Prospectus | August 27, 2020 |
Invesco DB US Dollar Index Trust |
UDN | Invesco DB US Dollar Index Bearish Fund | 188,482,020 |
Common Units of Beneficial Interest |
Symbol | Meaning |
UDN | Market price per Share on NYSE Arca |
UDN.IV | Intra-day indicative value (“IIV”) per Share |
UDN.NV | End of day NAV of the Fund |
USDDNX | Intra-day and Index closing level as of close of NYSE Arca from the prior day |
• | The novel coronavirus (“COVID-19”) has disrupted the global economy, causing high unemployment rates, illnesses and deaths, travel restrictions, and government emergency actions. The extent of the impact of COVID-19 is not fully known at this time and may adversely affect the Fund’s performance. |
• | Past performance is not necessarily indicative of future results; all or substantially all of an investment in the Fund could be lost. |
• | The Fund’s trading of futures contracts takes place in very volatile markets. |
• | Investments in foreign exchange related products are subject to many factors which contribute to potential volatility, including, but not limited to: |
• | National debt levels and trade deficits, including changes in balances of payments and trade; |
• | Domestic and foreign inflation rates and investors’ expectations concerning inflation rates; |
• | Domestic and foreign interest rates and investors’ expectations concerning interest rates; |
• | Currency exchange rates; |
• | Investment and trading activities of mutual funds, hedge funds and currency funds; |
• | Global or regional political, economic or financial events and situations; |
• | Supply and demand changes which influence the foreign exchange rates of various currencies; |
• | Monetary policies of governments (including exchange control programs, restrictions on local exchanges or markets and limitations on foreign investment in a country or on investment by residents of a country in other countries), trade restrictions, currency devaluations and revaluations; |
• | Governmental intervention in the currency market, directly and by regulation, in order to influence currency prices; and |
• | Expectations among market participants that a currency’s value soon will change. |
• | The Fund is subject to fees and expenses in the aggregate amount of approximately 0.77% per annum and will be successful only if its annual returns from futures trading, plus its annual Treasury Income, Money Market Income and T-Bill ETF Income exceed such fees and expenses. |
• | ICE U.S. Dollar Index futures contracts (“DX Contracts”) are not subject to position limits imposed by the CFTC and/or futures exchange rules. There can be no assurance that the DX Contracts will not become subject to position limits. Should the Fund become subject to position limits with respect to its DX Contracts holdings, the Fund’s positions in DX Contracts might be required to be aggregated with positions in other accounts that the Managing Owner owns or for which it controls trading unless an exemption applies under the applicable regulations of the CFTC or the futures exchange on which the DX Contracts trade. Should the Fund become subject to position limits, the Fund’s ability to issue new Creation Units or to reinvest income in additional DX Contracts may be impaired or limited. This may adversely affect the correlation between the market price of the Shares and the NAV of the Fund, which could result in Shares trading at a premium or discount to the NAV of the Fund. |
• | There can be no assurance that the Fund will achieve profits or avoid losses, significant or otherwise. |
• | Performance of the Fund may not track the Index during particular periods or over the long term. Such tracking error may cause the Fund to outperform or underperform the Index. |
• | Disruptions in the ability to create or redeem Creation Units may adversely affect investors. |
• | Certain potential conflicts of interest exist between the Managing Owner, the Commodity Broker (as defined herein) and their affiliates and the Fund’s shareholders (“Shareholders”). Although the Managing Owner attempts to monitor for conflicts, it is extremely difficult, if not impossible, for the Managing Owner to ensure that the conflicts will not, in fact, result in adverse consequences to the Fund and the Shareholders. |
• | The Fund’s NAV may not always correspond to the market price of the Shares and, as a result, Shares may trade at prices greater than NAV (at a premium), at NAV, or less than NAV (at a discount). |
