10-Q: Invesco CurrencyShares Euro Trust Reports Second Quarter 2024 Results

Invesco CurrencyShares Euro Trust reports its financial results for the second quarter of 2024, showing a net comprehensive income of $1,075,201.

Summary

• The Invesco CurrencyShares Euro Trust reported a net comprehensive income of $1,075,201 for the three months ended June 30, 2024, and $2,290,828 for the six months ended June 30, 2024.
• The Trust's assets primarily consist of euro deposits, with a balance of $173,046,893 as of June 30, 2024.
• The Trust's redeemable capital shares outstanding were 1,750,000 as of June 30, 2024, down from 2,150,000 at the end of 2023.
• The Trust distributes excess interest earned to shareholders on a monthly basis, with distributions per share of $0.60 for the three months ended June 30, 2024, and $1.18 for the six months ended June 30, 2024.
• The interest rate on the primary euro deposit account was 2.50% as of June 30, 2024.
• The Trust's performance is influenced by fluctuations in the euro to USD exchange rate and interest rates.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. The Trust is performing as expected, generating income and distributing it to shareholders. However, it is subject to currency risk and has seen a decrease in assets and outstanding shares.

Positives

• The Trust generated a net comprehensive income of $1,075,201 for the quarter and $2,290,828 for the first six months of 2024.
• The Trust continues to distribute excess interest to shareholders, with a distribution of $0.60 per share for the quarter and $1.18 per share for the first six months of 2024.
• The interest rate on the primary euro deposit account was 2.50% as of June 30, 2024, which contributes to the Trust's income.

Negatives

• The Trust's assets decreased from $219,786,627 at the end of 2023 to $173,432,086 as of June 30, 2024.
• The number of outstanding redeemable capital shares decreased from 2,150,000 at the end of 2023 to 1,750,000 as of June 30, 2024.
• The Trust's performance is subject to fluctuations in the euro to USD exchange rate, which can negatively impact the value of the shares.

Risks

• The Trust is exposed to fluctuations in the euro to USD exchange rate, which can significantly impact the value of the shares.
• The Trust's assets are concentrated in euro deposits held by a single financial institution, creating a risk of loss if the Depository becomes insolvent.
• Changes in interest rates can affect the Trust's income and the value of its assets.
• Geopolitical events and economic conditions can impact the euro's value and the Trust's performance.

Future Outlook

The Trust's performance will continue to be influenced by fluctuations in the euro to USD exchange rate and changes in interest rates. The Sponsor does not provide specific forward-looking guidance.

Management Comments

• The Trust's management believes that the disclosure controls and procedures were effective to provide reasonable assurance that information is recorded, processed, summarized and reported accurately.
• The management of the Sponsor has concluded that there were no material changes in internal control over financial reporting during the quarter ended June 30, 2024.

Industry Context

This report reflects the performance of a currency-based exchange-traded fund (ETF), which is influenced by global currency markets and interest rate policies. The Trust's performance is directly tied to the euro's value against the US dollar, making it sensitive to macroeconomic factors and central bank actions.

Comparison to Industry Standards

• The Invesco CurrencyShares Euro Trust (FXE) is a single-currency ETF, which is different from diversified currency ETFs that may hold a basket of currencies.
• FXE's performance is directly comparable to other euro-tracking ETFs, such as the WisdomTree Euro ETF (EUD), which also aims to track the euro's performance against the US dollar.
• Unlike some currency ETFs that may use derivatives, FXE holds physical euro deposits, which may result in lower counterparty risk but also limits the potential for leverage.
• The expense ratio of FXE is 0.40%, which is comparable to other single-currency ETFs but may be higher than some diversified currency ETFs.

Related Party Transactions

• The Trust pays a sponsor's fee to Invesco Specialized Products, LLC, which is a related party.

Stakeholder Impact

• Shareholders will receive monthly distributions of excess interest.
• Shareholders are exposed to the risks associated with fluctuations in the euro to USD exchange rate.
• The Trust's performance impacts the value of the shares held by investors.

Next Steps

• The Trust will continue to monitor the euro to USD exchange rate and interest rates.
• The Trust will continue to distribute excess interest to shareholders on a monthly basis.
• The Trust will file its next quarterly report.

Key Dates

Keywords

Euro, Currency, Trust, Invesco, FXE, Exchange Rate, Interest Rate, Financial Results, ETF