What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-07 compared with 2025-08-07 · 77 added, 86 removed, 273 unchanged (37% of the section changed)

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Invesco DB U.S.

Dollar Index Bearish Fund (the “Fund”), a separate series of Invesco DB U.S.

Dollar Index Trust (the “Trust”) was formed as a Delaware statutory trust on August 3, 2006.

Dollar Index Bearish Fund (the “Fund”), a separate series of Invesco DB US Dollar Index Trust (the “Trust”) was formed as a Delaware statutory trust on August 3, 2006.

The term of the Fund is perpetual (unless terminated earlier in certain circumstances) as provided for in the Fifth Amended and Restated Declaration of Trust and Trust Agreement of the Trust, as amended (the “Trust Agreement”).

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Operating Activities

Net cash flow provided by (used in) operating activities was $(87.0) million and $10.8 million for the six months ended June 30, 2025 and 2024, respectively.

Net cash flow provided by (used in) operating activities was $(95.5) million and $3.2 million for the nine months ended September 30, 2025 and 2024, respectively.

These amounts primarily include net income (loss), net purchases and sales of money market mutual funds and net purchases and sales of United States Treasury Obligations, affiliated investments and net deposits to/from the Commodity Broker.

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While the Fund’s performance reflects the appreciation and depreciation of those holdings, the Fund’s performance, whether positive or negative, is driven primarily by its strategy of trading DX Contracts with the aim of seeking to track the Index.

During the six months ended June 30, 2025, there were no purchases of United States Treasury Obligations and $15.0 million was received from sales and maturing United States Treasury Obligations.

During the six months ended June 30, 2024, $29.2 million was paid to purchase United States Treasury Obligations and $30.0 million was received from sales and maturing United States Treasury Obligations.

$9.6 million was received from sales of affiliated investments and $110.9 million was paid to purchase affiliated investments during the six months ended June 30, 2025.

$23.9 million was received from sales of affiliated investments and $11.3 million was paid to purchase affiliated investments during the six months ended June 30, 2024.

During the six months ended June 30, 2025, net deposits to/from the Commodity Broker was $10.4 million.

There were no net deposits to/from the Commodity Broker during the six months ended June 30, 2024.

During the nine months ended September 30, 2025, there were no purchases of United States Treasury Obligations and $15.0 million was received from sales and maturing United States Treasury Obligations.

During the nine months ended September 30, 2024, $34.1 million was paid to purchase United States Treasury Obligations and $35.0 million was received from sales and maturing United States Treasury Obligations.

$16.5 million was received from sales of affiliated investments and $127.4 million was paid to purchase affiliated investments during the nine months ended September 30, 2025.

$29.1 million was received from sales of affiliated investments and $27.0 million was paid to purchase affiliated investments during the nine months ended September 30, 2024.

During the nine months ended September 30, 2025, net deposits to/from the Commodity Broker was $8.4 million.

There were no net deposits to/from the Commodity Broker during the nine months ended September 30, 2024.

Financing Activities

The Fund’s net cash flow provided by (used in) financing activities was $87.0 million and $(10.8) million during the six months ended June 30, 2025 and 2024, respectively.

This included $93.0 million and $2.7 million from Shares purchased by Authorized Participants and $5.9 million and $13.5 million from Shares redeemed by Authorized Participants during the six months ended June 30, 2025 and 2024, respectively.

No distributions were paid to Shareholders during the six months ended June 30, 2025 and 2024, respectively.

The Fund’s net cash flow provided by (used in) financing activities was $95.5 million and $(3.2) million during the nine months ended September 30, 2025 and 2024, respectively.

This included $108.0 million and $13.0 million from Shares purchased by Authorized Participants and $12.4 million and $16.2 million from Shares redeemed by Authorized Participants during the nine months ended September 30, 2025 and 2024, respectively.

No distributions were paid to Shareholders during the nine months ended September 30, 2025 and 2024, respectively.

Results of Operations

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

The following graphs illustrate the percentage changes in (i) the market price of the Shares (as reflected by the line “Market”), (ii) the Fund’s NAV (as reflected by the line “NAV”), and (iii) the closing levels of the Index (as reflected by the line “Deutsche Bank Short USD Currency Portfolio Index-Excess Return TM ”).

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Similarly, no representation is being made that the Fund will generate profits or losses similar to the Fund’s past performance or changes in the Index closing levels.