• | Shareholders will be subject to taxation on their allocable share of the Fund’s taxable income, whether or not they receive cash distributions. |
• | On each Index Roll Day, 1/3 of the DX Contracts that will expire on the next IMM Date is sold and positions in the DX Contracts that expire on the IMM Date following the next IMM Date are purchased. |
• | On each Index Roll Day, new notional holdings are calculated for the old DX Contracts leaving the Index as well as the new DX Contracts entering the Index. |
• | On all days that are not Index Roll Days, the notional holdings of the DX Contracts in the Index remain constant. |
Index Currency | Index Base Weight (%) |
Euro | 57.60 |
Japanese Yen | 13.60 |
British Pound | 11.90 |
Canadian Dollar | 9.10 |
Swedish Krona | 4.20 |
Swiss Franc | 3.60 |
Closing Level at Inception: | 100.000 |
Fee | Description |
Management Fee | The Fund pays the Managing Owner a Management Fee, monthly in arrears, in an amount equal to 0.75% per annum of the daily NAV of the Fund. The Management Fee is paid in consideration of the Managing Owner’s services related to the management of the Fund’s business and affairs, including the provision of futures trading advisory services. The Fund may, for margin and/or cash management purposes, invest in money market mutual funds and/or T-Bill ETFs that are managed by affiliates of the Managing Owner. The indirect portion of the management fees that the Fund may incur through such investments is in addition to the Management Fee paid to the Managing Owner. The Managing Owner has contractually agreed to waive indefinitely the fees that it receives in an amount equal to the indirect management fees that the Fund incurs through its investments in affiliated money market mutual funds and/or affiliated T-Bill ETFs. The Managing Owner may terminate the fee waiver on 60 days’ notice. |
Fee | Description |
Offering Expenses | Expenses incurred in connection with the continuous offering of Shares are paid by the Managing Owner. |
Brokerage Commissions and Fees | The Fund pays to the Commodity Broker all brokerage commissions, including applicable exchange fees, NFA fees, give-up fees, pit brokerage fees and other transaction related fees and expenses charged in connection with its trading activities. On average, total charges paid to the Commodity Broker are expected to be less than $6.00 per round-turn trade, although the Commodity Broker’s brokerage commissions and trading fees are determined on a contract-by-contract basis. The Managing Owner estimates the brokerage commissions and fees will be approximately 0.02% of the NAV of the Fund in any year, although the actual amount of brokerage commissions and fees in any year or any part of any year may be greater. |
Routine Operational, Administrative and Other Ordinary Expenses | The Managing Owner pays all of the routine operational, administrative and other ordinary expenses of the Fund, including, but not limited to, the fees and expenses of the Trustee, license and service fees paid to DIMA as Marketing Agent and Index Sponsor, legal and accounting fees and expenses, tax preparation expenses, filing fees, and printing, mailing and duplication costs. |
Non-Recurring Fees and Expenses | The Fund pays all of the non-recurring and unusual fees and expenses (referred to as extraordinary fees and expenses in the Trust Agreement), if any, as determined by the Managing Owner. Non-recurring and unusual fees and expenses include items such as legal claims and liabilities, litigation costs, indemnification expenses and other expenses that are not currently anticipated obligations of the Fund or of managed futures funds in general. |
Management Fee and Expenses to be Paid First out of Treasury Income, Money Market Income and/or T-Bill ETF Income | The Management Fee and the brokerage commissions and fees of the Fund are paid first out of Treasury Income from the Fund’s holdings of Treasury Securities, Money Market Income from the Fund’s holdings of money market mutual funds (affiliated or otherwise) and T-Bill ETF Income from the Fund’s holdings of T-Bill ETFs (affiliated or otherwise), as applicable, on deposit with the Commodity Broker as margin, the Custodian, or otherwise. If the sum of the Treasury Income, the Money Market Income and the T-Bill ETF Income is not sufficient to cover the fees and expenses of the Fund that are payable by the Fund during any period, the excess of such fees and expenses over such Treasury Income, Money Market Income and T-Bill ETF Income, as applicable, will be paid out of income from futures trading, if any, or from sales of the Fund’s holdings in Treasury Securities, money market mutual funds, and/or holdings in T-Bill ETFs. |
