10-Q: Invesco Swiss Franc Trust Reports Q3 2025 Loss Amid Negative Rates, Tariffs

Invesco CurrencyShares Swiss Franc Trust reported a significant net comprehensive loss for Q3 2025, driven by negative interest rates and increased expenses, despite a substantial increase in assets under management.

Summary

• Net comprehensive loss for the three months ended September 30, 2025, was $(572,926), significantly wider than the $(54,871) loss for the same period in 2024.
• For the nine months ended September 30, 2025, the net comprehensive loss was $(1,139,711), compared to a loss of $(68,932) in 2024.
• Basic and diluted loss per share increased to $(0.16) for the three months and $(0.37) for the nine months ended September 30, 2025, from $(0.04) in both periods of 2024.
• Total assets, primarily Swiss Franc deposits, grew substantially to $395,300,165 as of September 30, 2025, from $142,218,802 at December 31, 2024.
• The number of outstanding Redeemable Capital Shares increased to 3,550,000 as of September 30, 2025, from 1,450,000 at December 31, 2024.
• Interest income was $0 for both the three and nine months ended September 30, 2025, down from $93,302 and $397,835 respectively in 2024.
• The Trust incurred interest expense on currency deposits of $(157,982) for both the three and nine months ended September 30, 2025, which was $0 in 2024.
• The annual nominal interest rate on Swiss Franc deposits was -0.15% as of September 30, 2025.
• The Swiss Franc (CHF/USD) experienced a narrow loss in Q3 2025, impacted by a 39% U.S. tariff on Switzerland, though pharmaceuticals were exempted.
• No distributions were made to shareholders during the quarter ended September 30, 2025.

Sentiment

Score: 3

Explanation: The Trust experienced a significant widening of net comprehensive losses due to zero interest income and new interest expenses from negative rates, despite a substantial increase in assets under management. While asset growth indicates investor interest, the operational losses and negative interest rate environment are significant headwinds for profitability. The impact of tariffs and geopolitical uncertainty also adds to the negative sentiment regarding the underlying currency's stability.

Positives

• Total assets, primarily Swiss Franc deposits, grew substantially to $395,300,165 as of September 30, 2025, from $142,209,321 at December 31, 2024.
• The number of outstanding Redeemable Capital Shares more than doubled to 3,550,000 as of September 30, 2025, from 1,450,000 at December 31, 2024, indicating increased investor interest or capital inflows.
• The Swiss Franc was supported by continued demand for safe haven assets and became the favored haven currency amid turbulence in the U.S. dollar and Japanese yen during Q3 2025.
• Disclosure controls and procedures were evaluated as effective as of September 30, 2025.

Negatives

• Net comprehensive loss significantly widened to $(572,926) for the three months ended September 30, 2025, compared to $(54,871) for the same period in 2024.
• Year-to-date net comprehensive loss also significantly widened to $(1,139,711) for the nine months ended September 30, 2025, from $(68,932) in 2024.
• Interest income dropped to $0 for both the three and nine months ended September 30, 2025, from $93,302 and $397,835 respectively in 2024.
• The Trust incurred new interest expense on currency deposits of $(157,982) for both the three and nine months ended September 30, 2025, due to negative interest rates.
• The annual nominal interest rate on Swiss Franc deposits was negative at -0.15% as of September 30, 2025.
• Total expenses increased substantially to $(572,926) for the three months and $(1,139,711) for the nine months ended September 30, 2025, primarily due to higher Sponsor's fees and the new interest expense.
• No distributions were made to shareholders during the quarter ended September 30, 2025, or year-to-date 2025, compared to $54,755 in distributions for the nine months ended September 30, 2024.
• The Swiss Franc experienced a narrow loss in Q3 2025 after the U.S. imposed a 39% tariff rate on Switzerland, impacting sentiment.

Risks

• All of the Trust's assets are Swiss Francs, creating a concentration risk associated with fluctuations in the CHF/USD exchange rate, which could adversely affect the value of the Shares.
• The price of the Swiss Franc can be influenced by various factors including national debt levels, trade deficits, domestic and foreign inflation rates, domestic and foreign interest rates, investment and trading activities of institutions, and global or regional political, economic, or financial events and situations.
• Substantial sales of Swiss Francs by the official sector (central banks, other governmental agencies) could adversely affect an investment in the Shares.
• All Swiss Francs are held by a single financial institution, JPMorgan Chase Bank, N.A., London Branch, increasing the potential for loss if the Depository becomes insolvent.
• The Depository may change the interest rate on deposits, including reducing it to zero or below zero, which results in interest expense for the Trust and impacts profitability. The current rate is -0.15%.
• Changes to United States tariff and trade policies, such as the 39% tariff imposed on Switzerland, have increased and may continue to increase foreign exchange rate volatility, materially and adversely affecting the performance of the Shares.

