As filed with the Securities and Exchange Commission on October 25, 2016June 21, 2021
Registration No. 333-[__]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POWERSHARESINVESCO DB G10 CURRENCY HARVEST FUND
(Registrant)
(Exact name of registrant as specified in its charter)
Delaware | 6799 | 16-6562496 | ||
(State of Organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
c/o Invesco Management LLC 3500 Lacey Road, Suite 700 Downers Grove, Illinois 60515 (800) 983-0903 |
c/o Invesco Management LLC 3500 Lacey Road, Suite 700 Downers Grove, Illinois 60515 (800) 983-0903 | |
(Address, including zip code, and telephone number, including | (Name, address, including zip code, and telephone number, including area code, of agent for service) |
Copies to:
James C. Munsell,Michael M. Philipp, Esq.
Sidley AustinMorgan, Lewis & Bockius LLP
787 Seventh Avenue110 North Wacker Drive
New York, New York 10019Suite 2800
Chicago, IL 60606-1511
Approximate date of commencement of proposed sale to the public:
As promptly as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment filedthereto that shall become effective upon filing with the Commission pursuant to Rule 462(d)462(e) under the Securities Act, check the following box and listbox. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, registration statement number ofcheck the earlier effective registration statement for the same offering.following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,”filer”, “accelerated filer” and, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting 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 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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Title of Securities being included in this registration statement | Earlier Registration | Unsold Number of Shares from Earlier Registration Statement | Filing fee paid for Unsold Shares | |||
PowerShares DB G10 Currency Harvest Fund Common Units of Beneficial Interest | 333-192126 | 45,200,000 | $76,121.59 | |||
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Title of each Class of Securities to be Registered Amount to be Registered1 Proposed Maximum Offering Price per Unit2 Proposed Maximum Aggregate Offering Price Invesco DB G10 Currency Harvest Fund Common Units of Beneficial Interest Pursuant to the provisions of Rule 415(a)(6) under the Securities Act of 1933, as amended, the issuer is including on this new registration statement both the unsold securities and the filing fees paid in connection with such unsold securities that was covered by the earlier registration statement as provided in the following table. The filing fees in the below table will continue to be applied to such unsold securities. Filing Fee2 42,600,000 $25.09 $1,068,834,000.00 $71,742.91
(1) | Includes 42,600,000 unsold common units of beneficial interest (“Shares”) registered on Form S-1 (File No. 333-233251) (the “Prior Registration Statement”), for which the filing fee was previously paid. The Prior Registration Statement’s registration fee table mistakenly stated that only 13,000,000 Shares were being carried forward from an earlier registration statement. The correct number of Shares being carried forward was 43,200,000, as correctly reflected on the cover page of the prospectus included in the Prior Registration Statement. No additional shares are being registered as part of this registration statement (the “Registration Statement”). |
(2) | Pursuant to the provisions of Rule 415(a)(6) under the Securities Act of 1933, as amended, the issuer is including on this new registration statement both the unsold Shares and the filing fees paid in connection with such unsold Shares that were covered by the Prior Registration Statement. No additional shares are being registered hereby and the filing fee in the table above consists of the filing fee previously paid with respect to the unsold Shares, which will continue to be applied to such unsold Shares. Pursuant to Rule 415(a)(6), the offering of the unsold Shares registered under the Prior Registration Statement will be deemed terminated as of the date of effectiveness of this registration statement. If any of such unsold Shares are sold pursuant to the Prior Registration Statement after the date of this filing, and prior to the date of effectiveness of this registration statement, the registrant will file a pre-effective amendment to this registration statement which will reduce the number of such unsold Shares included on this registration statement. |
The registrantRegistrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrantRegistrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
POWERSHARES DB G10 CURRENCY HARVEST FUND
45,200,000 Common Units of Beneficial Interest
PowerShares
DBV | Invesco DB G10 Currency Harvest Fund |
42,600,000 | Common Units of Beneficial Interest |
Authorized Participants Shares may sell the Shares they purchasebe purchased from the Fund only by certain eligible financial institutions (“Authorized Participants”) and only in one or more blocks of 200,000100,000 Shares called Baskets, to other investors(“Creation Units”). The Fund issues Shares in Creation Units on a continuous basis at prices that are expected to reflect, among other factors, the trading priceapplicable net asset value (“NAV”) per Share as of the Shares onclosing time of the NYSE Arca, Inc., (“NYSE Arca”) or the NYSE Arca, and the supply of and demand for Shares at the time of sale and are expectedlast to fall between net asset value, or NAV, and the trading priceclose of the Sharesexchanges on which the Fund’s futures contracts are traded, whichever is later, on the NYSE Arca at the time of sale.
creation order date.
“DBV.”
Income”). The Fund also gains exposure to Treasury Securities through an investment in exchange-traded funds (affiliated or otherwise) (“ETFs”) that track indexes that measure the performance of U.S. Treasury Obligations with a maximum remaining maturity of up to twelve months (“T-Bill ETFs”), and the Fund may receive dividends or distributions of capital gains from those investments (“T-Bill ETF Income”). While the Fund’s performance will reflect the appreciation or depreciation of its
The Index, at any time, is comprised of six of the following Group of Ten, or G10,(“G10”) currencies: United States Dollars, Euros, Japanese Yen, Canadian Dollars, Swiss Francs, British Pounds, Australian Dollars, New Zealand Dollars, Norwegian Krone and Swedish Krona or, collectively, the Eligible(the “Eligible Index Currencies.Currencies”). At any time, the Index is comprised of long futures positions in the three Eligible Index Currencies associated with the highest interest rates and short futures positions in the three Eligible Index Currencies associated with the lowest interest rates. The Index’s six component currencies from time-to-time,time to time, comprised of the three long and three short futures positions, are referred to as the Index Currencies and are used to calculate the value of the Index.
Allocations among the Eligible Index Currencies are adjusted quarterly to take into account changes in the relevant interest rates. To track the Index, the Fund generally will establish long futures positions in the three Eligible Index Currencies associated with the highest interest rates and short futures positions in the three Eligible Index Currencies associated with the lowest interest rates and will adjust its holdings quarterly as the Index is adjusted. However, if the United States Dollar, or USD, is among the Index Currencies from time-to-time, the Fund will not establish a long or short futures position (as the case may be) in USD, because USD is the Fund’s home currency and, as a consequence, the Fund never can enjoy profit or suffer loss from long or short futures positions in USD.
When the USD is not associated with the highest or lowest interest rates among the Eligible Index Currencies, the aggregate notional value of the Fund’s futures contracts at the time they are established will be double the value of the Fund’s holdings of United States Treasury Securities and money market mutual funds (affiliated or otherwise), which means the Fund will have a leverage ratio at such time of 2:1. If the USD is associated with the highest or lowest interest rates among the Eligible Index Currencies, the aggregate notional value of the Fund’s futures contracts at the time they are established will be approximately 1.66 times the value of the Fund’s holdings of United States Treasury Securities and money market mutual funds (affiliated or otherwise), which means the Fund will have a leverage ratio at such time of approximately 1.66:1. The Fund’s ability to track the Index will not be affected by the presence or absence of the USD among the Index Currencies. Because the notional value of the Fund’s futures positions can rise or fall over time, the leverage ratio could be higher or lower between quarterly adjustments of the Index Currencies.
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STATEMENT OF ADDITIONAL
INFORMATION
General Information Relating to Invesco | 95 | |||
95 |
Summary Information | ||||
June 21, 2021 |
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DBV | Invesco DB G10 Currency Harvest Fund |
This summary of material information contained or incorporated by reference in this Prospectus is intended for quick reference only and does not contain all of the information that may be important to you. The remainder of this Prospectus contains more detailed information. You should read the entire Prospectus, including the information incorporated by reference in this Prospectus, before deciding whether to invest in Shares. Please see the section “Incorporation by Reference of Certain Documents” on page 105 for information on how you can obtain the information that is incorporated by reference in this Prospectus. This Prospectus is dated , 2016.
PowerShares
Information regarding the offered Fund is available at https://www.invesco.com/ETFs.
The through brokers. Because the Shares
Baskets may be created or redeemed directly with the Fund only by Authorized Participants. It is expected that Baskets will be created when theat market price per Share is at a premium to the NAV
per Share. Similarly, it is expected that Baskets will be redeemed when the market price per Share is at a discount to the NAV per Share. Retail investors seeking to purchase or sell Shares on any day are expected to effect such transactions in the secondary market, on the NYSE Arca, at the market price per Share,prices rather than in connection with the creation or redemption of Baskets.
The market price of theNAV, Shares may not be identical to thetrade at prices greater than NAV per Share, but these valuations are expected to be very close. Investors are able to use the intra-day indicative value,(at a premium), at NAV, or the IIV, per Share to determine if they want to purchase in the secondary market via the NYSE Arca. The IIV per Share is based on the prior day’s finalless than NAV adjusted four times per minute throughout the trading day to reflect the continuous price changes of the Fund’s futures positions, which provide(at a continuously updated estimated NAV per Share.
discount).
Symbol | Meaning | |
DBV | ||
Market price per Share on NYSE Arca | ||
FBV | Intra-day indicative value (“IIV”) per Share | |
FBV.NV | ||
End of day NAV of the Fund | ||
DBCFHX | Intra-day Index level | |
DBHVFER |
End of day Index closing level as of close of NYSE Arca |
The Index Sponsor (as defined herein) calculates and publishes the closing level of the Index daily. The Managing Owner publishes the NAV of the Fund and the NAV per Share daily. Additionally, the Index Sponsor calculates and publishes the intra-day Index level, and the Index Sponsor calculates, and the Managing Owner publishes, the IIV per Share (quoted in USD) once every fifteen seconds throughout each trading day.
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All of the foregoing information is published as follows:
Bloomberg.
The Index Sponsorindex.db.com.
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• National debt levels and trade deficits, including changes in balances of payments and trade; • Domestic and foreign inflation rates and investors’ expectations concerning inflation rates; • Domestic and foreign interest rates and investors’ expectations concerning interest rates; • Currency exchange rates; • Investment and trading activities of mutual funds, hedge funds and currency funds; • Global or regional political, economic or financial events and situations; • Supply and demand changes which influence the foreign exchange rates of various currencies; • Monetary policies of governments (including exchange control programs, restrictions on local exchanges or markets and limitations on foreign investment in a country or on investment by residents of a country in other countries), trade restrictions, currency devaluations and revaluations; • Governmental intervention in the currency market, directly and by regulation, in order |
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The Index is designed to reflect the return from investing on a 2:1 leveraged basis in long currency futures positions for certain currencies associated with relatively high yielding interest rates and in short currency futures positions for certain currencies associated with relatively low yielding interest rates. The Index is designed to exploit the trend that currencies associated with relatively high interest rates, on average, tend to rise in value relative to currencies associated with relatively low interest rates. The Index exploitsseeks to exploit this trend using both long and short futures positions, which is expected to provide more consistent and less volatile returns than could be obtained by taking long positions only or short positions only.
Advantages of investing in the Fund include:
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Investing in the Fund does not insulate Shareholders from certain risks, including price volatility.
A general description of the Index (including, but not limited to, the underlying formulae and all other Index terms and conditions), or the General Description, is included on the Index Sponsor’s website athttps://index.db.com, or any successor thereto.
The currencies that are eligible for inclusion in the Index, or Eligible Index Currencies are the currencies of The Group of Ten, orthe G10 countries which include the following currencies:
Eligible Index Currency | Symbol | |
United States Dollar | USD | |
Euro | EUR | |
Japanese Yen | JPY | |
Canadian Dollar | CAD | |
Swiss Franc | CHF | |
British Pound | GBP | |
Australian Dollar | AUD | |
New Zealand Dollar | NZD | |
Norwegian Krone | NOK | |
Swedish Krona | SEK | |
The Index Sponsor calculates the Index on both an excess return basis and a total return basis. The excess return basis calculation reflects the change in market value of the applicable underlying currency futures only. The total return basis calculation, which reflects the sum of the change in market value of the applicable underlying currency futures plus the return on 3-month U.S. Treasury bills. The Fund seeks to track changes, whether positive or negative, in the level of the Index calculated on an excess return basis, over time, plus the excess, if any, of the sum of the Fund’s Treasury Income and Money Market Income over the expenses of the Fund. For the avoidance of doubt, the Fund invests in futures contracts in an attempt to track its Index. The Fund holds Treasury Securities and money market mutual funds for margin and/or cash management purposes only.
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The Fund will make distributions at the discretion of the Managing Owner. To the extent that the Fund’s actual and projected Treasury Income and the Fund’s actual and projected Money Market Income exceeds the actual and projected fees and expenses of the Fund, the Managing Owner expects periodically to make distributions of the amount of such excess. The Managing Owner currently does not expect to make distributions with respect to the Fund’s capital gains. Depending on the Fund’s performance for the taxable year and your own tax situation for such year, your income tax liability for the taxable year for your allocable share of the Fund’s net ordinary income or loss and capital gain or loss may exceed any distributions you receive with respect to such year.
In order to determine which Eligible Index Currencies to include in the Index, from time-to-time, the Index Sponsor will review the composition of the Index on a quarterly basis as described in “Description of the Deutsche Bank G10 Currency Future Harvest Index® – —Excess Return.”
The Index Sponsor will review the three month Libor rate for each Eligible Index Currency other than NZD, SEK, NOK, CAD and AUD. The Index Sponsor will review the 3 month rate of the New Zealand Bank Bill for NZD. The Index Sponsor will review the three month Stibor rate and the three month Nibor rate of the SEK and NOK, respectively. The Index Sponsor will review the 3 month Canada Bankers Acceptance Rate for CAD. The Index Sponsor will review the Australian Bank Bill Short Term 3 Month Mid rate for AUD. The Libor, Stibor and Nibor rates for the Eligible Index Currencies, as applicable, mean the London, Stockholm and Norway interbank offered rates for overnight deposits, respectively, each of which is published by Reuters on pages libor01 and libor02 with respect
The Index is re-weighted quarterly. Upon re-weighting, the high yielding Index Currencies are allocated a base weight of 33 1/3% and the low yielding Index Currencies are allocated a base weight
of -33 1/3%. These new weights are applied during the Index Re-Weighting Period, as described in “Description of the Deutsche Bank G10 Currency Future Harvest Index® – Excess Return.”
The CME-traded futures contract of each applicable Index Currency that is closest to expiration is used in the Index calculation. The futures contracts on the Index Currencies are rolled during the Index Re-Weighting Period. The new futures contract on an Index Currency that has the next closest expiration date is selected. The calculation of the Index on an excess return basis is the weighted return on the change in price of the futures contracts on the Index Currencies.
A 3-month U.S. Treasury bill return is then calculated and included to calculate the total return index. Please refer to Exhibit B of the Trust Declaration for the mathematical formulae of the Index.
The Index has been calculated using historical data since March 12, 1993. The Index is composed of notional amounts of each Index Currency. The notional amounts of the Index Currencies included in the Index are based on the Index Closing Level as of the Index Re-Weighting Period. The Index Closing Level reflects an arithmetic weighted return of the change in the Index Currencies exchange rates against the USD since March 12, 1993. March 1993 was chosen as a starting period because it represents the earliest date on which reliable data for all the Eligible Index Currencies exists. On March 12, 1993, the closing Index level was USD 100. Between March 12, 1993 to August 31, 2016, the Index level as calculated on an excess return basis has ranged from as high as USD 315.27 (July 25, 2007) to as low as USD 94.03 (July 30, 1993). Past Index results are not necessarily indicative of future changes, positive or negative, in the Index.
To track the Index, the Fund generally will establish long futures positions in the three Eligible Index Currencies associated with the highest interest rates and short futures positions in the three Eligible Index Currencies associated with the lowest interest rates and will adjust its holdings quarterly as the Index is adjusted. However, if the USD is among the Index Currencies from time-to-time,time to time, the Fund will not establish a long or short futures position (as the case may be) in USD, because USD is the Fund’s home currency and, as a consequence, the Fund never can enjoy profit or suffer loss from long or short futures positions in USD. When the USD is not associated with the highest or lowest interest rates
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among the Eligible Index Currencies, the aggregate notional value of the Fund’s futures contracts at the time they are established will be double the value of the Fund’s holdings of United States Treasury Securities andsecurities (“Treasury Securities”), money market mutual funds (affiliated or otherwise) and T-Bill ETFs (affiliated or otherwise), which means the Fund will have a leverage ratio at such time of 2:1. If the USD is associated with the highest or lowest interest rates among the Eligible Index Currencies, the aggregate notional value of the Fund’s futures contracts at the time they are established will be approximately 1.66 times the value of the Fund’s holdings of United States Treasury Securities, and money market mutual funds (affiliated or otherwise) and T-Bill ETFs (affiliated or otherwise), which means the Fund will have a leverage ratio at such time of approximately 1.66:1.
There can be no assurance that the use of both long and short positions will reduce the volatility of the Index during any or all market cycles or performance periods, or that the Fund will achieve its objectives.
As a result of its use of leverage, the Fund will be required to deposit a greater proportionapproximately twice as much of its net assets as margin,than would be required if
futures contracts and incur more brokerage commission expenseexpenses than it would if it did not use leverage. The additional amount of brokerage commission expenseexpenses generally will be proportional to the Fund’s leverage ratio.
Under the Trust Declaration, Wilmington Trust Company, the Trustee of the Fund, has delegated toCurrency. When they are not, the Managing Owner the exclusive management and control of all aspects of the business of the Fund. The Trustee has no duty or liabilitymay seek to supervise or monitor the performance of the Managing Owner, nor does the Trustee have any liability for the acts or omissions of the Managing Owner.
There can be no assurance that the Fund will achieve its investment objective or avoid substantial losses.
Shares Should Track Closely the Value of the Index
The Shares are intended to provide investment results that generally correspond to the changes, positive or negative, in the levels of the Index over time.
The value of the Shares is expected to fluctuate in relation to changes in the value of the Fund’s portfolio. The market price of the Shares may not be identical to the NAV per Share, but these two valuations are expected to be very close.
The Fund holds a leveraged portfolio of both long and shortselect futures contracts on thethat it reasonably believes tend to exhibit trading prices that correlate with an Index Currencies which comprise the Index from time-to-time (other than the USD), each of which are traded on various currency futures markets in the United
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States. The Fund also holds United States Treasury Securities for deposit with the Fund’s Commodity Broker as margin and United States Treasury Securities, cash and money market mutual funds (affiliated or otherwise) on deposit with the Custodian (for cash management purposes).
The Fund’s portfolio is traded with a view to tracking the Index over time, whether the Index is rising, falling or flat over any particular period. The Fund is not “managed” by traditional methods, which typically involve effecting changes in the composition of the Fund’s portfolio on the basis of judgments relating to economic, financial and market considerations with a view to obtaining positive results under all market conditions. To maintain the correspondence between the composition and weightings of the Index Currencies of the Index to the Fund, the Managing Owner adjusts the portfolio on a quarterly basis to conform to periodic changes in the composition and relative weightings of the Index Currencies. The Managing Owner aggregates certain of the adjustments and makes changes to the portfolio at least monthly or more frequently in the case of significant changes to the Index.
Managing Owner must comply with various regulatory requirements under the United States Commodity Exchange Act of 1936, as amended (the “Commodity Exchange Act”) and the rules and regulations of the CFTC and the NFA, including investor protection requirements, antifraud prohibitions, disclosure requirements, and reporting and recordkeeping requirements. The Managing Owner also is subject to periodic inspections and audits by the CFTC and NFA.
An investment in the Shares is speculative and involves a high degree of risk.
PowerShares® is a registered service mark of Invesco PowerShares Capital Management LLC.
4, 2018, the name of the Managing Owner changed from Invesco PowerShares Capital
Management LLC to Invesco Capital Management LLC, and the name of the Fund changed from PowerShares DB G10 Currency Harvest Fund to Invesco DB G10 Currency Harvest Fund.-8-
The Fund pays to the Commodity Broker all brokerage commissions, including applicable exchange fees, NFA fees,give-up fees, pit brokerage fees and other transaction related fees and expenses charged in connection with trading activities.activities for the Fund. On average, total charges paid to the Commodity Broker are expected to be less than USD 6.00$6.00 perround-turn trade, although the Commodity Broker’s brokerage commissions and trading fees are determined on a contract-by-contract basis. The Managing Owner estimates the brokerage commissions and fees will be approximately 0.05%0.03% of the NAV of the Fund in any year, although the actual amount of brokerage commissions and fees in any year or any part of any year may be greater.
A round-turn trade is a completed transaction involving both a purchase and a liquidating sale, or a sale followed by a covering purchase.
The Bank of New York Mellon, a banking corporation organized under the laws of the State of New York with trust powers, has an office at 2 Hanson Place, Brooklyn, N.Y. 11217. The Bank of New York Mellon is subject to supervision by the New York State Banking Department and the Board of Governors of the Federal Reserve System. Information regarding the NAV of the Fund, creation and redemption transaction fees and the names of the parties that have executed a Participant Agreement may be obtained from The Bank of New York Mellon by calling the following number:
Pursuant to the Administration Agreement, the Administrator performs or supervises the performance of services necessary for the operation and administration of the Fund (other than making
investment decisions), including receiving and processing orders from Authorized Participants to create and redeem Baskets, NAV calculations, accounting and other fund administrative services. The Administrator retains certain financial books and records, including: Basket creation and redemption books and records, Fund accounting records, ledgers with respect to assets, liabilities, capital, income and expenses, the registrar, transfer journals and related details and trading and related documents received from futures commission merchants, c/o The Bank of New York Mellon, 2 Hanson Place, Brooklyn, New York 11217, telephone number(718) 315-7500.
The Administration Agreement is continuously in effect unless terminated on at least 90 days’ prior written notice by either party to the other party. Notwithstanding the foregoing, the Administrator may terminate the Administration Agreement upon 30 days’ prior written notice if the Fund has materially failed to perform its obligations under the Administration Agreement.
The Administration Agreement provides for the exculpation and indemnification of the Administrator from and against any costs, expenses, damages, liabilities or claims (other than those resulting from the Administrator’s own bad faith, negligence or willful misconduct) which may be imposed on, incurred by or asserted against the Administrator in performing its obligations or duties under the Administration Agreement.
The Administrator
TheService Agreement, the Transfer Agent receives a transaction
The Fund is expected From time to retaintime, the services of oneManaging Owner, in its sole discretion, may reimburse Authorized Participants for all or more additional service providers to assist with certain tax reporting requirementsa portion of the Fund and its Shareholders.
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Invesco Advisers Inc.
Invesco Advisers Inc., a Delaware corporation, or Invesco Advisers, is the commodity trading advisor of the Trust and the Fund and is an affiliate ofperforming additional marketing and distribution related services as may be agreed upon by Invesco Distributors and the Managing Owner. The Managing Owner may utilize the Invesco Advisers trading desk to place trades for the Fund. Invesco Advisers receives no compensation for providing this service.
Invesco Advisers has been registered with the CFTC as a commodity pool operator since January 1, 2000, commodity trading advisor since November 8, 1984 and a swap firm since January 8, 2013 and has been a member of the NFA since February 11, 1986. Its principal place of business is 1555 Peachtree Street NE, Atlanta, Georgia 30309, telephone number (404) 439-3271. The registration of Invesco Advisers with the CFTC and its membership in the NFA must not be taken as an indication that either the CFTC or the NFA has recommended or approved Invesco Advisers, the Trust or each Fund.
Sponsor calculates and publishes the daily index levels and the indicative intraday index levels. Additionally, theThe Index Sponsor also calculates the IIV per Share of the Fund throughout each business day.
Business Day.
The Managing Owner, on behalf of the Fund, has appointed Deutsche Bank Securities Inc., or the Marketing Agent, to assist the Managing Owner by providing support to educate institutional investors about the Deutsche Bank indices and to complete governmental or institutional due diligence questionnaires or requests for proposals related to the Deutsche Bank indices.
The Managing Owner pays the Marketing Agent a marketing services fee out of the Management Fee.
The Marketing Agent will not open or maintain customer accounts or handle orders for the Fund. The Marketing Agent has no responsibility for the performance of the Fund or the decisions made or actions taken by the Managing Owner.
An investor may be required to return some or all of its capital in the event of a bankruptcy of the Fund.
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each order to create or redeem a Basket. Authorized Participants may sell the Shares included in the Baskets they purchase from the Fund to other investors.