Selling Commission | Retail investors may purchase and sell Shares through traditional brokerage accounts. Investors are expected to be charged a commission by their brokers in connection with purchases of Shares that will vary from investor to investor. Investors are encouraged to review the terms of their brokerage accounts for applicable charges. |
• | National debt levels and trade deficits; |
• | Domestic and foreign inflation rates; and |
• | Investors’ expectations concerning inflation rates: |
• | Domestic and foreign interest rates; |
• | Currency exchange rates |
• | Investment and trading activities from mutual funds, hedge funds and currency funds; and |
• | Global or regional political, economic or financial events and situations. |
• | National debt levels and trade deficits, including changes in balances of payments and trade; |
• | Domestic and foreign interest rates and investors’ expectations concerning interest rates; |
• | Domestic and foreign inflation rates and investors’ expectations concerning inflation rates; |
• | Currency exchange rates; |
• | Investment and trading activities by other futures market participants; |
• | Global or regional political, economic or financial events and situations; |
• | Supply and demand changes which influence the foreign exchange rates of various currencies; |
• | Monetary policies of central banks (including exchange control programs, restrictions on local exchanges or markets and limitations on foreign investment in a country or on investment by residents of a country in other countries), trade restrictions, currency devaluations and re-valuations; |
• | Governmental intervention in the currency market, directly and by regulation, in order to influence currency prices; and |
• | Expectations among market participants that a currency’s value soon will change. |
• | Shareholders’ actions unrelated to the business of the Fund, or |
• | taxes imposed on the Shares by the states or municipalities in which such investors reside. |
• | a different month DX Contract other than the specific DX Contract that was originally required by the Index, |
• | another futures contract substantially similar to the DX Contracts, if available, |
• | the futures contracts referencing the Index Currencies, or |
• | a forward agreement, swap, or other OTC derivative referencing the Index Currencies, |
• | selects the Trustee, Commodity Broker, Administrator, Index Sponsor, Custodian, Transfer Agent, Marketing Agent, distributor and auditor; |
• | negotiates various agreements and fees; |
• | performs such other services as the Managing Owner believes that the Fund may from time to time require; and |
• | monitors the performance results of the Fund’s portfolio and reallocates assets within the portfolio with a view to causing the performance of the Fund’s portfolio to track that of the Index over time. |
Dollar
Amount and Percentage of Expenses and Interest Income | ||
Expense 1 | $ | % |
Management Fee2 | $0.1518 | 0.75% |
Offering Expense Reimbursement | $0.0000 | 0.00% |
Brokerage Commissions and Fees3 | $0.0039 | 0.02% |
Routine Operational, Administrative and Other Ordinary Expenses4 | $0.0000 | 0.00% |
Treasury Income, Money Market Income and T-Bill ETF Income5 | $0.0385 | 0.19% |
12-Month Breakeven6 | $0.1173 | 0.58% |
1. | See the “Charges” section for an explanation of the expenses included in the Breakeven Table. |
2. | The Managing Owner, out of its own assets, pays the fees and expenses of the Administrator, Invesco Distributors, the Index Sponsor and the Marketing Agent. |
The Fund may, for margin and/or cash management purposes, invest in money market mutual funds and/or T-Bill ETFs that are managed by affiliates of the Managing Owner. The indirect portion of the management fees that the Fund may incur through such investments is in addition to the Management Fee paid to the Managing Owner. The Managing Owner has contractually agreed to waive indefinitely the fees that it receives in an amount equal to the indirect management fees that the Fund incurs through its investments in affiliated money market mutual funds and/or affiliated T-Bill ETFs. The Managing Owner may terminate this fee waiver on 60 days’ notice. | |
As of the date of this prospectus, this waiver is approximately less than $0.01 per Share per annum. | |
3. | The actual amount of brokerage commissions and trading fees to be incurred will vary based upon the trading frequency of the Fund and the specific futures contracts traded. |