COMPARISON OF MARKET, NAV AND DEUTSCHE BANK SHORT USD CURRENCY PORTFOLIO INDEX EXCESS RETURN TM FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

COMPARISON OF MARKET, NAV AND DEUTSCHE BANK SHORT USD CURRENCY PORTFOLIO INDEX EXCESS RETURN TM FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

NEITHER THE PAST PERFORMANCE OF THE FUND NOR THE PRIOR INDEX LEVELS AND CHANGES, POSITIVE OR NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE FUND’S FUTURE PERFORMANCE.

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Performance Summary

This Report covers the three and six months ended June 30, 2025 and 2024.

This Report covers the three and nine months ended September 30, 2025 and 2024.

Past performance of the Fund is not necessarily indicative of future performance.

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Past results of the Index and the Short Index–TR TM are not necessarily indicative of future changes, positive or negative, in the Index closing levels.

The section “Summary of the Deutsche Bank Short USD Currency Portfolio Index–Total Return TM and Underlying DX Contract Returns for the Three and Six Months Ended June 30, 2025 and 2024” below provides an overview of the changes in the closing levels of the Short Index–TR TM by disclosing the change in closing levels of the underlying DX Contracts of the Index through a “surrogate” (and analogous) index that also reflects the return of 3-month United States Treasury Bills.

The section “Summary of the Deutsche Bank Short USD Currency Portfolio Index–Total Return TM and Underlying DX Contract Returns for the Three and Nine Months Ended September 30, 2025 and 2024” below provides an overview of the changes in the closing levels of the Short Index–TR TM by disclosing the change in closing levels of the underlying DX Contracts of the Index through a “surrogate” (and analogous) index that also reflects the return of 3-month United States Treasury Bills.

Please note also that the Fund’s objective is to track the Index (not the Short Index–TR) and the Fund does not attempt to outperform or underperform the Index.

Summary of the Deutsche Bank Short USD Currency Portfolio Index–Total Return TM and Underlying DX Contract Returns for the Three Months Ended June 30, 2025 and 2024

Summary of the Deutsche Bank Short USD Currency Portfolio Index–Total Return TM and Underlying DX Contract Returns for the Three and Nine Months Ended September 30, 2025 and 2024

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Underlying Index

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If the Fund’s fees and expenses were to exceed the Fund’s Treasury Income, Money Market Income and T-Bill ETF Income, if any, the aggregate return on an investment in the Fund is expected to underperform the Excess Return Index.

FOR THE THREE MONTHS ENDED JUNE 30, 2025 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2024

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2024

Fund Share Price Performance

For the three months ended June 30, 2025, the NYSE Arca market value of each Share increased from $17.55 per Share to $18.92 per Share.

The Share price low and high for the three months ended June 30, 2025 and related change from the Share price on March 31, 2025 was as follows:

Shares traded at a low of $17.54 per Share (-0.06%) on April 1, 2025, and a high of $18.92 per Share (+7.81%) on June 30, 2025.

For the three months ended September 30, 2025, the NYSE Arca market value of each Share decreased from $18.92 per Share to $18.81 per Share.

The Share price low and high for the three months ended September 30, 2025 and related change from the Share price on June 30, 2025 was as follows:

Shares traded at a low of $18.31 per Share (-3.22%) on July 31, 2025, and a high of $19.02 per Share (+0.53%) on September 16, 2025.

The total return for the Fund on a market value basis was -0.58%.

dollar remained under pressure in the second quarter of 2025, extending its first quarter weakness, leading to gains for the Fund.

While the initial tariff driven rally in late 2024 was predicated on relative U.S.

strength versus trading partners, the narrative has since reversed.

The tariffs announced on Liberation Day in April undermined U.S.

consumer and business confidence, fueling domestic growth concerns and de-dollarization trades.

The 90-day tariff truce with China temporarily eased trade tensions in mid-May but continued uncertainty weighed on gains.

Meanwhile, the Federal Reserve maintained its dovish stance, with markets still pricing in 50 basis points of interest rate cuts for the year, further eroding yield support for the greenback.

In contrast, the euro found support from resilient economic data and fiscal stimulus tied to defense and infrastructure, while the yen benefited from the Bank of Japan’s continued tightening bias.

With global policy divergence widening and confidence in U.S.

fiscal discipline faltering, the U.S.

dollar’s outlook remained clouded heading into the second half of the year.

