INVESCO DB BASE METALS FUND
For the period ended Sep 30, 2024. Filed Nov 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.
Sep 30, 2024 · Filed Nov 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 2024-06-30; filed 2024-08-07.
0000950170-24-092110
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000950170-24-122591
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 97 previous paragraphs and 97 current paragraphs.
70 unchanged; 17 reworded; 10 added; 10 removed; 0 previous and 0 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 (10)
Current report
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
Current report
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
Current report
Returns for the Three and Nine Months Ended September 30, 2024 and 2023
Current report
For the three months ended September 30, 2024 the NYSE Arca market value of each Share increased from $20.11 per Share to $20.80 per Share. The Share price low and high for the three months ended September 30, 2024 and related change from the Share price on June 30, 2024 was as follows: Shares traded at a low of $18.09 per Share (-10.07%) on August 7, 2024 and a high of $20.99 per Share (+4.35%) on September 26, 2024. The total return for the Fund on a market value basis was +3.43%.
Current report
Industrial metals performed positively in the third quarter of 2024. While China’s stalled economy continued to paint a more pessimistic backdrop, anticipation leading into the first Federal Reserve interest rate cut and China’s optimistic stimulus announcement provided a boost for the complex to end the quarter. The kickoff of the Federal Reserve's easing of interest rates and the surprise hike in Japanese rates also weighed on the US dollar. Commodity-wise, zinc was the strongest performer supported by persisting concentrate supply tightness.
Current report
For the three months ended September 30, 2023, the NYSE Arca market value of each Share increased from $17.97 per Share to $19.15 per Share. The Share price low and high for the three months ended September 30, 2023 and related change from the Share price on June 30, 2023 was as follows: Shares traded at a low of $17.69 per Share (-1.59%) on August 16, 2023 and a high of $19.22 per Share (+6.93%) on July 31, 2023. The total return for the Fund on a market value basis was +6.57%.
Current report
Base metals posted positive performance in the third quarter of 2023, though most of it was attributed to the improving macro sentiment. Despite the Federal Reserve’s commitment to its higher-for-longer narrative, confidence that the tightening was near an end grew. However, China continued to be a key headwind with the steady stream of disappointing economic data and lack of clarity around additional stimulus measures driving the growth in bearish positions and capping the upside. Aluminum and zinc both surged to end September as LME stocks once again fell towards historically low levels due to large withdrawals in Asia, which led to a round of short covering among bearish investors which helped to push prices even higher. Copper, on the other hand, remained pressured as inventories continued to recover amid the China gloom. US dollar strength also pressured prices.
Current report
For the three months ended September 30, 2023, the NAV of each Share increased from $17.95 per Share to $19.12 per Share. Rising commodity futures contract prices for aluminum, zinc and copper during the three months ended September 30, 2023 contributed to an overall 5.31% increase in the level of the Index and to a 6.73% increase in the level of the DBIQ-OY Industrial Metals TR™. The total return for the Fund on a NAV basis was +6.52%.
Current report
Net income (loss) for the three months ended September 30, 2023 was $10.1 million, primarily resulting from $2.3 million of income, net realized gain (loss) of $(10.4) million, net change in unrealized gain (loss) of $18.6 million and net operating expenses of $0.3 million.
Current report
Net income (loss) for the nine months ended September 30, 2023 was $(8.5) million, primarily resulting from $9.0 million of income, net realized gain (loss) of $(53.3) million, net change in unrealized gain (loss) of $36.9 million and net operating expenses of $1.1 million.
Removed paragraphs (10)
Previous report
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023
Previous report
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023
Previous report
Returns for the Three and Six Months Ended June 30, 2024 and 2023
Previous 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%.
Previous 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.
Previous 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%.
Previous 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.
Previous report
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%.
Previous report
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 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.
Reworded paragraphs (17)
Previous wording
On any business day, an Authorized Participant may place an order with the Transfer Agent to redeem one or more blocks of 50,000 Shares (“Creation Units”). Redemption orders must be placed by 10:00 a.m., Eastern Time. The day on which the Managing Owner receives a valid redemption order is the redemption order date. The day on which a redemption order is settled is the redemption order settlement date. As provided below, the redemption order settlement date may occur up to two business days after the redemption order date. Redemption orders are irrevocable. The redemption procedures allow Authorized Participants to redeem Creation Units. Individual Shareholders may not redeem directly from the Fund. Instead, individual Shareholders may only redeem Shares in integral multiples of 50,000 and only through an Authorized Participant.
Current wording
On any business day, an Authorized Participant may place an order with the Transfer Agent to redeem one or more blocks of 50,000 Shares (“Creation Units”). Redemption orders must be placed by 10:00 a.m., Eastern Time. The day on which the Managing Owner receives a valid redemption order is the redemption order date. The day on which a redemption order is settled is the redemption order settlement date. As provided below, the redemption order settlement date may occur up to one business day after the redemption order date. Redemption orders are irrevocable. The redemption procedures allow Authorized Participants to redeem Creation Units. Individual Shareholders may not redeem directly from the Fund. Instead, individual Shareholders may only redeem Shares in integral multiples of 50,000 and only through an Authorized Participant.
Previous wording
Unless otherwise agreed to by the Managing Owner and the Authorized Participant as provided in the next sentence, by placing a redemption order, an Authorized Participant agrees to deliver the Creation Units to be redeemed through DTC’s book-entry system to the Fund no later than the redemption order settlement date as of 2:45 p.m., Eastern Time, on the business day immediately following the redemption order date. Upon submission of a redemption order, the Authorized Participant may request the Managing Owner to agree to a redemption order settlement date up to two business days after the redemption order date. By placing a redemption order, and prior to receipt of the redemption proceeds, an Authorized Participant’s DTC account is charged the non-refundable transaction fee due for the redemption order.
