UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(A Series of Invesco DB Multi-Sector Commodity Trust)
(Exact name of registrant as specified in its charter)
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(State or Other Jurisdiction of Incorporation or Organization) |
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(I.R.S. Employer Identification No.) |
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(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer |
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Accelerated Filer |
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Indicate the number of outstanding Shares as of March 31, 2023:
INVESCO DB PRECIOUS METALS FUND
(A SERIES OF INVESCO DB MULTI-SECTOR COMMODITY TRUST)
QUARTER ENDED MARCH 31, 2023
TABLE OF CONTENTS
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Page |
PART I. |
1 |
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ITEM 1. |
1 |
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8 |
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ITEM 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
18 |
ITEM 3. |
26 |
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ITEM 4. |
28 |
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PART II. |
29 |
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Item 1. |
29 |
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Item 1A. |
29 |
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Item 2. |
29 |
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Item 3. |
29 |
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Item 4. |
29 |
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Item 5. |
29 |
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Item 6. |
30 |
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31 |
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Invesco DB Precious Metals Fund
Statements of Financial Condition
March 31, 2023 and December 31, 2022
(Unaudited)
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March 31, |
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December 31, |
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2023 |
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2022 |
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Assets |
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United States Treasury Obligations, at value (cost $ |
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$ |
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$ |
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Affiliated investments, at value (cost $ |
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Cash held by custodian |
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— |
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Receivable for: |
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Dividends from affiliates |
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Total assets |
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$ |
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$ |
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Liabilities |
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Other Investments: |
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Variation margin payable- Commodity Futures Contracts |
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$ |
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Payable for: |
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Management fees |
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Brokerage commissions and fees |
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Total liabilities |
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Equity |
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Shareholder's equity—General Shares |
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Shareholders' equity—Shares |
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Total shareholders' equity |
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Total liabilities and equity |
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$ |
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$ |
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General Shares outstanding |
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Shares outstanding |
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Net asset value per share |
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$ |
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Market value per share |
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$ |
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$ |
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See accompanying Notes to Unaudited Financial Statements which are an integral part of the financial statements.
1
Invesco DB Precious Metals Fund
Schedule of Investments
March 31, 2023
(Unaudited)
Description |
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Percentage of |
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Value |
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Principal Value |
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United States Treasury Obligations (a) |
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U.S. Treasury Bill, |
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% |
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$ |
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$ |
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U.S. Treasury Bill, |
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Total United States Treasury Obligations (cost $ |
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% |
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$ |
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Affiliated Investments |
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Shares |
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Exchange-Traded Fund |
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Invesco Treasury Collateral ETF (cost $ |
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% |
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$ |
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Money Market Mutual Fund |
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Invesco Government & Agency Portfolio, Institutional Class, |
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Total Affiliated Investments (cost $ |
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% |
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$ |
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Total Investments in Securities (cost $ |
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% |
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$ |
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Open Commodity Futures Contracts |
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Number of Contracts |
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Expiration Date |
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Notional |
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Value(f) |
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Unrealized Appreciation (Depreciation)(f) |
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Long Futures Contracts |
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COMEX Gold |
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$ |
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$ |
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$ |
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COMEX Silver |
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COMEX Silver |
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Total Commodity Futures Contracts |
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$ |
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$ |
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See accompanying Notes to Unaudited Financial Statements which are an integral part of the financial statements.
2
Invesco DB Precious Metals Fund
Schedule of Investments
December 31, 2022
(Unaudited)
Description |
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Percentage of |
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Value |
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Principal Value |
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United States Treasury Obligations (a) |
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U.S. Treasury Bill, |
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% |
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$ |
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$ |
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U.S. Treasury Bill, |
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Total United States Treasury Obligations (cost $ |
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% |
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$ |
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Affiliated Investments |
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Shares |
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Exchange-Traded Fund |
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Invesco Treasury Collateral ETF (cost $ |
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% |
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$ |
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Money Market Mutual Fund |
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Invesco Government & Agency Portfolio, Institutional |
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Total Affiliated Investments (cost $ |
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% |
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Total Investments in Securities (cost $ |
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% |
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$ |
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Open Commodity Futures Contracts |
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Number of Contracts |
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Expiration Date |
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Notional |
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Value(e) |
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Unrealized Appreciation (Depreciation)(e) |
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Long Futures Contracts |
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COMEX Gold |
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$ |
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$ |
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$ |
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COMEX Silver |
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Total Commodity Futures Contracts |
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$ |
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$ |
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See accompanying Notes to Unaudited Financial Statements which are an integral part of the financial statements.