For the three months ended June 30, 2024 the NYSE Arca market value of each Share decreased from $17.99 per Share to $17.90 per Share.

The Share price low and high for the three months ended June 30, 2024 and related change from the Share price on March 31, 2024 was as follows:

Shares traded at a low of $17.67 per Share (-1.75%) on April 16, 2024, and a high of $18.17 per Share (+1.03%) on June 3, 2024.

The Fund delivered a loss in the third quarter of 2025 with the U.S.

dollar ending higher.

Despite the downtrend in the first half of the year, U.S.

dollar rebounded, benefitting from positive economic data which brought central bank policy divergence into focus.

Trade agreements also provided some relief as gyrating tariffs heavily pressured investor sentiment on the US economy.

However, resurging concerns around the Federal Reserve’s credibility, weaker labor market data, the Federal Reserve’s tilt to dovishness, and September’s rate cut all led to the dollar paring some of these gains.

The growth of U.S.

dollar debasement trades was also a headwind to Fund performance.

For the three months ended September 30, 2024, the NYSE Arca market value of each Share increased from $17.90 per Share to $18.93 per Share.

The Share price low and high for the three months ended September 30, 2024 and related change from the Share price on June 30, 2024 was as follows:

Shares traded at a low of $17.90 per Share (0.00%) on July 01, 2024, and a high of $19.01 per Share (+6.23%) on September 27, 2024.

The total return for the Fund on a market value basis was +5.75%.

While not following a smooth path, the U.S.

dollar moved higher in the second quarter of 2024, leading to losses for the Fund.

The key driver was the Federal Reserve’s more hawkish stance amid persistent U.S.

While the markets had expected for the central bank to start cutting rates imminently, those hopes were repeatedly dashed through the quarter.

In comparison, many global economies, including Switzerland, Sweden, Canada, and the European Central Bank (ECB), had kicked off their easing (i.e., lowering interest rates) cycles.

Higher interest rates generally make a country’s currency more attractive to hold.

dollar was heavily pressured in the third quarter of 2024, leading to gains for the Fund.

In addition to the highly anticipated Federal Reserve easing cycle which officially kicked off in September – the central bank announced a larger-than-expected interest rate cut of 0.50% – the Bank of Japan also surprised the market with a rate hike in August.

Higher interest rates generally boost a country’s currency and vice versa;

in this case, the events boosted the Japanese yen and pressured the U.S.

Fund Share Net Asset Performance

For the three months ended June 30, 2025, the NAV of each Share increased from $17.53 per Share to $18.90 per Share.

Rising currency futures contracts prices for short DX Contracts during the three months ended June 30, 2025 contributed to a 6.89% increase in the level of the Index and to a 8.04% increase in the level of the Short Index–TR TM .

For the three months ended September 30, 2025, the NAV of each Share decreased from $18.90 per Share to $18.80 per Share.

Falling currency futures contracts prices for short DX Contracts during the three months ended September 30, 2025 contributed to a 1.37% decrease in the level of the Index and to a 0.32% decrease in the level of the Short Index–TR TM .

The total return for the Fund on a NAV basis was -0.53%.

Net income (loss) for the three months ended June 30, 2025 was $7.9 million, primarily resulting from $1.3 million of income, net realized gain (loss) of $4.0 million, net change in unrealized gain (loss) of $2.8 million and net operating expenses of $0.2 million.

For the three months ended June 30, 2024, the NAV of each Share decreased from $17.98 per Share to $17.90 per Share.

Falling currency futures contracts prices for short DX Contracts during the three months ended June 30, 2024 contributed to a 1.60% decrease in the level of the Index and to a 0.27% decrease in the level of the Short Index–TR TM .

Net income (loss) for the September 30, 2025 was $(0.7) million, primarily resulting from $1.6 million of income, net realized gain (loss) of $0.6 million, net change in unrealized gain (loss) of ($2.6) million and net operating expenses of $0.3 million.

For the three months ended September 30, 2024, the NAV of each Share increased from $17.90 per Share to $18.92 per Share.

Rising currency futures contracts prices for short DX Contracts during the September 30, 2024 contributed to a 4.51% increase in the level of the Index and to a 5.89% increase in the level of the Short Index–TR TM .

The total return for the Fund on a NAV basis was +5.70%.

