INVESCO DB BASE METALS FUND
For the period ended Jun 30, 2024. Filed Aug 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 7, 2024
DBB$24.58+0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-08.
0000950170-24-054952
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0000950170-24-092110
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 90 previous paragraphs and 97 current paragraphs.
69 unchanged; 12 reworded; 15 added; 7 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023
Current report
Returns for the Three and Six Months Ended June 30, 2024 and 2023
Current report
For the three months ended June 30, 2024, the NYSE Arca market value of each Share increased from $17.95 per Share to $20.11 per Share. The Share price low and high for the three months ended June 30, 2024 and related change from the Share price on March 31, 2024 was as follows: Shares traded at a low of $18.10 per Share (0.81%) on April 1, 2024 and a high of $21.65 per Share (20.58%) on May 24, 2024. The total return for the Fund on a market value basis was +12.03%.
Current report
Industrial metals saw strong positive performance in the second quarter of 2024. Zinc was the top performer among the three metals included in the Fund, with front month prices up over 20% as the consequences of tight concentrate supplies and plunging treatment charges rippled through the processing chains. Copper and aluminum also continued their supply-driven gains through most of May, with copper even experiencing a short squeeze, sending prices to a record high. However, both retreated on increased profit-taking and hawkish Federal Reserve rhetoric. This dented broader investor risk appetite which had improved in the first quarter on hopes that the Federal Reserve would start cutting rates imminently. Adding to the bullish sentiment, the US and United Kingdom ("UK") issued fresh sanctions on Russian copper, aluminum, and nickel in April. However, physical markets did turn weaker in June as China remained well-supplied in copper and European zinc smelters announced plans to restart.
Current report
For the three months ended June 30, 2023, the NYSE Arca market value of each Share decreased from $20.19 per Share to $17.97 per Share. The Share price low and high for the three months ended June 30, 2023 and related change from the Share price on March 31, 2023 was as follows: Shares traded at a low of $17.50 per Share (-13.30% ) on May 25, 2023 and a high of $20.09 per Share (-0.50%) on April 18, 2023. The total return for the Fund on a market value basis was -11.00%.
Current report
Following the slight positive performance in the first quarter, industrial metals plunged sharply in the second quarter of 2023 with aluminum, copper and zinc all detracting from the Fund’s performance. Zinc fared the worst among the three with front month prices dropping nearly 20% through the quarter as Chinese demand continued to disappoint and smelters were expected to restart amid the plunge in energy prices. Aluminum front month futures also fell over 10% on the same reasons, though production curtailments in Yunnan, China due to their hydropower shortage limited some of the downside. China stimulus expectations also provided some support for copper, but the metal still posted a loss.
Current report
Net income (loss) for the three months ended June 30, 2024 was $14.6 million, primarily resulting from $2.0 million of income, net realized gain (loss) of $6.7 million, net change in unrealized gain of $6.2 million and net operating expenses of $0.3 million.
Current report
FOR THE SIX MONTHS ENDED JUNE 30, 2024 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2023
Current report
Fund Share Price Performance
Current report
Industrial metals ended the first half of 2024 in positive territory with all three metals included in the Fund posting gains. Copper and zinc were supported by shortfalls in concentrate supplies and plunging treatment and refining charges, i.e., the profit for smelters to refine the metal, forcing cutbacks in refined metal supply. Aluminum was the weakest of the three but still gained significantly on tightening physical fundamentals. Adding to this, the US and UK issued fresh sanctions on Russian copper, aluminum, and nickel in April. Furthermore, an improving macro backdrop, bolstered by expectations for a soft landing in the US and brighter Chinese outlook, underpinned stronger prices. However, the sector did retreat sharply through June with Federal Reserve rate cut expectations repeatedly being pushed out and physical markets turning weaker – China remained well-supplied in copper and European zinc smelters announced plans to restart idled capacity.
Current report
While industrial metals posted slight positive performance in the first quarter, the complex plunged sharply in the second quarter of 2023, leaving the Fund in deep negative territory year-to-date. For the first quarter, while all of the Fund’s components rallied in January, continuing its China and “Fed-pivot” driven rally from year-end 2022, prices eased through February and the first half of March, pressured by hotter-than-expected labor data, resilient US inflation and a lack of bullish data out of China to support indications the country was reopening. A broader risk-off move triggered by the turmoil in the banking sector also pressured the commodities in general to end the quarter. However, in the second quarter, continued disappointing Chinese data, coupled with expectations for smelter restarts amid weak energy prices and easing supply concerns, dealt a heavy blow to the commodity sector.
