Invesco CurrencyShares Swiss Franc Trust

Previous wording

The Trust does not have any material cash requirements as of the end of the latest fiscal period. The Sponsor is not aware of any known trends, demands, commitments, events or uncertainties that will result in, or are reasonably likely to result in, material changes to the Trust’s liquidity and capital resources needs. The Trust’s Depository, JPMorgan Chase Bank, N.A., London Branch, maintains two deposit accounts for the Trust, a primary deposit account that may earn interest and a secondary deposit account that does not earn interest. Interest on the primary deposit account, if any, accrues daily and is paid monthly. The interest rate in effect as of June 30, 2024 was an annual nominal rate of 0.25%. The following chart provides the daily rate paid by the Depository since June 30, 2019:

Current wording

The Trust does not have any material cash requirements as of the end of the latest fiscal period. The Sponsor is not aware of any known trends, demands, commitments, events or uncertainties that will result in, or are reasonably likely to result in, material changes to the Trust’s liquidity and capital resources needs. The Trust’s Depository, JPMorgan Chase Bank, N.A., London Branch, maintains two deposit accounts for the Trust, a primary deposit account that may earn interest and a secondary deposit account that does not earn interest. Interest on the primary deposit account, if any, accrues daily and is paid monthly. The interest rate in effect as of September 30, 2024 was an annual nominal rate of 0.20%. The following chart provides the daily rate paid by the Depository since September 30, 2019:

Previous wording

In exchange for a fee, the Sponsor bears most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the period covered by this report was the Sponsor’s fee. Each month the Depository deposits into the secondary deposit account accrued but unpaid interest, if any, and the Trustee withdraws Swiss Francs from the secondary deposit account to pay the accrued Sponsor’s fee for the previous month plus other Trust expenses (including, without limitation, expenses resulting from negative interest rates), if any. When the interest deposited, if any, exceeds the sum of the Sponsor’s fee for the prior month plus other Trust expenses, if any, the Trustee converts the excess into USD at the prevailing market rate and distributes the USD as promptly as practicable to Shareholders on a pro-rata basis (in accordance with the number of Shares that they own). Distributions paid during the current reporting period follow (annualized yield reflects the estimated annual yield an investor would receive if a monthly distribution stayed the same for the entire year going forward, and is calculated by annualizing the monthly distribution and dividing by the Trust NAV for the dates listed below):

Current wording

In exchange for a fee, the Sponsor bears most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the period covered by this report was the Sponsor’s fee. Each month the Depository deposits into the secondary deposit account accrued but unpaid interest, if any, and the Trustee withdraws Swiss Francs from the secondary deposit account to pay the accrued Sponsor’s fee for the previous month plus other Trust expenses (including, without limitation, expenses resulting from negative interest rates), if any. When the interest deposited, if any, exceeds the sum of the Sponsor’s fee for the prior month plus other Trust expenses, if any, the Trustee converts the excess into USD at the prevailing market rate and distributes the USD as promptly as practicable to Shareholders on a pro-rata basis (in accordance with the number of Shares that they own). The Trust did not make any distributions during the quarter ended September 30, 2024.

Previous wording

During the three and six months ended June 30, 2024 and 2023, the Trust’s net comprehensive income (loss) was, in part, impacted by market volatility resulting from expectations around the Federal Reserve (Fed) easing and heightened geopolitical concerns for 2024, and the US banking sector turmoil for 2023, which are considered to be unusual or infrequent events. Although the full and direct impact of Fed easing expectations, rising geopolitical tensions, and the US banking sector turmoil, on the Trust’s net comprehensive income (loss) during the three and six months ended June 30, 2024 and 2023 cannot be known, it is believed that they have each independently impacted the Closing Spot Rate, the interest rate paid by the Depository, and the global economy and markets generally, including the number of Shares created and redeemed by the Trust.