See “Creationcreated and Redemption of Shares” for more details.
Unless otherwise agreed to by the Managing Owner and the Authorized Participant as provided in the next sentence, the Fund issues Shares in Baskets to Authorized Participantsredeemed continuously on the creation order settlement date or redemption order settlement date, as applicable, as of
2:45 p.m., Eastern time, on the business day immediately following the date on which a valid order to create or redeem a BasketCreation Unit is accepted by the Fund,Fund. The creation or redemption will be at the NAV of 200,000100,000 Shares as of the closing time of the NYSE Arca or the last to close of the exchanges on which the Fund’sFund's futures contracts are traded, whichever is later, on the date that a valid order to create or redeem a BasketCreation Unit is accepted by the Fund. Upon submission of a creation order or redemption order, the Authorized Participant may request the Managing Owner to agree to a creation order settlement or redemption order settlement date up to 3two business days after the creation order date or redemption order date.
Baskets
United States, consistently applied under the accrual method of accounting.
and T-Bill ETF Income
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Because the Fund invests a portion of its assets in each of the Treasury Securities and the money market mutual funds, its expected income from each of its holdings will be approximately $0.05 and $0.01, respectively, for an aggregate amount of approximately $0.06. This income is used by the Fund to pay its expenses.otherwise). See “Fees and Expenses” for more details.
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Fee | Description | |
Management Fee | The Fund pays the Managing Owner a Management Fee, monthly in arrears, in an amount equal to 0.75% per annum of the daily NAV of the Fund. The Management Fee is paid in consideration of the Managing Owner’s related to the management of the Fund’s business and affairs, including the provision of futures trading advisory services. The Fund may, for margin and/or cash management purposes, invest in money market mutual funds and/or T-Bill ETFs that are managed by affiliates of the Managing Owner. The indirect portion of the management through such Managing Owner. The Managing Owner has contractually agreed to waive indefinitely the fees that it receives in an amount equal to the indirect management fees that the Fund incurs through its investments in affiliated money market mutual funds Owner may terminate the fee waiver on 60 days’ notice. | |
Offering Expenses | ||
Expenses incurred in connection with the continuous offering of Shares paid by the Managing Owner. | ||
Brokerage Commissions and Fees | The Fund pays to the Commodity Broker all brokerage commissions, including applicable exchange fees, NFA fees,give-up fees, pit brokerage fees and other transaction related fees and expenses charged in connection with its trading activities. On average, total charges paid to the Commodity Broker are expected to be less than the Commodity Broker’s brokerage commissions and trading fees are determined on a contract-by-contract basis. The Managing Owner estimates the brokerage commissions and fees will be approximately of the NAV of the Fund in any year, although the actual amount of brokerage commissions and fees in any year or any part of any year may be greater. |
Fee | Description | |
Routine Operational, Administrative and Other Ordinary Expenses | The Managing Owner pays all of the routine operational, administrative and other ordinary expenses of the Fund, including, but not limited to, and expenses of the Trustee, license and service fees paid to Sponsor, legal and accounting fees and expenses, tax preparation expenses, filing fees, and printing, mailing and duplication costs. | |
Non-Recurring Fees and Expenses | The Fund pays all of the non-recurring and unusual fees and expenses (referred to as extraordinary fees and expenses in the Trust any, fees and expenses costs, indemnification expenses and other expenses that are not currently anticipated obligations of the Fund or | |
Management Fee and Expenses to be Paid First out of Treasury Income, Money Market Income and/or T-Bill ETF Income | The Management Fee and the brokerage commissions and fees of the Fund are paid first out of Treasury Income from the Fund’s holdings of Securities, market mutual funds (affiliated or otherwise) and T-Bill ETF Income from the Fund’s holdings of T-Bill ETFs (affiliated or otherwise), as applicable, on deposit with the Commodity Broker as margin, the Custodian, or otherwise. If the sum of the Treasury Income, ETF Income is not sufficient to cover the fees and expenses of the Fund that are payable by the Fund during any period, the excess of such fees and expenses over such Treasury Income, Income, as applicable, will be paid out of income from futures trading, if any, or from sales of the Fund’s market mutual funds, and/or holdings in |
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Selling Commission | Retail investors may purchase and sell Shares through traditional brokerage accounts. Investors are expected to be charged a brokers in connection with purchases of Shares that will vary from investor to investor. Investors are encouraged to review the terms of their brokerage accounts for applicable charges. | |
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The estimated amount of all fees and expenses which are anticipated to be incurred by a new investor in Shares during the first twelve months of investment is 0.80% per annum of the NAV of the Fund plus the amount of any commissions charged by the investor’s broker.
The Fund will be successful only if its annual returns from futures trading, plus its annual Treasury Income and Money Market Income exceed such fees and expenses of approximately 0.80% per annum. The Fund is expected to earn Treasury Income equal to 0.24% per annum, based upon the yield of 3-month United States Treasury Securities as of September 30, 2016, or a maximum of $0.06 per annum per Share at $25.00 as the NAV per Share. The Fund is also expected to earn Money Market Income equal to 0.36% per annum as of September 30, 2016, or a maximum of $0.09 per annum per Share at $25.00 as the NAV per Share. Because the Fund invests a portion of its assets in each of the Treasury Securities and the money market mutual funds, its expected income from each of its holdings will be approximately $0.05 and $0.01, respectively, for an aggregate amount of approximately $0.06. Therefore, based upon the difference between the sum of the current Treasury Income plus the Money Market Income and the annual fees and expenses, the Fund will be required to earn approximately 0.56% per annum, or $0.14 per annum per Share at $25.00 as the NAV per Share, in order for an investor to break-even on an investment during the first twelve months of an investment. Actual Treasury Income and Money Market Income could be higher or lower than the current levels. For the avoidance of doubt, the Fund invests in futures contracts in an attempt to track its Index. The Fund holds Treasury Securities and money market mutual funds for margin and/or cash management purposes only.
exceeds as applicable, exceed the actual and projected fees and expenses of the Fund, the Managing Owner expects periodically to make distributions of the amount of such excess. The Managing Owner currently does not expect to make distributions with respect to the Fund’s capital gains. Depending on the Fund’s performance for the taxable year and your owna Shareholder’s particular tax situation for such year, youra Shareholder’s income tax liability for the taxable year for yoursuch Shareholder’s allocable share of the Fund’s net ordinary income or loss and capital gain or loss may exceed any distributions you receivereceived with respect to such year.
Additionally, please
The Breakeven Table, as presented, is an approximation only. The capitalization of the Fund does not directly affect the level of its charges as a percentage of its NAV, other than brokerage commissions.
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Breakeven Table
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The Fund may, for cash management purposes, invest in money market mutual funds that are managed by affiliates of the Managing Owner. The indirect portion of the management fee that the Fund may incur through such investment is in addition to the Management Fee paid to the Managing Owner. Therefore, the Managing Owner has contractually agreed to waive the fees that it receives in an amount equal to the indirect management fees that the Fund incurs through its investments in affiliated money market mutual funds through June 20, 2017, or the Money Market Management Fee Waiver. As of the date of this prospectus, the Money Market Management Fee Waiver is approximately less than $0.01 per Share per annum.
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Incorporation by Reference of Certain Documents
The Securities and Exchange Commission, or the SEC, allows us to “incorporate by reference” into this Prospectus the information that we file with it, meaning we can disclose important information to you by referring you to those documents already on file with the SEC.
This filing incorporates by reference the following documents, which we have previously filed with the SEC, in response to certain disclosures:
Any statement contained in a document that is incorporated by reference will be modified or superseded for all purposes to the extent that a statement contained in this Prospectus modifies or is contrary to that previous statement. Any statement so modified or superseded will not be deemed a part of this Prospectus except as so modified or superseded.
We will provide to you a copy of the filings that have been incorporated by reference in this Prospectus upon your request, at no cost. Any request may be made by writing or calling us at the following address or telephone number:
Invesco PowerShares Capital Management LLC
3500 Lacey Road, Suite 700
Downers Grove, IL 60515
Telephone: (800) 983-0903
These documents may also be accessed through our website athttp://www.invescopowershares.com or as described herein under “Additional
Information.” The information and other content contained on or linked from our website are not incorporated by reference in this Prospectus and should not be considered a part of this Prospectus.
We file annual, quarterly, current reports and other information with the SEC. You may read and copy these materials at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet site athttp://www.sec.gov that contains reports, proxy and information statements and other information regarding the Fund.
The Managing Owner will furnish you with an annual report of the Fund within 90 calendar days after the end of the Fund’s fiscal year as required by the rules and regulations of the CFTC, including, but not limited to, an annual audited financial statement certified by independent registered public accountants and any other reports required by any other governmental authority that has jurisdiction over the activities of the Fund. You also will be provided with appropriate information to permit you to file your U.S. federal and state income tax returns (on a timely basis) with respect to your Shares. Monthly account statements conforming to CFTC and NFA requirements are posted on the Managing Owner’s website athttp://www.invescopowershares.com. Additional reports may be posted on the Managing Owner’s website in the discretion of the Managing Owner or as required by regulatory authorities.
Cautionary Note Regarding Forward-Looking Statements
This Prospectus includesforward-looking statements that reflect the Managing Owner’s current expectations about the future results, performance, prospects and opportunities of the Fund. The Managing Owner has tried to identify theseforward-looking statements by using words such as “may,” “will,” “expect,” “anticipate,” “believe,” “intend,” “should,” “estimate” or the negative of those terms or similar expressions. Theseforward-looking statements are based on information currently available to the Managing Owner and are subject to a number of risks, uncertainties and other factors, both known, such as those described in “Risk Factors” in this Summary, in “The Risks You Face” and elsewhere in this Prospectus, and unknown, that
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could cause the actual results, performance, prospects or opportunities of the Fund to differ materially from those expressed in, or implied by, theseforward-looking statements.
You should not place undue reliance on anyforward-looking statements. Except as expressly required by the federal securities laws, the Managing Owner undertakes no obligation to publicly update or revise anyforward-looking statements or the risks, uncertainties or other factors described in this Prospectus, as a result of new information, future events or changed circumstances or for any other reason after the date of this Prospectus.
THE SHARES ARE SPECULATIVE AND
INVOLVE A HIGH DEGREE OF RISK.
[Remainder of page left blank intentionally.]
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Risk FactorsShares are designedWorld Health Organization has declared the outbreak to reflect as closely as possiblebe a public health emergency of international concern, and the changes, positive or negative,U.S. Health and Human Services Secretary has declared it a public health emergency in the levelUnited States.Index, over time, throughoutbreak of COVID-19 has been extensive in many aspects of society. The outbreak has resulted in a significant number of deaths, adversely impacted global commercial activity, and led to significant uncertainty and disruptions in the Fund’s portfolioglobal financial markets and the economies of exchange traded futures contractsnations where the coronavirus disease has arisen. Many countries have reacted by instituting quarantines, prohibitions on travel and the closure of offices, businesses, schools, retail stores and other public venues. Businesses are also implementing similar precautionary measures. Such measures, as well as the general uncertainty surrounding the dangers and impact of COVID-19, as well as the effectiveness and timing of distribution of a vaccine, are creating significant disruption in supply chains and economic activity. Consumer, corporate and financial confidence is being materially adversely affected by this outbreak. Such erosion of confidence may lead to or extend to a localized or global economic downturn. Such health crisis could exacerbate political, social, and economic risks and result in significant breakdowns, delays, and other disruptions to the economy, with potential corresponding results on the Index Currencies. The valueperformance of the Shares relates directlyFund and its investments.valueglobal financial markets and the economies of nations where COVID-19 has arisen and may in the portfolio, lessfuture arise, and may result in adverse impacts on the liabilities (including estimated accrued but unpaid expenses)global economy in general, with potential corresponding results on the performance of the Fund. The priceglobal impact of this outbreak continues to evolve, and it is impossible to predict the scope of this outbreak or the impact it may have on the global economy or the global financial markets. The COVID-19 outbreak has already led to certain governmental interventions that were implemented on an “emergency” basis, suddenly and substantially eliminating market participants’ ability to continue to implement certain strategies or manage the risk of their outstanding positions. No assurances can be made regarding the policies that may be adopted by the Federal Reserve, the federal government (including regulatory agencies), any state government, or any foreign government as a result of the Index Currencies may fluctuate widely. Several factors mayoutbreak or market volatility. In response to the COVID-19 outbreak, most of the Managing Owner’s personnel is working remotely and travel is restricted. Although the Managing Owner has implemented its business continuity plan to permit personnel to effectively work remotely, there is no assurance that this will work effectively at all times.pricesFund’s ability to fulfill its investment objectives, and could result in significant losses to the Fund. The extent of the Index Currencies,impact of any outbreak on the performance of the Fund and its investments depend on many factors, including but not limited to:National debt levelsthe duration and trade deficits, including changes in balancesscope of paymentssuch outbreak, the development and trade;Domesticdistribution of treatments and foreign inflation ratesvaccines for viruses such as COVID-19, the extent of its disruption to important global, regional and investors’ expectations concerning inflation rates;Domesticlocal supply chains and foreign interest rateseconomic markets, and investors’ expectations concerning interest rates;Currency exchange rates;Investment and trading activitiesthe impact of mutual funds, hedge funds and currency funds;Global or regional political, economic or financial events and situations;Supplysuch outbreak on overall supply and demand, changesinvestor liquidity, consumer confidence and levels of economic activity, all of which influence the foreign exchange rates of various currencies;are highly uncertain and cannot be predicted.Monetary policies12
at, above or below their NAV. The NAV per Share will change as fluctuations occurfluctuates with changes in the market value of its portfolio. Investors should be aware that the publicFund’s assets. The trading price of a Basket may be different fromShares fluctuates in accordance with changes in the NAV, of a Basket (i.e., 200,000 Shares may trade at a premium over, or a discount to, NAV of a Basket) and similarly the public trading price per Share may be different from the NAV per Share. Consequently, an Authorized Participant may be able to create or redeem a Basket at a discount or a premium to the public trading price per Share. This price difference may be due, in large part, to the fact that supply and demand forces at workintraday changes in the secondary trading market for Shares are closely related, but not identical to, the same forces influencing the pricesvalue of the Index Currencies trading individually or in the aggregate at any point in time. Investors also should note that the sizeContracts and market supply and demand. The amount of the Funddiscount or premium in terms of total assets held may change substantially over time and fromtime-to-time as Baskets are created and redeemed.
Authorized Participants or their clients or customers may have an opportunity to realize a profit if they can purchase a Basket at a discount to the public trading price of the Shares or can redeem a Basket at a premium over the public trading price of the Shares. The Managing Owner expects that the exploitation of such arbitrage opportunities by Authorized Participants andrelative to their clients and customers will tend to cause the public trading price to track NAV per Share closely over time.
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The value of a Share may be influenced bynon-concurrent trading hours between the NYSE Arca (the exchange on which the Shares trade) and the various futures exchanges on which the Index CurrenciesContracts are traded. While the Shares are expected to trade on NYSE Arca until 4:00 p.m. (Eastern time), liquidity in the markets for the Index Contracts is expected to be reduced whenever the principal markets for those contracts are closed. As a result, during periods when the NYSE Arca is open and the futures exchanges on which the Index Currencies are traded are closed, trading spreads, and the resulting premium or discount on the Shares, may widen and, therefore, increase the difference between the price ofduring these gaps in market trading hours.
It is possible that the Fund’s performance may not fully replicate the changes in the closing levels of the Index dueWhich Would Adversely Impact Your Ability to disruptions in the markets for the Index Currencies or due to other extraordinary circumstances. In addition, the Fund is not able to replicate exactly the changes in the closing levels of the Index because the total return generated by the Fund is reduced by expenses and transaction costs, including those incurred in connection with the Fund’s trading activities, and increased by Treasury Income from its holdings of United States Treasury Securities and Money Market Income from its holding of money market mutual funds (affiliated or otherwise) held for margin and cash management purposes. Tracking the Index requires trading of the Fund’s portfolio with a view to tracking the Index over time and is dependent upon the skills of the Managing Owner and its trading principals, among other factors. As of the date of this prospectus, the futures contracts associated with the Index Currencies, or the Fund Contracts, are not subject to speculative position limits. There can be no assurance that the Fund Contracts will not become subject to speculative position limits. Should the Fund Contracts become subject to speculative position limits, the Fund’s positions in the Fund Contracts might be required to be aggregated with positions in other accounts that the Managing Owner owns or for which it controls trading unless the investment team managing the Fund qualifies as an “independent account controller” under current law or regulations proposed by the CFTC. If the CFTC does not extend or renew the independent account controller exemption from aggregation, or if the exemption were otherwise unavailable, to the extent that the Managing Owner avails itself of the exemption, it may be required to aggregate the Fund’s positions in Fund Contracts in multiple other accounts or commodity pools. In that case, the Fund’s ability to issue new Baskets or the Fund’s
ability to reinvest income in additional Fund Contracts may be impaired or limited to the extent that these activities would cause the Fund to exceed the potential future position limits. Limiting the size of the Fund to stay within these position limits may affect the correlation between the price of the Shares, as traded on the NYSE Arca, and the NAV. Additionally, the Fund on any given date may not have an effective registration statement with the SEC with sufficient Shares available, which may limit the Fund’s ability to create new Baskets. The inability to create additional Baskets could result in Shares trading at a premium or discount to NAV of the Fund.
The Fund is not actively managed by traditional methods. Therefore, if positions in any one or more of the Index Currencies are declining in value, the Fund will not close out such positions, except in connection with a change in the composition or weighting of the Index. The Managing Owner seeks to cause the NAV to track the Index during periods in which the Index is flat or declining as well as when the Index is rising.
The Index is expected to rise as a result of any upward price movement on long positions in futures contracts on the Index Currencies when the prices of these long futures contracts increase relative to the USD. The Index also is expected to rise as a result of any downward price movement on short positions in futures contracts on the Index Currencies when the prices of these short futures contracts decrease relative to the USD. Because the price of your Shares is expected to track the Index, if the price of the Fund’s long futures contracts decreases relative to
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the USD or the price of the Fund’s short futures contracts increases relative to the USD on any or all of the Index Currencies, the value of your Shares may decrease. The decrease in the value of your Shares will be amplified if both assumptions fail simultaneously (i.e., both the price of the Fund’s long futures contracts decreases relative to the USD and the price of the Fund’s short futures contracts increases relative to the USD on any or all of the Index Currencies).
The Index is re-weighted quarterly based upon the three highest and three lowest yielding Eligible Index Currencies at the time of re-weighting. At any point in time between quarterly re-weightings, the Index Currencies may not be among the three highest or lowest yielding Eligible Index Currencies. Between quarterly re-weightings of the Index, a currency that was among the three highest yielding Eligible Index Currencies could be among the three lowest yielding Eligible Index Currencies, or vice versa. Under such circumstances, the Fund may not be able to exploit efficiently the trend that currencies associated with relatively high interest rates, on average, tend to rise in value relative to currencies associated with relatively low interest rates. If the interest rates associated with the Eligible Index Currencies change sufficiently during any quarter, the Fund may find itself positioned such that the effects of this trend will cause the Fund to lose money. Even if the interest rates associated with the Eligible Index Currencies vary substantially between re-weightings, the Fund will not adjust its portfolio of currency futures until the next quarterly re-weighting.
The Shares are listed for trading on the NYSE Arca under the market symbol DBV.Arca. Trading in Shares may be halted due to market conditions or in light of certain procedures and safeguards under NYSE Arca rules and procedures, for reasons that, in the view of the NYSE Arca, make trading in Shares inadvisable.rules. In addition, trading is subject to trading halts caused by extraordinary market volatility pursuant to “circuit breaker” rules that require trading to be halted for a specified period based on a specified market decline. There can beIf the Fund were no assurance thatlonger to meet the requirements necessary to maintain the listing of its Shares, the Shares will continue towould be met or will remain unchanged. delisted. In such a scenario, the Fund would be terminated.
Although the Shares are listed and traded on the NYSE Arca, there can be no guarantee that an active trading market for the Shares will be maintained. If you need to sell your Shares at a time when no active market for them exists, the price you receive for your Shares, assuming that you are able to sell them, likely will be lower than the price you would receive if an active market did exist.
The mechanisms and procedures governing
The Managing Owner manages a number of exchange-traded funds that use financial futures as part of their investment strategy and, only for a limited time, has actively managed an exchange-traded fund related to a broad-based futures index. The past performance of these funds is no indication of the Managing Owner’s ability to manage exchange-traded investment vehicles that track an index such as the Fund. There can be no assurance that the Managing Owner will be able to cause the NAV per Share of the Fund to closely track the changes in the Index levels. If the experience of the Managing Owner and its principals is not relatively adequate or suitable to manage investment vehicles such as the Fund, the operations of the Fund may be adversely affected.
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Although past performance is not necessarily indicative of future results, the Fund’s performance history might (or might not) provide you with more information on which to evaluate an investment in the Fund. Likewise, the Index has a history which might (or might not) be indicative of the future Index results, or of the future performance of the Fund. Therefore, you will have to make your decision to invest in the Fund without relying on the Fund’s past performance history or the Index’s closing level history.
The ten Eligible Index Currencies are United States Dollars, Euro, Japanese Yen, Canadian Dollars, Swiss Francs, British Pounds, Australian Dollars, New Zealand Dollars, Norwegian Krone and Swedish Krona. The Index is comprised of only six of the ten Eligible Index Currencies from time-to-time. Accordingly, the Index is concentrated in terms of the number of currencies represented. You should be aware that other currency indices are more diversified in terms of the number of currencies included. Concentration in fewer currencies may result in a greater degree of volatility in the Index and the NAV of the Fund, which tracks the Index under specific market conditions and over time.
Although the Fund is not expected to establish positions that exceed a leverage ratio of 2:1 at the time of establishment, reinvestment of collateral or movements in the market price of the Fund’s futures positions between the Index Re-Weighting Periods may increase or decrease the Fund’s leverage ratio. Any such increase or decrease, respectively, in the Fund’s leverage ratio will magnify or decrease, respectively, the potential for loss or gain of the Fund’s futures positions and, in turn, the value of your Shares.
The Fund will take long futures positions in thehigh-yielding Eligible Index Currencies and will take short futures positions in thelow-yielding Eligible Index Currencies with a view to tracking the changes in the Index over time. Assuming that the USD is not one of the three highest or lowest yielding currencies during any Index Re-Weighting Period,re-weighting period, the long futures positions and short futures positions in the Index Currencies will each have a notional value approximately equal to the Fund’s NAV. Accordingly, if the USD is not one of the three highest or lowest yielding currencies during any the Index Re-Weighting Period,re-weighting period, the aggregate notional amount of the futures positions held by the Fund is expected to be approximately 200% of the Fund’s NAV, but it may increase due to the reinvestment of collateral or the movements in the market price of the Fund’s future positions. If the USD is one of the three highest or lowest yielding currencies, the Fund will not establish a long or short futures position (as the case may be) in USD, as the
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There can be no assurance that the use of both long and short positions will reduce the volatility of the Index during any or all market cycles or periods, or that the Fund will achieve its objectives. It is possible that, prior to an Index rebalancing, that Index Currencies expected to lose relative to the USD may rise and/or Index Currencies expected to gain relative to the USD may fall. In such cases, the Fund may experience losses in both its long and short positions at the same time. Such losses will be greater as a result of the Fund’s use of leverage, reflected in its long futures exposure to Index Currencies with a notional value of up to 100% of the Fund’s NAV and its short futures exposure to Index Currencies with a notional value of up to 100% of the Fund’s NAV. Under such circumstances, the Fund’s losses would be greater as a result of its leverage than would be the case were it to limit its overall exposure to Index Currencies with a notional value of 100% of the Fund’s net assets.
As
Any such increase or decrease in the Fund’s leverage ratio will magnify or decrease, respectively, the potential for loss or gain of the Fund’s futures positions and, in turn, the value of your Shares.
By contrast, a short futures position in a foreign currency requires the Fund to deliver at a future date an amount in USD equal to the price in USD of a fixed amount of the foreign currency at that future date. The Fund will profit if the price of the foreign currency falls relative to the USD while the contract is open and the Fund will suffer loss if the price of the foreign currency rises relative to the USD while the contract is open. Because the price in USD of a fixed amount of the foreign currency could, in theory, rise to infinity, a short futures position exposes the Fund to theoretically unlimited liability.