Future Outlook

The Trust's forward-looking statements indicate that its future performance is directly tied to fluctuations in the price of the Swiss Franc. Market volatility stemming from global tariff gyrations, U.S. economic uncertainty, Federal Reserve easing expectations, and heightened geopolitical concerns are expected to continue impacting the Swiss Franc/USD exchange rate, the interest rate paid by the Depository, and the global economy, thereby affecting the Trust's net comprehensive income (loss) and share creation/redemption activity. The Sponsor does not intend to revise or update these forward-looking statements.

Management Comments

• "Forward-looking statements are based upon our current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance."
• "Various factors may cause our actual results to differ materially from those expressed in our forward-looking statements. These factors include fluctuations in the price of the Swiss Franc, as the value of the Shares relates directly to the value of the Swiss Francs held by the Trust and price fluctuations could materially adversely affect an investment in the Shares."
• "Neither Invesco Specialized Products, LLC (the Sponsor) nor any other person assumes responsibility for the accuracy or completeness of forward-looking statements contained in this report."
• "The forward-looking statements are made as of the date of this report, and will not be revised or updated to reflect actual results or changes in the Sponsors expectations or predictions."
• "The Trust does not have any material cash requirements as of the end of the latest fiscal period. 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."
• "As long as the Sponsors fee and the interest expense on currency deposits, if any, exceed interest income, the Trust will incur a net comprehensive loss."
• "The Trusts disclosure controls and procedures were effective to provide reasonable assurance that information the Trust is required to disclose in the reports that it files or submits with the Securities and Exchange Commission (the SEC) under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms."

Industry Context

The Invesco CurrencyShares Swiss Franc Trust operates within the niche market of currency-backed exchange-traded funds (ETFs), specifically focusing on the Swiss Franc. The filing highlights the impact of broader macroeconomic and geopolitical trends on currency markets, such as global tariff disputes, U.S. economic uncertainty, Federal Reserve monetary policy (easing cycles), and geopolitical tensions. The Swiss Franc's role as a "safe-haven" currency is a recurring theme, indicating its sensitivity to global instability. The negative interest rate environment in Switzerland, as reflected by the -0.15% rate on deposits, is a significant factor impacting the Trust's profitability, a trend seen in other developed economies with accommodative monetary policies. The increased volatility due to U.S. trade policies, including tariffs, underscores the interconnectedness of trade, politics, and currency valuations, affecting all participants in the foreign exchange market.

Comparison to Industry Standards

• NA

Related Party Transactions

• The Sponsor, Invesco Specialized Products, LLC, is a related party of the Trust.
• The Trust pays the Sponsor a fee that accrues daily at an annual nominal rate of 0.40% of the Swiss Francs in the Trust. This fee is paid monthly.

Stakeholder Impact

• Shareholders are directly impacted by the net comprehensive losses, which reduce the value of their investment. They also did not receive any distributions in 2025, unlike the prior year. The value of their shares is directly tied to the Swiss Franc's performance against the USD, making them vulnerable to currency fluctuations, tariffs, and negative interest rates.
• The Sponsor (Invesco Specialized Products, LLC) benefits from increased assets under management as its fee is calculated as a percentage of the Swiss Francs held by the Trust, leading to higher fee income despite the Trust's losses.
• The Depository (JPMorgan Chase Bank, N.A., London Branch) holds all of the Trust's Swiss Francs and charges a negative interest rate, which benefits the Depository while creating an expense for the Trust.

Next Steps

• The Trust will continue to operate as a passive investment vehicle, reflecting the price of the Swiss Franc in USD.
• The Sponsor will continue to publish the Trust's Net Asset Value (NAV) and NAV per Share daily on its website.
• The Trustee will continue to calculate NAV daily, adjusting for accrued interest, fees, and pending share transactions.
• The Trust will continue to monitor market conditions, including Swiss Franc/USD exchange rates and Depository interest rates, which directly impact its performance.

Key Dates

Recommendation

While the Trust has seen significant asset growth, indicating continued investor interest in Swiss Franc exposure, its operational profitability is severely hampered by negative interest rates and increased expenses. The direct correlation to the Swiss Franc's value, coupled with ongoing geopolitical and trade uncertainties, introduces significant volatility. For investors seeking direct Swiss Franc exposure, the Trust serves its purpose, but the current financial performance suggests it's not generating positive returns from its underlying assets beyond currency appreciation. Therefore, a "hold" recommendation is appropriate for existing investors who believe in the long-term appreciation of the Swiss Franc or its safe-haven status, but new investors should be cautious given the negative carry and operational losses.

Keywords

Swiss Franc, CurrencyShares, FXF, Invesco, Exchange Traded Fund, ETF, Foreign Exchange, CHF/USD, Grantor Trust, SEC Filing, Quarterly Report, Financial Results, Market Risk, Tariffs, Interest Rates, Safe Haven Currency