Current report
Fund Share Net Asset Performance
Current report
For the six months ended June 30, 2024, the NAV of each Share increased from $18.28 per Share to $20.16 per Share. Rising commodity futures contract prices for aluminum, zinc and copper during the six months ended June 30, 2024 contributed to an overall 7.88% increase in the level of the Index and to a 10.79% increase in the level of the DBIQ-OY Industrial Metals TR™. The total return for the Fund on a NAV basis was +10.29%.
Current report
Net income (loss) for the six months ended June 30, 2024 was $12.4 million, primarily resulting from $3.7 million of income, net realized gain (loss) of $6.6 million, net change in unrealized gain of $2.6 million and net operating expenses of $0.5 million.
Current report
Net income (loss) for the six months ended June 30, 2023 was $(18.6) million, primarily resulting from $6.8 million of income, net realized gain (loss) of $(42.9) million, net change in unrealized gain (loss) of $18.3 million and net operating expenses of $0.8 million.
Removed paragraphs (7)
Previous report
NEITHER THE PAST PERFORMANCE OF THE FUND NOR THE PRIOR INDEX LEVELS AND CHANGES,
Previous report
POSITIVE OR NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE FUND’S FUTURE PERFORMANCE.
Previous report
NEITHER THE PAST PERFORMANCE OF THE FUND NOR THE PRIOR INDEX LEVELS AND CHANGES,
Previous report
POSITIVE OR NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE FUND’S FUTURE PERFORMANCE.
Previous report
Industrial metals were mixed in the first quarter of 2024. Copper managed to lock in gains and aluminum was slightly lower, while Zinc prices continued to plunge. Copper prices were supported by the severe shortfalls in concentrate supplies and expanded Chinese smelter capacity, leading to plunging treatment and refining charges (i.e., the profit for smelters to refine the metal, and hence forcing cutbacks in refined metal supply). Nickel prices gained mostly in February and early March as low prices started to feed into its cost curve leading to output cuts. Iron Ore and Zinc, both heavily linked to China’s property sector, continued to suffer.
Previous report
Industrial metal commodities had a strong start to 2023, with the Fund posting its largest quarterly gain since 2010, as growing geopolitical tensions over the war in Ukraine further strained markets that were already facing critically low supplies. Following an over 40% rally in 2022, as China imposed production curbs to meet its climate ambitions, aluminum front month futures soared again to an all-time high this quarter, given Russia’s role as the world’s largest aluminum producer behind China. Furthermore, heightened energy prices due to the war caused power costs to spike even higher, leading to additional cuts in smelter production across all metals, amid rapidly declining exchange inventories.
Previous report
Net income (loss) for the three months ended March 31, 2024 was $(2.2) million, primarily resulting from $1.6 million of income, net realized gain (loss) of $(0.1) million, net change in unrealized gain of $(3.5) million and net operating expenses of $0.2 million.
Reworded paragraphs (12)
Previous wording
As of the date of this Report, each of ABN AMRO Clearing Chicago LLC, BofA Securities, Inc., BMO Capital Markets Corp., BNP Paribas Securities Corp., Cantor Fitzgerald & Co., Citadel Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co., Goldman Sachs Execution & Clearing LP, Interactive Brokers LLC, Jefferies LLC, JP Morgan Securities Inc., Merrill Lynch Professional Clearing Corp., Morgan Stanley & Co. LLC, Nomura Securities International Inc., RBC Capital Markets LLC, SG Americas Securities LLC, UBS Securities LLC, Virtu Americas LLC and Virtu Financial Capital Markets LLC has executed a Participant Agreement and are the only Authorized Participants.
Current wording
As of the date of this Report, each of ABN AMRO Clearing Chicago LLC, Bank of America Securities, BMO Capital Markets Corp., BNP Paribas Securities Corp., BofA Securities, Inc., Cantor Fitzgerald & Co., Citadel Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co., Goldman Sachs Execution & Clearing LP, Interactive Brokers LLC, Jane Street Capital LLC, Jefferies LLC, JP Morgan Securities Inc., Morgan Stanley & Co. LLC, Nomura Securities International Inc., RBC Capital Markets LLC, SG Americas Securities LLC, UBS Securities LLC, Virtu Americas LLC and Virtu Financial Capital Markets LLC has executed a Participant Agreement and are the only Authorized Participants.
Previous wording
Net cash flow provided by (used in) operating activities was $1.3 million and $5.8 million for the three months ended March 31, 2024 and 2023, respectively. These amounts primarily include net income (loss), net purchases and sales of money market mutual funds and net purchases and sales of United States Treasury Obligations and affiliated investments. The Fund invests in United States Treasury Obligations, money market mutual funds and T-Bill ETFs (affiliated or otherwise), if any, for margin and/or cash management purposes. While the Fund's performance reflects the appreciation and depreciation of those holdings, the Fund's performance, whether positive or negative, is driven primarily by its strategy of trading futures contracts with the aim of seeking to track the Index.