Futures contracts have a high degree of price variability and are subject to occasional rapid and substantial changes. Consequently, you could lose all or substantially all of your investment in the Fund.
The following table reflects various measures of volatility*
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The following table reflects the daily volatility on an annual basisis Not Indicative of Future Performance.
Year | Daily | |
1993*** | 8.67% | |
1994 | 4.97% | |
1995 | 13.93% | |
1996 | 7.01% | |
1997 | 7.73% | |
1998 | 8.90% | |
1999 | 5.70% | |
2000 | 6.17% | |
2001 | 5.37% | |
2002 | 7.45% | |
2003 | 6.69% | |
2004 | 7.90% | |
2005 | 5.41% | |
2006 | 7.10% |
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Year | Daily | |
2007 | 10.95% | |
2008 | 21.86% | |
2009 | 17.10% | |
2010 | 12.86% | |
2011 | 13.58% | |
2012 | 7.00% | |
2013 | 8.12% | |
2014 | 5.79% | |
2015 | 10.48% | |
2016** | 8.66% |
Daily Volatility: The relative rate at which the price ofFund or the Index moves up and down, found by calculating the annualized standard deviation of the daily change in price.
Monthly Return Volatility: The relative rate at which the price of the Index moves up and down, found by calculating the annualized standard deviation of the monthly change in price.
Average Annual Volatility: The average of yearly volatilities for a given sample period. The yearly volatility is the relative rate at which the price of the Index moves up and down, found by calculating the annualized standard deviation of the daily change in price for each business day in the given year.
Past Index results are not necessarily indicative of future changes, positiveresults. Therefore, past performance of the Fund or negative, in the Index levels.
should not be relied upon in deciding whether to buy Shares of the Fund.
upon the yield of 3-month United States Treasury Securities as of September 30, 2016, or a maximum of $0.06 per annum per Share at $25.00 as the NAV per Share. The Fund is also expected to earn Money Market Income equal to 0.36% per annum as of September 30, 2016, or a maximum of $0.09 per annum per Share at $25.00 as the NAV per Share. Because the Fund’s current Treasury Income and/or Money MarketT-Bill ETF Income may not exceed its fees and expenses. If such income does not exceed its fees and expenses, in order to break even, the FundFund’s futures trading activity will need to have a positivefavorable performance that exceeds the difference between the sum of the Fund’s Treasury Income, Money Market Income and/or Money MarketT-Bill ETF Income and its fees and expenses in order to break-even.expenses. If the aggregateFund’s futures trading performance is not sufficiently favorable, the Fund’s expenses could deplete its assets over time. In such a scenario, the value of your Shares will decrease.
You cannot be assured that theRejection Under
Futures positions cannot always be liquidated at the desired price. It is difficult to execute a trade at a specific price when there is a relatively small volume of buy and sell orders in a market. A market disruption, such as when foreign governments may take or be subject to political actions which disrupt the markets in their currency or major exports, can also make it difficult to liquidate a position.
There can be no assurance that market illiquidity will not cause losses for the Fund. The large size of the positions which the Fund may acquire increases the risk of illiquidity by both making its positions more difficult to liquidate and increasing the losses incurred while trying to do so.
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The Fund may, in its discretion, suspend the right of redemption or postpone the redemption order settlement date with respect to Creation Units for (1) any period during which an emergency exists as a result of which the redemption distribution is not reasonably practicable, or (2) such other period as the Managing Owner determines to be necessary for the protection of the Shareholders. In addition, the Fund will reject a redemption order if the order is not in proper form as described in the participant agreement amongwith the Authorized Participant, the Managing Owner, either in its own capacity or in its capacity as managing owner of the Fund, or if the fulfillment of the order, in the opinion of itsthe Fund’s counsel, might be unlawful. Any such postponement, suspension or rejection could adversely affect a redeeming Authorized Participant. For example, the resulting delay may adversely affect the value of the Authorized Participant’s redemption proceeds if the NAV of the Fund declines during the period of delay. The Fund disclaims any liability for any loss or damage that may result from any such suspension or postponement.
Futures trading is a risk transfer economic activity. For every gain there is
Historically, currency futures’ returns have tended to exhibit low to negative correlation with the returns of other assets such as stocks and bonds. Although currency futures trading can provide a diversification benefit to investor portfolios because of its low to negative correlation with other financial assets, the fact that the Index is not 100% negatively correlated with financial assets such as stocks and bonds means that the Fund cannot be expected to be automatically profitable during unfavorable periods for the stock or bond market, or vice versa. If the Shares perform in a manner that correlates with the general financial markets or do not perform successfully, you will obtain no diversification benefits by investing in the Shares and the Shares may produce no gains to offset your losses from other investments.
The Fund is not registered as an investment company under the Investment Company Act1940 Act. Consequently, Shareholders do not have the legal and regulatory protections provided to the investors in investment companies that are registered as such.
Shareholders.
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and/or T-Bill ETFs for margin and/or cash management purposes, the Managing Owner may select affiliated money market mutual funds and/or T-Bill ETFs that may pay dividends that are lower than non-affiliated money market mutual funds.funds and/or T-Bill ETFs. In addition, the Managing Owner would have a conflict of interest if it sought to redeem the Fund’s interest in an affiliated money market mutual fund or T-Bill ETF in circumstances when such a redemption would be unfavorable for the affiliated fund. The Managing Owner has not established any formal procedure to resolve conflicts of interest. Consequently, investors are dependent on the good faith of the respective parties subject to such conflicts to resolve them equitably. Although the Managing Owner attempts to
Because the Managing Owner and Invesco Distributors are affiliates, the Managing Owner has a disincentive to replace Invesco Distributors. Furthermore, the Managing Owner did not conduct an arm’s length negotiation with respect towhen it retained Invesco Distributors.
Shareholders will be subject to U.S. federal income taxation and, in some cases, state, local, or foreign income taxation on their allocable share
U.S. federal income tax rules applicable to partnerships are complex and often difficult to apply to publicly traded partnerships. The Fund will apply certain assumptions and conventions in an attempt to
comply with applicable rules and to report items of income, gain, loss and deduction to Shareholders in a manner that reflects the Shareholders’ beneficial interest in such tax items, but these assumptions and conventions may not be in compliance with all aspects of the applicable tax requirements. It is possible that the United States Internal Revenue Service, or the IRS, will successfully assert that the conventions and assumptions used by the Fund do not satisfy the technical requirements of the Internal Revenue Code of 1986, as amended, or the Code and/or Treasury Regulations and could require that items of income, gain, loss and deduction be adjusted or reallocated in a manner that adversely affects one or more Shareholders.
Under current law, long-term capital gains are taxed to non-corporate investors at reduced U.S. federal income tax rates. This tax treatment may be adversely affected, changed or repealed by future changes in, or the expiration of, tax laws at any time.
PROSPECTIVE INVESTORS ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISORS AND COUNSEL WITH RESPECT TO THE POSSIBLE TAX CONSEQUENCES TO THEM OF AN INVESTMENT IN THE SHARES; SUCH TAX CONSEQUENCES MAY DIFFER WITH RESPECT TO DIFFERENT INVESTORS.
The Commodity Exchange Act requires a clearing broker to segregate all funds received from customers from such broker’s proprietary assets. If the Commodity Broker fails to do so, the assets of the Fund might not be fully protected in the event of the Commodity Broker’s bankruptcy. Furthermore, in the event of the Commodity Broker’s bankruptcy, the Fund could be limited to recovering either a pro rata share of all available funds segregated on behalf of the Commodity Broker’s combined customer
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accounts or the Fund may not recover any assets at all, even though certain property specifically traceable to the Fund was held by the Commodity Broker. The Commodity Broker may, from time-to-time, have been the subject of certain regulatory and private causes of action. Such material actions, if any, are described under “The Commodity Broker.”
In the event of a bankruptcy or insolvency of any exchange or a clearing house, the Fund could experience a loss of the funds deposited through its Commodity Broker as margin with the exchange or clearing house, a loss of any unrealized profits on its open positions on the exchange, and the loss of profits on its closed positions on the exchange.
The global financial markets have in the past few years gone through pervasive and fundamental disruptions that have led to extensive and unprecedented governmental intervention. Such intervention has in certain cases been implemented on an “emergency” basis, suddenly and substantially eliminating market participants’ ability to continue to implement certain strategies or manage the risk of their outstanding positions. In addition — as one would expect given the complexities of the financial markets and the limited time frame within which governments have felt compelled to take action — these interventions have typically been unclear in scope and application, resulting in confusion and uncertainty which in itself has been materially detrimental to the efficient functioning of the markets as well as previously successful investment strategies.
The Fund may incur major losses in the event of disrupted markets and other extraordinary events in which historical pricing relationships become materially distorted. The risk of loss from pricing distortions is compounded by the fact that in disrupted markets many positions become illiquid, making it difficult or impossible to close out positions against which the markets are moving. The financing available to market participants from their banks, dealers and other counterparties is typically reduced in disrupted markets. Such a reduction may result in substantial losses to the affected market participants. Market disruptions may from time to time cause dramatic losses, and such events can result in otherwise historically low-risk strategies performing with unprecedented volatility and risk.
The regulation of commodity interest transactions in the United States is a rapidly changing area of law and is subject to ongoing modification by governmental and judicial action. Considerable regulatory attention has been focused on non-traditional investment pools that are publicly distributed in the United States. The Dodd-Frank Act regulates markets, market participants and financial instruments that previously have been unregulated and substantially alters the regulation of many other markets, market participants and financial instruments. It is difficult to predict the impact of the Dodd-Frank Act on the Fund, the Managing Owner, and the markets in which the Fund may invest, the NAV of the Fund or the market price of the Shares. The Dodd-Frank Act and the implementing regulation adopted by regulators could result in the Fund’s investment strategy becoming non-viable or non-economic to implement. Therefore, the Dodd-Frank Act and regulations adopted pursuant to the Dodd-Frank Act could have a material adverse impact on the profit potential of the Fund and in turn the value of your Shares.
The Managing Owner has consulted with counsel, accountants and other advisers regarding the formation and operation of the Fund. No counsel has been appointed to represent you in connection with the Fund’s continuous offering of Shares. Accordingly, you should consult your own legal, tax and financial advisers regarding the desirability of an investmentabout whether you should invest in the Shares.
Fund.
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another vehicle, and may not be able to find another vehicle that offers the same features as the Fund. See “Description of the Shares; Certain Material Terms of the Trust DeclarationAgreement – Termination Events” for a summary of termination events. Such detrimental developments could cause you to liquidate your investments and upset the overall maturity and timing of your investment portfolio. In addition, Shareholders could receive less from the sale of the Fund’s assets in the event of its liquidation and termination than amounts that could be realized from sales of those assets other than in the case of a liquidation and termination. If the registrations with the CFTC or memberships in the NFA of the Managing Owner or the Commodity Broker were revoked or suspended, such entity would no longer be able to provide services to the Fund.
As interests in an investment trust, the Shares have none
The Fund constitutes a relatively new type of investment vehicle. The Fund competes with other financial vehicles, including mutual funds, and other investment companies, ETFs, other index tracking commodity pools, actively traded commodity pools, hedge funds, traditional debt and equity securities issued by companies and foreign governments, other securities backed by or linked to currencies, and direct investments in the underlying currencies or currencies futures contracts. Market and financial conditions, and other conditions beyond the Managing Owner’s control, may make it more attractive to invest in other financial vehicles or to invest in such currencies directly, which could limit the market for the Shares and therefore reduce the liquidity of the Shares.
While the Managing Owner believes that all intellectual property rights needed to operate the Fund in the manner described in this Prospectus are either owned by or licensed to the Managing Owner or have been obtained, third parties may allege or assert ownership of intellectual property rights which may be related to the design, structure and operations of the Fund. To the extent any claims of such ownership are brought or any proceedings are instituted to assert such claims, the issuance of any restraining orders or injunctions, the negotiation, litigation or settlement of such claims, or the ultimate disposition of such claims in a court of law if a suit is brought, may adversely affect the Fund and an investment in the Shares, forShares. For example, resultingsuch actions could result in expenses or damages payable by the Fund, suspension of activities or the termination of the Fund.
Calculating
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futures contract pursuant to policies the Managing Owner has adopted, which are consistent with normal industry standards. In such a situation, there is a risk that the calculation of the NAV of the Fund on such day will not accurately reflect the realizable market value of such foreign exchange futures contract. For example, daily limits are generally triggered in the event of a significant change in market price of a foreign exchange futures contract. Therefore, as a result of the daily limit, the current settlement price is unavailable. Because the Managing Owner may value such futures contract pursuant to policies the Managing Owner has adopted, which are consistent with normal industry standards, there is a risk that the resulting calculation of the NAV of the Fund could be under or overstated, perhaps to a significant degree. Although the Eligible Index Currencies that the Fund will invest in are not currently subject to “daily limits,” the terms and conditions of these contracts may change in the future, and thus, may subject the Fund to the above-described risks.
Foreign exchange rates are influenced by national debt levels and trade deficits, domestic and foreign inflation rates and investors’ expectations concerning inflation rates, domestic and foreign interest rates and investors’ expectations concerning interest rates, currency exchange rates, investment and trading activities of mutual funds, hedge funds and currency funds; and global or regional political, economic or financial events and situations. Additionally, foreign exchange rates on the Index Currencies may also be influenced by changing supply and demand for a particular Index Currency, monetary policies of governments (including exchange control programs, restrictions on local exchanges or markets and limitations on foreign investment in a country or on investment by residents of a country in other countries), changes in balances of payments and trade, trade restrictions, currency devaluations and revaluations. Also, governments from time-to-time intervene in the currency markets, directly and by regulation, in order to influence prices directly. Additionally, expectations among market participants that a currency’s value soon will change may also affect exchange rates on the Index Currencies. These events and actions are unpredictable. The resulting volatility in the exchange rates on the underlying Index Currencies may materially and adversely affect the market value of the futures contracts on the Index Currencies, which would then negatively impact the value of your Shares.
The official sector consists of central banks, other governmental agencies andmulti-lateral institutions that buy, sell and hold certain Index Currencies as part of their reserve assets. The official sector holds a significant amount of Index Currencies that can be mobilized in the open market. In the event that future economic, political or social conditions or pressures require members of the official sector to sell their Index Currencies simultaneously or in an uncoordinated manner, the demand for Index Currencies might not be sufficient to accommodate the sudden increase in the supply of certain Index Currencies to the market. Consequently, the price of an Index Currency may decline, which may then negatively impact the Shares.
The Shares are limited liability investments; investors may not lose more than the amount that they invest plusincluding any profits recognized onappreciation in their investment.investments. However, Shareholders could be required, as a matter of bankruptcy law, to return to the estate of the Fund any distribution they received at a time when the Fund was in fact insolvent or in violation of itsthe Trust Declaration.Agreement. In addition, although the Managing Owner is not aware of this provision ever having been invoked in the case of any public futures fund, Shareholders agree in the Trust DeclarationAgreement that they will indemnify the Fund for any harm suffered by it as a result of
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Although aThe Fund may invest in government money market mutual fund seeksfunds that have chosen to not rely on the ability to impose fees on shareholder redemptions, or liquidity fees, or temporarily to suspend redemption privileges, or gates, if the government money market fund’s weekly liquid assets fall below a certain threshold. Although such government money market funds seek to preserve the value of an investment at $1.00 per share, there is no guarantee that they will be able to do so. As a result, the Fund may lose money by investing in a government money market mutualfund. An investment in a government money market fund for cash management purposes.is not insured or guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. The share price of a government money market mutual fundsfund can fall below the $1.00 share price. The Fund cannot rely on or expect a government money market mutual fund’s adviser or its affiliates to enter into support agreements or take other actions to maintain the government money market mutual fund’s $1.00 share price. The credit quality of a government money market mutual fund’s holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the government money market mutual fund’s share price. TheDue to fluctuations in interest rates, the market value of securities held by a government money market mutualfund may vary. A government money market fund’s share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. Furthermore,
Unintentional Cyber Attacks Pose Operational
and Information Security Risks.damage, reimbursement or other compensation costs, and/or additional compliance costs. In addition, substantial costs may be incurred in order to prevent any cyber incidents in the future. The Fund and its shareholdersShareholders could be negatively impacted as a result.
losses to the Fund and Shareholders.
Because the Shares are publicly traded, the Fund is subject to certain rules“Risk Factors” and regulations of federal, stateelsewhere in this Prospectus and financial market exchange entities charged with the protection of investors and the oversight of companies whose securities are publicly traded. These entities, including the Public Company Accounting Oversight Board, thein other SEC the CFTC and NYSE-ARCA, have in recent years issued new requirements and regulations, most notably the Sarbanes-Oxley Act of 2002. From time to time, since the adoption of the Sarbanes-Oxley Act of 2002, these authorities have continued to develop additional regulations or interpretations of existing regulations. The Fund’s ongoing efforts to comply with these regulations and interpretations have resulted in, and are likely to continue resulting in, a diversion of management’s time and attention from focusing on Fund management to compliance related activities.
The Fund is responsible for establishing and maintaining adequate internal control over financial reporting. The Fund’s internal control system is designed to provide reasonable assurance to its management regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective may provide only reasonable assurance with respect to financial statement preparation and presentation.
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PricewaterhouseCoopers LLP informedfilings by the Fund, that it has identified an issue related to its independence under Rule 2-01(c)(1)(ii)(A) of Regulation S-X (referred to ascould cause the Loan Rule). The Loan Rule prohibits accounting firms, such as PricewaterhouseCoopers LLP, from being deemed independent if they have certain financial relationships with their audit clientsactual results, performance, prospects or certain affiliates of those clients. The Fund is required under various securities laws to have its financial statements audited by an independent accounting firm.
The Loan Rule specifically provides that an accounting firm would not be independent if it receives a loan from a lender that is a record or beneficial owner of more than ten percent of an audit client’s equity securities. For purposes of the Loan Rule, audit clients include the Fund as well as all registered investment companies advised by the Managing Owner and its affiliates, including other subsidiaries of the Managing Owner’s parent company, Invesco Ltd. (collectively, the Invesco Fund Complex). PricewaterhouseCoopers LLP informed the Fund it has relationships with lenders who hold, as record owner, more than ten percent of the shares of certain funds within the Invesco Fund Complex. These relationships call into question PricewaterhouseCoopers LLP independence under the Loan Rule with respect to those funds, as well as all other funds in the Invesco Fund Complex.
On June 20, 2016, the SEC Staff issued a “no-action” letter to another mutual fund complex (see Fidelity Management & Research Company et al., No-Action Letter) related to the audit independence issue described above. In that letter, the SEC confirmed that it would not recommend enforcement action against a fund that relied on audit services performed by an audit firm that was not in compliance with the Loan Rule in certain specified circumstances. PricewaterhouseCoopers LLP has communicated that the circumstances which called into question its independence under the Loan Rule with respect to the audits of the Invesco Fund Complex are consistent with circumstances described
in the no action letter. PricewaterhouseCoopers LLP also concluded that its objectivity and impartiality was not impaired with respect to the planning for and execution of the Fund’s audits and that they have complied with PCAOB Rule 3526(b)(1) and (2), which are conditions to the Fund relying on the no action letter. Therefore, the Managing Owner, the Fund and PricewaterhouseCoopers LLP have concluded that PricewaterhouseCoopers LLP can continue as the Fund’s independent registered public accounting firm. The Invesco Fund Complex intends to rely upon the no-action letter.
If in the future the independence of PricewaterhouseCoopers LLP is called into question under the Loan Rule by circumstances that are not addressed in the SEC’s no-action letter, the Fund will need to take other action in order for the Fund’s filings with the SEC containing financial statements to be deemed compliant with applicable securities laws. Such additional actions could result in additional costs, impair the abilityopportunities of the Fund to issuediffer materially from those expressed in, or implied by, these forward-looking statements.
management. While the Fund’s performance will reflect the appreciation or depreciation of those holdings, the Fund’s performance, whether positive or negative, will be driven primarily by its strategy of trading futures contracts with the aim of seeking to track the Index.
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The Index is designed to exploit the trend that currencies associated with relatively high interest rates, on average, tend to rise in value relative to currencies associated with relatively low interest rates. This trend is consistent with economic theory regarding the correct price of a currency future, known as theInterest Rate Parity formula or theCovered Interest Arbitrage formula, and can be seen in the historical trading patterns of currency futures.
The theoretical or “fair market” price of a currency future contract is derived from the spot FX rate, interest rates of the two currencies and time to expiry of the currency future contract and represents an equilibrium relationship among the interest rates, spot markets and futures markets associated with the currencies in question. If an equilibrium relationship does not exist between two currencies, arbitrage opportunities arise and the exploitation of these opportunities by arbitrageurs will tend to drive currency futures prices toward equilibrium. Application of theInterest Rate Parity formula under circumstances in which currencies are not in an equilibrium relationship predicts that if the currency future is based on a rate ranging from a high yielding currency to a low yielding currency, the fair market price of the currency future will be below the spot rate. The longer the time to the expiry of the currency future the greater the amount the fair market price of the currency future will be below the spot rate. If the spot rate stays approximately the same then, as you move closer to the expiry of the currency future, the fair market price will increase. In other words, the currency future rate between a relatively high interest rate currency and low interest rate currency tends to increase over time (assuming spot is relatively stable).
The Index exploits
Advantages of investing in the Fund include:
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To the extent that the Fund’s actual and projected Treasury Income and Money Market Income exceeds the actual and projected fees and expenses of the Fund, the Managing Owner expects periodically to make distributions of the amount of such excess.
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Investing in the Fund does not insulate Shareholders from certain risks, including price volatility.
The Managing Owner serves as the commodity pool operator and commodity trading advisor of the Fund.
Specifically, the Managing Owner:
The Managing Owner is registered as a commodity pool operator, commodity trading advisor and swap firm with the CFTC and is a member of the NFA.
The principal office of the Managing Owner is located at c/o Invesco PowerShares Capital Management LLC, 3500 Lacey Road, Suite 700, Downers Grove, IL 60515. The telephone number of the Managing Owner is (800) 983-0903.
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PERFORMANCE OF POWERSHARES DB G10 CURRENCY HARVEST FUND (TICKER: DBV)
Name of Pool:PowerShares DB G10 Currency Harvest Fund
Type of Pool:Public, Exchange-Listed Commodity Pool
Inception of Trading:September 2006
Aggregate Gross Capital Subscriptions as of August 31, 20161: $1,496,737,196
NAV as of August 31, 20162: $73,618,287
NAV per Share as of August 31, 20163:$24.54
Worst Monthly Drawdown4: (5.93)% January 2015
Worst Peak-to-Valley Drawdown5: (19.01)% April 2013 – September 2015
Monthly Rate of Return | 2016 | (%) | 2015 | (%) | 2014 | (%) | 2013 | (%) | 2012 | (%) | 2011 | (%) | ||||||||||||
January | (0.60 | ) | (5.93 | ) | (1.89 | ) | 1.95 | 2.98 | 0.04 | |||||||||||||||
February | (0.13 | ) | 4.34 | 1.60 | 0.08 | 4.24 | 0.55 | |||||||||||||||||
March | 1.43 | (0.64 | ) | 3.16 | 1.91 | (2.03 | ) | 1.84 | ||||||||||||||||
April | 0.30 | 0.24 | (0.23 | ) | 0.85 | (0.92 | ) | 3.21 | ||||||||||||||||
May | (0.51 | ) | (2.37 | ) | (0.12 | ) | (2.99 | ) | (5.32 | ) | (1.43 | ) | ||||||||||||
June | 3.12 | (3.29 | ) | 0.27 | (4.40 | ) | 4.85 | (0.28 | ) | |||||||||||||||
July | 0.79 | (0.98 | ) | (0.83 | ) | (0.28 | ) | 1.22 | (0.65 | ) | ||||||||||||||
August | 0.90 | (3.87 | ) | 0.99 | (2.01 | ) | (0.04 | ) | (1.06 | ) | ||||||||||||||
September | (0.67 | ) | (1.66 | ) | 2.82 | 1.64 | (5.28 | ) | ||||||||||||||||
October | 4.28 | 0.00 | 0.82 | 0.28 | 6.36 | |||||||||||||||||||
November | 2.12 | 0.27 | (1.28 | ) | 1.22 | (2.33 | ) | |||||||||||||||||
December | (1.52 | ) | (1.32 | ) | (0.04 | ) | 1.63 | (0.13 | ) | |||||||||||||||
Compound Rate of Return6 |
| 5.37 (8 months | % ) | (8.49 | )% | 0.13 | % | (2.79 | )% | 9.74 | % | 0.38 | % |
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
Footnotes to Performance Information
1. “Aggregate Gross Capital Subscriptions” is the aggregate of all amounts ever contributed to the pool.
