10-K: Invesco CurrencyShares Australian Dollar Trust Reports Annual Results for Fiscal Year 2024

Invesco CurrencyShares Australian Dollar Trust reports its annual results, highlighting the impact of market volatility on the price of the Australian Dollar and the Trust's performance.

Summary

• Invesco CurrencyShares Australian Dollar Trust is a grantor trust aiming to reflect the price of the Australian Dollar in USD, less expenses.
• The Trust issues shares in blocks of 50,000 (a Basket) in exchange for deposits of Australian Dollars and distributes Australian Dollars in connection with the redemption of Baskets.
• The Sponsor's fee accrues daily at an annual nominal rate of 0.40% of the Australian Dollars in the Trust, amounting to $277,952 for the year ended December 31, 2024.
• The interest rate on the primary deposit account was 1.92% as of December 31, 2024.
• The Trust's net comprehensive income for 2024 was $1,078,586, compared to $796,270 in 2023.
• The Trust had 66 holders of record of its Shares as of January 31, 2025.
• The Trust redeemed 50,000 shares at an average price of $64.30 during the three months ended December 31, 2024.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook due to the increased net comprehensive income, but acknowledges risks associated with currency fluctuations and market volatility.

Positives

• The Trust reported a net comprehensive income of $1,078,586 for 2024, an increase from the previous year's $796,270.
• The Trust continues to operate as a simple, cost-effective means for investors to gain exposure to the Australian Dollar.

Negatives

• The value of the Shares is directly linked to the value of the Australian Dollar, making it susceptible to currency fluctuations.
• If interest earned by the Trust does not exceed expenses, the Trustee will withdraw Australian Dollars from the Trust to pay these excess expenses, which will reduce the amount of Australian Dollars represented by each Share on an ongoing basis and may result in adverse tax consequences for Shareholders.

Risks

• Fluctuations in the price of the Australian Dollar could materially and adversely affect the value of the Shares.
• The Australian Dollar/USD exchange rate can be volatile and difficult to predict.
• If interest earned by the Trust does not exceed the Trusts expenses, the Trustee will withdraw Australian Dollars from the Trust to pay these excess expenses, which will reduce the amount of Australian Dollars represented by each Share on an ongoing basis.
• Disruptions in the ability to create and redeem Baskets may adversely impact the price of the Shares.
• Substantial sales of Australian Dollars by the official sector could adversely affect an investment in the Shares.
• International armed conflicts may result in volatility in currency prices that could adversely affect the Fund's performance.
• Pandemics and other public health emergencies could disrupt the global economy and adversely impact the Trust's performance.
• Changes to United States tariff and trade policies may increase the volatility of foreign exchange rates.
• Cyber attacks pose operational and information security risks.

Future Outlook

The report contains forward-looking statements regarding future developments and their potential effects on the Trust, which are subject to various factors and uncertainties.

Industry Context

The Trust provides a means for institutional and retail investors to participate in the market for the Australian Dollar without directly holding the currency.

Comparison to Industry Standards

• The Invesco CurrencyShares Australian Dollar Trust operates similarly to other currency trusts, such as the CurrencyShares Euro Trust (FXE) and the CurrencyShares Japanese Yen Trust (FXY), in that it aims to track the price of a specific currency.
• The Sponsor's fee of 0.40% is comparable to the expense ratios of other currency ETFs.
• The Trust's performance is directly tied to the fluctuations of the Australian Dollar against the US Dollar, similar to how other currency ETFs are affected by the performance of their respective currencies.

Management Changes

Related Party Transactions

• The Trust pays Invesco Specialized Products, LLC, the Sponsor, a fee that accrues daily at an annual nominal rate of 0.40% of the Australian Dollars in the Trust.

Stakeholder Impact

• Shareholders are exposed to the fluctuations in the Australian Dollar/USD exchange rate.
• Authorized Participants are able to create and redeem Baskets of Shares.

Key Dates

Keywords

Australian Dollar, CurrencyShares, Invesco, FXA, Trust, Exchange Rate, ETF