10-Q: Invesco CurrencyShares Euro Trust Reports Third Quarter Results

Invesco CurrencyShares Euro Trust reports a net comprehensive income of $940,117 for the three months ended September 30, 2024, and $3,230,945 for the nine months ended September 30, 2024.

Summary

• The Invesco CurrencyShares Euro Trust reported a net comprehensive income of $940,117 for the three months ended September 30, 2024, compared to $1,218,240 for the same period in 2023.
• For the nine months ended September 30, 2024, the Trust's net comprehensive income was $3,230,945, compared to $2,951,340 for the same period in 2023.
• The Trust's assets primarily consist of euro deposits, with $190,494,276 in interest-bearing deposits and $10,284 in non-interest-bearing deposits as of September 30, 2024.
• The Trust's redeemable capital shares outstanding were 1,850,000 as of September 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 a distribution of $0.17264 per share paid on October 7, 2024.
• The interest rate on the primary deposit account was 2.30% as of September 30, 2024.
• The Trust's performance is influenced by fluctuations in the euro to USD exchange rate and changes in interest rates.

Sentiment

Score: 5

Explanation: The sentiment is neutral to slightly negative due to the decrease in net comprehensive income for the quarter compared to the previous year, offset by the positive interest rate and overall positive net comprehensive income for the nine month period. The report highlights both positive and negative aspects of the Trust's performance.

Positives

• The Trust experienced a net comprehensive income of $3,230,945 for the nine months ended September 30, 2024, an increase compared to $2,951,340 for the same period in 2023.
• The Trust continues to distribute excess interest to shareholders on a monthly basis.
• The interest rate on the primary deposit account was 2.30% as of September 30, 2024, which is a positive for the Trust's income generation.

Negatives

• The Trust's net comprehensive income for the three months ended September 30, 2024 was lower at $940,117 compared to $1,218,240 for the same period in 2023.
• The number of outstanding shares decreased from 2,150,000 at the end of 2023 to 1,850,000 as of September 30, 2024, indicating a reduction in the size of the Trust.

Risks

• The Trust is subject to fluctuations in the euro to USD exchange rate, which can adversely affect the value of the shares.
• Changes in interest rates can impact the Trust's income.
• 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.
• Geopolitical events and economic conditions can impact the value of the euro 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 Trust will continue to distribute excess interest to shareholders on a monthly basis.

Management Comments

• The management of the Sponsor concluded that the Trust's disclosure controls and procedures were effective.
• The Sponsor is not aware of any known trends, demands, commitments, events or uncertainties that will result in, or are reasonably likely to result in, material changes to the Trusts liquidity and capital resources needs.

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 environments. 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 policies.

Comparison to Industry Standards

• The Invesco CurrencyShares Euro Trust is comparable to other currency ETFs that track the value of a specific currency against the US dollar.
• Similar ETFs include the WisdomTree Euro ETF (EUD) and the ProShares Ultra Euro ETF (ULE), which also aim to provide investors with exposure to the euro.
• The performance of these ETFs is generally correlated with the movements of the underlying currency, and their expense ratios and trading volumes are key factors for investors to consider.
• The 2.30% interest rate on the primary deposit account is a key differentiator for this ETF, as it provides a source of income in addition to the currency fluctuations.

Related Party Transactions

• The Trust pays the Sponsor, Invesco Specialized Products, LLC, a Sponsor's fee.

Stakeholder Impact

• Shareholders are impacted by the fluctuations in the euro to USD exchange rate and the monthly distributions.
• The Trust's performance affects the value of the shares held by investors.
• The Sponsor is impacted by the fees paid by the Trust.

Next Steps

• The Trust will continue to monitor the euro to USD exchange rate and interest rate environment.
• 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, Invesco, Trust, FXE, Exchange Rate, Interest Rate, Net Asset Value, Shareholders, Deposits