Current wording

During the three and nine months ended September 30, 2024 and 2023, the Trust’s net comprehensive income (loss) was, in part, impacted by market volatility resulting from expectations around the Federal Reserve (the “Fed”) easing and heightened geopolitical concerns for 2024, and the US banking sector turmoil for 2023 which are considered to be unusual or infrequent events. Although the full and direct impact of Fed easing expectations, rising geopolitical tensions, and the US banking sector turmoil on the Trust’s net comprehensive income (loss) during the three and nine months ended September 30, 2024 and 2023 cannot be known, it is believed that they have each independently impacted the Closing Spot Rate, the interest rate paid by the Depository, and the global economy and markets generally, including the number of Shares created and redeemed by the Trust.

Previous wording

The Swiss Franc (CHF/USD) posted a loss in the first half of 2024, with the pair down nearly 7%. While some of this was driven by gains in the US dollar – the Fed’s higher-for-longer rhetoric and stickier-than-expected US inflation pushed out expectations for rate cuts, supporting US treasury yields – the pair was heavily pressured after the Swiss National Bank (SNB) became the first major central bank to start cutting its interest rates in March. Lower interest rates reduce the appeal of the country’s currency.

Current wording

The Swiss franc (CHF/USD) posted a slight loss in the first three quarters of 2024. US dollar strength in Q1 and Q2 due to the Fed’s higher-for-longer rhetoric was the overarching headwind. However, the Swiss National Bank (SNB) was also the first major central bank to start cutting its interest rates in March; lower interest rates reduce the appeal of the country’s currency. That said, gains from Q3 helped erase most of earlier losses. Not only did the Fed and many other global central banks begin their rate easing cycle but the pair also benefitted from increasing safe haven demand due to geopolitical tension, and US economic and equity market turmoil.

Previous wording

The Swiss Franc (CHF/USD) posted a gain in the first half of 2023, with price action largely driven by dollar moves. The USD fell sharply in January, helping the pair rally, as speculation for a dovish pivot in Fed rate hike plans grew with US economic data coming in weaker than expected. However, with the dollar making a turnaround in February, due to signs of a strong labor market and resilient inflation in the US, the currency pair depreciated. In March, though, the pair returned to positive territory as the US dollar once again weakened amid the turmoil in the US banking sector, renewing speculation that the Fed would slow down rate hikes amid the economic uncertainty. While Switzerland’s banking sector also took a hit following the collapse of Credit Suisse, the impact was limited given swift government intervention. While the second quarter of 2023 followed largely the same theme, with the CHF bouncing back and forth on Fed-driven dollar moves, the pair also received support from rising safe-haven currency demand.

Current wording

The Swiss franc (CHF/USD) posted a small gain in the first three quarters of 2023 with price action largely driven by dollar moves and SNB policies. The USD fell sharply in January, helping the pair rally, as speculation for a dovish pivot in Fed rate hike plans grew. However, with the dollar making a turnaround in February due to signs of a strong labor market and resilient inflation in the US, the currency pair depreciated. In March though, the pair returned to positive territory as the US dollar once again weakened amid the turmoil in the US banking sector. While Switzerland’s banking sector also took a hit following the collapse of Credit Suisse, the impact was limited given swift government intervention. While Q2 was largely the same theme, with the CHF bouncing back and forth on Fed-driven dollar moves, the pair also received support from rising safe haven demand. Q3 marked a negative period for the Swiss franc as the SNB turned increasingly dovish, especially when compared with the US Fed, which held on to its higher for longer guidance.

Previous wording

Additionally, the interest rate paid by the Depository has generally trended upward over the past year, slightly offset by decline in the recent quarters, to the current interest rate of 0.25%, as set forth in the FXF Rate Chart above. As long as the Sponsor’s fee and the interest expense on currency deposits, if any, exceed interest income, the Trust will incur a net comprehensive loss.

Current wording

Additionally, the interest rate paid by the Depository has generally trended upward over the past year, slightly offset by decline in the recent quarters, to the current interest rate of 0.20%, as set forth in the FXF Rate Chart above. As long as the Sponsor’s fee and the interest expense on currency deposits, if any, exceed interest income, the Trust will incur a net comprehensive loss.