Invesco DB Energy Fund
For the period ended Jun 30, 2024. Filed Aug 7, 2024.
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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
DBE$36.60+1.0%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.
0000950170-24-054958
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.
0000950170-24-092111
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 87 previous paragraphs and 101 current paragraphs.
70 unchanged; 15 reworded; 11 added; 1 removed; 1 previous and 5 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 (11)
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 $20.71 per Share to $20.89 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 $19.37 per Share (-6.47%) on June 4, 2024, and a high of $21.52 per Share (+3.89%) on April 12, 2024. The total return for the Fund on a market value basis was +0.87%.
Current report
Energy commodities generally moved lower in the second quarter of 2024, though natural gas was the surprising exception with front month prices rebounding sharply, up 48%. Warmer weather forecasts, falling US rig counts and strong overall liquified natural gas (LNG) demand sparked a round of short coverings. On the other hand, crude oil and refined products like gasoline and NY Harbor Ultra Low Sulfur Diesel (ULSD) all moved lower. While some of it was driven by broader risk off sentiment due to the repeated delays of Federal Reserve rate cut expectations, other drivers included fading geopolitical risk premium, US crude inventory builds due to unplanned refinery outages and unattractive refining margins, and OPEC announcing plans to gradually bring back barrels later this year.
Current report
For the three months ended June 30, 2023, the NYSE Arca market value of each Share decreased from $20.55 per Share to $19.80 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 $18.57 per Share (-9.64%) on May 3, 2023, and a high of $21.70 per Share (+5.60%) on April 12, 2023. The total return for the Fund on a market value basis was -3.65%.
Current report
Energy commodities posted negative performance in the second quarter of 2023 with all Index Commodities detracting from the Fund’s performance. The largest detractor was Ultra-Low Sulfur Diesel which saw front month prices plunge another 8% through the quarter as Russian supplies continued to make it onto the market despite the European Union sanctions, and supplies remained abundant in the US following the physical hoarding leading up to the ban. Crude oil, and the complex overall were pressured by the continuously disappointing recovery in China and Fed/banking sector/debt ceiling-driven recession concerns, fueling a broader risk-off sentiment.
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
Energy commodities were down sharply in the first two quarters of 2023, with most of the underperformance coming from Ultra-Low Sulphur Diesel and natural gas. In the first quarter, US natural gas prices went into freefall (front month US NG prices were down nearly 50% for the quarter), pressured by persistently warm temperatures in both the US and Europe. While prices did recover in the second quarter on hotter-than-expected weather forecasts, it was still down over 35% year-to-date. Diesel prices fell in the first quarter with Europe boosting imports of Russian supplies ahead of the February 5th ban and the weakness continued into the second quarter of 2023, weighed down by the resulting supply overhang, leaving front month prices down over 25% year-to-date. Crude oil prices also plunged sharply as macro recession concerns remained top of mind and China’s recovery continued to fall short of earlier expectations. However, prices did recover significantly in June following the cooler-than-expected Consumer Price Index results raising bets that the Federal Reserve was near the end of its aggressive rate hike cycle.
Current report
Fund Share Net Asset Performance
Current report
Net income (loss) for the six months ended June 30, 2024 was $6.3 million, primarily resulting from $2.2 million of income, net realized gain (loss) of $(3.6) million, net change in unrealized gain (loss) of $7.9 million and net operating expenses of $0.3 million.
Current report
Net income (loss) for the six months ended June 30, 2023 was $(14.3) million, primarily resulting from $2.2 million of income, net realized gain (loss) of $(16.8) million, net change in unrealized gain (loss) of $0.7 million and net operating expenses of $0.4 million.
Removed paragraphs (1)
Previous report
Energy turned sharply lower in the first quarter of 2023 with all included commodities detracting from the returns, sending the Fund down nearly 10%. The largest negative performer was natural gas followed by NY Harbor Ultra Low Sulfur Diesel (ULSD) and then WTI crude oil. U.S. natural gas prices went into freefall (front month U.S. natural gas prices were down nearly 50% for the quarter), pressured by persistently warm temperatures in both the U.S. and Europe. Diesel prices fell with Europe boosting imports of Russian supplies ahead of the February 5, 2023 ban on imports of Russian gasoline, diesel and other products used throughout Europe. Lastly, crude oil prices ping-ponged between gains and losses in January and February on diverging factors – crude inventory builds (due to seasonal refinery maintenance and strong production), Federal Reserve interest rate hike concerns, the five hundred thousand barrel per day (kb/d) Russian “production cut”, mandated U.S. Strategic Petroleum Reserve releases, and optimistic signs out of China. Prices continued lower in the first half of March 2023, as broader financial sector fears led to a flight to safe havens.
