10-Q: Invesco CurrencyShares Canadian Dollar Trust Reports Q3 2024 Results

Invesco CurrencyShares Canadian Dollar Trust reports its financial results for the quarter ended September 30, 2024, noting impacts from market volatility and central bank policies.

Summary

• Invesco CurrencyShares Canadian Dollar Trust's investment objective is to reflect the price in USD of Canadian Dollars plus accrued interest, less expenses.
• The Trust's assets primarily consist of Canadian Dollars held on deposit.
• For the three months ended September 30, 2024, the Trust reported net comprehensive income of $300,066, or $0.35 per share, compared to $471,784, or $0.43 per share, for the same period in 2023.
• For the nine months ended September 30, 2024, the Trust reported net comprehensive income of $1,036,055, or $1.20 per share, compared to $1,410,499, or $1.11 per share, for the same period in 2023.
• The interest rate on the primary deposit account was 2.11% as of September 30, 2024.
• The Trust had 850,000 shares outstanding as of September 30, 2024, compared to 1,050,000 shares outstanding as of December 31, 2023.
• Distributions per share were $0.36 for the three months ended September 30, 2024, and $1.25 for the nine months ended September 30, 2024.
• The Sponsor's fee accrues daily at an annual nominal rate of 0.40% of the Canadian Dollars in the Trust.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the fund remains operational and distributes income, the decrease in net comprehensive income and the inherent risks associated with currency fluctuations temper any positive outlook.

Positives

• The Trust continues to provide a cost-effective way for investors to gain exposure to the Canadian Dollar.
• The Trust maintains a primary deposit account that earns interest, contributing to income.
• The Trust distributes excess interest to shareholders on a monthly basis.

Negatives

• Net comprehensive income decreased for both the three and nine months ended September 30, 2024, compared to the same periods in 2023.
• The Trust is subject to concentration risk as all assets are Canadian Dollars.
• Fluctuations in the Canadian Dollar to USD exchange rate can adversely affect the value of the shares.

Risks

• Fluctuations in the price of the Canadian Dollar could materially adversely affect an investment in the Shares.
• The Trust is subject to concentration risk as all of its assets are Canadian Dollars.
• The Trust's Canadian Dollars are held by a single depository, creating risk if the depository becomes insolvent.
• Market volatility and geopolitical concerns can impact the Trust's net comprehensive income.
• Changes in interest rates set by the Bank of Canada and the Federal Reserve can impact the value of the Canadian dollar.

Future Outlook

The report contains forward-looking statements regarding future developments and their potential effects, but these are not guarantees of future performance and will not be revised or updated.

Industry Context

This report provides insight into the performance of a currency-based ETF, which is influenced by macroeconomic factors, central bank policies, and currency exchange rates. The performance is directly tied to the Canadian dollar and is impacted by global economic events.

Comparison to Industry Standards

• Comparable currency trusts include those tracking the Euro (FXE), Japanese Yen (FXY), and British Pound (FXB).
• The performance of FXC is directly correlated to the CAD/USD exchange rate, while other currency trusts track different currency pairs.
• The expense ratio of FXC, reflected in the Sponsor's fee of 0.40%, is a key factor for investors to compare against similar currency ETFs.

Related Party Transactions

• The Trust pays the Sponsor, Invesco Specialized Products, LLC, a Sponsor's fee which accrues daily at an annual nominal rate of 0.40% of the Canadian Dollars in the Trust and is paid monthly.

Stakeholder Impact

• Shareholders are impacted by fluctuations in the Canadian Dollar to USD exchange rate.
• Shareholders receive monthly distributions of excess interest earned by the Trust.
• Authorized Participants are able to create and redeem shares in Baskets.

Key Dates

Keywords

Canadian Dollar, CurrencyShares, Invesco, FXC, Currency ETF, Financial Results, Trust, ETF