4. | The Managing Owner is responsible for paying all routine operational, administrative and other ordinary expenses of the Fund. |
5. | Treasury Income is assumed to be earned at a rate of 0.13%, Money Market Income is estimated to be earned at a rate of 0.25%, and T-Bill ETF Income is estimated to be earned at a rate of 0.22%. These assumed rates are based on market rates as of June 30, 2020. T-Bill ETF Income reflects dividend income from the Fund’s holdings in T-Bill ETFs, if any. Actual Treasury Income, Money Market Income and T-Bill ETF Income could be higher or lower than the levels shown. |
6. | Investors may pay brokerage commissions in connection with purchases of the Shares. Brokerage commissions have not been included in the Breakeven Table because they are borne by investors rather than the Fund and will generally vary from investor to investor. Investors are encouraged to review the terms of their brokerage accounts for applicable charges. |
Name of Pool | Invesco DB US Dollar Index Bearish Fund |
Type of Pool | Public, Exchange-Listed Commodity Pool |
Inception of Trading | February 2007 |
Aggregate Gross Capital Subscriptions as of June 30, 20201 | $1,233,131,762 |
NAV as of June 30, 2020 | $52,620,587 |
NAV per Share as of June 30, 20202 | $20.24 |
Worst Monthly Drawdown3 | (5.22)% January 2015 |
Worst Peak-to-Valley Drawdown4 | (30.17)% March 2008 – December 20165 |
Monthly Rate of Return | 2020 (%) | 2019 (%) | 2018 (%) | 2017 (%) | 2016 (%) | 2015 (%) |
January | (1.12) | 0.57 | 3.03 | 2.69 | (0.98) | (5.22) |
February | (0.79) | (0.62) | (1.56) | (1.57) | 1.46 | (0.53) |
March | (0.94) | (1.24) | 0.35 | 0.73 | 3.81 | (4.02) |
April | 0.05 | (0.24) | (1.97) | 1.30 | 1.52 | 3.77 |
May | 0.65 | (0.34) | (2.55) | 1.99 | (2.87) | (2.20) |
June | 0.90 | 1.70 | (0.73) | 1.21 | (0.45) | 1.47 |
July | (2.53) | 0.14 | 2.80 | 0.73 | (1.94) | |
August | (0.49) | (0.74) | 0.09 | (0.59) | 1.66 | |
September | (0.49) | 0.00 | (0.54) | 0.55 | (0.54) | |
October | 2.03 | (2.14) | (1.70) | (3.17) | (0.64) | |
November | (1.02) | (0.19) | 1.64 | (3.37) | (3.44) | |
December | 1.84 | 1.08 | 0.78 | (0.92) | 1.66 | |
Compound Rate of Return5 | (1.27)% | (0.93)% | (5.28)% | 9.69% | (4.44)% | (9.89)% |
Fund (%) | Index (%) | Index TR7 (%) | USDX Spot Index8 (%) | |
1 Year | (2.00) | (2.61) | (1.40) | 1.31 |
5 Year | (1.24) | (1.59) | (0.47) | 0.40 |
10 Year | (1.77) | (1.51) | (0.92) | 1.25 |
1. | “Aggregate Gross Capital Subscriptions” is the aggregate of all amounts ever contributed to the Fund, including investors who subsequently redeemed their investments. |
2. | “NAV per Share” is the NAV of the Fund divided by the total number of Shares outstanding with respect to the Fund as of June 30, 2020. |
3. | “Worst Monthly Drawdown” is the largest single month loss sustained during the most recent five calendar years and year to date (if applicable). “Drawdown” as used in this section of the Prospectus means losses experienced by the Fund over the specified period and is calculated on a rate of return basis, i.e., dividing net performance by beginning equity. “Drawdown” is measured on the basis of monthly returns only, and does not reflect intra-month figures. “Month” is the month of the Worst Monthly Drawdown. |
4. | “Worst Peak-to-Valley Drawdown” is the largest percentage decline in the NAV per Share during the most recent five calendar years (and to the extent applicable, for a period beyond the most recent five calendar years if the starting date of the peak value extends beyond this period). This need not be a continuous decline, but can be a series of positive and negative returns where the negative returns are larger than the positive returns. “Worst Peak-to-Valley Drawdown” represents the greatest percentage decline from any month-end NAV per Share that occurs without such month-end NAV per Share being equaled or exceeded as of a subsequent month-end. For example, if the NAV per Share of the Fund declined by $1 in each of January and February, increased by $1 in March and declined again by $2 in April, a “peak-to-valley drawdown” analysis conducted as of the end of April would consider that “drawdown” to be still continuing and to be $3 in amount, whereas if the NAV per Share had increased by $2 in March, the January-February drawdown would have ended as of the end of February at the $2 level. |
5. | “Compound Rate of Return” of the Fund is calculated by multiplying on a compound basis each of the monthly rates of return set forth in the chart above and not by adding or averaging such monthly rates of return. For periods of less than one year, the results are year-to-date. |