Current wording
Net cash flow provided by (used in) operating activities was $(35.0) million and $39.7 million for the six months ended June 30, 2024 and 2023, respectively. These amounts primarily include net income (loss), net purchases and sales of money market mutual funds and net purchases and sales of United States Treasury Obligations and affiliated investments. The Fund invests in United States Treasury Obligations, money market mutual funds and T-Bill ETFs (affiliated or otherwise), if any, for margin and/or cash management purposes. While the Fund's performance reflects the appreciation and depreciation of those holdings, the Fund's performance, whether positive or negative, is driven primarily by its strategy of trading futures contracts with the aim of seeking to track the Index.
Previous wording
During the three months ended March 31, 2024, $6.0 million was received from sales and maturing United States Treasury Obligations. During the three months ended March 31, 2023, $135.4 million was paid to purchase United States Treasury Obligations and $147.0 million was received from sales and maturing United States Treasury Obligations. $4.6 million was received from sales of affiliated investments and $10.0 million was paid to purchase affiliated investments during the three months ended March 31, 2024. $168.4 million was received from sales of affiliated investments and $175.8 million was paid to purchase affiliated investments during the three months ended March 31, 2023.
Current wording
During the six months ended June 30, 2024, $74.0 million was paid to purchase United States Treasury Obligations and $57.0 million was received from sales and maturing United States Treasury Obligations. During the six months ended June 30, 2023, $191.0 million was paid to purchase United States Treasury Obligations and $284.0 million was received from sales and maturing United States Treasury Obligations. $104.8 million was received from sales of affiliated investments and $86.0 million was paid to purchase affiliated investments during the six months ended June 30, 2024. $381.0 million was received from sales of affiliated investments and $333.9 million was paid to purchase affiliated investments during the six months ended June 30, 2023.
Previous wording
The Fund’s net cash flow provided by (used in) financing activities was $(1.3) million and $(7.7) million during the three months ended March 31, 2024 and 2023, respectively. This included $3.5 million and $53.3 million from Shares purchased by Authorized Participants and $4.4 million and $61.1 million from Shares redeemed by Authorized Participants during the three months ended March 31, 2024 and 2023, respectively. During the three months ended March 31, 2024, distributions paid to Shareholders were $0.4 million. No distributions were paid to Shareholders during the three months ended March 31, 2023.
Current wording
The Fund’s net cash flow provided by (used in) financing activities was $35.0 million and $(41.7) million during the six months ended June 30, 2024 and 2023, respectively. This included $82.6 million and $79.0 million from Shares purchased by Authorized Participants and $(47.2) million and $(120.7) million from Shares redeemed by Authorized Participants during the six months ended June 30, 2024 and 2023, respectively. During the six months ended June 30, 2024, distributions paid to Shareholders were $0.4 million. No distributions were paid to Shareholders during the six months ended June 30, 2023.
Previous wording
FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
Current wording
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023
Previous wording
This Report covers the three months ended March 31, 2024 and 2023. Past performance of the Fund is not necessarily indicative of future performance.
Current wording
This Report covers the three and six months ended June 30, 2024 and 2023. Past performance of the Fund is not necessarily indicative of future performance.
Previous wording
The section “Summary of the DBIQ-OY Industrial Metals TR™ and Underlying Index Commodity Returns for the Three Months Ended March 31, 2024 and 2023” below provides an overview of the changes in the closing levels of the DBIQ-OY Industrial Metals TR™ by disclosing the change in market value of each underlying component Index Commodity through a “surrogate” (and analogous) index that also reflects 3-month United States Treasury Obligations returns. Please note also that the Fund’s objective is to track the Index (not the DBIQ-OY Industrial Metals TR™), and the Fund does not attempt to outperform or underperform the Index. The Index employs the optimum yield roll method with the objective of mitigating the negative effects of contango, the condition in which distant delivery prices for futures exceed spot prices, and maximizing the positive effects of backwardation, a condition opposite of contango.
Current wording
The section “Summary of the DBIQ-OY Industrial Metals TR™ and Underlying Index Commodity Returns for the Three and Six Months Ended June 30, 2024 and 2023” below provides an overview of the changes in the closing levels of the DBIQ-OY Industrial Metals TR™ by disclosing the change in market value of each underlying component Index Commodity through a “surrogate” (and analogous) index that also reflects 3-month United States Treasury Obligations returns. Please note also that the Fund’s objective is to track the Index (not the DBIQ-OY Industrial Metals TR™), and the Fund does not attempt to outperform or underperform the Index. The Index employs the optimum yield roll method with the objective of mitigating the negative effects of contango, the condition in which distant delivery prices for futures exceed spot prices, and maximizing the positive effects of backwardation, a condition opposite of contango.