3
Invesco DB Precious Metals Fund
Statements of Income and Expenses
For the Three Months Ended March 31, 2023 and 2022
(Unaudited)
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Three Months Ended |
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March 31, |
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2023 |
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2022 |
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Income |
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Interest Income |
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$ |
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$ |
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Dividends from Affiliates |
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Total Income |
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Expenses |
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Management Fees |
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Brokerage Commissions and Fees |
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Interest Expense |
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Total Expenses |
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Less: Waivers |
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Net Expenses |
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Net Investment Income (Loss) |
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Net Realized and Net Change in Unrealized Gain (Loss) on |
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Net Realized Gain (Loss) on |
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Commodity Futures Contracts |
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Net Realized Gain (Loss) |
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Net Change in Unrealized Gain (Loss) on |
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United States Treasury Obligations |
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( |
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Affiliated Investments |
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Commodity Futures Contracts |
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Net Change in Unrealized Gain (Loss) |
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Net Realized and Net Change in Unrealized Gain (Loss) on |
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Net Income (Loss) |
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$ |
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$ |
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See accompanying Notes to Unaudited Financial Statements which are an integral part of the financial statements.
4
Invesco DB Precious Metals Fund
Statement of Changes in Shareholders’ Equity
For the Three Months Ended March 31, 2023
(Unaudited)
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General Shares |
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Shares |
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Total |
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Shares |
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Total |
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Shares |
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Total |
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Shareholders' |
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Balance at December 31, 2022 |
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$ |
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$ |
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$ |
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Purchases of Shares |
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Redemption of Shares |
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Net Increase (Decrease) due to Share Transactions |
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Net Income (Loss) |
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Net Investment Income (Loss) |
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Net Realized Gain (Loss) on United States |
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Net Change in Unrealized Gain (Loss) on |
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Net Income (Loss) |
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Net Change in Shareholders' Equity |
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— |
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Balance at March 31, 2023 |
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$ |
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$ |
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$ |
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See accompanying Notes to Unaudited Financial Statements which are an integral part of the financial statements.
5
Invesco DB Precious Metals Fund
Statement of Changes in Shareholders’ Equity
For the Three Months Ended March 31, 2022
(Unaudited)
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General Shares |
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Shares |
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Total |
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Shares |
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Total |
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Shares |
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Total |
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Shareholders' |
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Balance at December 31, 2021 |
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$ |
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$ |
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$ |
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Purchases of Shares |
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Redemption of Shares |
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— |
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— |
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— |
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Net Increase (Decrease) due to Share Transactions |
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Net Income (Loss) |
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Net Investment Income (Loss) |
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Net Realized Gain (Loss) on United States |
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Net Change in Unrealized Gain (Loss) on |
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Net Income (Loss) |
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Net Change in Shareholders' Equity |
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— |
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Balance at March 31, 2022 |
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$ |
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$ |
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$ |
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See accompanying Notes to Unaudited Financial Statements which are an integral part of the financial statements.
6
Invesco DB Precious Metals Fund
Statements of Cash Flows
For the Three Months Ended March 31, 2023 and 2022
(Unaudited)
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Three Months Ended |
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March 31, |
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2023 |
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2022 |
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Cash flows from operating activities: |
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Net Income (Loss) |
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$ |
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$ |
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Adjustments to reconcile net income (loss) to net cash provided by (used in) operating |
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Cost of securities purchased |
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Proceeds from securities sold and matured |
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Cost of affiliated investments purchased |
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Proceeds from affiliated investments sold |
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Net accretion of discount on United States Treasury Obligations |
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Net change in unrealized (gain) loss on United States Treasury Obligations and |
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Change in operating assets and liabilities: |
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Variation margin- Commodity Futures Contracts |
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Dividends from affiliates |
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Management fees |
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Brokerage commissions and fees |
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( |
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Due from broker |
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— |
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Net cash provided by (used in) operating activities |
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Cash flows from financing activities: |
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Proceeds from purchases of Shares |
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Redemption of Shares |
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Net cash provided by (used in) financing activities |
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Net change in cash |
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Cash at beginning of period |
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Cash at end of period |
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$ |
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$ |
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Supplemental disclosure of cash flow information |
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Cash paid for interest |
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$ |
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$ |
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See accompanying Notes to Unaudited Financial Statements which are an integral part of the financial statements.
7
Invesco DB Precious Metals Fund
Notes to Unaudited Financial Statements
March 31, 2023
Note 1 - Organization
Invesco DB Precious Metals Fund (the “Fund”), a separate series of Invesco DB Multi-Sector Commodity Trust (the “Trust”), a Delaware statutory trust organized in
Invesco Capital Management LLC (“Invesco”) has served as the managing owner (the “Managing Owner”), commodity pool operator and commodity trading advisor of the Trust and the Fund since February 23, 2015. The Managing Owner holds
The Fund seeks to track changes, whether positive or negative, in the level of the DBIQ Optimum Yield Precious Metals Index Excess Return (the “Index”) over time, plus the excess, if any, of the sum of the Fund’s interest income from its holdings of United States Treasury Obligations (“Treasury Income”), dividends from its holdings in money market mutual funds (affiliated or otherwise) (“Money Market Income”) and dividends or distributions of capital gains from its holdings of T-Bill ETFs (as defined below) (“T-Bill ETF Income”) over the expenses of the Fund. The Fund invests in futures contracts in an attempt to track its Index. The Index is intended to reflect the change in market value of the precious metals sector. The commodities comprising the Index are gold and silver (each an “Index Commodity”, and collectively, the “Index Commodities”).