6. | Returns shown are for previous full calendar years. |
7. | Deutsche Bank Short USD Currency Portfolio Index – Total ReturnTM (“Index TR”). Index TR reflects the change in the market value of the same underlying DX Contracts as the Index. Index TR is calculated on a funded (total return) basis, which reflects the change in market value of the underlying DX Contracts and interest income from a notional basket of fixed income securities. Index TR is included so that investors can evaluate an index with both DX Contracts and income components, as the Fund tracks the Index and expects to generate income from positions in Treasury Securities, money market funds, and/or T-Bill ETFs that are maintained for margin and/or cash management purposes. |
8. | The USDX Spot Index has been included to provide investors with an additional basis for evaluating the Fund. |
Index Currency | Index Base Weight (%) |
Euro | 57.60 |
Japanese Yen | 13.60 |
British Pound | 11.90 |
Canadian Dollar | 9.10 |
Swedish Krona | 4.20 |
Swiss Franc | 3.60 |
Closing Level at Inception: | 100.00 |
• | On each Index Roll Day, 1/3 of the DX Contracts that will expire on the next IMM Date is sold and positions in the DX Contracts that expire on the IMM Date following the next IMM Date are purchased. |
• | On each Index Roll Day, new notional holdings are calculated for the old DX Contracts leaving the Index as well as the new DX Contracts entering the Index. |
• | On all days that are not Index Roll Days, the notional holdings of the DX Contracts in the Index remain constant. |
• | make such determinations and/or adjustments to the terms of the Index as it considers appropriate to determine any closing level on any such Index business day; |
• | defer publication of the information relating to the Index until the next Index business day on which it determines that no force majeure event exists; and/or |
• | permanently cancel publication of the information relating to the Index. |
• | continue to calculate the relevant closing price for a further period of five successive trading days for the Index Currency on the relevant exchange; or |
• | if such period extends beyond the five successive trading days, the Index Sponsor may elect to replace the futures contract with respect to the Index Currency and shall make all necessary adjustments to the methodology and calculation of the Index as it deems appropriate. |
CLOSING LEVEL | INDEX CHANGES | |||
High 1 | Low 2 | Annual 3 | Since
Inception4 | |
2010 | 145.80 | 125.18 | -1.22% | 41.22% |
2011 | 153.04 | 137.70 | 0.24% | 41.56% |
2012 | 145.74 | 136.58 | 1.92% | 44.28% |
2013 | 146.15 | 136.10 | 0.33% | 44.76% |
2014 | 146.91 | 128.36 | -11.33% | 28.36% |
2015 | 128.36 | 114.27 | -9.01% | 16.79% |
2016 | 124.41 | 111.05 | -3.99% | 12.13% |
2017 | 124.42 | 111.14 | 9.60% | 22.89% |
2018 | 127.18 | 113.81 | -6.27% | 15.19% |
2019 | 116.30 | 109.65 | -2.30% | 12.54% |
2020 (YTD)5 | 113.91 | 104.17 | -1.33% | 11.04% |
1. | “High” under “Closing Level” reflects the highest closing level of the Index during the applicable year. |
2. | “Low” under “Closing Level” reflects the lowest closing level of the Index during the applicable year. |
3. | “Annual” under “Index Changes” reflects the change to the Index closing level on an annual basis as of December 31 of each applicable year. |
4. | “Since Inception” under “Index Changes” reflects the change of the Index closing levels since inception on a compounded annual basis as of December 31 of each applicable year. |
5. | For the period January 1, 2020 through June 30, 2020. |
(i) | up to approximately 8% of the NAV of the Fund will be maintained in segregated accounts in the name of the Fund with the Commodity Broker (or another eligible financial institution, as applicable) to margin the Fund’s DX Contracts positions. Those funds are segregated pursuant to CFTC rules; |
(ii) | up to approximately 92% of the NAV of the Fund is maintained in segregated accounts with the Custodian. |
• | registration fees, filing fees and taxes; |
• | costs of preparing, printing (including typesetting), amending, supplementing, mailing and distributing the Registration Statement, the exhibits thereto and this Prospectus; |
• | the costs of qualifying, printing (including typesetting), amending, supplementing, mailing and distributing sales materials used in connection with the offering and issuance of the Shares; |