2. “NAV” is the NAV of the pool as of August 31, 2016.
3. “NAV per Share” is the NAV of the pool divided by the total number of Shares outstanding as of August 31, 2016.
4. “Worst Monthly Drawdown” is the largest single month loss sustained during the most recent five calendar years and year to date (if applicable). “Drawdown” as used in this section of the Prospectus means losses experienced by the relevant pool over the specified period and is calculated on a rate of return basis, i.e., dividing net performance by beginning equity. “Drawdown” is measured on the basis of monthly returns only, and does not reflect intra-month figures. “Month” is the month of the Worst Monthly Drawdown.
5. “Worst Peak-to-Valley Drawdown” is the largest percentage decline in the NAV per Share during the most recent five calendar years (and to the extent applicable, for a period beyond the most recent five calendar years if the starting date of the peak value extends beyond this period). This need not be a continuous decline, but can be a series of positive and negative returns where the negative returns are larger than the positive returns. “Worst Peak-to-Valley Drawdown” represents the greatest percentage decline from any month-end NAV per Share that occurs without such month-end NAV per Share being equaled or exceeded as of a subsequent month-end. For example, if the NAV per Share of a particular pool declined by $1 in each of January and February, increased by $1 in March and declined again by $2 in April, a “peak-to-valley drawdown” analysis conducted as of the end of April would consider that “drawdown” to be still continuing and to be $3 in amount, whereas if the NAV per Share had increased by $2 in March, the January-February drawdown would have ended as of the end of February at the $2 level.
6. “Compound Rate of Return” is calculated by multiplying on a compound basis each of the monthly rates of return set forth in the chart above and not by adding or averaging such monthly rates of return. For periods of less than one year, the results are year-to-date.
THE FUND’S PERFORMANCE INFORMATION FROM INCEPTION UP TO AND EXCLUDING FEBRUARY 23, 2015 IS A REFLECTION OF THE PERFORMANCE ASSOCIATED WITH DB COMMODITY SERVICES LLC, WHICH SERVED AS THE PREDECESSOR MANAGING OWNER. ALL THE PERFORMANCE INFORMATION ON AND AFTER FEBRUARY 23, 2015 REFLECTS THE PERFORMANCE ASSOCIATED WITH THE MANAGING OWNER.
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DESCRIPTION OF THE DEUTSCHE BANK G10 CURRENCY FUTURE HARVEST INDEX® – EXCESS RETURN
The PowerShares DB G10 Currency Harvest Fund (the “Fund”) is not sponsored or endorsed by Deutsche Bank AG, Deutsche Bank Securities Inc. or any subsidiary or affiliate of Deutsche Bank AG or Deutsche Bank Securities Inc. (collectively, “Deutsche Bank”). The Deutsche Bank G10 Currency Future Harvest Index® – Excess Return (the “DB Index”) is the exclusive property of Deutsche Bank Securities Inc. Neither Deutsche Bank nor any other party involved in, or related to, making or compiling the DB Index makes any representation or warranty, express or implied, concerning the DB Index, the Fund or the advisability of investing in securities generally. Neither Deutsche Bank nor any other party involved in, or related to, making or compiling the DB Index has any obligation to take the needs of Invesco PowerShares Capital Management LLC, the sponsor of the Fund, or its clients into consideration in determining, composing or calculating the DB Index. Neither Deutsche Bank nor any other party involved in, or related to, making or compiling the DB Index is responsible for or has participated in the determination of the timing of, prices at, quantities or valuation of the Fund. Neither Deutsche Bank nor any other party involved in, or related to, making or compiling the DB Index has any obligation or liability in connection with the administration or trading of the Fund.
NEITHER DEUTSCHE BANK NOR ANY OTHER PARTY INVOLVED IN, OR RELATED TO, MAKING OR COMPILING THE DB INDEX, WARRANTS OR GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE DB INDEX OR ANY DATA INCLUDED THEREIN AND SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. NEITHER DEUTSCHE BANK NOR ANY OTHER PARTY INVOLVED IN, OR RELATED TO, MAKING OR COMPILING THE DB INDEX, MAKES ANY WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY INVESCO POWERSHARES CAPITAL MANAGEMENT LLC FROM THE USE OF THE DB INDEX OR ANY DATA INCLUDED THEREIN. NEITHER DEUTSCHE BANK NOR ANY OTHER PARTY INVOLVED IN, OR RELATED TO, MAKING OR COMPILING THE DB INDEX, MAKES ANY EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE WITH RESPECT TO THE DB INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DEUTSCHE BANK OR ANY OTHER PARTY INVOLVED IN, OR RELATED TO, MAKING OR COMPILING THE DB INDEX HAVE ANY LIABILITY FOR DIRECT, INDIRECT, PUNITIVE, SPECIAL, CONSEQUENTIAL OR ANY OTHER DAMAGES OR LOSSES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF. EXCEPT AS EXPRESSLY PROVIDED TO THE CONTRARY, THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN DEUTSCHE BANK AND INVESCO POWERSHARES CAPITAL MANAGEMENT LLC.
No purchaser, seller or holder of the shares of this Fund, or any other person or entity, should use or refer to any Deutsche Bank trade name, trademark or service mark to sponsor, endorse, market or promote this Fund without first contacting Deutsche Bank to determine whether Deutsche Bank’s permission is required. Under no circumstances may any person or entity claim any affiliation with Deutsche Bank without the written permission of Deutsche Bank.
A general description of the Index (including, but not limited to, the underlying formulae and all other Index terms and conditions), or the General Description, is included on the Index Sponsor’s website athttps://index.db.com, or any successor thereto. The information included in Exhibit B of the Trust Declaration, which is the Index description, or the Description, may be provided in greater detail than that which is included in the General Description. Any material changes to the terms and conditions of the Index as disclosed in future versions of the General Descriptiongenerally will be deemed to amend such corresponding terms and conditions that are included in the Description, unless otherwise determined at the sole discretion of the Index Sponsor. The Index Sponsor may, in its sole discretion and for housekeeping purposes, amend and restate the Description to conform it to reflect material changes to the General Description.
The sponsor of the Index, or the Index Sponsor, is Deutsche Bank Securities Inc. The composition of the Index may be adjusted in the Index Sponsor’s discretion. The Index Sponsor may from time-to-time subcontract the provision of the calculation and other services described below to one or more third parties.
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The currencies that are eligible for inclusion in the Index, or Eligible Index Currencies, are the currencies of The Group of Ten, or G10, countries, which include the following currencies:
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Futures contracts referencing each of the Eligible Index Currencies (except USD) currently are traded on the Chicago Mercantile Exchange, or CME, although currency futures contracts on the Eligible Index Currencies also trade on other exchanges in the United States and the Fund may invest in such contracts.
At any time, the Index is comprised ofestablish long futures positions in the three Eligible Index Currencies associated with the highest interest rates and short futures positions in the three Eligible Index Currencies associated with the lowest interest rates. The Index’s six component currencies from time-to-time, comprised of the three long and three short futures positions, are referred to as the Index Currencies and are used to calculate the value of the Index. The composition of the Index may be adjusted in the event that the Index Sponsor is not able to calculate the closing prices of the Index Currencies.
The Index Sponsor calculates the Index on both an excess return basis and a total return basis. The excess return basis calculation reflects the change in market value of the applicable underlying currency futures only. The total return basis calculation reflects the sum of the change in market value of the applicable underlying currency futures plus the return
on 3-month U.S. Treasury bills. The Fund seeks to track changes, whether positive or negative, in the level of the Index calculated on an excess return basis, over time, plus the excess, if any, of the Fund’s Treasury Income and Money Market Income over expenses of the Fund. For the avoidance of doubt, the Fund invests in futures contracts in an attempt to track its Index. The Fund holds Treasury Securities and money market mutual funds for margin and/or cash management purposes only.
The Fund will make distributions at the discretion of the Managing Owner. To the extent that the Fund’s actual and projected Treasury Income and the Fund’s actual and projected Money Market Income exceeds the actual and projected fees and expenses of the Fund, the Managing Owner expects periodically to make distributions of the amount of such excess. The Fund currently does not expect to make distributions with respect to its capital gains. Depending on the Fund’s performance for the taxable year and your own tax situation for such year, your income tax liability for the taxable year for your allocable share of the Fund’s net ordinary income or loss and capital gain or loss may exceed any distributions you receive with respect to such year.
In order to determine which Eligible Index Currencies to include in the Index from time-to-time, the Index Sponsor will review the composition of the Index on a quarterly basis 5 business days prior to the IMM Date. “IMM Date” means the third Wednesday of March, June, September and December, a traditional settlement date in the International Money Market.
The Index Sponsor will review the three month Libor rate for each Eligible Index Currency other than NZD, SEK, NOK, CAD and AUD. The Index Sponsor will review the 3 month rate of the New Zealand Bank Bill for NZD. The Index Sponsor will review the three month Stibor rate and the three month Nibor rate of the SEK and NOK, respectively. The Index Sponsor will review the 3 month Canada Bankers Acceptance Rate for CAD. The Index Sponsor will review the Australian Bank Bill Short Term 3 Month Mid rate for AUD. The Libor, Stibor and Nibor rates for the Eligible Index Currencies, as applicable, mean the London, Stockholm and Norway interbank offered rates for overnight deposits, respectively, each of which is published by Reuters. The Eligible Index Currencies are then ranked according to yield. The three highest yielding and three lowest yielding are selected as Index
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Currencies for inclusion in calculating the Index. If two Index Currencies have the same yield, then the previous quarter’s ranking will be used.
The Index is re-weighted quarterly. Upon re-weighting, the high yielding Index Currencies are allocated a base weight of 33 1/3% and the low yielding Index Currencies are allocated a base weight of -33 1/3%. These new weights are applied during the Index re-weighting period, which takes place between the fourth and third Index Business Days prior to the applicable IMM Date, or Index Re-Weighting Period.
The CME traded futures contract of each applicable Index Currency that is closest to expiration is used in the Index calculation. The futures contracts on the Index Currencies are rolled during the Index Re-Weighting Period. The new futures contract on an Index Currency that has the next closest expiration date is selected. The calculation of the Index on an excess return basis is the weighted return on the change in price of the futures contracts on the Index Currencies.
A 3-month U.S. Treasury bill return is then calculated and included to calculate the total return index. Please refer to Exhibit B of the Trust Declaration for the mathematical formulae of the Index.
The Index has been calculated using historical data since March 12, 1993. The Index is composed of notional amounts of each Index Currency. The notional amounts of the Index Currencies included in the Index are based on the Index Closing Level as of the Index Re-Weighting Period. The Index Closing Level reflects an arithmetic weighted return of the change in the Index Currencies exchange rates against the USD since March 12, 1993. March 1993 was chosen as a starting period because it represents the earliest date on which reliable data for all the Eligible Index Currencies exists. On March 12, 1993, the closing Index level was USD 100. Between March 12, 1993 to August 31, 2016, the Index level as calculated on an excess return basis has ranged from as high as USD 315.27 (July 25, 2007) to as low as USD 94.03 (July 30, 1993). Past Index results are not necessarily indicative of future changes, positive or negative, in the Index.
To track the Index, the Fund generally will establish long futures positions in the three Eligible Index Currencies associated with the highest interest rates and short futures positions in the three Eligible Index Currencies associated with the lowest interest
rates and will adjust its holdings quarterly as the Index is adjusted. However, if the United States Dollar or USD,(“USD”) is among the Index Currencies from time-to-time,time to time, the Fund will not establish a long or short futures position (as the case may be) in USD, because USD is the Fund’s home currency and, as a consequence, the Fund never can enjoy profit or suffer loss from long or short futures positions in USD.
The use of long and short positions in the construction of the Index causes the Index to rise as a result of any upward price movement of Index Currencies expected to gain relative to the USD and to rise as a result of any downward price movement of Index Currencies expected to lose relative to the USD. The inclusion of both long and short positions is also expected to reduce the country specific foreign exchange risk of the Index (and, therefore, risk in connection with an investment in the Fund) relative to a directional (outright long or short) exposure to any or all of the Index Currencies.
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rebalancing, that Index Currencies expected to lose relative to the USD may rise and/or Index Currencies expected to gain relative to the USD may fall. In such cases, the Fund may experience losses in both its long and short positions at the same time. Such losses will be greater as a result of the Fund’s use of leverage, reflected in its long futures exposure to Index Currencies with a notional value of up to 100% of the Fund’s NAV and its short futures exposure to Index Currencies with a notional value of up to 100% of the Fund’s NAV. Under such circumstances, the Fund’s losses would be greater as a result of its leverage than would be the case were it to limit its overall exposure to Index Currencies with a notional value of 100% of the Fund’s NAV.
As a result of its use of leverage, the
Under the Trust Declaration of Additionally, the Fund Wilmington Trust Company,gains an exposure to Treasury Securities with a maximum remaining maturity of up to 12 months through its holdings of T-Bill ETFs (affiliated or otherwise). Such holdings of T-Bill ETFs will also be on deposit with the TrusteeCustodian (for margin and/or cash management purposes) and may be held by the Fund’s Commodity Broker as margin, to the extent permissible under CFTC rules.
Fund does not insulate Shareholders from certain risks, including price volatility.
Publication of Closing Levels and Adjustments
In order to calculate the indicative Index level, the Index Sponsor polls Reuters every 15 seconds to
determine the real time price of each underlying futures contract with respect to each Index Currency of the Index. The Index Sponsor then applies a set of rules to these values to create the indicative level of the Index. These rules are consistent with the rules which the Index Sponsor applies at the end of each trading day to calculate the closing level of the Index.
The IIV per Share ofTemporary Defensive Positions
The Index Sponsor calculates and publishes the closing level of the Index daily. over time,
Dollar Amount and Percentage of Expenses and Interest Income | ||
Expense1 | $ | % |
Management Fee2 | $0.1894 | 0.75% |
Offering Expense Reimbursement | $0.0000 | 0.00% |
Brokerage Commissions and Fees3 | $0.0087 | 0.03% |
Routine Operational, Administrative and Other Ordinary Expenses4 | $0.0000 | 0.00% |
Treasury Income, Money Market Income and T-Bill ETF Income5 | $0.0051 | 0.02% |
12-Month Breakeven6 | $0.1931 | 0.76% |
AllT-Bill ETFs, if any. Actual Treasury Income, Money Market Income and T-Bill ETF Income could be higher or lower than the levels shown.
The intra-day level ofShares. Brokerage commissions have not been included in the Index (symbol: DBCFHX) and the IIV per Share of the Fund (symbol: FBV) (each quoted in USD)Breakeven Table because they are published once every fifteen seconds throughout each trading day on the consolidated tape, Reuters and/or Bloomberg and on the Managing Owner’s website athttp://www.invescopowershares.com, or any successor thereto.
The current trading price per Share (symbol: DBV) (quoted in USD) is published continuously as trades occur throughout each trading day on the consolidated tape, Reuters and/or Bloomberg and on the Managing Owner’s website athttp://www.invescopowershares.com, or any successor thereto.
The most recent end-of-day Index closing level (symbol: DBCFHX) is published as of the close of the NYSE Arca each trading day on the consolidated tape, Reuters and/or Bloomberg and on the Managing Owner’s website athttp://www.invescopowershares.com, or any successor thereto.
The most recent end-of-day NAV of the Fund (symbol: FBV.NV) is published as of the close of business on Reuters and/or Bloomberg and on the
-39-
Managing Owner’s website athttp://www.invescopowershares.com, or any successor thereto. In addition, the most recent end-of-day NAV of the Fund (symbol: FBV.NV) is published the following morning on the consolidated tape.
All of the foregoing information with respect to the Index is also published athttps://index.db.com.
Any adjustments made to the Index will be published on bothhttps://index.db.com and athttp://www.invescopowershares.com, or any successor(s) thereto.
The final NAV ofborne by investors rather than the Fund and the final NAV per Share will be calculated as of the closing time of the NYSE Arca or the lastgenerally vary from investor to close of the exchanges on which its Fund’s futures contractsinvestor. Investors are traded, whichever is later, and posted in the same manner. Although a time gap may exist between the close of the NYSE Arca and the close of the CME, there is no effect on the NAV calculations as a result.
The Shares are intendedencouraged to provide investment results that generally correspond to the changes, positive and negative, in the levels of the Index over time. The value of the Shares is expected to fluctuate in relation to changes in the value of the Fund’s portfolio. The market price of the Shares may not be identical to the NAV per Share, but these two valuations are expected to be very close. See “The Risks You Face – (2) NAV May Not Always Correspond to Market Price and, as a Result, Baskets may be Created or Redeemed at a Value that Differs from the Market Price of the Shares.”
There can be no assurance that the Fund will achieve its investment objective or avoid substantial losses.
Change in the Methodology of the Index
The Index Sponsor will employ the methodology described above and its application of such methodology shall be conclusive and binding. While the Index Sponsor currently intends to employ the above described methodology to calculate the Index, no assurance can be given that fiscal, market, regulatory, juridical or financial circumstances (including, but not limited to, any changes to or any suspension or termination of or any other events affecting any Index Currency or a futures contract) will not arise that would, in the view of the Index Sponsor, necessitate a modification of or change to
such methodology and in such circumstances the Index Sponsor may make any such modification or change as it determines appropriate. The Index Sponsor may also make modifications toreview the terms of the Index in any manner that it may deem necessary or desirable, including (without limitation) to correct any manifest or proven error or to cure, correct or supplement any defective provisiontheir brokerage accounts for applicable charges.
Interruption of Index Calculation
Calculation of the Index may not be possible or feasible under certain events or circumstances, including, without limitation, a systems failure, natural orman-made disaster, act of God, armed conflict, act of terrorism, riot or labor disruption or any similar intervening circumstance, that is beyond the reasonable control of the Index Sponsor and that the Index Sponsor determines affects the Index or any Index Currency. Upon the occurrence of such force majeure events, the Index Sponsor may, in its discretion, elect one (or more) of the following options:
Additionally, calculation of the Index may also be disrupted by an event that would require the Index Sponsor to calculate the closing price in respect of the relevant IndexInvesco DB G10 Currency on an alternative basis were such event to occur or exist on a day that is a trading day for such Index Currency on the relevant exchange. If such an Index disruption event in relation to an Index Currency as described in the prior sentence occurs and continues for a period of five successive trading days for such Index Currency on the relevant exchange, the Index Sponsor will, in its discretion, either
-40-
Set out below are the closing levels based on historical data from March 12, 1993 to August 31, 2016.
The following Closing Levels table starts from March 12, 1993 and reflects both the high and low closing values, the annual Index changes and Index changes since inception of the Index. Since March 13, 2003, CME currency futures close prices were used in the Index calculation. The Index Sponsor has not independently verified the CME currency futures close prices obtained from Bloomberg. Since February 1, 2006, the Index Sponsor has obtained the CME currency futures close prices from Reuters. Prior to March 13, 2003, implied futures prices were calculated using the relevant currencies spot rates, money market rates and USD money market rates obtained from Reuters, Bloomberg and WM Company. Implied futures prices are an accurate proxy for the futures close prices due to the high liquidity in foreign exchange forward markets.
It is not necessary to have a USD futures contract because the forward rate of the USDvis-à-vis the USD will be equal. Whenever USD was used to calculate the value of the Index, the futures price of USD was assumed to be 100.
The Index Sponsor used 3-month money market rates as a proxy for 3-month Libor fixings with respect to the USD on and prior to June 10, 1998.
The Index Sponsor used 3-month money market rates as a proxy for 3-month Libor fixings with respect to the EUR, JPY, GBP, CHF, CAD and AUD on and prior to March 11, 1998.
The Index Sponsor used 3-month money market rates as a proxy for 3-month Libor fixings with respect to the NZD on and prior to September 10, 2003.
The Index Sponsor used 3-month money market rates as a proxy for 3-month Stibor fixings with respect to the SEK on and prior to December 9, 1998.
The Index Sponsor used 3-month money market rates as a proxy for 3-month Nibor fixings with respect to the NOK on and prior to December 9, 1998.
The Libor, Stibor and Nibor rates for the Eligible Index Currencies, as applicable, mean the London, Stockholm and Norway interbank offered rates for overnight deposits, respectively, each of which is published by Reuters on pages libor01 and libor02 with respect to Libor and pages SIDE and NIBR with respect to Stibor and Nibor.
The Index Sponsor considers the use of 3-month money market rates as a proxy for Libor, Stibor and Nibor to be appropriate because the difference between Libor, Stibor and Nibor rates and money market rates should not be material in light of the liquidity of the 3-month deposit markets.
The CME-traded futures contract of each applicable Index Currency that is closest to expiration is used in the Index calculation. The futures contracts on the Index Currencies are rolled during the Index Re-Weighting Period. The new futures contract on an Index Currency that has the next closest expiration date is selected. The calculation of the Index on an excess return basis is the weighted return on the change in price of the futures contracts on the Index Currencies.
The Index is calculated on both an excess return basis and a total return basis. The excess return index reflects the return of the applicable underlying currencies. The total return is the sum of the return of the applicable underlying currencies plus the return of 3-month U.S. Treasury bills. The following tables reflect both the excess return calculation and the total return calculation of the Index.
Cautionary Statement-Statistical Information
Various statistical information is presented on the following pages, relating to the Closing Levels of the Index, on an annual and cumulative basis, including certain comparisons of the Index to other currencies indices. In reviewing such information, prospective investors should consider that:
-41-
| ||||
|
For example, the “Worst Peak-to-Valley Drawdown” of the Index, represents the greatest percentage decline from any month-end Closing Level, without such Closing Level being equaled or exceeded as of a subsequent month-end, which occurred during the above-listed time period.
The “Worst Monthly Drawdown” of the Index occurred during the above-listed month and year.
Name of Pool | Invesco DB G10 Currency Harvest Fund |
Type of Pool |
Public, Exchange-Listed Commodity Pool |
Inception of Trading | September 2006 |
Aggregate Gross Capital Subscriptions as of May 20211 | $1,587,447,335 |
NAV as of May 31, 2021 | $27,782,452 |
NAV per Share as of May 31, 20212 | $25.26 |
Worst Monthly Drawdown3 | (5.18)% March 2020 |
Worst Peak-to-Valley Drawdown4 | (10.73)% February 2017 - March 2020 |
WHILE THE FUND’S OBJECTIVE
Monthly Rate of Return | 2021 (%) | 2020 (%) | 2019 (%) | 2018 (%) | 2017 (%) | 2016 (%) |
January | 1.00 | (1.60) | 3.78 | (1.40) | 2.29 | (0.60) |
February | 1.28 | (0.92) | 0.41 | 1.16 | 1.65 | (0.13) |
March | 2.56 | (5.18) | (0.08) | 0.47 | (2.40) | 1.43 |
April | 0.12 | 2.31 | 0.53 | 1.98 | (2.46) | 0.30 |
May | 0.00 | 2.00 | (1.95) | 1.32 | (1.58) | (0.51) |
June | 1.11 | 0.70 | (0.78) | 0.62 | 3.12 | |
July | (1.05) | 0.99 | 0.00 | 0.04 | 0.79 | |
August | 1.62 | (1.83) | (0.91) | (2.58) | 0.90 | |
September | (2.09) | 1.62 | (0.21) | 0.63 | 1.75 | |
October | (0.94) | (1.02) | 1.83 | (1.09) | 1.28 | |
November | 4.10 | 1.15 | 0.65 | (1.35) | 0.47 | |
December | (0.21) | 0.67 | (3.40) | 1.37 | (2.05) | |
Compound Rate of Return5 | 5.03% | (1.19)% | 4.95% | 0.61% | (4.91)% | 6.87% |
Fund (%) | Index (%) | Index TR7 (%) | U.S. Dollar Index8 (%) | |
1 Year | 7.58% | 8.36% | 8.45% | (8.66)% |
5 Year | 2.08% | 1.74% | 2.88% | (1.30)% |
10 Year | 0.47% | 0.71% | 1.31% | 1.87% |
NO REPRESENTATION IS BEING MADE THAT THE INDEX WILL OR IS LIKELY TO ACHIEVE ANNUAL OR CUMULATIVE CLOSING LEVELS CONSISTENT WITH OR SIMILAR TO THOSE SET FORTH HEREIN. SIMILARLY, NO REPRESENTATION IS BEING MADE THAT THE FUND WILL GENERATE PROFITS OR LOSSES SIMILAR TO THE FUND’S PAST PERFORMANCE OR THE HISTORICAL ANNUAL OR CUMULATIVE CHANGES IN INDEX CLOSING LEVELS. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICALFUTURE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY INVESTMENT METHODOLOGIES, WHETHER ACTIVE OR PASSIVE.