Previous wording
For the three months ended March 31, 2023, the NAV of each Share increased from $19.50 per Share to $20.21 per Share. Rising commodity futures contract prices for aluminum, zinc and copper during the three months ended March 31, 2023 contributed to an overall 2.27% increase in the level of the Index and to a 3.48% increase in the level of the DBIQ-OY Industrial Metals TR™. The total return for the Fund on a NAV basis was +3.64%.
Current wording
For the three months ended June 30, 2024, the NAV of each Share increased from $17.94 per Share to $20.16 per Share. Rising commodity futures contract prices for aluminum, zinc and copper during the three months June 30, 2024 contributed to an overall 11.20% increase in the level of the Index and to a 12.70% increase in the level of the DBIQ-OY Industrial Metals TR™. The total return for the Fund on a NAV basis was +12.37%.
Previous wording
Net income (loss) for the three months ended March 31, 2023 was $5.8 million, primarily resulting from $3.6 million of income, net realized gain (loss) of $(12.1) million, net change in unrealized gain (loss) of $14.7 million and net operating expenses of $0.4 million.
Current wording
Net income (loss) for the three months ended June 30, 2023 was $(24.4) million, primarily resulting from $3.1 million of income, net realized gain (loss) of $(30.8) million, net change in unrealized gain (loss) of $3.6 million and net operating expenses of $0.4 million.
Previous wording
For the three months ended March 31, 2024, the NYSE Arca market value of each Share decreased from $18.31 per Share to $17.95 per Share. The Share price low and high for the three months ended March 31, 2024 and related change from the Share price December 31, 2023 was as follows: Shares traded at a low of $16.80 per Share (-8.25%) on February 9, 2024 and a high of $18.17 per Share (-0.76%) on March 15, 2024. The total return for the Fund on a market value basis was -1.97%.
Current wording
For the six months ended June 30, 2024, the NYSE Arca market value of each Share increased from $18.31 per Share to $20.11 per Share. The Share price low and high for the six months ended June 30, 2024 and related change from the Share price on December 31, 2023 was as follows: Shares traded at a low of $16.80 per Share (-8.25%) on February 9, 2024, and a high of $21.65 per Share (18.25%) on May 21, 2024. The total return for the Fund on a market value basis was +9.83%.
Previous wording
For the three months ended March 31, 2023, the NYSE Arca market value of each Share increased from $19.57 per Share to $20.19 per Share. The Share price low and high for the three months ended March 31, 2023 and related change from the Share price December 31, 2022 was as follows: Shares traded at a low of $19.19 per Share (-1.94% ) on January 4, 2023 and a high of $22.28 per Share (+13.82%) on January 26, 2023. The total return for the Fund on a market value basis was +3.17%.
Current wording
For the six months ended June 30, 2023, the NYSE Arca market value of each Share decreased from $19.57 per Share to $17.97 per Share. The Share price low and high for the six months ended June 30, 2023 and related change from the Share price on December 31, 2022 was as follows: Shares traded at a low of $17.50 per Share (-10.58%) on May 25, 2023, and a high of $22.28 per Share (+13.82%) on January 26, 2023. The total return for the Fund on a market value basis was -8.18%.
Previous wording
For the three months ended March 31, 2024, the NAV of each Share decreased from $18.28 per Share to $17.94 per Share. Falling commodity futures contract prices for aluminum and zinc were partially offset by rising commodity futures contract prices for copper during the three months ended March 31, 2024, contributing to an overall 2.98% decrease in the level of the Index and to a 1.69% decrease in the level of the DBIQ-OY Industrial Metals TR™. The total return for the Fund on a NAV basis was -1.86%.
Current wording
For the six months ended June 30, 2023, the NAV of each Share decreased from $19.50 per Share to $17.95 per Share. Falling commodity futures contract prices for aluminum and zinc were partially offset by rising commodity for copper during the six months ended June 30, 2023 contributed to an overall 10.45% decrease in the level of the Index and to a 8.22% decrease in the level of the DBIQ-OY Industrial Metals TR™. The total return for the Fund on a NAV basis was -7.95%.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For the three months ended June 30, 2023, the NAV of each Share decreased from $20.21 per Share to $17.94 per Share. Falling commodity futures contract prices for aluminum, zinc and copper during the three months ended June 30, 2023 contributed to an overall 12.44% decrease in the level of the Index and to a 11.31% decrease in the level of the DBIQ-OY Industrial Metals TR™. The total return for the Fund on a NAV basis was -11.18%.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
Previous report — wording carried elsewhere
Returns for the Three Months Ended March 31, 2024 and 2023