• | travel, telegraph, telephone and other expenses in connection with the offering and issuance of the Shares; and |
• | accounting, auditing and legal fees (including disbursements related thereto) incurred in connection therewith. |
• | any breach by the Managing Owner, the Fund, or any of their respective agents or employees, of any provision of the Participant Agreement, including any representations, warranties and covenants by any of them or the Fund therein or in the Officer’s Certificate (as defined in the Participant Agreement); |
• | any failure on the part of the Managing Owner to perform any obligation of the Managing Owner set forth in the Participant Agreement; |
• | any failure by the Managing Owner to comply with applicable laws and regulations in connection with the Participant Agreement, except that the Managing Owner will not be required to indemnify a Managing Owner Indemnified Party (as defined in the Participant Agreement) to the extent that |
such failure was caused by the reasonable reliance on instructions given or representations made by one or more Managing Owner Indemnified Parties or the negligence or willful malfeasance of any Managing Owner Indemnified Party; | |
• | any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement of the Trust as originally filed with the SEC, or in any amendment thereof, or in any prospectus, or in any amendment thereof or supplement thereto, or arising out of or based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except those statements in the Registration Statement or the Prospectus based on information furnished in writing by or on behalf of the Authorized Participant expressly for use in the Registration Statement or the Prospectus. |
• | The Managing Owner or the Transfer Agent determines that the creation order is not in proper form; |
• | The Managing Owner believes that the acceptance or receipt of the creation order would have adverse tax consequences to the Fund or its Shareholders; or |
• | Circumstances outside the control of the Managing Owner or the Transfer Agent make it, for all practical purposes, not feasible to process creations of Creation Units. |
Name | Capacity |
Anna Paglia | Chief Executive Officer, Board of Managers |
Peter Hubbard | Vice President and Director of Portfolio Management |
Kristie Feinberg | Board of Managers |
Annette Lege | Principal |
Melanie Zimdars | Chief Compliance Officer |
Kelli Gallegos | Principal Financial and Accounting Officer, Investment Pools |
John Zerr | Board of Managers |
Brian Hartigan | Global Head of ETF Investments |
• | Shareholders’ actions unrelated to the business of the Fund; or |
• | taxes separately imposed on the Fund by any state, local or foreign taxing authority. |
• | The filing of a certificate of dissolution or revocation of the Managing Owner’s charter (and the expiration of 90 days after the date of notice to the Managing Owner of revocation without a reinstatement of its charter) or upon the withdrawal, removal, adjudication or admission of bankruptcy or insolvency of the Managing Owner, or an event of withdrawal unless (i) at the time there is at least one remaining managing owner and that remaining managing owner carries on the business of the Fund or (ii) within 90 days of such event of withdrawal all the remaining Shareholders agree in writing to continue the business of the Fund and to select, effective as of the date of such event, one or more successor managing owners. If the Trust is terminated as the result of an event of withdrawal and a failure of all remaining Shareholders to continue the business of the Trust and to appoint a successor managing owner as provided above within 120 days of such event of withdrawal, Shareholders holding Shares representing at least a majority (over 50%) of the NAV of the Fund (not including Shares held by the Managing Owner and its affiliates) may elect to continue the business of the Trust by forming a new statutory trust (“ Reconstituted Trust”) on the same terms and provisions as set forth in the Trust Agreement (whereupon the Managing Owner and the Trustee shall execute and deliver any documents or instruments as may be necessary to reform the Trust). Any such election must also provide for the election of a managing owner to the Reconstituted Trust. If such an election is made, all Shareholders shall be bound thereby and continue as Shareholders of the series of the Reconstituted Trust. |
• | The occurrence of any event which would make unlawful the continued existence of the Trust or the Fund, as the case may be. |