The Fund may invest directly in United States Treasury Obligations. The Fund may also gain exposure to United States Treasury Obligations through investments in exchange-traded funds (“ETFs”) (affiliated or otherwise) that track indexes that measure the performance of United States Treasury Obligations with a maximum remaining maturity of up to
The Commodity Futures Trading Commission (the “CFTC”) and certain futures exchanges impose position limits on futures contracts that reference Index Commodities (the “Index Contracts”). As the Fund approaches or reaches position limits with respect to an Index Commodity, the Fund may commence investing in Index Contracts that reference other Index Commodities. In those circumstances, the Fund may also trade in futures contracts based on commodities other than Index Commodities that the Managing Owner reasonably believes tend to exhibit trading prices that correlate with an Index Contract.
The Managing Owner may determine to invest in other futures contracts if at any time it is impractical or inefficient to gain full or partial exposure to an Index Commodity through the use of Index Contracts. These other futures contracts may or may not be based on an Index Commodity. When they are not, the Managing Owner may seek to select futures contracts that it reasonably believes tend to exhibit trading prices that correlate with an Index Contract.
The Fund offers common units of beneficial interest (the “Shares”) only to certain eligible financial institutions (the “Authorized Participants”) in
This Quarterly Report (the “Report”) covers the three months ended March 31, 2023 and 2022. The accompanying unaudited financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). In the opinion of management, all material adjustments, consisting only of normal recurring adjustments, considered necessary for a fair statement of the interim period financial statements have been made. Interim period results are not necessarily indicative of results for a full-year period. These financial statements and the notes thereto should be read in conjunction with the Fund’s financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 24, 2023.
8
Note 2 - Summary of Significant Accounting Policies
The financial statements of the Fund have been prepared using U.S. GAAP.
The Fund has determined that it meets the definition of an investment company and has prepared the financial statements in conformity with U.S. GAAP for investment companies in conformity with accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services — Investment Companies.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are issued.
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end-of-day net asset value (“NAV”) per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
United States Treasury Obligations are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as developments related to specific securities, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. All debt obligations involve some risk of default with respect to interest and/or principal payments.
Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith following procedures approved by the Managing Owner. Issuer-specific events, market trends, bid/asked quotes of brokers and information providers and other data may be reviewed in the course of making a good faith determination of a security’s fair value.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or adverse investor sentiment generally and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Investment transactions are accounted for on a trade date basis. Realized gains or losses from the sale or disposition of securities or derivatives are determined on a specific identification basis and recognized in the Statements of Income and Expenses in the period in which the contract is closed or the sale or disposition occurs, respectively. Interest income on United States Treasury Obligations is recognized on an accrual basis when earned. Premiums and discounts are amortized or accreted over the life of the United States Treasury Obligations. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
Pursuant to the Trust Agreement, income and expenses are allocated pro rata to the Managing Owner as holder of the General Shares and to the Shareholders monthly based on their respective percentage interests as of the close of the last trading day of the preceding month. Distributions (other than redemption of units) may be made at the sole discretion of the Managing Owner on a pro rata basis in accordance with the respective capital balances of the shareholders.
The Managing Owner is responsible for all routine operational, administrative and other ordinary expenses of the Fund, including, but not limited to, computer services, the fees and expenses of the Trustee, legal and accounting fees and expenses, tax preparation expenses, filing fees and printing, mailing and duplication costs. The Fund does not reimburse the Managing Owner for the routine operational, administrative and other ordinary expenses of the Fund. Accordingly, such expenses are not reflected in the Statements of Income and Expenses of the Fund.
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The Fund pays all non-recurring and unusual fees and expenses, if any, of itself, as determined by the Managing Owner. Non-recurring and unusual fees and expenses include fees and expenses such as legal claims and liabilities, litigation costs, indemnification expenses or other non-routine expenses. Non-recurring and unusual fees and expenses, by their nature, are unpredictable in terms of timing and amount. For the three months ended March 31, 2023 and 2022, the Fund did not incur such expenses.
The Fund incurs all brokerage commissions, including applicable exchange fees, National Futures Association (“NFA”) fees, give-up fees, pit brokerage fees and other transaction related fees and expenses charged in connection with trading activities by the Commodity Broker (as defined below). These costs are recorded as Brokerage Commissions and Fees in the Statements of Income and Expenses. The Commodity Broker’s brokerage commissions and trading fees are determined on a contract-by-contract basis. On average, total charges paid to the Commodity Broker, as applicable were less than $