ONE OF THE LIMITATIONS OF HYPOTHETICAL INFORMATION IS THAT IT IS GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. TO THE EXTENT THAT INFORMATION PRESENTED HEREIN RELATES TO THE PERIOD MARCH 1993 THROUGH NOVEMBER 2005, THE INDEX CLOSING LEVELS REFLECT THE APPLICATION OF THE INDEX METHODOLOGY, AND SELECTION OF INDEX CURRENCIES, IN HINDSIGHT.
NO HYPOTHETICAL RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THERE ARE NUMEROUS FACTORS, INCLUDING THOSE DESCRIBED UNDER “THE RISKS YOU FACE” SET FORTH HEREIN, RELATED TO THE CURRENCIES MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF THE FUND’S EFFORTS TO TRACK THE INDEX OVER TIME WHICH
-42-
CANNOT BE, AND HAVE NOT BEEN, ACCOUNTED FOR IN THE PREPARATION OF THE INDEX INFORMATION SET FORTH ON THE FOLLOWING PAGES, ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL PERFORMANCE RESULTS FOR THE FUND. FURTHERMORE, THE INDEX INFORMATION DOES NOT INVOLVE FINANCIAL RISK OR ACCOUNT FOR THE IMPACT OF FEES AND COSTS ASSOCIATED WITH THE FUND.
THE MANAGING OWNER AND ITS TRADING PRINCIPALS HAVE LIMITED EXPERIENCE MANAGING THE DAY-TO-DAY OPERATIONS FOR THE FUND AND HAVE ONLY MANAGED AN EXCHANGE-TRADED FUND THAT RELATES TO A BROAD-BASED COMMODITY INDEX FOR A SHORT PERIOD. BECAUSE THERE ARE LIMITED PERFORMANCE RESULTS OF THE MANAGING OWNER THAT ARE COMPARABLE TO THE INDEX CLOSING LEVELS SET FORTH HEREIN, PROSPECTIVE INVESTORS SHOULD BE PARTICULARLY WARY OF PLACING UNDUE RELIANCE ON THE ANNUAL OR CUMULATIVE INDEX RESULTS. FOR THE AVOIDANCE OF DOUBT, NONE OF THE PERFORMANCE RELATED INFORMATION THAT IS COVERED HEREIN UP TO AND EXCLUDING THE CLOSING DATE CAN BE ATTRIBUTED TO THE MANAGING OWNER.
THE PREDECESSOR MANAGING OWNER, AN INDIRECT WHOLLY OWNED SUBSIDIARY OF DEUTSCHE BANK AG, COMMENCED OPERATIONS IN JANUARY 2006. AS THE PREDECESSOR MANAGING OWNER, THE PREDECESSOR MANAGING OWNER AND ITS TRADING PRINCIPALS MANAGED THE DAY-TO-DAY OPERATIONS FOR THE FUND FROM INCEPTION UP TO AND EXCLUDING THE CLOSING DATE. BECAUSE THERE ARE LIMITED TRADING RESULTS TO COMPARE TO THE INDEX CLOSING LEVELS SET FORTH HEREIN, PROSPECTIVE INVESTORS SHOULD BE PARTICULARLY WARY OF PLACING UNDUE RELIANCE ON THE ANNUAL OR CUMULATIVE INDEX RESULTS. IN RESPECT OF ANY PERIOD, FOR THE AVOIDANCE OF DOUBT, NONE OF THE PERFORMANCE RELATED INFORMATION THAT IS COVERED HEREIN ON AND AFTER THE CLOSING DATE CAN BE ATTRIBUTED TO THE PREDECESSOR MANAGING OWNER.
THE FUND’S PERFORMANCE INFORMATION FROM INCEPTION UP TO AND EXCLUDING THE CLOSING DATEFEBRUARY 23, 2015 IS A REFLECTION OF THE PERFORMANCE ASSOCIATED WITH THE FUND’S PREDECESSOR MANAGING OWNER. ALL THE MANAGING OWNER HAS SERVED AS MANAGING OWNER OF THE FUND SINCE THE CLOSING DATE, AND THE FUND’S PERFORMANCE INFORMATION SINCE THE CLOSING DATE IS A REFLECTION OFON AND AFTER FEBRUARY 23, 2015 REFLECTS THE PERFORMANCE ASSOCIATED WITH THE MANAGING OWNER. PAST PERFORMANCE OF THE FUND IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE.
[Remainder
-43-
DEUTSCHE BANK G10 CURRENCY FUTURE HARVEST INDEX® – EXCESS RETURN
CLOSING LEVELS TABLE
Closing Level | Index Changes | |||||||||||||||
High1 | Low2 | Annual3 | Since Inception | |||||||||||||
19934 | 105.60 | 94.03 | -0.19 | % | -0.19 | % | ||||||||||
1994 | 108.79 | 99.81 | 7.42 | % | 7.22 | % | ||||||||||
1995 | 110.52 | 94.16 | 2.66 | % | 10.07 | % | ||||||||||
1996 | 140.05 | 110.42 | 27.23 | % | 40.05 | % | ||||||||||
1997 | 146.72 | 137.83 | 2.58 | % | 43.67 | % | ||||||||||
1998 | 151.79 | 132.52 | -6.35 | % | 34.55 | % | ||||||||||
1999 | 151.12 | 134.71 | 9.81 | % | 47.76 | % | ||||||||||
2000 | 158.57 | 146.79 | 4.73 | % | 54.74 | % | ||||||||||
2001 | 171.15 | 154.68 | 10.61 | % | 71.15 | % | ||||||||||
2002 | 199.51 | 172.25 | 15.76 | % | 98.13 | % | ||||||||||
2003 | 234.45 | 199.00 | 18.33 | % | 134.45 | % | ||||||||||
2004 | 252.36 | 230.02 | 6.69 | % | 150.14 | % | ||||||||||
2005 | 286.06 | 248.34 | 10.66 | % | 176.81 | % | ||||||||||
2006 | 280.48 | 254.18 | 1.00 | % | 179.58 | % | ||||||||||
2007 | 315.27 | 276.77 | 5.15 | % | 193.98 | % | ||||||||||
2008 | 295.87 | 200.14 | -28.80 | % | 109.32 | % | ||||||||||
2009 | 260.64 | 196.13 | 21.91 | % | 155.18 | % | ||||||||||
2010 | 264.24 | 236.66 | 1.67 | % | 159.45 | % | ||||||||||
2011 | 274.83 | 241.88 | 1.18 | % | 162.52 | % | ||||||||||
2012 | 290.15 | 258.40 | 10.39 | % | 189.79 | % | ||||||||||
2013 | 310.79 | 276.57 | -1.98 | % | 184.05 | % | ||||||||||
2014 | 295.63 | 276.74 | 0.92 | % | 186.68 | % | ||||||||||
2015 | 289.15 | 250.27 | -7.53 | % | 165.08 | % | ||||||||||
20165 | 281.39 | 256.24 | 5.87 | % | 180.35 | % |
THE FUND WILL TRADE WITH A VIEW TO TRACKING THE
DEUTSCHE BANK G10 CURRENCY FUTURE HARVEST INDEX® – EXCESS RETURN OVER TIME.
NEITHER THE PAST PERFORMANCE OF THE FUND NOR THE PRIOR INDEX LEVELS AND CHANGES, POSITIVE AND
NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE FUND’S FUTURE PERFORMANCE.
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DEUTSCHE BANK G10 CURRENCY FUTURE HARVEST INDEX® – TOTAL RETURN
CLOSING LEVELS TABLE
Closing Level | Index Changes | |||||||||||||||
High1 | Low2 | Annual3 | Since Inception | |||||||||||||
19934 | 106.15 | 95.13 | 2.30 | % | 2.30 | % | ||||||||||
1994 | 116.32 | 102.32 | 12.15 | % | 14.73 | % | ||||||||||
1995 | 124.55 | 102.55 | 8.56 | % | 24.55 | % | ||||||||||
1996 | 166.84 | 125.01 | 33.95 | % | 66.84 | % | ||||||||||
1997 | 180.54 | 164.92 | 8.01 | % | 80.19 | % | ||||||||||
1998 | 195.70 | 172.90 | -1.68 | % | 77.17 | % | ||||||||||
1999 | 203.96 | 177.49 | 15.12 | % | 103.96 | % | ||||||||||
2000 | 227.93 | 202.75 | 11.11 | % | 126.61 | % | ||||||||||
2001 | 259.57 | 226.67 | 14.55 | % | 159.57 | % | ||||||||||
2002 | 307.46 | 261.27 | 17.68 | % | 205.47 | % | ||||||||||
2003 | 365.18 | 306.83 | 19.55 | % | 265.18 | % | ||||||||||
2004 | 398.22 | 359.55 | 8.18 | % | 295.05 | % | ||||||||||
2005 | 465.10 | 392.65 | 14.23 | % | 351.27 | % | ||||||||||
2006 | 479.65 | 421.90 | 5.96 | % | 378.18 | % | ||||||||||
2007 | 554.63 | 477.16 | 9.96 | % | 425.80 | % | ||||||||||
2008 | 531.26 | 362.87 | -27.80 | % | 279.60 | % | ||||||||||
2009 | 473.31 | 355.72 | 22.09 | % | 363.44 | % | ||||||||||
2010 | 480.08 | 430.07 | 1.81 | % | 371.83 | % | ||||||||||
2011 | 499.96 | 440.07 | 1.23 | % | 377.64 | % | ||||||||||
2012 | 528.33 | 470.29 | 10.48 | % | 427.70 | % | ||||||||||
2013 | 566.06 | 503.81 | -1.93 | % | 417.53 | % | ||||||||||
2014 | 538.72 | 504.24 | 0.95 | % | 422.47 | % | ||||||||||
2015 | 527.74 | 453.32 | -7.58 | % | 382.87 | % | ||||||||||
20165 | 513.81 | 467.26 | 6.06 | % | 412.13 | % |
THE FUND WILL NOT TRADE WITH A VIEW TO TRACKING THE
DEUTSCHE BANK G10 CURRENCY FUTURE HARVEST INDEX® – TOTAL RETURN OVER TIME.
NEITHER THE PAST PERFORMANCE OF THE FUND NOR THE PRIOR INDEX LEVELS AND CHANGES, POSITIVE AND
NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE FUND’S FUTURE PERFORMANCE.
See accompanying Notes
-45-
INDEX CURRENCY WEIGHTS TABLE
DEUTSCHE BANK G10 CURRENCY FUTURE HARVEST INDEX® – EXCESS RETURN AND THE DEUTSCHE BANK G10 CURRENCY FUTURE HARVEST
INDEX® – TOTAL RETURN
USD | EUR | JPY | CAD | CHF | GBP | AUD | NZD | NOK | SEK | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
High1 | Low2 | High | Low | High | Low | High | Low | High | Low | High | Low | High | Low | High | Low | High | Low | High | Low | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
19934 | -31.6 | % | -36.8 | % | 33.8 | % | 34.0 | % | -33.7 | % | -37.2 | % | 0.0 | % | -36.8 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | -31.1 | % | 0.0 | % | 0.0 | % | 0.0 | % | 33.9 | % | 34.1 | % | 33.9 | % | 32.3 | % | ||||||||||||||||||||||||||||||||||||||||
1994 | 0.0 | % | -33.3 | % | -33.0 | % | 32.5 | % | -33.1 | % | -32.5 | % | 0.0 | % | -33.4 | % | -33.1 | % | 0.0 | % | 0.0 | % | 0.0 | % | 33.2 | % | 0.0 | % | 33.3 | % | 33.6 | % | 0.0 | % | 0.0 | % | 33.4 | % | 33.2 | % | ||||||||||||||||||||||||||||||||||||||||
1995 | 0.0 | % | 0.0 | % | -33.7 | % | -35.7 | % | -33.1 | % | -39.1 | % | 0.0 | % | 35.9 | % | -33.7 | % | -36.8 | % | 0.0 | % | 0.0 | % | 32.4 | % | 0.0 | % | 33.0 | % | 36.3 | % | 0.0 | % | 0.0 | % | 36.2 | % | 34.6 | % | ||||||||||||||||||||||||||||||||||||||||
1996 | 0.0 | % | 0.0 | % | 0.0 | % | -33.5 | % | -31.7 | % | -32.5 | % | -32.1 | % | 0.0 | % | -31.5 | % | -33.3 | % | 33.3 | % | 0.0 | % | 32.4 | % | 33.3 | % | 32.6 | % | 33.3 | % | 0.0 | % | 0.0 | % | 0.0 | % | 33.2 | % | ||||||||||||||||||||||||||||||||||||||||
1997 | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | -31.5 | % | -30.6 | % | -31.7 | % | -33.1 | % | -32.2 | % | -30.4 | % | 33.2 | % | 31.7 | % | 31.9 | % | 31.5 | % | 32.6 | % | 32.3 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||
1998 | 0.0 | % | 0.0 | % | -32.3 | % | -36.7 | % | -32.9 | % | -40.1 | % | 0.0 | % | 0.0 | % | -31.8 | % | -37.5 | % | 32.3 | % | 36.0 | % | 34.2 | % | 0.0 | % | 34.2 | % | 36.5 | % | 0.0 | % | 35.7 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||
1999 | 32.6 | % | 33.0 | % | -31.6 | % | -32.2 | % | -31.3 | % | -34.4 | % | 0.0 | % | 0.0 | % | -31.4 | % | -32.0 | % | 31.6 | % | 32.5 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 32.1 | % | 34.1 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||
2000 | 31.9 | % | 33.3 | % | -29.4 | % | -33.7 | % | -30.8 | % | -32.9 | % | 0.0 | % | 0.0 | % | -30.5 | % | -33.5 | % | 31.6 | % | 33.5 | % | 0.0 | % | 0.0 | % | 31.6 | % | 0.0 | % | 0.0 | % | 33.5 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||
2001 | -33.1 | % | 33.1 | % | 0.0 | % | 0.0 | % | -32.1 | % | -32.4 | % | 0.0 | % | 0.0 | % | -32.5 | % | -34.5 | % | 0.0 | % | 0.0 | % | 32.7 | % | 0.0 | % | �� | 33.0 | % | 34.1 | % | 32.8 | % | 34.1 | % | 0.0 | % | -33.7 | % | |||||||||||||||||||||||||||||||||||||||
2002 | -33.2 | % | -32.9 | % | 0.0 | % | 0.0 | % | -33.1 | % | -31.6 | % | 0.0 | % | 0.0 | % | -33.5 | % | -32.7 | % | 0.0 | % | 0.0 | % | 33.3 | % | 32.6 | % | 33.5 | % | 33.1 | % | 33.5 | % | 33.0 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||
2003 | -33.0 | % | -33.2 | % | 0.0 | % | 0.0 | % | -33.0 | % | -33.4 | % | 0.0 | % | 0.0 | % | -33.5 | % | -34.2 | % | 33.7 | % | 0.0 | % | 33.4 | % | 33.2 | % | 33.4 | % | 33.9 | % | 0.0 | % | 34.1 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||
2004 | 0.0 | % | -34.6 | % | 0.0 | % | 0.0 | % | -33.2 | % | -33.5 | % | 0.0 | % | 0.0 | % | -33.0 | % | -34.7 | % | 33.4 | % | 34.1 | % | 33.6 | % | 32.6 | % | 33.4 | % | 32.3 | % | -33.1 | % | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||
2005 | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | -29.1 | % | -34.4 | % | 0.0 | % | 0.0 | % | -30.7 | % | -32.8 | % | 30.7 | % | 32.7 | % | 31.2 | % | 33.9 | % | 32.7 | % | 33.2 | % | 0.0 | % | -33.2 | % | -30.2 | % | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||
2006 | 32.9 | % | 36.0 | % | 0.0 | % | 0.0 | % | -32.6 | % | -38.1 | % | 0.0 | % | 0.0 | % | -32.9 | % | -39.1 | % | 0.0 | % | 0.0 | % | 33.2 | % | 37.1 | % | 33.7 | % | 35.1 | % | 0.0 | % | 0.0 | % | -33.1 | % | -38.8 | % | ||||||||||||||||||||||||||||||||||||||||
2007 | 0.0 | % | 33.3 | % | 0.0 | % | 0.0 | % | -33.2 | % | -33.7 | % | 0.0 | % | 0.0 | % | -33.2 | % | -33.1 | % | 33.8 | % | 0.0 | % | 34.2 | % | 32.9 | % | 34.8 | % | 32.8 | % | 0.0 | % | 0.0 | % | -34.1 | % | -32.3 | % | ||||||||||||||||||||||||||||||||||||||||
2008 | 0.0 | % | -44.2 | % | 0.0 | % | 0.0 | % | -34.8 | % | -50.7 | % | 0.0 | % | 0.0 | % | -35.2 | % | -43.3 | % | 32.7 | % | 0.0 | % | 36.1 | % | 32.9 | % | 35.6 | % | 36.1 | % | 0.0 | % | 36.6 | % | -34.6 | % | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||
2009 | -31.2 | % | -35.2 | % | 0.0 | % | 0.0 | % | -31.0 | % | -35.8 | % | 0.0 | % | 0.0 | % | -32.2 | % | -35.6 | % | 0.0 | % | 0.0 | % | 33.7 | % | 33.7 | % | 33.7 | % | 32.7 | % | 33.4 | % | 34.5 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||
2010 | -32.1 | % | -34.8 | % | 0.0 | % | 0.0 | % | -30.7 | % | -36.5 | % | 0.0 | % | 0.0 | % | -31.4 | % | 37.7 | % | 0.0 | % | 0.0 | % | 32.7 | % | 34.6 | % | 33.6 | % | 34.9 | % | 31.6 | % | 35.0 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||
2011 | -31.5 | % | -36.7 | % | 0.0 | % | 0.0 | % | -31.8 | % | -38.3 | % | 0.0 | % | 0.0 | % | -33.9 | % | -43.2 | % | 0.0 | % | 0.0 | % | 34.3 | % | 35.3 | % | 34.5 | % | 36.3 | % | 33.9 | % | 36.5 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||
2012 | 0.0 | % | -36.2 | % | -32.1 | % | 0.0 | % | 30.2 | % | 38.6 | % | 0.0 | % | 0.0 | % | -32.2 | % | -34.2 | % | 0.0 | % | 0.0 | % | 32.4 | % | 33.4 | % | 32.9 | % | 33.2 | % | 32.7 | % | 33.8 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||
2013 | 0.0 | % | 0.0 | % | -32.3 | % | -34.7 | % | -30.8 | % | -33.6 | % | 0.0 | % | 0.0 | % | -32.5 | % | -34.8 | % | 0.0 | % | 0.0 | % | 32.7 | % | 32.6 | % | 33.7 | % | 33.7 | % | 32.6 | % | 33.0 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||
2014 | 0.0 | % | 0.0 | % | 0.0 | % | -33.4 | % | -33.3 | % | -34.6 | % | 0.0 | % | 0.0 | % | -33.3 | % | -33.4 | % | 0.0 | % | 0.0 | % | 33.3 | % | 33.2 | % | 33.3 | % | 33.3 | % | 33.3 | % | 33.4 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||
2015 | 0.0 | % | 0.0 | % | -34.2 | % | -36.8 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | -34.4 | % | -35.5 | % | 0.0 | % | 0.0 | % | 34.4 | % | 33.3 | % | 34.5 | % | 33.4 | % | 35.1 | % | 33.8 | % | -33.3 | % | -35.4 | % | ||||||||||||||||||||||||||||||||||||||||
20165 | 0.0 | % | 0.0 | % | -31.4 | % | -33.7 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | -31.2 | % | -33.3 | % | 0.0 | % | 0.0 | % | 33.2 | % | 32.5 | % | 33.2 | % | 32.8 | % | 31.3 | % | 33.3 | % | -31.1 | % | -33.6 | % |
THE FUND WILL TRADE WITH A VIEW TO TRACKING THE
DEUTSCHE BANK G10 CURRENCY FUTURE HARVEST INDEX® – EXCESS RETURN (AND NOT THE DEUTSCHE BANK G10 CURRENCY FUTURE HARVEST INDEX® – TOTAL RETURN) OVER TIME.
NEITHER THE PAST PERFORMANCE OF THE FUND NOR THE PRIOR INDEX LEVELS AND CHANGES, POSITIVE AND NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE FUND’S FUTURE PERFORMANCE.
See accompanying Notesyear to date (if applicable). “Drawdown” as used in this section of the Prospectus means losses experienced by the Fund over the specified period and Legends.
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All Statistics basedis calculated on data from March 12, 1993 to August 31, 2016.
VARIOUS STATISTICAL MEASURES* | INDEX ER6,7 | INDEX TR6,7 | DXY6,7 | |||||||||
Annualized Changes to Index Level8 | 4.5 | % | 7.2 | % | 0.1 | % | ||||||
Average rolling 3-month daily volatility9 | 8.8 | % | 8.8 | % | 7.8 | % | ||||||
Sharpe Ratio10 | 0.51 | 0.52 | -0.33 | |||||||||
% of months with positive change | 63 | % | 66 | % | 48 | % | ||||||
Average monthly positive return change | 1.9 | % | 2.0 | % | 1.9 | % | ||||||
Average monthly negative return change | -2.1 | % | -2.1 | % | -1.7 | % | ||||||
ANNUALIZED INDEX LEVELS | INDEX ER6,7 | INDEX TR6,7 | DXY6,7 | |||||||||
1 year | 10.6 | % | 10.8 | % | 0.2 | % | ||||||
3 year | 0.4 | % | 0.5 | % | 5.4 | % | ||||||
5 year | 1.0 | % | 1.1 | % | 5.3 | % | ||||||
7 year | 2.2 | % | 2.2 | % | 3.0 | % | ||||||
10 year | 0.4 | % | 1.2 | % | 1.2 | % | ||||||
15 year | 3.5 | % | 4.8 | % | -1.1 | % |
NEITHER THE PAST PERFORMANCE OF THE FUND NOR THE PRIOR INDEX LEVELS AND CHANGES, POSITIVE AND NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE FUND’S FUTURE PERFORMANCE.
WHILE THE FUND’S OBJECTIVE IS NOT TO GENERATE PROFIT THROUGH ACTIVE PORTFOLIO MANAGEMENT, BUT IS TO TRACK THE INDEX, BECAUSE THE INDEX WAS ESTABLISHED IN DECEMBER 2005, CERTAIN INFORMATION RELATING TO THE INDEX CLOSING LEVELS MAY BE CONSIDERED TO BE “HYPOTHETICAL.” HYPOTHETICAL INFORMATION MAY HAVE CERTAIN INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW.
NO REPRESENTATION IS BEING MADE THAT THE INDEX WILL OR IS LIKELY TO ACHIEVE ANNUAL OR CUMULATIVE CLOSING LEVELS CONSISTENT WITH OR SIMILAR TO THOSE SET FORTH HEREIN. SIMILARLY, NO REPRESENTATION IS BEING MADE THAT THE FUND WILL GENERATE PROFITS OR LOSSES SIMILAR TO THE FUND’S PAST PERFORMANCE OR THE HISTORICAL ANNUAL OR CUMULATIVE CHANGES IN INDEX CLOSING LEVELS. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY INVESTMENT METHODOLOGIES, WHETHER ACTIVE OR PASSIVE.
ONE OF THE LIMITATIONS OF HYPOTHETICAL INFORMATION IS THAT IT IS GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. TO THE EXTENT THAT INFORMATION PRESENTED HEREIN RELATES TO THE PERIOD MARCH 1993 THROUGH NOVEMBER 2005, THE INDEX CLOSING LEVELS REFLECT THE APPLICATION OF THE INDEX METHODOLOGY, AND SELECTION OF INDEX CURRENCIES, IN HINDSIGHT.