• | In the event of the suspension, revocation or termination of the Managing Owner’s registration as a commodity pool operator or commodity trading advisor under the Commodity Exchange Act, or membership as a commodity pool operator or commodity trading advisor with the NFA (if, in either case, such registration is required under the Commodity Exchange Act or the rules promulgated thereunder) unless at the time there is at least one remaining Managing Owner whose registration or membership has not been suspended, revoked or terminated. |
• | The Trust or the Fund, as the case may be, becomes insolvent or bankrupt. |
• | The Shareholders holding Shares representing at least a majority (over 50%) of the NAV (which excludes the Shares of the Managing Owner) vote to dissolve the Trust, notice of which is sent to the Managing Owner not less than ninety (90) Business Days prior to the effective date of termination. |
• | The determination of the Managing Owner that the aggregate net assets of the Fund in relation to the operating expenses of the Fund make it unreasonable or imprudent to continue the business of |
the Fund, or, in the exercise of its reasonable discretion, the determination by the Managing Owner to dissolve the Trust because the aggregate NAV of the Trust as of the close of business on any business day declines below $10 million. | |
• | The Trust or the Fund is required to be registered as an investment company under the 1940 Act. |
• | DTC is unable or unwilling to continue to perform its functions, and a comparable replacement is unavailable. |
• | acts as the clearing broker; |
• | acts as custodian of the Fund’s assets in connection with the clearing of transactions; and |
• | performs such other services for the Fund as the Managing Owner may from time to time request. |
• | the assets of the Fund held in its account with the Commodity Broker and all contracts and rights to payment thereunder are held as security for the Fund’s obligations to the Commodity Broker; |
• | the Commodity Broker shall have the right to limit the size of open positions (net or gross) of the Fund with respect to its account at any time only as necessary to comply with the applicable law or applicable position limits and shall promptly notify the Fund of any rejected order; |
• | the Fund must make all applicable original margin, variation margin, intra-day margin and premium payments to the Commodity Broker; the Commodity Broker may, among other things, close out positions, sell securities or other property held in the Fund’s account, purchase futures or cancel orders at any time upon the default of the Fund under the Brokerage Agreement, without the consent of the Managing Owner on behalf of the Fund; and |
• | absent a separate written agreement with the Fund with respect to give-up transactions, the Commodity Broker, in its sole discretion, may accept from other brokers contracts executed by such brokers and to be given up to the Commodity Broker for clearance or carrying in any account. |
• | Either party terminates prior to the expiration of the initial term in the event the other party breaches any material provision of the Transfer Agency and Service Agreement, including, without limitation in the case of the Trust, on behalf of the Fund, its obligations to compensate the Transfer Agent, provided that the non-breaching party gives written notice of such breach to the breaching party and the breaching party does not cure such violation within ninety (90) days of receipt of such notice. |
• | The Fund may terminate the Transfer Agency and Service Agreement prior to the expiration of the initial term upon ninety (90) days prior written notice in the event that the Managing Owner determines to liquidate the Trust or the Fund and terminate its registration with the SEC other than in connection with a merger or acquisition of the Trust. |
• | All actions of the Transfer Agent or its agents or subcontractors required to be taken pursuant to the Transfer Agency and Service Agreement, provided that such actions are taken without gross negligence, or willful misconduct. |
• | The Trust’s or the Fund’s gross negligence or willful misconduct. |
• | The breach of any representation or warranty of the Trust thereunder. |
• | The conclusive reliance on or use by the Transfer Agent or its agents or subcontractors of information, records, documents or services which (i) are received by the Transfer Agent or its agents or subcontractors, and (ii) have been prepared, maintained or performed by the Trust, on its own behalf or on behalf of the Fund, or any other person or firm on behalf of the Trust or the Fund including but not limited to any previous transfer agent or registrar. |