Current wording
Unless otherwise agreed to by the Managing Owner and the Authorized Participant as provided in the next sentence, by placing a redemption order, an Authorized Participant agrees to deliver the Creation Units to be redeemed through DTC’s book-entry system to the Fund no later than the redemption order settlement date as of 2:45 p.m., Eastern Time, on the business day immediately following the redemption order date. Upon submission of a redemption order, the Authorized Participant may request the Managing Owner to agree to a redemption order settlement date up to one business day after the redemption order date. By placing a redemption order, and prior to receipt of the redemption proceeds, an Authorized Participant’s DTC account is charged the non-refundable transaction fee due for the redemption order.
Previous 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.
Current wording
Net cash flow provided by (used in) operating activities was $9.4 million and $62.8 million for the nine months ended September 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 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.
Current wording
During the nine months ended September 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 nine months ended September 30, 2023, $202.8 million was paid to purchase United States Treasury Obligations and $296.0 million was received from sales and maturing United States Treasury Obligations. $152.6 million was received from sales of affiliated investments and $127.6 million was paid to purchase affiliated investments during the nine months ended September 30, 2024. $417.8 million was received from sales of affiliated investments and $339.0 million was paid to purchase affiliated investments during the nine months ended September 30, 2023.
Previous 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.
Current wording
The Fund’s net cash flow provided by (used in) financing activities was $(9.4) million and $(64.8) million during the nine months ended September 30, 2024 and 2023, respectively. This included $91.2 million and $79.9 million from Shares purchased by Authorized Participants and $(100.2) million and $(144.7) million from Shares redeemed by Authorized Participants during the nine months ended September 30, 2024 and 2023, respectively. During the nine months ended September 30, 2024, distributions paid to Shareholders were $0.4 million. No distributions were paid to Shareholders during the nine months ended September 30, 2023.
Previous 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.
Current wording
This Report covers the three and nine months ended September 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 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.
Current wording
The section “Summary of the DBIQ-OY Industrial Metals TR™ and Underlying Index Commodity Returns for the Three and Nine Months Ended September 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 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%.
Current wording
For the three months ended September 30, 2024, the NAV of each Share increased from $20.16 per Share to $20.81 per Share. Rising commodity futures contract prices for aluminum, zinc and copper during the three months September 30, 2024 contributed to an overall 2.04% increase in the level of the Index and to a 3.40% increase in the level of the DBIQ-OY Industrial Metals TR™. The total return for the Fund on a NAV basis was +3.22%.
Previous wording
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 wording
Net income (loss) for the three months ended September 30, 2024 was $2.0 million, primarily resulting from $1.7 million of income, net realized gain (loss) of $0.2 million, net change in unrealized gain of $0.4 million and net operating expenses of $0.3 million.
Previous wording
FOR THE SIX MONTHS ENDED JUNE 30, 2024 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2023
Current wording
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2023
Previous 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%.
Current wording
For the nine months ended September 30, 2024, the NYSE Arca market value of each Share increased from $18.31 per Share to $20.80 per Share. The Share price low and high for the nine months ended September 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 +13.60%.
Previous wording
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 wording
Industrial metals ended the first three quarters 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 United Kingdom 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 especially in the third quarter. The kickoff of the Federal Reserve's easing cycle and China’s surprise stimulus in September marked a key shift in sentiment.
Previous 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%.
Current wording
For the nine months ended September 30, 2023, the NYSE Arca market value of each Share decreased from $19.57 per Share to $19.15 per Share. The Share price low and high for the nine months ended September 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 -2.15%.
Previous wording
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 wording
Industrial metals ended the first three quarters of 2023 down slightly. 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 the reopening story. A broader risk-off move triggered by the turmoil in the banking sector also pressured commodities in general, to end the quarter. In the second quarter, continued disappointing Chinese data, coupled with expectations for smelter restarts amid weaker energy prices and easing supply concerns, dealt a heavy blow to the commodity sector. While the sector recovered a bit in the third quarter on improving macro sentiment and renewed supply concerns, triggering a short covering rally, it still fell short of reversing second quarter losses.
Previous wording
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 wording
For the nine months ended September 30, 2024, the NAV of each Share increased from $18.28 per Share to $20.81 per Share. Rising commodity futures contract prices for aluminum, zinc and copper during the nine months ended September 30, 2024 contributed to an overall 10.09% increase in the level of the Index and to a 14.56% increase in the level of the DBIQ-OY Industrial Metals TR™. The total return for the Fund on a NAV basis was +13.84%.
Previous wording
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.
Current wording
Net income (loss) for the nine months ended September 30, 2024 was $14.4 million, primarily resulting from $5.4 million of income, net realized gain (loss) of $6.8 million, net change in unrealized gain (loss) of $3.0 million and net operating expenses of $0.8 million.
Previous 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%.
Current wording
For the nine months ended September 30, 2023, the NAV of each Share decreased from $19.50 per Share to $19.12 per Share. Falling commodity futures contract prices for aluminum and zinc were partially offset by rising commodity for copper during the nine months ended September 30, 2023, contributing to an overall 5.70% decrease in the level of the Index and to a 2.04% decrease in the level of the DBIQ-OY Industrial Metals TR™. The total return for the Fund on a NAV basis was -1.95%.