Reworded paragraphs (15)
Previous wording
As of the date of this Report, each of ABN AMRO Clearing Chicago LLC, 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., Bank of America Securities, 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 $(10.1) million and $48.2 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 $6.7 million and $63.4 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, $23.4 million was paid to purchase United States Treasury Obligations and $32.6 million was received from sales and maturing United States Treasury Obligations. During the three months ended March 31, 2023, $49.4 million was paid to purchase United States Treasury Obligations and $105.0 million was received from sales and maturing United States Treasury Obligations. $32.8 million was received from sales of affiliated investments and $57.1 million was paid to purchase affiliated investments during the three months ended March 31, 2024. $80.3 million was received from sales of affiliated investments and $77.0 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, $35.1 million was paid to purchase United States Treasury Obligations and $44.6 million was received from sales and maturing United States Treasury Obligations. During the six months ended June 30, 2023, $79.0 million was paid to purchase United States Treasury Obligations and $155.0 million was received from sales and maturing United States Treasury Obligations. $68.5 million was received from sales of affiliated investments and $76.9 million was paid to purchase affiliated investments during the six months ended June 30, 2024. $149.8 million was received from sales of affiliated investments and $148.9 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 $10.1 million and $(48.2) million during the three months ended March 31, 2024 and 2023, respectively. This included $15.6 million and $4.2 million from Shares purchased by Authorized Participants and $4.8 million and $52.4 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 $0.6 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 $(6.7) million and $(63.4) million during the six months ended June 30, 2024 and 2023, respectively. This included $15.6 million and $4.2 million from Shares purchased by Authorized Participants and $21.7 million and $67.6 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 $0.6 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
COMPARISON OF MARKET, NAV AND DBIQ OPT YIELD ENERGY INDEX ER FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
Current wording
COMPARISON OF MARKET, NAV AND DBIQ OPT YIELD ENERGY INDEX ER 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 Energy 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 Energy 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 Energy 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 Energy 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 Energy 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 Energy 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, 2024, the NAV of each Share increased from $19.19 per Share to $20.77 per Share. Rising commodity futures contract prices for Brent Crude Oil, Light Sweet Crude Oil, RBOB Gasoline and Ultra-Low Sulphur Diesel were partially offset by falling commodity futures contract prices for Natural Gas during the three months ended March 31, 2024, contributing to an overall 7.07% increase in the level of the Index and to a 8.50% increase in the level of the DBIQ-OY Energy TR™. The total return for the Fund on a NAV basis was +8.23%.
Current wording
For the three months ended June 30, 2024, the NAV of each Share increased from $20.77 per Share to $20.87 per Share. Rising commodity futures contract prices for Brent Crude Oil, Light Sweet Crude Oil, RBOB Gasoline and Natural Gas were partially offset by falling commodity futures contract prices for Ultra-Low Sulphur Diesel during the three months ended June 30, 2024, contributing to an overall 0.64% decrease in the level of the Index and to a 0.69% increase in the level of the DBIQ-OY Energy TR™. The total return for the Fund on a NAV basis was +0.48%.
Previous wording
Net income (loss) for three months ended March 31, 2024 was $6.7 million, primarily resulting from $1.1 million of income, net realized gain (loss) of $(0.1) million, net change in unrealized gain (loss) of $5.8 million and net operating expenses of $0.2 million.
Current wording
Net income (loss) for the three months ended June 30, 2024 was $(0.4) million, primarily resulting from $1.1 million of income, net realized gain (loss) of $(3.5) million, net change in unrealized gain (loss) of $2.1 million and net operating expenses of $0.2 million.
Previous wording
For the three months ended March 31, 2023, the NAV of each Share decreased from $22.65 per Share to $20.58 per Share. Falling commodity futures contract prices for Brent Crude Oil, Light Sweet Crude Oil, Natural Gas, RBOB Gasoline and Ultra-Low Sulphur Diesel during the three months ended March 31, 2023, contributed to an overall 9.97% decrease in the level of the Index and to an 8.90% decrease in the level of the DBIQ-OY Energy TR™. The total return for the Fund on a NAV basis was -9.14%.
Current wording
For the three months ended June 30, 2023, the NAV of each Share decreased from $20.58 per Share to $19.82 per Share. Falling commodity futures contract prices for Brent Crude Oil, Light Sweet Crude Oil, Natural Gas, RBOB Gasoline and Ultra-Low Sulphur Diesel during the three months ended June 30, 2023, contributed to an overall 4.69% decrease in the level of the Index and to a 3.45% decrease in the level of the DBIQ-OY Energy TR™. The total return for the Fund on a NAV basis was -3.69%.
Previous wording
Net income (loss) for the three months ended March 31, 2023 was $(11.1) million, primarily resulting from $1.2 million of income, net realized gain (loss) of $(5.6) million, net change in unrealized gain (loss) of $(6.5) million and net operating expenses of $0.2 million.