Net income (loss) for the three months ended June 30, 2024 was $(0.3) million, primarily resulting from $0.7 million of income, net realized gain (loss) of $(1.4) million, net change in unrealized gain (loss) of $0.5 million and net operating expenses of $0.1 million.

FOR THE SIX MONTHS ENDED JUNE 30, 2025 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2024

Net income (loss) for the three months ended September 30, 2024 was $3.0 million, primarily resulting from $0.7 million of income, net realized gain (loss) of $1.5 million, net change in unrealized gain (loss) of $0.8 million and net operating expenses of $0.1 million.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2024

Fund Share Price Performance

For the six months ended June 30, 2025, the NYSE Arca market value of each Share increased from $16.71 per Share to $18.92 per Share.

The Share price low and high for the six months ended June 30, 2025 and related change from the Share price on December 31, 2024 was as follows:

Shares traded at a low of $16.53 per Share (-1.08%) on January 13, 2025, and a high of $18.92 per Share (+13.23%) on June 30, 2025.

For the nine months ended September 30, 2025, the NYSE Arca market value of each Share increased from $16.71 per Share to $18.81 per Share.

The Share price low and high for the nine months ended September 30, 2025 and related change from the Share price on December 31, 2024 was as follows:

Shares traded at a low of $16.53 per Share (-1.08%) on January 13, 2025, and a high of $19.02 per Share (+13.82%) on September 16, 2025.

The total return for the Fund on a market value basis was +12.57%.

dollar declined sharply in the first half of 2025, resulting in positive performance for the Fund.

This marks a sharp reversal from the strong rally that closed out 2024, when President Trump’s tariff policy was expected to disproportionately impact trading partners’ currencies and support the greenback.

However, those same policies have since undermined U.S.

investor and business confidence, with stagflation and domestic growth concerns becoming top of mind.

This, coupled with geopolitical instability in the second quarter, pushed investors further away from the U.S.

dollar and towards safe havens like the Swiss franc and Japanese yen.

The euro was also buoyed by defense and infrastructure stimulus, and the Japanese yen strengthened on expected Bank of Japan rate hikes, which added pressure to the U.S.

Finally, the Federal Reserve’s dovish stance, maintaining 50 basis points of expected interest rate cuts, also eroded yield support for the U.S.

For six months ended June 30, 2024, the NYSE Arca market value of each Share decreased from $18.43 per Share to $17.90 per Share.

The Share price low and high for the six months ended June 30, 2024 and related change from the Share price on December 31, 2023 was as follows:

Shares traded at a low of $17.67 per Share (-4.10%) on April 16, 2024, and a high of $18.28 per Share (-0.81%) on January 8, 2024.

The Fund experienced a gain in the first three quarters of 2025 as the U.S.

dollar moved sharply lower.

dollar downtrend theme has been persistent due to the Federal Reserve’s plans to deliver rate cuts, waning confidence in the U.S.

economy due to tariffs and stagflation concerns, softening economic data, and concerns about the Federal Reserve's credibility adding momentum to the U.S.

dollar debasement trade.

Despite some bounces and a rebound in the third quarter, the U.S.

dollar continued its broader downtrend on these structural performance headwinds.

For nine months ended September 30, 2024, the NYSE Arca market value of each Share increased from $18.43 per Share to $18.93 per Share.

The Share price low and high for the nine months ended September 30, 2024 and related change from the Share price on December 31, 2023 was as follows:

Shares traded at a low of $17.67 per Share (-4.10%) on April 16, 2024, and a high of $19.01 per Share (+3.18%) on September 27, 2024.

The total return for the Fund on a market value basis was +2.71%.

dollar performed positively in the first half of 2024, leading to losses for the Fund.

While the dollar had fallen to end 2023 on expectations for imminent rate cuts, the Federal Reserve stuck to its higher-for-longer rhetoric as U.S.

inflation proved more persistent than expected, forcing the market to repeatedly delay easing expectations.

In comparison, many global economies including Switzerland, Sweden, Canada, and the European Central Bank (ECB) had kicked off their easing (i.e., lowering interest rates) cycles;

higher interest rates tend to make holding the currency more attractive.

A resilient U.S.

economy and heightened geopolitical tensions also provided some support.

dollar performed positively in the first three quarters of 2024.

While the dollar had fallen to end 2023 on expectations for imminent interest rate cuts, the Federal Reserve stuck to its higher-for-longer rhetoric through the first two quarters of the year as U.S.

inflation proved stickier than expected.