NO HYPOTHETICAL RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THERE ARE NUMEROUS FACTORS, INCLUDING THOSE DESCRIBED UNDER “THE RISKS YOU FACE” SET FORTH HEREIN, RELATED TO THE CURRENCIES MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF THE FUND’S EFFORTS TO TRACK THE INDEX OVER TIME WHICH CANNOT BE, AND HAVE NOT BEEN, ACCOUNTED FOR IN THE PREPARATION OF THE INDEX INFORMATION SET FORTH ON THE FOLLOWING PAGES, ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL PERFORMANCE RESULTS FOR THE FUND. FURTHERMORE, THE INDEX INFORMATION DOES NOT INVOLVE FINANCIAL RISK OR ACCOUNT FOR THE IMPACT OF FEES AND COSTS ASSOCIATED WITH THE FUND.
THE MANAGING OWNER COMMENCED OPERATIONS IN JANUARY 2006. AS MANAGING OWNER, THE MANAGING OWNER AND ITS TRADING PRINCIPALS HAVE BEEN MANAGING THE DAY-TO-DAY OPERATIONS FOR THE FUND AND RELATED PRODUCTS AND MANAGING FUTURES TRADING ACCOUNTS. BECAUSE THERE ARE LIMITED ACTUAL TRADING RESULTS TO COMPARE TO THE INDEX CLOSING LEVELS SET FORTH HEREIN, PROSPECTIVE INVESTORS SHOULD BE PARTICULARLY WARY OF PLACING UNDUE RELIANCE ON THE ANNUAL OR CUMULATIVE INDEX RESULTS. FOR THE AVOIDANCE OF DOUBT, NONE OF THE PERFORMANCE RELATED INFORMATION THAT IS COVERED HEREIN UP TO AND EXCLUDING THE CLOSING DATE CAN BE ATTRIBUTED TO THE MANAGING OWNER.
THE PREDECESSOR MANAGING OWNER, AN INDIRECT WHOLLY OWNED SUBSIDIARY OF DEUTSCHE BANK AG, COMMENCED OPERATIONS IN JANUARY 2006. AS THE PREDECESSOR MANAGING OWNER, THE PREDECESSOR MANAGING OWNER AND ITS TRADING PRINCIPALS MANAGED THE DAY-TO-DAY OPERATIONS FOR THE FUND FROM INCEPTION UP TO AND EXCLUDING THE CLOSING DATE. BECAUSE THERE ARE LIMITED TRADING RESULTS TO COMPARE TO THE INDEX CLOSING LEVELS SET FORTH HEREIN, PROSPECTIVE INVESTORS SHOULD BE PARTICULARLY WARY OF PLACING UNDUE RELIANCE ON THE ANNUAL OR CUMULATIVE INDEX RESULTS. IN RESPECT OF ANY PERIOD, FOR THE AVOIDANCE OF DOUBT, NONE OF THE PERFORMANCE RELATED INFORMATION THAT IS COVERED HEREIN ON AND AFTER THE CLOSING DATE CAN BE ATTRIBUTED TO THE PREDECESSOR MANAGING OWNER.
THE FUND’S PERFORMANCE INFORMATION FROM INCEPTION UP TO AND EXCLUDING THE CLOSING DATE IS A REFLECTION OF THE PERFORMANCE ASSOCIATED WITH THE PREDECESSOR MANAGING OWNER. THE MANAGING OWNER HAS SERVED AS MANAGING OWNER OF THE FUND SINCE THE CLOSING DATE, AND THE FUND’S PERFORMANCE INFORMATION SINCE THE CLOSING DATE IS A REFLECTION OF THE PERFORMANCE ASSOCIATED WITH THE MANAGING OWNER. PAST PERFORMANCE OF THE FUND IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE.
See accompanying Notesa rate of return basis, i.e., dividing net performance by beginning equity. “Drawdown” is measured on the basis of monthly returns only, and Legends.
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COMPARISON OF THE DEUTSCHE BANK G10 CURRENCY FUTURE HARVEST INDEX® – TOTAL RETURN WITH U.S. DOLLAR INDEX®
(March 12, 1993 – August 31, 2016)*
NEITHER THE PAST PERFORMANCE OF THE FUND NOR THE PRIOR INDEX LEVELS AND CHANGES, POSITIVE AND NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE FUND’S FUTURE PERFORMANCE.
The indices dodoes not reflect any fees or expenses and do not reflect actual trading.
WHILE THE FUND’S OBJECTIVE IS NOT TO GENERATE PROFIT THROUGH ACTIVE PORTFOLIO MANAGEMENT, BUT IS TO TRACK THE INDEX, BECAUSE THE INDEX WAS ESTABLISHED IN DECEMBER 2005, CERTAIN INFORMATION RELATING TO THE INDEX CLOSING LEVELS MAY BE CONSIDERED TO BE “HYPOTHETICAL.” HYPOTHETICAL INFORMATION MAY HAVE CERTAIN INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW.
NO REPRESENTATION IS BEING MADE THAT THE INDEX WILL OR IS LIKELY TO ACHIEVE ANNUAL OR CUMULATIVE CLOSING LEVELS CONSISTENT WITH OR SIMILAR TO THOSE SET FORTH HEREIN. SIMILARLY, NO REPRESENTATION IS BEING MADE THAT THE FUND WILL GENERATE PROFITS OR LOSSES SIMILAR TO THE FUND’S PAST PERFORMANCE OR THE HISTORICAL ANNUAL OR CUMULATIVE CHANGES IN INDEX CLOSING LEVELS. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY INVESTMENT METHODOLOGIES, WHETHER ACTIVE OR PASSIVE.
ONE OF THE LIMITATIONS OF HYPOTHETICAL INFORMATION IS THAT IT IS GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. TO THE EXTENT THAT INFORMATION PRESENTED HEREIN RELATES TO THE PERIOD MARCH 1993 THROUGH NOVEMBER 2005, THE INDEX CLOSING LEVELS REFLECT THE APPLICATION OF THE INDEX METHODOLOGY, AND SELECTION OF INDEX CURRENCIES, IN HINDSIGHT.
NO HYPOTHETICAL RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THERE ARE NUMEROUS FACTORS, INCLUDING THOSE DESCRIBED UNDER “THE RISKS YOU FACE” SET FORTH HEREIN, RELATED TO THE CURRENCIES MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF THE FUND’S EFFORTS TO TRACK THE INDEX OVER TIME WHICH CANNOT BE, AND HAVE NOT BEEN, ACCOUNTED FOR IN THE PREPARATION OF THE INDEX INFORMATION SET FORTH ON THE FOLLOWING PAGES, ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL PERFORMANCE RESULTS FOR THE FUND. FURTHERMORE, THE INDEX INFORMATION DOES NOT INVOLVE FINANCIAL RISK OR ACCOUNT FOR THE IMPACT OF FEES AND COSTS ASSOCIATED WITH THE FUND.
THE MANAGING OWNER COMMENCED OPERATIONS IN JANUARY 2006. AS MANAGING OWNER, THE MANAGING OWNER AND ITS TRADING PRINCIPALS HAVE BEEN MANAGING THE DAY-TO-DAY OPERATIONS FOR THE FUND AND RELATED PRODUCTS AND MANAGING FUTURES TRADING ACCOUNTS. BECAUSE THERE ARE LIMITED ACTUAL TRADING RESULTS TO COMPARE TO THE INDEX CLOSING LEVELS SET FORTH HEREIN, PROSPECTIVE INVESTORS SHOULD BE PARTICULARLY WARY OF PLACING UNDUE RELIANCE ON THE ANNUAL OR CUMULATIVE INDEX RESULTS. FOR THE AVOIDANCE OF DOUBT, NONE OF THE PERFORMANCE RELATED INFORMATION THAT IS COVERED HEREIN UP TO AND EXCLUDING THE CLOSING DATE CAN BE ATTRIBUTED TO THE MANAGING OWNER.
THE PREDECESSOR MANAGING OWNER, AN INDIRECT WHOLLY OWNED SUBSIDIARY OF DEUTSCHE BANK AG, COMMENCED OPERATIONS IN JANUARY 2006. AS THE PREDECESSOR MANAGING OWNER, THE PREDECESSOR MANAGING OWNER AND ITS TRADING PRINCIPALS MANAGED THE DAY-TO-DAY OPERATIONS FOR THE FUND FROM INCEPTION UP TO AND
-48-
EXCLUDING THE CLOSING DATE. BECAUSE THERE ARE LIMITED TRADING RESULTS TO COMPARE TO THE INDEX CLOSING LEVELS SET FORTH HEREIN, PROSPECTIVE INVESTORS SHOULD BE PARTICULARLY WARY OF PLACING UNDUE RELIANCE ON THE ANNUAL OR CUMULATIVE INDEX RESULTS. IN RESPECT OF ANY PERIOD, FOR THE AVOIDANCE OF DOUBT, NONE OF THE PERFORMANCE RELATED INFORMATION THAT IS COVERED HEREIN ON AND AFTER THE CLOSING DATE CAN BE ATTRIBUTED TO THE PREDECESSOR MANAGING OWNER.
THE FUND’S PERFORMANCE INFORMATION FROM INCEPTION UP TO AND EXCLUDING THE CLOSING DATE IS A REFLECTION OF THE PERFORMANCE ASSOCIATED WITH THE PREDECESSOR MANAGING OWNER. THE MANAGING OWNER HAS SERVED AS MANAGING OWNER OF THE FUND SINCE THE CLOSING DATE, AND THE FUND’S PERFORMANCE INFORMATION SINCE THE CLOSING DATE IS A REFLECTION OF THE PERFORMANCE ASSOCIATED WITH THE MANAGING OWNER. PAST PERFORMANCE OF THE FUND IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE.
See accompanying Notes and Legends.
-49-
RESULTS OF DEUTSCHE BANK G10 CURRENCY FUTURE HARVEST INDEX® – TOTAL RETURN
(March 12, 1993 – August 31, 2016)*
NEITHER THE PAST PERFORMANCE OF THE FUND NOR THE PRIOR INDEX LEVELS AND CHANGES, POSITIVE AND NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE FUND’S FUTURE PERFORMANCE.
The indices do not reflect any fees or expenses and do not reflect actual trading.
WHILE THE FUND’S OBJECTIVE IS NOT TO GENERATE PROFIT THROUGH ACTIVE PORTFOLIO MANAGEMENT, BUT IS TO TRACK THE INDEX, BECAUSE THE INDEX WAS ESTABLISHED IN DECEMBER 2005, CERTAIN INFORMATION RELATING TO THE INDEX CLOSING LEVELS MAY BE CONSIDERED TO BE “HYPOTHETICAL.” HYPOTHETICAL INFORMATION MAY HAVE CERTAIN INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW.
NO REPRESENTATION IS BEING MADE THAT THE INDEX WILL OR IS LIKELY TO ACHIEVE ANNUAL OR CUMULATIVE CLOSING LEVELS CONSISTENT WITH OR SIMILAR TO THOSE SET FORTH HEREIN. SIMILARLY, NO REPRESENTATION IS BEING MADE THAT THE FUND WILL GENERATE PROFITS OR LOSSES SIMILAR TO THE FUND’S PAST PERFORMANCE OR THE HISTORICAL ANNUAL OR CUMULATIVE CHANGES IN INDEX CLOSING LEVELS. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY INVESTMENT METHODOLOGIES, WHETHER ACTIVE OR PASSIVE.
ONE OF THE LIMITATIONS OF HYPOTHETICAL INFORMATION IS THAT IT IS GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. TO THE EXTENT THAT INFORMATION PRESENTED HEREIN RELATES TO THE PERIOD MARCH 1993 THROUGH NOVEMBER 2005, THE INDEX CLOSING LEVELS REFLECT THE APPLICATION OF THE INDEX METHODOLOGY, AND SELECTION OF INDEX CURRENCIES, IN HINDSIGHT.
NO HYPOTHETICAL RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THERE ARE NUMEROUS FACTORS, INCLUDING THOSE DESCRIBED UNDER “THE RISKS YOU FACE” SET FORTH HEREIN, RELATED TO THE CURRENCIES MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF THE FUND’S EFFORTS TO TRACK THE INDEX OVER TIME WHICH CANNOT BE, AND HAVE NOT BEEN, ACCOUNTED FOR IN THE PREPARATION OF THE INDEX INFORMATION SET FORTH ON THE FOLLOWING PAGES, ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL PERFORMANCE RESULTS FOR THE FUND. FURTHERMORE, THE INDEX INFORMATION DOES NOT INVOLVE FINANCIAL RISK OR ACCOUNT FOR THE IMPACT OF FEES AND COSTS ASSOCIATED WITH THE FUND.
THE MANAGING OWNER COMMENCED OPERATIONS IN JANUARY 2006. AS MANAGING OWNER, THE MANAGING OWNER AND ITS TRADING PRINCIPALS HAVE BEEN MANAGING THE DAY-TO-DAY OPERATIONS FOR THE FUND AND RELATED PRODUCTS AND MANAGING FUTURES TRADING ACCOUNTS. BECAUSE THERE ARE LIMITED ACTUAL TRADING RESULTS TO COMPARE TO THE INDEX CLOSING LEVELS SET FORTH HEREIN, PROSPECTIVE INVESTORS SHOULD BE PARTICULARLY WARY OF PLACING UNDUE RELIANCE ON THE ANNUAL OR CUMULATIVE INDEX RESULTS. FOR THE AVOIDANCE OF DOUBT, NONE OF THE PERFORMANCE RELATED INFORMATION THAT IS COVERED HEREIN UP TO AND EXCLUDING THE CLOSING DATE CAN BE ATTRIBUTED TO THE MANAGING OWNER.
-50-
THE PREDECESSOR MANAGING OWNER, AN INDIRECT WHOLLY OWNED SUBSIDIARY OF DEUTSCHE BANK AG, COMMENCED OPERATIONS IN JANUARY 2006. AS THE PREDECESSOR MANAGING OWNER, THE PREDECESSOR MANAGING OWNER AND ITS TRADING PRINCIPALS MANAGED THE DAY-TO-DAY OPERATIONS FOR THE FUND FROM INCEPTION UP TO AND EXCLUDING THE CLOSING DATE. BECAUSE THERE ARE LIMITED TRADING RESULTS TO COMPARE TO THE INDEX CLOSING LEVELS SET FORTH HEREIN, PROSPECTIVE INVESTORS SHOULD BE PARTICULARLY WARY OF PLACING UNDUE RELIANCE ON THE ANNUAL OR CUMULATIVE INDEX RESULTS. IN RESPECT OF ANY PERIOD, FOR THE AVOIDANCE OF DOUBT, NONE OF THE PERFORMANCE RELATED INFORMATION THAT IS COVERED HEREIN ON AND AFTER THE CLOSING DATE CAN BE ATTRIBUTED TO THE PREDECESSOR MANAGING OWNER.
THE FUND’S PERFORMANCE INFORMATION FROM INCEPTION UP TO AND EXCLUDING THE CLOSING DATE IS A REFLECTION OF THE PERFORMANCE ASSOCIATED WITH THE PREDECESSOR MANAGING OWNER. THE MANAGING OWNER HAS SERVED AS MANAGING OWNER OF THE FUND SINCE THE CLOSING DATE, AND THE FUND’S PERFORMANCE INFORMATION SINCE THE CLOSING DATE IS A REFLECTION OF THE PERFORMANCE ASSOCIATED WITH THE MANAGING OWNER. PAST PERFORMANCE OF THE FUND IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE.
See accompanying Notes and Legends.
-51-
NOTES AND LEGENDS:
1. “High” reflectsintra-month figures. “Month” is the highest closing levelmonth of the IndexWorst Monthly Drawdown.
2. “Low” reflectsfor a period beyond the lowest closing levelmost recent five calendar years if the starting date of the Index duringpeak value extends beyond this period). This need not be a continuous decline, but can be a series of positive and negative returns where the applicable year.
3. “Annual Index Changes” reflectnegative returns are larger than the change topositive returns. “Worst Peak-to-Valley Drawdown” represents the Index level on an annual basisgreatest percentage decline from any month-end NAV per Share that occurs without such month-end NAV per Share being equaled or exceeded as of December 31a subsequent month-end. For example, if the NAV per Share of the Fund declined by $1 in each applicable year.
4. Closing levelsof January and February, increased by $1 in March and declined again by $2 in April, a “peak-to-valley drawdown” analysis conducted as of inception onthe end of April would consider that “drawdown” to be still continuing and to be $3 in amount, whereas if the NAV per Share had increased by $2 in March, 12, 1993.
5. Closing levelsthe January-February drawdown would have ended as of August 31, 2016.
6. “INDEX-TR”the end of February at the $2 level.
7. If the Fund’s Treasury Income and Money Market Income were to exceed the Fund’s fees and expenses, the total return on an investment in the Fund is expected to outperform the Index and the Managing Owner expects to periodically to make distributions of the amount of such excess. If the Fund’s Treasury Income and Money Market Income do not exceed the Fund’s fees and expenses, the total return on an investment in the Fund is expected to underperform the Index. The market price of the Shares is expected to track the Index closely. The total return on an investment in the Fund over any period is the sum of the capital appreciation or depreciation of the Shares over the period, plus the amount of Treasury Income and Money Market Income and any distributions during the period. For the avoidance of doubt, the Fund invests in futures contracts in an attempt to track its Index. The Fund holds Treasury Securities and money market mutual funds for margin and/or cash management purposes only.
8. “Annualized Changes to Index Level” reflects the change to the level of the applicable index on an annual basis as of December 31 of each applicable year.
9. “Average rolling 3-month daily volatility.” The daily volatility reflects the relative rate at which the price of the applicable index moves up and down, which is found by calculating the annualized standard deviation of the daily change in price. In turn, an average of this value is calculated on a 3-month rolling basis.
10. “Sharpe Ratio” compares the annualized rate of return minus the annualized risk-free rate of return to the annualized variability — often referred to as the “standard deviation” — of the monthly rates of return. A Sharpe Ratio of 1:1 or higher indicates that, according to the measures used in calculating the ratio, the rate of return achieved by a particular strategy has equaled or exceeded the risks assumed by such strategy. The risk-free rate of return that was used in these calculations was assumed to be 2.62%
* For the period from March 12, 1993 to August 31, 2016.
WHILE THE FUND’S OBJECTIVE IS NOT TO GENERATE PROFIT THROUGH ACTIVE PORTFOLIO MANAGEMENT, BUT IS TO TRACK THE INDEX, BECAUSE THE INDEX WAS ESTABLISHED IN DECEMBER 2005, CERTAIN INFORMATION RELATING TO THE INDEX CLOSING LEVELS MAY BE CONSIDERED TO BE “HYPOTHETICAL.” HYPOTHETICAL INFORMATION MAY HAVE CERTAIN INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW.
NO REPRESENTATION IS BEING MADE THAT THE INDEX WILL OR IS LIKELY TO ACHIEVE ANNUAL OR CUMULATIVE CLOSING LEVELS CONSISTENT WITH OR SIMILAR TO THOSE SET FORTH HEREIN. SIMILARLY, NO REPRESENTATION IS BEING MADE THAT THE FUND WILL GENERATE PROFITS OR LOSSES SIMILAR TO THE FUND’S PAST PERFORMANCE OR THE HISTORICAL ANNUAL OR CUMULATIVE CHANGES IN INDEX CLOSING LEVELS. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY INVESTMENT METHODOLOGIES, WHETHER ACTIVE OR PASSIVE.
ONE OF THE LIMITATIONS OF HYPOTHETICAL INFORMATION IS THAT IT IS GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. TO THE EXTENT THAT INFORMATION PRESENTED HEREIN RELATES TO THE PERIOD MARCH 1993 THROUGH NOVEMBER 2005, THE INDEX CLOSING LEVELS REFLECT THE APPLICATION OF THE INDEX METHODOLOGY, AND SELECTION OF INDEX CURRENCIES, IN HINDSIGHT.
NO HYPOTHETICAL RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THERE ARE NUMEROUS FACTORS, INCLUDING THOSE DESCRIBED UNDER “THE RISKS YOU FACE” SET FORTH HEREIN, RELATED TO THE CURRENCIES MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF THE FUND’S EFFORTS TO TRACK THE INDEX OVER TIME WHICH CANNOT BE, AND HAVE NOT BEEN, ACCOUNTED FOR IN THE PREPARATION OF THE INDEX INFORMATION SET FORTH ON THE FOLLOWING PAGES, ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL PERFORMANCE RESULTS FOR THE FUND. FURTHERMORE, THE INDEX INFORMATION DOES NOT INVOLVE FINANCIAL RISK OR ACCOUNT FOR THE IMPACT OF FEES AND COSTS ASSOCIATED WITH THE FUND.
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THE MANAGING OWNER COMMENCED OPERATIONS IN JANUARY 2006. AS MANAGING OWNER, THE MANAGING OWNER AND ITS TRADING PRINCIPALS HAVE BEEN MANAGING THE DAY-TO-DAY OPERATIONS FOR THE FUND AND RELATED PRODUCTS AND MANAGING FUTURES TRADING ACCOUNTS. BECAUSE THERE ARE LIMITED ACTUAL TRADING RESULTS TO COMPARE TO THE INDEX CLOSING LEVELS SET FORTH HEREIN, PROSPECTIVE INVESTORS SHOULD BE PARTICULARLY WARY OF PLACING UNDUE RELIANCE ON THE ANNUAL OR CUMULATIVE INDEX RESULTS. FOR THE AVOIDANCE OF DOUBT, NONE OF THE PERFORMANCE RELATED INFORMATION THAT IS COVERED HEREIN UP TO AND EXCLUDING THE CLOSING DATE CAN BE ATTRIBUTED TO THE MANAGING OWNER.
THE PREDECESSOR MANAGING OWNER, AN INDIRECT WHOLLY OWNED SUBSIDIARY OF DEUTSCHE BANK AG, COMMENCED OPERATIONS IN JANUARY 2006. AS THE PREDECESSOR MANAGING OWNER, THE PREDECESSOR MANAGING OWNER AND ITS TRADING PRINCIPALS MANAGED THE DAY-TO-DAY OPERATIONS FOR THE FUND FROM INCEPTION UP TO AND EXCLUDING THE CLOSING DATE. BECAUSE THERE ARE LIMITED TRADING RESULTS TO COMPARE TO THE INDEX CLOSING LEVELS SET FORTH HEREIN, PROSPECTIVE INVESTORS SHOULD BE PARTICULARLY WARY OF PLACING UNDUE RELIANCE ON THE ANNUAL OR CUMULATIVE INDEX RESULTS. IN RESPECT OF ANY PERIOD, FOR THE AVOIDANCE OF DOUBT, NONE OF THE PERFORMANCE RELATED INFORMATION THAT IS COVERED HEREIN ON AND AFTER THE CLOSING DATE CAN BE ATTRIBUTED TO THE PREDECESSOR MANAGING OWNER.
THE FUND’S PERFORMANCE INFORMATION FROM INCEPTION UP TO AND EXCLUDING THE CLOSING DATE IS A REFLECTION OF THE PERFORMANCE ASSOCIATED WITH THE PREDECESSOR MANAGING OWNER. THE MANAGING OWNER HAS SERVED AS MANAGING OWNER OF THE FUND SINCE THE CLOSING DATE, AND THE FUND’S PERFORMANCE INFORMATION SINCE THE CLOSING DATE IS A REFLECTION OF THE PERFORMANCE ASSOCIATED WITH THE MANAGING OWNER. PAST PERFORMANCE OF THE FUND IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE.