Current wording
Net income (loss) for the three months ended June 30, 2023 was $(3.2) million, primarily resulting from $1.0 million of income, net realized gain (loss) of $(11.2) million, net change in unrealized gain (loss) of $7.2 million and net operating expenses of $0.2 million.
Previous wording
For the three months ended March 31, 2024, the NYSE Arca market value of each Share increased from $19.19 per Share to $20.71 per Share. The Share price low and high for the three months ended March 31, 2024 and related change from the Share price on December 31, 2023 was as follows: Shares traded at a low of $19.10 per Share (-0.47%) on January 2, 2024, and a high of $20.97 per Share (+9.25%) on March 19, 2024. The total return for the Fund on a market value basis was +7.92%.
Current wording
For the six months ended June 30, 2024, the NYSE Arca market value of each Share increased from $19.19 per Share to $20.89 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 $19.10 per Share (-0.47%) on January 2, 2024, and a high of $21.52 per Share (+12.12%) on April 12, 2024. The total return for the Fund on a market value basis was +8.86%.
Previous wording
Energy was generally higher in the first three months of 2024. Crude oil prices gained as escalating tensions in the Middle East and Ukraine raised supply disruption risk. In addition to geopolitics, an improving macro backdrop amid a resilient US economy and expected Federal Reserve easing also supported broader risk assets like energy. In terms of front month performance, gasoline was the standout, up over 30% on disruptions in Russian’s refinery infrastructure and tightening US stockpiles ahead of the summer driving season. Natural Gas was the persistent laggard with front month prices dropping another 30% on ample inventories and warmer-than-usual weather, reducing heating demand.
Current wording
Energy commodities performed positively in the first half of 2024, with the exception of natural gas. Crude oil prices gained as escalating tensions in the Middle East and Russia/Ukraine raised supply concerns; front month prices ended the first half of the year up around 15%. In addition to geopolitics, an improving macro backdrop amid a resilient US economy, and expected Federal Reserve easing also supported broader risk assets like energy. However, this tailwind eased in the second quarter as the Federal Reserve stuck to its higher for longer rhetoric amid sticky inflation, weighing down the entire energy complex. Gasoline also gained following repeated attacks on Russia’s refinery infrastructure and tightening US stockpiles ahead of the summer driving season. Natural gas was the laggard with front month prices dropping another 30% in the first quarter on ample inventories and warmer-than-usual weather. However, prices did make a strong comeback in May and the first half of June as forecasted heatwaves raised its demand outlook.
Previous wording
For the three months ended March 31, 2023, the NYSE Arca market value of each Share decreased from $22.65 per Share to $20.55 per Share. The Share price low and high for the three months ended March 31, 2023 and related change from the Share price on December 31, 2022 was as follows: Shares traded at a low of $19.26 per Share (-14.95%) on March 17, 2023, and a high of $23.08 per Share (+1.92%) on January 23, 2023. The total return for the Fund on a market value basis was -9.27%.
Current wording
For the six months ended June 30, 2023, the NYSE Arca market value of each Share decreased from $22.65 per Share to $19.80 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 $18.57 per Share (-18.02%) on May 3, 2023, and a high of $23.08 per Share (+1.92%) on January 23, 2023. The total return for the Fund on a market value basis was -12.58%.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
NEITHER THE PAST PERFORMANCE OF THE FUND NOR THE PRIOR INDEX LEVELS AND CHANGES, POSITIVE OR NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE FUND’S FUTURE PERFORMANCE.
Current report — wording carried from elsewhere
NEITHER THE PAST PERFORMANCE OF THE FUND NOR THE PRIOR INDEX LEVELS AND CHANGES, POSITIVE OR
Current report — wording carried from elsewhere
NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE FUND’S FUTURE PERFORMANCE.
Current report — wording carried from elsewhere
For the six months ended June 30, 2024, the NAV of each Share increased from $19.19 per Share to $20.87 per Share. Rising commodity futures contract prices for Brent Crude Oil, Light Sweet Crude Oil, RBOB Gasoline and Ultra-Low Sulphur Diesel were partially offset by falling commodity futures contract prices for Natural Gas during the six months ended June 30, 2024, contributing to an overall 6.38% increase in the level of the Index and to a 9.25% increase in the level of the DBIQ-OY Energy TR™. The total return for the Fund on a NAV basis was +8.75%.
Current report — wording carried from elsewhere
For the six months ended June 30, 2023, the NAV of each Share decreased from $22.65 per Share to $19.82 per Share. Falling commodity futures contract prices for Brent Crude Oil, Light Sweet Crude Oil, Natural Gas, RBOB Gasoline and Ultra-Low Sulphur Diesel during the six months ended June 30, 2023, contributed to an overall 14.19% decrease in the level of the Index and to a 12.05% decrease in the level of the DBIQ-OY Energy TR™. The total return for the Fund on a NAV basis was -12.49%.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Returns for the Three Months Ended March 31, 2024 and 2023