• | The conclusive reliance on, or the carrying out by the Transfer Agent or its agents or subcontractors of any instructions or requests of the Trust, on its own behalf and on behalf of the Fund. |
• | The offer or sale of Shares in violation of any requirement under the federal securities laws or regulations or the securities laws or regulations of any state that such Shares be registered in such state or in violation of any stop order or other determination or ruling by any federal agency or any state with respect to the offer or sale of such Shares in such state. |
• | is the indemnity of the Fund in favor of Invesco Distributors or any person indemnified to be deemed to protect Invesco Distributors or any person against any liability to the Fund or its security holders to which Invesco Distributors or such person would otherwise be subject by reason of willful misfeasance, bad faith or negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under the Distribution Services Agreement; or |
• | is the Fund to be liable under its indemnity agreement with respect to any claim made against Invesco Distributors or any person indemnified unless Invesco Distributors or such person, as the case may be, will have notified the Fund in writing of the claim promptly after the summons or other first written notification giving information of the nature of the claims will have been served upon Invesco Distributors or any such person (or after Invesco Distributors or such person will have received notice of service on any designated agent). |
• | dealers in securities, commodities or currencies; |
• | financial institutions; |
• | regulated investment companies (“RICs”) other than the status of the Fund as a qualified publicly traded partnership (a “qualified PTP”) within the meaning of the Code; |
• | real estate investment trusts; |
• | tax-exempt organizations; |
• | insurance companies; |
• | persons holding Shares as a part of a hedging, integrated or conversion transaction or a straddle; |
• | traders in securities or commodities that elect to use a mark-to-market method of accounting for their securities or commodities holdings; or |
• | persons liable for federal alternative minimum tax. |
• | an individual citizen or resident of the United States; |
• | a corporation (or other entity taxable as a corporation) created or organized in or under the laws of the United States or any state thereof or the District of Columbia; |
• | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of such trust or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person. |
• | 3% of the individual’s adjusted gross income in excess of certain threshold amounts; or |
• | 80% of the amount of certain itemized deductions otherwise allowable for the taxable year. |
Nature of Payment | Recipient | Payor | Amount of Payment | Services Provided |
Selling Commission | Authorized Participants | Shareholders | No greater than 0.99% of the gross offering proceeds. | Brokering purchases and sales of the Shares and creating and redeeming Creation Units. |
Distribution Services Fee | Invesco Distributors | Managing Owner | Capped at $25,000 per annum, not to exceed 0.25% of the gross offering proceeds | Assisting the Managing Owner with certain functions and duties relating to distribution and marketing, including reviewing and approving marketing materials, consulting with FINRA and ensuring compliance with FINRA marketing rules and maintaining certain books and records pertaining to the Trust and the Fund. |
Marketing Services Fee | Marketing Agent | Managing Owner | A range from 0.05% - 0.345% per annum of the Total Average Net Assets (as defined herein) during each year calculated in U.S. dollars; not to exceed 8.75% of the gross offering proceeds. | Assisting the Managing Owner by providing support to educate institutional investors about the Deutsche Bank indices and to complete governmental or institutional due diligence questionnaires or requests for proposals related to the Deutsche Bank indices. |
• | The Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed on February 28, 2020; |
• | The Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2020 and June 30, 2020, filed on May 8, 2020 and August 7, 2020, respectively; and |
• | Any documents filed under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering made under this Prospectus. |