PowerSharesInvesco DB G10 Currency Harvest Fund (the “Fund”) is not sponsored or endorsed by Deutsche Bank
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USE
CLOSING LEVEL | INDEX CHANGES | |||
High1 | Low2 | Annual3 | Since Inception4 | |
2011 | 274.83 | 241.88 | 1.18% | 162.52% |
2012 | 290.15 | 258.40 | 10.39% | 189.79% |
2013 | 310.79 | 276.57 | -1.98% | 184.05% |
2014 | 295.63 | 276.74 | 0.92% | 186.68% |
2015 | 289.15 | 250.27 | -7.53% | 165.08% |
2016 | 293.83 | 256.24 | 7.60% | 184.93% |
2017 | 297.76 | 267.22 | -4.97% | 170.77% |
2018 | 280.78 | 264.78 | -0.44% | 169.57% |
2019 | 282.37 | 270.73 | 3.54% | 179.12% |
2020 | 280.80 | 245.74 | -1.06% | 176.17% |
2021 (YTD)5 | 292.25 | 276.14 | 5.35% | 190.94% |
THE FUND’S FUTURE PERFORMANCE. THE INDEX DOES NOT REFLECT ANY FEES OR EXPENSES ASSOCIATED WITH OPERATING A FUND OR ACTUAL TRADING.
The Fund trades exchange-traded futures on the currencies comprising the Deutsche Bank G10 Currency Future Harvest Index® – Excess Return, or the Index, with a viewMay 31, 2021.
The Index is designed to exploit the trend that currencies associated with relatively high interest rates, on average, tend to rise in value relative to currencies associated with relatively low interest rates. The Index exploits this trend using both long and short futures positions, which is expected to provide more consistent and less volatile returns than could be obtained by taking long positions only or short positions only.
To the extent, if any, that the Fund trades intrading futures contracts on United States exchanges, the assets deposited by the Fund with its Commodity Broker as margin must be segregated pursuant to the regulations of the CFTC. Such segregated funds may be invested only in a limited range of instruments, — principally U.S. government obligations.
To the extent, if any, that the Fund trades in futures on markets other than regulated United States futures exchanges, funds deposited to margin positions held on such exchanges are invested in bank deposits or in instruments of a credit standing generally comparable to those authorized by the CFTC for investment of “customer segregated funds,” although applicable CFTC rules prohibit funds employed in trading on foreign exchanges from being deposited in “customer segregated fund accounts.”
(i) up to approximately 3% of the NAV of the Fund will be placed in segregated accounts |
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The Managing Owner, a registered commodity pool operator, commodity trading advisor, and swap firm, is responsible for the cash management activities of the Fund, including investing in United States Treasury Securities, United States Government Agencies issues and money market mutual funds (affiliated or otherwise) for cash management purposes.
In addition, assets of the Fund not required to margin positions may be used for cash management purposes and may be maintained in United States bank accounts opened in the name of the Fund with the Commodity Broker (or another eligible financial institution, as applicable) to margin the Fund’s Index Contract positions. Those funds are segregated pursuant to CFTC rules; and
aim of seeking to track the Index.
Shares were paid by DB Commodity Services LLC, referred to as either the PredecessorFund’s predecessor managing owner (the “Predecessor Managing Owner or DBCS.Owner”). Expenses incurred in connection with the continuous offering of Shares from commencement of the Fund’s trading operations up to and excluding February 23, 2015 were also paid by the Predecessor Managing Owner. Expenses incurred in connection with the continuous offering of Shares on and after February 23, 2015 were and are paid by the Managing Owner. The Managing Owner aggregates the organization and offering expenses related to the Fund and other commodity and currency pools within the PowerSharesInvesco DB fund suite, and allocates the costs associated to each Fund for payment by the Managing Owner on behalf of the Fund. The Managing Owner expects that as of the date of this Prospectus, the expenses incurred in connection with the continuous offering of Shares of the PowerSharesInvesco DB fund suite may be approximately 0.03%0.06% of the average of the Fund’sfunds’ NAV during the life of the Fund’s currently effective registration statement, provided that this amountstatement. These costs may vary substantially depending uponconsiderably during the costs associated with the registration of additional shares, the total assetslife of the Fund, and any other related continuous offering costs.
Organization and offeringFund’s current registration statement, but the Managing Owner retains the obligation to pay those expenses in lieu of the Fund.
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Prior to January 1, 2011, the Fund invested substantially all of its assets in the DB G10 Currency Harvest Master Fund, or the Master Fund. Upon formation of the Fund and the Master Fund in April 2006, organizational and offering costs were to be paid by the Predecessor Managing Owner subject to reimbursement by the Master Fund. As of July 12, 2006, costs incurred by the Fund amounted to $1,064,500, which were expensed in the accounts of the Master Fund and recorded as a liability to the Predecessor Managing Owner. On July 12, 2006, prior to the commencement of investment operations and consolidation of the Fund and Master Fund, the Predecessor Managing Owner determined to assume all the organization and offering costs both already incurred and to be incurred by the Predecessor Managing Owner on behalf of the Fund and Master Fund. Accordingly, the obligation of the Master Fund as of July 12, 2006 was written off.
and/or
T-Bill ETF Income-56-
T-Bill ETF Income, as applicable, on deposit with the Commodity Broker as margin, the Custodian, or otherwise. If the sum of the Treasury Income, and the Money Market Income and the T-Bill ETF Income, as applicable, is not sufficient to cover the fees and expenses of the Fund that are payable by the Fund during any period, the excess of such fees and expenses over such Treasury Income, and Money Market Income and T-Bill ETF Income, as applicable, will be paid out of income from futures trading, if any, or from sales of the Fund’s United States Treasury Securities and/or holdings in money market mutual funds. For the avoidance of doubt, the Fund investsfunds and/or holdings in futures contracts in an attempt to track its Index.T-Bill ETFs. The Fund holds Treasury Securities, and money market mutual funds and T-Bill ETFs for margin and/or cash management purposes only.
Baskets
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Each Authorized Participant must be registered as a broker-dealer under the Exchange Act and regulated by FINRA, or exempt from being, or otherwise not be required to be, so regulated or registered, and qualified to act as a broker or dealer in the states or other jurisdictions where the nature of its business so requires. Certain Authorized Participants may be regulated under federal and state banking laws and regulations. Each Authorized Participant will have its own set of rules and procedures, internal controls and information barriers as it determines is appropriate in light of its own regulatory regime.
Authorized Participants may act for their own accounts or as agents for broker-dealers, custodians and other securities market participants that wish to create or redeem Baskets.
Creation Units.
|
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Unless otherwise agreed to by the Managing Owner and the Authorized Participant as provided in the next sentence, Baskets
creation order for the Basket.Creation Unit. The Fund’s NAV and the total amount of the payment required to create a BasketCreation Unit could rise or fall substantially between the time a creation order is submitted and the time the amount of the purchase price in respect thereof is determined.
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Unless otherwise agreed to by the Managing Owner and the Authorized Participant as provided in the next sentence, byBy placing a redemption order, an Authorized Participant agrees to deliver the BasketsCreation Units to be redeemed through DTC’s book-entry system to the Fund not 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 3two 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.
redemption distribution notwithstanding that the BasketsCreation Units to be redeemed are not credited to the Fund’s DTC account by 2:45 p.m., Eastern time, on the redemption order settlement date if the Authorized Participant
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A variety of executing brokers executesexecute futures transactions on behalf of the Fund. Such executingExecuting brokers give-up all such transactions to the Commodity Broker, Morgan Stanley & Co. LLC (“MS&Co.”). MS&Co. is a Delaware limited liability company which serveswith its main business office located at 1585 Broadway, New York, New York 10036. Among other registrations and memberships, MS&Co. is registered as a futures commission merchant and is a member of the Fund’s clearing broker, or Commodity Broker.NFA. In its capacity as clearing broker, the Commodity BrokerMS&Co. may execute or receive transactions executed by others and clears all of the Fund’s futures transactions and performs certain administrative and custodial services for the Fund. Morgan Stanley & Co. LLC is also registered with the Commodity Futures Trading Commission as a futures commission merchant and is a member of the National Futures Association in such capacity.
On June 1, 2011, Morgan Stanley & Co. Incorporated converted from a Delaware corporation to a Delaware limited liability company. As a result of that conversion, Morgan Stanley & Co. Incorporated is now named Morgan Stanley & Co. LLC (“MS&Co.” or the “Company”).
2016.
of Morgan Stanley and
MS&Co. is a Delaware limited liability company with its main business office located at 1585 Broadway, New York, New York 10036. Among other registrations and memberships, MS&Co. is registered as a futures commission merchant and is a member of the National Futures Association.
The Company has receivedMatters
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On April 1, 2016, the California Attorney General’s Office filed an action against the Company and certain affiliates in California state court styledCalifornia v. Morgan Stanley, et al., on behalf of California investors, including the California Public Employees’ Retirement System and the California Teachers’ Retirement System. The complaint alleges that the Company made misrepresentations and omissions regarding residential mortgage-backed securities and notes issued by the Cheyne SIV, and asserts violations of the California False Claims Act and other state laws and seeks treble damages, civil penalties, disgorgement, and injunctive relief.
In October 2014, the Illinois Attorney General’s Office (“ILAG”) sent a letter to the CompanyMS&Co. alleging that the CompanyMS&Co. knowingly made misrepresentations related to RMBS purchased by certain pension funds affiliated with the State of Illinois and demanding that the CompanyMS&Co. pay ILAG approximately $88 million. The CompanyMS&Co. and ILAG reached an agreement to resolve the matter on February 10, 2016.
On June 5, 2012, the Company consented to and became the subject of an Order Instituting Proceedings Pursuant to Sections 6(c) and 6(d) of the Commodity Exchange Act, as amended, Making Findings and Imposing Remedial Sanctions by The Commodity Futures Trading Commission (CFTC) to resolve allegations related to the failure of a salesperson to comply with exchange rules that prohibit off-exchange futures transactions unless there is an Exchange for Related Position (EFRP). Specifically, the CFTC found that from April 2008 through October 2009, the Company violated Section 4c(a) of the Commodity Exchange Act and Commission Regulation 1.38 by executing, processing and reporting numerous off-exchange futures trades to the Chicago Mercantile Exchange (CME) and Chicago Board of Trade (CBOT) as EFRPs in violation of CME and CBOT rules because those trades lacked the corresponding and related cash, OTC swap, OTC option, or other OTC
derivative position. In addition, the CFTC found that the Company violated CFTC Regulation 166.3 by failing to supervise the handling of the trades at issue and failing to have adequate policies and procedures designed to detect and deter the violations of the Act and Regulations. Without admitting or denying the underlying allegations and without adjudication of any issue of law or fact, the Company accepted and consented to entry of findings and the imposition of a cease and desist order, a fine of $5,000,000, and undertakings related to public statements, cooperation and payment of the fine. The Company entered into corresponding and related settlements with the CME and CBOT in which the CME found that the Company violated CME Rules 432.Q and 538 and fined the Company $750,000 and CBOT found that the Company violated CBOT Rules 432.Q and 538 and fined the Company $1,000,000.
On July 23, 2014, the U.S. Securities and Exchange Commission (“SEC”)SEC approved a settlement by MS&Co. and certain affiliates to resolve an investigation related to certain subprime RMBS transactions sponsored and underwritten by those entities in 2007. Pursuant to the settlement, MS&Co. and certain affiliates were charged with violating Sections 17(a)(2) and 17(a)(3) of the Securities Act, agreed to pay disgorgement and penalties in an amount of $275 million and neither admitted nor denied the SEC’s findings.
were resolved on June 28, 2016, in which there were no findings of fraud, but MS&Co. was jointly and severally liable for a $400,000 fine and $152,664 in disgorgement.
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On December 23, 2009, the Federal Home Loan Bank of Seattle filed a complaint against the Company and another defendant in the Superior Court of the State of Washington, styledFederal Home Loan Bank of Seattle v. Morgan Stanley & Co. Inc., et al. The amended complaint, filed on September 28, 2010, alleges that defendants made untrue statements and material omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sold to plaintiff by the Company was approximately $233 million. The complaint raises claims under the Washington State Securities Act and seeks, among other things, to rescind the plaintiff’s purchase of such certificates By orders dated June 23, 2011 and July 18, 2011, the court denied defendants’ omnibus motion to dismiss plaintiff’s amended complaint and on August 15, 2011, the court denied the Company’s individual motion to dismiss the amended complaint. On March 7, 2013, the court granted defendants’ motion to strike plaintiff’s demand for a jury trial. The defendants’ joint motions for partial summary judgment were denied on November 9, 2015. At March 25, 2016, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $45 million, and the certificates had not yet incurred actual losses. Based on currently available information, the Company
believes it could incur a loss in this action up to the difference between the $45 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against the Company, plus pre- and post-judgment interest, fees and costs. The Company may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.
On March 15, 2010, the Federal Home Loan Bank of San Francisco filed a complaint against the Company and other defendants in��the Superior Court of the State of California styledFederal Home Loan Bank of San Francisco v. Deutsche Bank Securities Inc. et al. An amended complaint, filed on June 10, 2010, alleges that defendants made untrue statements and material omissions in connection with the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly sold to plaintiff by the Company was approximately $276 million. The complaint raises claims under both the federal securities laws and California law and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On August 11, 2011, plaintiff’s federal securities law claims were dismissed with prejudice. On February 9, 2012, defendants’ demurrers with respect to all other claims were overruled. On December 20, 2013, plaintiff’s negligent misrepresentation claims were dismissed2016, MS&Co. consented to and became the subject of an order by the SEC in connection with prejudice. At March 25, 2016, the current unpaid balanceallegations that MS&Co. willfully violated Sections 15(c)(3) and 17(a)(1) of the mortgage pass-through certificates at issueExchange Act and Rules 15c3-3(e), 17a-5(a), and 17a-5(d) thereunder, by inaccurately calculating its Reserve Account requirement under Rule 15c3-3 by including margin loans to an affiliate in these cases was approximately $56 million,its calculations, which resulted in making inaccurate records and the certificates had incurred actual losses of approximately $1 million. Based on currently available information, the Company believes it could incur a loss for this action upsubmitting inaccurate reports to the difference betweenSEC. Without admitting or denying the $56 million unpaid balanceunderlying allegations and without adjudication of these certificates (plus any losses incurred) and their fair market value at the timeissue of a judgment against the Company,law or upon sale, plus pre- and post-judgment interest, fees and costs. The Company may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff priorfact, MS&Co. consented to a judgment.
cease and desist order, a censure, and a civil monetary penalty of $7,500,000.
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claims for common law fraud, fraudulent inducement and fraudulent concealment and alleges that the CompanyMS&Co. misrepresented the risks of the STACK 2006-1 CDO to CDIB, and that the CompanyMS&Co. knew that the assets backing the CDO were of poor quality when it entered into the credit default swap with CDIB. The complaint seeks compensatory damages related to the approximately $228 million that CDIB alleges it has already lost under the credit default swap, rescission of CDIB’s obligation to pay an additional $12 million, punitive damages, equitable relief, fees and costs. On February 28, 2011, the court denied the Company’sMS&Co.’s motion to dismiss the complaint. BasedOn December 21, 2018, the court denied MS&Co.’s motion for summary judgement and granted in part MS&Co.’s motion for sanctions related to the spoliation of evidence. On January 18, 2019, CDIB filed a motion to clarify and resettle the portion of the court’s December 21, 2018 order granting spoliation sanctions. On January 24, 2019, CDIB filed a notice of appeal from the court’s December 21, 2018 order, and on currently available information,January 25, 2019, MS&Co. filed a notice of appeal from the Company believes it could incursame order. On March 7, 2019 the court denied the relief requested by CDIB in its January 24, 2019 appeal. On December 5, 2019, the Appellate Division, First Department heard the parties’ cross-appeals. On May 21, 2020, the First Department modified the order of the Supreme Court of NY to deny the MS&Co.’s motion for sanctions relating to spoliation of evidence and otherwise affirmed the denial of the MS&Co.’s motion for summary judgment. On June 19, 2020, MS&Co. moved for leave to appeal the First Department’s decision to the Court of Appeals, which the First Department denied on July 24, 2020. On March 22, 2021, the parties entered into a losssettlement agreement, the terms of up to approximately $240 million plus pre- and post-judgment interest, fees and costs.
which are confidential. On April 16, 2021, the court entered a stipulation of voluntary discontinuance, with prejudice.
for interest received by the plaintiff prior to a judgment.
On April 20, 2011, the Federal Home Loan Bank of Boston filed a complaint against the Company and other defendants in the Superior Court of the Commonwealth of Massachusetts styledFederal Home Loan Bank of Boston v. Ally Financial, Inc. F/K/A GMAC LLC et al. An amended complaint was filed on June 29, 2012 and alleges that defendants made untrue statements and material omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued by the Company or sold to plaintiff by the Company was approximately $385 million. The amended complaint raises claims under the Massachusetts Uniform Securities Act, the Massachusetts Consumer Protection Act and common law and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On May 26, 2011, defendants removed the case to the United States District Court for the District of Massachusetts. The defendants’ motions to dismiss the amended complaint were granted in part and denied in part on September 30, 2013. On November 25, 2013, July 16, 2014, and May 19, 2015, respectively, the plaintiff voluntarily dismissed its claims against the Company with respect to three of the securitizations at issue. After these voluntary dismissals, the remaining amount of certificates allegedly issued by the Company or sold to plaintiff by the Company was approximately $332 million. At March 25, 2016, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $54 million, and the certificates had not yet incurred actual losses. Based on currently available information, the Company believes it could incur a loss in this action up to the difference between the $54 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against the Company, or upon sale, plus pre- and post-judgment interest, fees and costs. The CompanyMS&Co. may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.
On May 3, 2013, plaintiffs inDeutsche Zentral-Genossenschaftsbank AG et al. v. Morgan Stanley et al.filed a complaint against the Company, certain affiliates, and other defendants in the Supreme Court of NY. The complaint alleges that defendants made material misrepresentations and omissions in the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing
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residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by the Company to plaintiff currently at issue in this action was approximately $644 million. The complaint alleges causes of action against the Company for common law fraud, fraudulent concealment, aiding and abetting fraud, negligent misrepresentation, and rescission and seeks, among other things, compensatory and punitive damages. On June 10, 2014, the court granted in part and denied in part the Company’s motion to dismiss the complaint. The Company perfected its appeal from that decision on June 12, 2015. At March 25, 2016, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $263 million, and the certificates had incurred actual losses of approximately $84 million. Based on currently available information, the Company believes it could incur a loss in this action up to the difference between the $263 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against the Company, or upon sale, plus pre- and post-judgment interest, fees and costs. The Company may be entitled to be indemnified for some of these losses.
On May 17, 2013, a plaintiff inIKB International S.A. in Liquidation, et al. v. Morgan Stanley, et al.al. filed a complaint against the CompanyMS&Co. and certain affiliates in the Supreme Court of NY. The complaint alleges that the defendants made material misrepresentations and omissions in the sale to the plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. to the Company to plaintiff was approximately $132$133 million. The complaint alleges causes of action against the CompanyMS&Co. for common law fraud, fraudulent concealment, aiding and abetting fraud, and negligent misrepresentation, and seeks, among other things, compensatory and punitive damages. On October 29, 2014, the court granted in part and denied in part the Company’sMS&Co.’s motion to dismiss. All claims regarding four certificates were dismissed. After these dismissals, the remaining amount of certificates allegedly issued by the CompanyMS&Co. or sold to the plaintiff by the CompanyMS&Co. was approximately $116 million. On August 26, 2015, the CompanyMS&Co. perfected its appeal from the court’s October 29, 2014 decision. On August 11, 2016, the Appellate Division, First Department affirmed the trial court’s decision denying in part MS&Co.’s motion to dismiss the complaint. At MarchJune 25, 2016,2018, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $28$24 million, and the certificates had incurred actual losses of $58 million. Based on currently available information, the
CompanyMS&Co. believes it could incur a loss in this action up to the difference between the $28$24 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against the Company,MS&Co., or upon sale, plus pre- and post-judgment interest, fees and costs. The CompanyMS&Co. may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.
On
terms of which are confidential.
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On July 9, 2010 and February 11, 2011, Cambridge Place Investment Management Inc. filed two separate complaints against the CompanyMS&Co. and/or its affiliates and other defendants in the Superior Court of the Commonwealth of Massachusetts, both styledCambridge Place Investment Management Inc. v. Morgan Stanley & Co., Inc., et al. The complaints asserted claims on behalf of certain clients of the plaintiff’s affiliates and allege that the defendants made untrue statements and material omissions in the sale of a number of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued by the CompanyMS&Co. and/or its affiliates or sold to the plaintiff’s affiliates’ clients by the CompanyMS&Co. and/or its affiliates in the two matters was approximately $263 million. On February 11, 2014, the parties entered into an agreement to settle the litigation.litigation, the terms of which are confidential. On February 20, 2014, the court dismissed the action.
the court denied in substantial part the defendants’ motion to dismiss the amended complaint, which order the Company appealed on April 11, 2013. On May 3, 2013, the Company filed its answer to the amended complaint. On January 16, 2015, the parties reached an agreement to settle the litigation.
litigation, the terms of which are confidential.
litigation, the terms of which are confidential.
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certificates allegedly sponsored, underwritten, and/or sold by the CompanyMS&Co. was approximately $758 million. The amended complaint raised common law claims of fraud, fraudulent inducement, and aiding and abetting fraud and seeks, among other things, rescission, compensatory, and/or rescissionary damages, as well as punitive damages, associated with the plaintiffs’ purchases of such certificates. On April 11, 2014, the parties entered into a settlement agreement.
agreement, the terms of which are confidential.
litigation, the terms of which are confidential.
Stanley & Co. Inc. and alleged that the CompanyMS&Co. made untrue statements and material omissions in connection with the sale to the plaintiff of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly underwritten and sold to the plaintiff by the CompanyMS&Co. in these cases was approximately $67 million and $35 million, respectively. On July 2, 2015, the parties reached an agreement to settle the litigation.
litigation, the terms of which are confidential.
which are confidential.
matter, the terms of which are confidential.
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Act, as well as common law claims of actual and constructive fraud, and seeks, among other things, treble damages and civil penalties. On January 6, 2016, the parties reached an agreement to settle the litigation.litigation, the terms of which are confidential. An order dismissing the action with prejudice was entered on January 28, 2016.
Fund and the Shareholders.
theFund. The Managing Owner intends to devote, and to cause its professional staff to devote, sufficient time and resources to manage properly the business and affairs of the Fund consistent with its or their respective fiduciary duties to the Fund and others.
There isdividend and/or make a bigger distribution of capital gains. In addition, the
Placing trades generally involves acting on portfolio manager instructions to buy or sell
Shareholders should understand that the Commodity Broker receives a round-turn brokerage fee from the Fund for serving as the Fund’s
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commodity broker. A round-turn trade is a completed transaction involving both a purchase and a liquidating sale, or a sale followed by a covering purchase.
The Commodity Broker may act from time-to-timetime to time as a commodity broker for other accounts with which it is affiliated or in which it or one of its affiliates has a financial interest. The compensation received by the Commodity Broker from such accounts may be more or less than the compensation received for brokerage services provided to the Fund. Customers of the Commodity Broker who maintain commodity trading accounts may pay commissions at negotiated rates which are greater or lesslesser than the rate paid by the Fund. In addition, various accounts traded through the Commodity Broker (and over which their personnel may have discretionary trading authority) may take positions in the futures markets opposite to those of the Fund or may compete with the Fund for the same positions. The Commodity Broker may have a conflict of interest in its execution of trades for the Fund and for other customers. The Managing Owner will, however, not retain any commodity broker for the Fund which the Managing Owner has reason to believe would knowingly or deliberately favor any other customer over the Fund with respect to the execution of commodity trades.
The Commodity Broker will also benefit from executing orders for other clients, whereas the Fund may be harmed to the extent that the Commodity Broker has fewer resources to allocate to the Fund’s accounts due to the existence of such other clients.
Deutsche Bank Securities Inc.,
professional staff of Deutsche Bank Securities Inc.DBSI may also service other affiliates of Deutsche Bank Securities Inc.DBSI and their respective clients. Deutsche Bank Securities Inc.,DBSI, in its capacity as the
devote resources to other clients that otherwise would have been focused on the Fund.
Because the
The Commodity Broker, its principals and its affiliates may trade in the commodity and foreign exchange markets for their proprietary accounts and for the accounts of their clients, and in doing so may take positions opposite to those held by the Fund, may trade ahead
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DESCRIPTION OF THE SHARES; CERTAIN
MATERIAL TERMS OF THE TRUST
DECLARATION
The following summary describes in brief the Shares and certain aspects of the operation of the Fund and the respective responsibilities of the Trustee and the Managing Owner concerning the Fund and the material terms of the Trust Declaration.Agreement. Prospective investors should carefully review the Trust DeclarationAgreement which is incorporated by reference into this Prospectus and consult with their own advisers concerning the implications to such prospective subscribers of investing in a Delaware statutory trust. Capitalized terms used in this section and not otherwise defined shall have such meanings assigned to them under the Trust Declaration.
