.

Results of Operations

During the three and nine months ended September 30, 2025 and 2024, the Trust’s net comprehensive income (loss) was, in part, impacted by market volatility resulting from global tariff gyrations and mounting U.S.

economic uncertainty for 2025, and expectations around the Federal Reserve (the “Fed”) easing and heightened geopolitical concerns for both 2024 and 2025, which are considered to be unusual or infrequent events.

Although the full and direct impact of global tariffs, U.S.

economic concerns, Fed easing expectations and rising geopolitical tensions, on the Trust's net comprehensive income (loss) during the three and nine months ended September 30, 2025 and 2024, cannot be known, it is believed that they have each independently 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.

The Swiss Franc (CHF/USD) was mostly rangebound but closed the third quarter of 2025 with a narrow loss.

The franc was supported by continued demand for safe haven assets and became the favored haven currency amid turbulence in the U.S.

dollar and the Japanese yen.

However, the franc fell after the U.S.

imposed a tariff rate of 39% on Switzerland and the leaders failed to reach a trade deal.

Pharmaceuticals (the main Swiss export to the U.S.) was given an exemption, but sentiment remained bearish.

While the franc pared some losses after the Swiss National Bank (SNB) decided to hold benchmark rates steady in September, it remained vulnerable to fears that the SNB would employ policies that would drive further depreciation.

The tailwind from USD weakness also subsided in the third quarter, with the greenback gaining slightly.

The Swiss Franc (CHF/USD) ended the third quarter of 2024 with strong gains.

While partially due to U.S.

dollar weakness – the Fed officially kicked off its easing cycle in September – the Swiss Franc is generally also seen as a safe-haven currency due to its strong economy.

Thus, it benefitted from the selloff in the U.S.

equity market at the end of July into August, U.S.

election uncertainty, spiking geopolitical tensions in the Middle East, and briefly, reignited recession concerns in the U.S.

disappointing labor data.

The Swiss Franc (CHF/USD) delivered strong gains year-to-date through the third quarter of 2025, supported by ongoing U.S.

dollar weakness and steady demand for safe-haven assets amid heightened global uncertainty.

Despite some setbacks from the uncertainty around the impact of tariffs, the franc has remained the safe-haven currency of choice.

In the first quarter, the franc benefited from rising concerns about a U.S.

recession and stagflation, which triggered a sharp sell-off in risk assets and pushed investors toward more stable currencies like the franc.

That momentum carried into the second quarter, as confidence in U.S.

markets continued to decline.

However, the trend slowed in the third quarter as the greenback bounced back slightly.

The Swiss Franc (CHF/USD) posted a slight loss in the first three quarters of 2024.

dollar strength in the first and second quarters due to the Fed’s higher-for-longer rhetoric was the overarching headwind.

However, the Swiss National Bank (SNB) was also the first major central bank to start cutting its interest rates in March;

lower interest rates reduce the appeal of the country’s currency.

That said, gains from the third quarter helped erase most of earlier losses.

Not only did the Fed and many other global central banks begin their rate easing cycle but the pair also benefitted from increasing safe haven demand due to geopolitical tension, and U.S.

economic and equity market turmoil.

During the three months ended March 31, 2026 and 2025, the Trust’s net comprehensive income (loss) was, in part, impacted by periods of market volatility associated with evolving global macroeconomic and geopolitical conditions, which are considered to be unusual or infrequent events.

For the three months ended March 31, 2026, these conditions included heightened geopolitical tensions, ongoing trade and fiscal policy uncertainty, and shifting expectations regarding the pace and timing of monetary policy actions by central banks, including the Federal Reserve.

For the three months ended March 31, 2025, contributors to market volatility included concerns surrounding global economic growth, inflation dynamics, and expectations related to potential changes in monetary policy.

Although the full and direct impact of these conditions on the Trust’s net comprehensive income (loss) during the three months ended March 31, 2026 and 2025, cannot be known, it is believed that they have each independently 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.

The Swiss Franc (CHF) weakened modestly against the U.S.

dollar during the first quarter of 2026, resulting in negative performance for the Fund, with currency movements largely dictated by U.S.

dollar dynamics.

The Franc outperformed in January, gaining significantly as heightened safe‑haven demand tied to the Iran conflict coincided with growing expectations for Federal Reserve rate cuts, which weighed on the U.S.

dollar and reduced its yield advantage.

However, this divergence reversed later in the quarter as the U.S.

dollar recovered in February and March, supported by shifting policy expectations and renewed demand within the safe‑haven complex.

As a result, late‑quarter U.S.

dollar strength more than offset earlier gains in the Swiss Franc, leading to modest losses for the Fund during the quarter.

The Swiss Franc (CHF) posted strong gains in the first quarter of 2025 due to significant US dollar weakness and rising safe haven demand.

The greenback was pressured by mounting US recession and stagflation concerns, and the resulting equity market meltdown triggered a flight to safety;

the Swiss Franc is seen as a haven currency given Switzerland’s economic and political stability.In addition, while Swiss inflation remains at four-year lows, the US is still dealing with inflation risk skewed to the upside and a seemingly slowing economy.

Additionally, the interest rate paid by the Depository has generally trended downward over the past year with the current interest rate of -0.15%, as set forth in the FXF Rate Chart above.

4 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