This forced the market to repeatedly delay Federal Reserve easing expectations at the same time that many global economies including Switzerland, Sweden, Canada, and the European Central Bank (ECB) kicked off their rate-cutting cycles.

However, the greenback moved lower in the third quarter with the Federal Reserve joining the others, announcing its first interest rate cut in September.

Furthermore, the Bank of Japan surprised the market with a rate hike in August, sending the Japanese yen higher.

Fund Share Net Asset Performance

For the six months ended June 30, 2025, the NAV of each Share increased from $16.73 per Share to $18.90 per Share.

Rising currency futures contracts prices for short DX Contracts during the six months ended June 30, 2025 contributed to a 11.00% increase

in the level of the Index and to a 13.39% increase in the level of the Short Index–TR TM .

For the nine months ended September 30, 2025, the NAV of each Share increased from $16.73 per Share to $18.80 per Share.

Rising currency futures contracts prices for short DX Contracts during the nine months ended September 30, 2025 contributed to a 9.49% increase in the level of the Index and to a 13.03% increase in the level of the Short Index–TR TM .

The total return for the Fund on a NAV basis was 12.37%.

Net income (loss) for the six months ended June 30, 2025 was $10.3 million, primarily resulting from $1.9 million of income, net realized gain (loss) of $5.4 million, net change in unrealized gain (loss) of $3.3 million and net operating expenses of $0.3 million.

For the six months ended June 30, 2024, the NAV of each Share decreased from $18.42 per Share to $17.90 per Share.

Falling currency futures contracts prices for short DX Contracts during the six months ended June 30, 2024 contributed to a 5.00% decrease in the level of the Index and to a 2.43% decrease in the level of the Short Index–TR TM .

Net income (loss) for the nine months ended September 30, 2025 was $9.5 million, primarily resulting from $3.5 million of income, net realized gain (loss) of $5.9 million, net change in unrealized gain (loss) of $0.7 million and net operating expenses of $0.6 million.

For the nine months ended September 30, 2024, the NAV of each Share increased from $18.42 per Share to $18.92 per Share.

Rising currency futures contracts prices for short DX Contracts during the nine months ended September 30, 2024 contributed to a 0.72% decrease in the level of the Index and to a 3.31% increase in the level of the Short Index–TR TM .

The total return for the Fund on a NAV basis was +2.71%.

Net income (loss) for the six months ended June 30, 2024 was $(1.8) million, primarily resulting from $1.6 million of income, net realized gain (loss) of $(1.7) million, net change in unrealized gain (loss) of $(1.4) million and net operating expenses of $0.2 million.

Net income (loss) for the nine months ended September 30, 2024 was $1.2 million, primarily resulting from $2.3 million of income, net realized gain (loss) of $(0.2) million, net change in unrealized gain (loss) of $(0.6) million and net operating expenses of $0.3 million.

Critical Accounting Estimates

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

In addition, please refer to Note 2 to the financial statements of the Fund for further discussion of the Fund’s accounting policies and Item 7 – Management’s Discussions and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates on Form 10-K for the year ended December 31, 2024.

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 Fund's financial condition, used in the preparation of these financial statements.

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The Fund calculates VaR using the actual historical market movements of the Fund’s net assets.

The following table indicates the trading VaR associated with the Fund’s net assets as of June 30, 2025.

For the Six Months Ended

June 30, 2025

The following table indicates the trading VaR associated with the Fund’s net assets as of September 30, 2025.

For the Nine Months Ended

September 30, 2025

Daily Volatility

1 unchanged sentence

Number of times

Invesco DB U.S.

Dollar Index Bearish Fund

Invesco DB US Dollar Index Bearish Fund

The following table indicates the trading VaR associated with the Fund’s net assets as of December 31, 2024.

4 unchanged sentences

Number of times

Invesco DB U.S.

Dollar Index Bearish Fund

Invesco DB US Dollar Index Bearish Fund

* The VaR represents the one day downside risk, under normal market conditions, with a 99% confidence level.

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Changes in Internal Control Over Financial Reporting

There has been no change in internal control over financial reporting (as defined in the Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the Fund’s quarter ended June 30, 2025 that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.

There has been no change in internal control over financial reporting (as defined in the Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the Fund’s quarter ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.

OTHER INFORMATION

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