10-K: Invesco DB Agriculture Fund Reports Strong Performance in 2024, Driven by Cocoa and Coffee Gains

Invesco DB Agriculture Fund's 2024 performance was significantly boosted by rising cocoa and coffee prices, resulting in a substantial increase in share value.

Summary

• Invesco DB Agriculture Fund (DBA) seeks to track the DBIQ Diversified Agriculture Index Excess Return.
• The fund's performance is primarily driven by trading in commodity futures contracts, aiming to mirror the index's movements.
• The fund's NAV increased from $20.74 to $26.60 per share in 2024.
• The market value of each share increased from $20.73 to $26.59.
• The fund paid a distribution of $1.08408 per share on December 27, 2024.
• Net income for 2024 was $210.4 million, influenced by income, realized gains, unrealized gains, and operating expenses.
• The fund invests in U.S. Treasury Obligations and affiliated money market funds for margin and cash management.
• The fund is subject to position limits imposed by the CFTC and futures exchanges.
• The fund's performance is affected by backwardation and contango in futures markets.
• The fund's management fee is 0.85% per annum of the daily net asset value (NAV).

Sentiment

Score: 8

Explanation: The document presents a positive outlook due to the strong performance of the fund, driven by specific commodities like cocoa and coffee. While risks are acknowledged, the overall tone is optimistic.

Positives

• Strong performance in cocoa and coffee markets significantly boosted the fund's returns.
• The fund's NAV and market value per share saw substantial increases in 2024.
• The fund distributed $1.08408 per share to holders of record as of December 23, 2024.
• The fund maintained effective internal control over financial reporting as of December 31, 2024.
• The fund's total return on a market value basis was +33.53%.

Negatives

• Grains retreated due to ample global supplies and lacking US competitiveness.
• The fund is subject to fees and expenses, which can deplete assets if investment performance is not favorable.
• The fund's performance may not always track the index due to various factors.
• The fund is subject to position limits imposed by the CFTC and futures exchange rules.

Risks

• Fluctuations in commodity prices can significantly impact the value of shares.
• The fund's NAV may not always correspond to the market price of shares.
• Trading halts on the NYSE Arca could adversely impact the ability to sell shares.
• Volatility in futures markets may cause a total loss of investment.
• International armed conflicts may result in market volatility.
• Pandemics and other public health emergencies could disrupt the global economy.
• Regulatory changes or actions may alter the operations and profitability of the fund.
• Shareholders will be subject to taxation on their allocable share of the fund's taxable income.

Future Outlook

The discussion and analysis which follows may contain trend analysis and other forward-looking statements. See Cautionary Statement Concerning Forward-Looking Information above. You should not place undue reliance on any forward-looking statements. Except as expressly required by the Federal securities laws, the Fund and the Managing Owner undertake no obligation to publicly update or revise any forward-looking statements or the risks, uncertainties or other factors described in this Report, as a result of new information, future events or changed circumstances or for any other reason after the date of this Report.

Industry Context

The fund's performance reflects the broader trends in the agricultural commodity markets, particularly the surge in cocoa and coffee prices due to supply concerns and weather-related issues. The fund's strategy of tracking the DBIQ Diversified Agriculture Index Excess Return exposes it to the fluctuations in these commodity prices.

Comparison to Industry Standards

• The fund competes with other financial vehicles, including mutual funds, ETFs and other investment companies, other index tracking commodity pools, actively traded commodity pools, hedge funds, traditional debt and equity securities issued by companies in the commodities industry, other securities backed by or linked to commodities, and direct investments in the underlying commodities or commodity futures contracts.
• Other commodity indexes may contain a larger number of commodities than the Index.
• The Index Commodities are Corn, Soybeans, Wheat, Kansas City Wheat, Sugar, Cocoa, Coffee, Cotton, Live Cattle, Feeder Cattle, and Lean Hogs.

Related Party Transactions

• The Fund may, for margin and/or cash management purposes, invest in money market mutual funds and/or T-Bill ETFs that are managed by affiliates of the Managing Owner.
• The indirect portion of the management fee that the Fund may incur through such investment is in addition to the Management Fee paid to the Managing Owner.
• The Managing Owner has contractually agreed to waive indefinitely the fees that it receives in an amount equal to the indirect management fees that the Fund incurs through its investments in affiliated money market mutual funds and/or affiliated T-Bill ETFs.

Stakeholder Impact

• Shareholders benefited from the increased NAV and market value of shares.
• Authorized Participants experienced activity through creation and redemption of shares.
• The Managing Owner received management fees based on the fund's NAV.
• The Commodity Broker received brokerage commissions and fees related to trading activities.

Key Dates

Keywords

Agriculture, Commodities, Futures Contracts, Invesco DB Agriculture Fund, DBA, Index Tracking, Commodity Pool, Investment, Cocoa, Coffee, Corn, Soybeans, Wheat