Fund’s Commodity Brokers) are maintained at the Fund’s principal office, c/o Invesco PowerShares Capital Management LLC, 3500 Lacey Road, Suite 700, Downers Grove, IL 60515; telephone number (800) 983-0903.
Books and records of the Managing Owner (including those related to accounting, portfolio management, compliance, legal, marketing and operations): Iron Mountain, 341 S. Ari Ct., Addison, Illinois 60101; 121 Foster Ave., Bensenville, Illinois, 60106; 2625 W.
Agreement.
Agreement.
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Only the Managing Owner has signed the registration statement of which this Prospectus is a part, and only the assets of the Fund and the Managing Owner are subject to issuer liability under the federal securities laws for the information contained in this Prospectus and under federal securities laws with respect to the issuance and sale of the Shares. Under such laws, neither the Trustee, either in its capacity as Trustee or in its individual capacity, nor any director, officer or controlling person of the Trustee is, or has any liability as, the issuer or a director, officer or controlling person of the issuer of the Shares. The Trustee’s liability in connection with the issuance and sale of the Shares is limited solely to the express obligations of the Trustee set forth in the Trust Declaration.
Under the Trust Declaration, the Trustee has delegated to the Managing Owner the exclusive management and control of all aspects of the business of the Fund. Agreement.
Because the
The section “Performance of PowerShares DB G10 Currency Harvest Fund” on page 35 includes the performance of the offered pool.
Fund.
After consideration
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Principals
The following principals serve in the below capacities on behalf of the Managing Owner:
Name | Capacity | |
Anna Paglia |
| |
Chief Executive Officer, Board of Managers | ||
Peter Hubbard | Vice President and Director of Portfolio Management | |
Jordan Krugman | ||
Board of Managers | ||
Annette Lege | Principal | |
Kelli Gallegos | ||
Principal Financial and Accounting Officer, Investment Pools | ||
Melanie Zimdars | ||
Chief Compliance Officer | ||
John Zerr | Board of Managers | |
Brian Hartigan | Global Head of ETF Investments |
Daniel Draper (47)
registered as a Significant Influence Functions (SIF) person with the UK’s Financial Conduct Authority. He withdrew this status on June 30, 2013 when he left Credit Suisse. Mr. Draper received his MBA from the Kenan-Flagler Business School at the University of North Carolina at Chapel HillIllinois and his BA from the College of William and Mary in Virginia. Mr. Draper is currently registered with FINRA and holds the Series 7, 24 and 63 registrations. Mr. DraperNew York. Ms. Paglia was listed as a principal of the Managing Owner on December 16, 2013.
June 11, 2020.
David Warren (59)
Roderick Ellis (49)12, 2020.
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reporting, internal controls and group accounting policies. Mr. EllisMs. Lege also manages Invesco’s Finance operations and shared service centers and has held this role since September 2015. Previously, Ms. Lege was Head of FCS Transformation Office from October 2013 through September 2015, with responsibility for business transformation initiatives taking place across FCS at Invesco. Before assuming that role in October 2013, Ms. Lege held the position of North American Corporate Controller at Invesco from March 2007 to October 2013. Ms. Lege is also responsible for group insurance matters. Previously, Mr. Ellis was Global Director ofa CPA, is licensed by FINRA as a Financial PlanningOperations Principal, and Analysis, and Treasurer since May 2007. Mr. Ellis earned a B.A. (with honors) in Economics and Social History from the University of Sheffield, UK, in 1988. He is a member of the InstituteTexas State Board of Chartered AccountantsPublic Accountants. Ms. Lege earned a BBA in England and Wales. Mr. Ellisaccounting from the University of Houston. Ms. Lege was listed as a principal of the Managing Owner on NovemberMarch 30, 2012.
Steven Hill (52)2017 and was listed as a principal of Invesco Advisers, Inc., a registered investment adviser affiliated with the Managing Owner, on March 22, 2017.
Christopher Joe (47)September 25, 2018.
Owner, from November, 2014 to September, 2015. Mr. Joe has also servedUniversity of Wisconsin-La Crosse. Ms. Zimdars was listed as a principal of the Managing Owner since September 25, 2015.
on February 1, 2018.
FiduciarySeptember 27, 2018 and Regulatory Duties of the Managing Owner
As managing owner of the Fund, the Managing Owner effectively is subject to the duties and restrictions imposed on “fiduciaries” under both statutory and common law. The Trust Declaration is filed as an exhibit to the registration statement of which this Prospectus is a part. The general fiduciary duties which would otherwise be imposed on the
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Managing Owner (which would make the operation of the Fund as described herein impracticable due to the strict prohibition imposed by such duties on, for example, conflicts of interest on behalf of a fiduciary in its dealingshas periodically been listed with its beneficiaries), are defined and limited in scope by the disclosure of the business terms of the Fund, as set forth herein and in the Trust Declaration (to which terms all Shareholders, by subscribing to the Shares, are deemed to consent).
The Trust Declaration provides that the Covered Persons (which means the Managing Owner and its affiliates) will have no liability to the Fund or to any Shareholder, or other Covered Person or other person, for any loss suffered by the Fund arising out of any action or inaction of the Covered Person if the Covered Person, in good faith, determined that such course of conduct was in the best interests of the Fund and such course of conduct did not constitute gross negligence or willful misconduct by the Covered Person.
Each Covered Person will be indemnified by the Fund to the fullest extent permitted by law against any losses, judgments, liabilities, expenses, and amounts paid in settlement of any claims sustained by it in connection with its activities for the Fund, except with respect to any matter as to which such Covered Person will have been finally adjudicated in any action, suit, or other proceeding not to have acted in good faith in the reasonable belief that such Covered Person’s action was in the best interest of the Fund and except that no Covered Person will be indemnified against any liability to the Fund or to the limited owners by reason of willful misconduct or gross negligence of such Covered Person. Any such indemnification will only be recoverable from the Fund. The source of payments made in respect of indemnification under the Trust Declaration will be the assets of the Fund.
Under Delaware law, a beneficial owner of a business trust (suchNFA as a Shareholderprincipal of the Fund) may, under certain circumstances, institute legal action on behalf of himself and all other similarly situated beneficial owners (a “class action”) to recover damages from a managing owner of such business trust for violations of fiduciary duties, or on behalf of a business trust (a “derivative action”) to recover damages from a third party where a managing owner has failed or refused to institute proceedings to recover such damages. In addition, beneficial owners may have the right, subject to certain legal requirements, to bring class actions in federal court to enforce their rights under the federal securities laws and the rules and regulations
promulgated thereunder by the Securities and Exchange Commission (“SEC”). Beneficial owners who have suffered losses in connection with the purchase or sale of their beneficial interests may be able to recover such losses from a managing owner where the losses result from a violation by the Managing Owner of the anti-fraud provisions of the federal securities laws.
Under certain circumstances, Shareholders also have the right to institute a reparations proceeding before the CFTC against the Managing Owner (a registered commodity pool operator and commodity trading advisor), the Commodity Broker (registered futures commission merchant), as well as those of their respective employees who are required to be registered under the Commodity Exchange Act, as amended, and the rules and regulations promulgated thereunder. Private rights of action are conferred by the Commodity Exchange Act, as amended. Investors in futures and in commodity pools may, therefore, invoke the protections provided thereunder.
There are substantial and inherent conflicts of interest in the structure of the Fund which are, on their face, inconsistent with the Managing Owner’s fiduciary duties. One of the purposes underlying the disclosures set forth in this Prospectus is to disclose to all prospective Shareholders these conflicts of interest so that the Managing Owner may have the opportunity to obtain investors’ informed consent to such conflicts. Prospective investors who are not willing to consent to the various conflicts of interest described under “Conflicts of Interest” and elsewhere should not invest in the Fund. The Managing Owner currently intends to raise such disclosures and consent as a defense in any proceeding brought seeking relief based on the existence of such conflicts of interest.
The foregoing summary describing in general terms the remedies available to Shareholders under federal law is based on statutes, rules and decisions as of the date of this Prospectus. This is a rapidly developing and changing area of the law. Therefore, Shareholders who believe that they may have a legal cause of action against any of the foregoing parties should consult their own counsel as to their evaluation of the status of the applicable law at such time.
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Agreement.
effected. Because Section 11.3 of the Trust DeclarationAgreement provides for negative consent (e.g., that Shareholders are deemed to have consented unless they timely object), youra Shareholder’s consent will be deemed conclusively to have been granted with respect to any matter for which the Managing Owner may solicit yourShareholder consent unless you expressthe Shareholder expresses written objection in the manner required by the Trust DeclarationAgreement and yourthe written objection is actually received by the Trust within twenty (20) days after the notice of solicitation is effected. This means that not responding to the vote or consent solicitation would have the same effect as responding with your affirmative written consent. For example, in the context of a consent solicitation to change the managing owner or any other action, youra Shareholder’s lack of a response will have the same effect as if youthe Shareholder had provided your affirmative written consent for the proposed action.
Agreement.
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may be undertaken by the Fund unless such obligation is explicitly limited so as not to be enforceable against any Shareholder personally. Furthermore, the Fund itself indemnifies all its Shareholders against any liability that such Shareholders might incur in addition to that of a beneficial owner.
The foregoing repayment of distributions and indemnity provisions (other than the provision for Shareholders indemnifying the Fund for taxes imposed upon it by a state, local or foreign taxing authority, which is included only as a formality due to the fact that many states do not have business trust statutes so that the tax status of the Fund in such states might, theoretically, be challenged — although the Managing Owner is unaware of any instance in which this has actually occurred) are commonplace in statutory trusts and limited partnerships.
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NAV means the total assets of the Fund including, but not limited to, all cash and cash equivalents or other debt securities less total liabilities of the Fund, each determined on the basis of generally accepted accounting principles in the United States, consistently applied under the accrual method of accounting. In particular, NAV includes any unrealized profit or loss on open futures contracts, and any other credit or debit accruing to the Fund but unpaid or not received by the Fund. All open futures contracts traded on a United StatesU.S. exchange are calculated at their then current market value, which are based upon the settlement price for that particular futures contract traded on the applicable United StatesU.S. exchange on the date with respect to which NAV is being determined; provided, that if a futures contract traded on a United StatesU.S. exchange could not be liquidated on such day, due to the operation of daily limits or other rules of the exchange upon which that position is traded or otherwise, the Managing Owner may value such futures contract pursuant to policies the Managing Owner has adopted, which are consistent with normal industry standards.adopted. The current market value of all open futures contracts traded on a non-United Statesnon-U.S. exchange, to the extent applicable, will be based upon the settlement price for that particular futures contract traded on the applicable non-United Statesnon-U.S. exchange on the date with respect to which NAV is being determined; provided further, that if a futures contract traded on anon-United States non-U.S. exchange, to the extent applicable, could not be liquidated on such day, due to the operation of daily limits (if applicable) or other rules of the exchange upon which that position is traded or otherwise, the Managing Owner may value such futures contract pursuant to policies the Managing Owner has adopted,adopted. The current market value of all open forward contracts entered into by the Fund, if any, shall be the mean between the last bid and last asked prices quoted by the bank or financial institution which is a party to the contract on the date with respect to which NAV is being determined; provided, that if such quotations are consistent with normal industry standards.not available on such date, the mean between the last bid and asked prices on the first subsequent day on which such quotations are available shall be the basis for determining the market value of such forward contract for such day. The Managing Owner may in its discretion (and under extraordinary circumstances, including, but not limited to, periods during which a settlement price of a futures contract is not available due to exchange limit orders or force majeure type events such as systems failure, natural orman-made disaster, act of God, armed conflict, act of terrorism, riot or labor disruption or any similar intervening circumstance) value any asset of the Fund pursuant to such other principles as the Managing Owner deems fair and equitable so long as such principles are consistent with normal industry standards.equitable. Interest earned on the Fund’s foreign
exchange futures brokerage account is accrued at least monthly. The amount of any distribution will be a liability of the Fund from the day when the distribution is declared until it is paid.
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THE ADMINISTRATOR, CUSTODIAN AND
TRANSFER AGENT
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records, ledgers with respect to assets, liabilities, capital, income and expenses, the registrar, transfer journals and related details and trading and related documents received from futures commission merchants, c/o The Bank of New York Mellon, 2 Hanson Place, Brooklyn,240 Greenwich Street, New York, 11217,New York 10007, telephone number(718) 315-7500.
From time to time, the Managing Owner, in its sole discretion, may reimburse Authorized Participants for all or a portion of the processing fees from the Managing Owner’s own assets.
Distributors, Inc., 11 Greenway Plaza, Suite 1000, Houston, Texas 77046-1173; telephone number (800) 983-0903.
Background and Principals
Invesco Advisers Inc., a Delaware corporation, or Invesco Advisers, is the commodity trading advisor of the Trust and the Fund and is an affiliate of the Managing Owner. The Managing Owner may utilize the Invesco Advisers trading desk to place trades for the Fund. Invesco Advisers receives no compensation for providing this service.
Invesco Advisers has been registered with the CFTC as a commodity pool operator since January 1, 2000, commodity trading advisor since November 8, 1984 and a swap firm since January 8, 2013 and has been a member of the NFA since February 11, 1986. Its principal place of business is 1555 Peachtree Street NE, Atlanta, Georgia 30309, telephone number (404) 439-3271.The registration of Invesco Advisers with the CFTC and its membership in the NFA must not be taken as an indication that either the CFTC or the NFA has recommended or approved Invesco Advisers, the Trust or each Fund.
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Principals
The following principals serve in the below capacities on behalf of Invesco Advisers:
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Invesco North American Holdings Inc. is also a principal of Invesco Advisers.
Mark Ahnrud (54) joined Invesco Advisers in 2000 and serves as a Portfolio Manager. In this role, he works with the Invesco Global Asset Allocation team, which invests in stock, bond and commodity markets worldwide. He earned a BS degree in finance and investments from Babson College and an AMBA with a concentration in finance and real estate investments from Fuqua School of Business at Duke University. He is also a CFA charterholder. Mr. Ahnrud was registered as associated person and principal of Invesco Advisers on August 12, 2005 and September 20, 2005, respectively. He was registered as a swap associated person of Invesco Advisers effective as of January 8, 2013.
Kevin Carome (60) is Senior Managing Director and has served as General Counsel for Invesco Ltd., a global investment management company affiliated with Invesco Advisers. He was appointed to this position in January 2006, and also holds the role of Director of Invesco Advisers, a position he has held since January 2009. In these capacities, Mr. Carome is responsible for overseeing the legal activities and legal departments of Invesco Ltd. and its affiliated companies. He obtained a BA in political science and a JD from Boston College. Mr. Carome was listed as a principal of Invesco Advisers on May 6, 2011.
Eric Johnson (58) joined Invesco Ltd. in February 2010 and serves as Head of US Sales, Client Service and Consultant Relations for Invesco Ltd.’s Worldwide Institutional business. In that capacity, he is responsible for institutional sales, consultant relations and client service for Invesco’s traditional investment management capabilities. Mr. Johnson earned a BA degree with distinction from the University of Virginia. He was registered as associated person and principal of Invesco Advisers on March 24, 2010 and March 22, 2011, respectively. He was registered as a branch manager and swap
associated person of Invesco Advisers effective as of January 25, 2012 and July 24, 2013, respectively.
Karen Dunn Kelley (56) is Senior Managing Director of Investments for Invesco Ltd. She was appointed to this position in May 2011, and also leads Invesco’s Office of Investments. In these capacities, Ms. Dunn Kelley is responsible for Invesco’s fundamental equities business; the global asset allocation, quantitative strategies and global equities investment teams; equity trading and investment administration. She graduated magna cum laude with a BS degree from Villanova University College of Commerce and Finance. Ms. Dunn Kelley was listed as a principal of Invesco Advisers on March 27, 2014.
Robert Leveille (46) has been Chief Compliance Officer of Invesco Advisers since February 2016. In this role he is responsible for all aspects of regulatory compliance for Invesco Advisers. From March 2007 to February 2016, he served as Chief Compliance Officer of Putnam Investments, a global asset management firm, where he managed the firm’s compliance department and oversaw the design, implementation and monitoring of the compliance program for mutual funds and other registered entities. Mr. Leveille earned a BA from Duke University and a JD from Harvard Law School. He was listed as a principal of Invesco Advisers on April 8, 2016.
Colin Meadows (45) has served as Chief Administrative Officer of Invesco Ltd. since May 2006. In this role, he is responsible for information technology, operations, human resources, transfer agency and corporate development. In April 2014, Mr. Meadows assumed Senior Managing Director responsibility for Invesco Real Estate, WL Ross and Co. and Invesco Private Capital, each an asset manager affiliated with Invesco Advisers. Mr. Meadows earned a BA degree in economics and English literature from Andrews University and a JD from Harvard Law School. He was listed as a principal of Invesco Advisers on December 15, 2014.
Loren Starr (55) has served as Senior Managing Director and Chief Financial Officer of Invesco Ltd. since December, 2007. In this role, he is responsible for finance accounting investor relations and corporate properties. Mr. Meadows earned a BA degree in chemistry and a BS degree in industrial engineering, graduating summa cum laude from Columbia University. He earned an MBA from Columbia and an MS degree in operations research from Carnegie Mellon University. Mr. Starr is also a
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certified treasury professional. He was listed as a principal of Invesco Advisers on May 9, 2011.
Philip Taylor (61) is Senior Managing Director and Head of Invesco Ltd.’s North American business, a position he has held since April 2006. In this role, he has had general responsibility for Invesco’s global fixed income business. Mr. Taylor also has responsibility for Human Resources, as well as Strategy and Business Planning. He received a Bachelor of Commerce (Honours) degree from Carleton University and an MBA from the Schulich School of Business at York University. He was listed as a principal of Invesco Advisers on July 13, 2011.
Invesco North American Holdings Inc, which is a wholly owned, indirect subsidiary of Invesco Ltd., has been a principal of Investment Advisers since May 17, 1990.
The Managing Owner, on behalf of the Fund, has appointed Deutsche Bank Securities Inc.DBSI to serve as the Index Sponsor. On February 1, 2021, the provision of index sponsor or the Index Sponsor.services transferred back to DBSI from DWS Investment Management Americas, Inc., to whom DBSI had previously assigned such responsibility. The Index Sponsor
There is no relationship between the Index Sponsor and the Managing Owner or the Fund other than a services agreement and a license by the Index Sponsor to the Managing Owner of certain of the Index Sponsor’s trademarks and trade names, and the Index, for use by the Managing Owner or the Fund. Such trademarks, trade names and the Index have been created and developed by the Index Sponsor without regard to, and independently of, the Managing Owner and the Fund, their businesses,business, and/or any prospective investor. The Fund and the Managing Owner have arranged with the Index Sponsor to license the Index for possible inclusion in funds which the Managing Owner independently intends to develop and promote. The licensing of the Index to the Managing Owner or the Fund is not an offer to purchase or sell, or a solicitation to purchase, Shares in the Fund. A determination that any portion of an investor’s portfolio should be devoted to the Fund or any other ETF product developed by the Managing Owner with reference to the Index is a determination made solely by the Managing Owner serving the investor or the investor himself, not the Index Sponsor. The Index Sponsor is not responsible for, and has not participated in the determination of, the prices and amount of Shares or the timing of the issuance or sale of Shares or in the determination of any financial calculations relating thereto. The Index Sponsor has no obligation or liability in connection with the administration of the Fund, or marketing of the Shares. The Index Sponsor does not guarantee the accuracy and/or the completeness of the Index or any data included therein. The Index Sponsor shall have no liability for any errors, omissions, or interruptions therein. The Index Sponsor makes no warranty, express or implied, as to results to be obtained by the Managing Owner, the Fund or owners of Shares, or any other person or entity, from the use of the Index or any data included therein. The Index Sponsor makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the Index or any data included therein, the Fund, or the Shares. Deutsche Bank Securities Inc., which also serves as the marketing agent,DBSI has entered into a services agreement with the Managing Owner. The agreementsagreement between the Managing Owner and DBSI as Marketing Agent and Index Sponsor relaterelates to the Managing Owner’s sponsorship not only of the Fund but of other commodity pools and exchange-traded funds. These agreements areETFs. The agreement is for an initial six yearone-year term which commenced on February 26, 2015,January 31, 2021, with additional one-year renewal terms unless terminated.
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Both the Managing Owner and DBSI have the right to terminate on notice subject to payment of a termination fee, both with respect to a given fund and with respect to all funds subject to these agreements. Each party also has the right to terminate for cause, although the Managing Owner’s ability to exercise this right is restricted to a narrow set of circumstances during the initial six-yearone-year term. Accordingly, there may be circumstances where the Managing Owner would otherwise believe cause exists to terminate DBSI but where it would have to rely on its right to terminate at will. The termination fee payable by the Managing Owner would be based on anticipated fee payments under these agreements during the remainder of the initial six-yearone-year term, and therefore could be sufficiently high as to deter the Managing Owner from exercise of these termination rights. These termination fees would also be triggered by certain other termination rights of DBSI, including in the event of a change of control of the Managing Owner or changes of law affecting the licenses or services to be provided by DBSI. As a consequence of these termination fee rights, DBSI may elect to terminate these licenses and services under certain circumstances where, were these being provided under stand-alone arrangements in respect of the Fund, it might not elect to terminate the business relationship. Termination of the agreements between DBSI and the Managing Owner could result in disruption to the affairs of the Fund, including the need to adopt new indices and engage a replacement index sponsor.
particular purpose or any warranties as to the results to be obtained by the Managing Owner, the Fund or owners of Shares or anyone else in connection with the use of the Index Data. The Index Sponsor shall not be liable to the Managing Owner, the Fund or owners of Shares or anyone else for loss of business revenues, lost profits or any indirect, consequential, special or similar damages whatsoever, whether in contract, tort or otherwise, even if advised of the possibility of such damages.
Pursuant to the services agreement, the Managing Owner, on behalf of the Fund, has appointed Deutsche Bank
The Managing Owner pays the Marketing Agent a marketing services fee out of the Management Fee for performing its duties.
The Marketing Agent will not open or maintain customer accounts or handle orders for the Fund. The Marketing Agent has no responsibility for the performance of the Fund or the decisions made or actions taken by the Managing Owner.
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Investors may contact the Managing Owner toll free in the U.S. at (800) 983-0903.
THE SECURITIES DEPOSITORY; BOOK-ENTRY-ONLY SYSTEM; GLOBAL SECURITY
DTC acts as securities depository for the Shares. DTC is alimited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of section 17A of the Exchange Act. DTC was created to hold securities of DTC Participants and to facilitate the clearance and settlement of transactions in such securities among the DTC Participants through electronic book-entry changes. This eliminates the need for physical movement of securities certificates. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations, some of whom (and/or their representatives) own DTC. Access to the DTC system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly. DTC has agreed to administer its book-entry system in accordance with its rules and by-laws and the requirements of law.
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split or reverse split in the number of Shares outstanding and to make a corresponding change in the number of Shares constituting a Basket.
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Agreement by the Fund.
claims asserted by the Fund), and reasonable attorneys’ and accountants’ fees relating thereto, which are sustained or incurred or which may be asserted against the Administrator by reason of or as a result of any action taken or omitted to be taken by the Administrator in good faith under the Administration Agreement or in reliance upon (i) any law, act, regulation or interpretation of the same even though the same may thereafter have been altered, changed, amended or repealed, (ii) the registration statement or Prospectus, (iii) any Proper Instructions, or (iv) any opinion of legal counsel for the Fund, or arising out of transactions or other activities of the Fund which occurred prior to the commencement of the Administration Agreement; provided, that the Fund will not indemnify the Administrator for costs, expenses, damages, liabilities or claims for which the Administrator is liable under the preceding paragraph. This indemnity will be a continuing obligation of the Fund, its successors and assigns, notwithstanding the termination of the Administration Agreement. Without limiting the generality of the foregoing, the Fund will indemnify the Administrator against and save the Administrator harmless from any loss, damage or expense, including counsel fees and other costs and expenses of a defense against any claim or liability, arising from any one or more of the following: (i) errors in records or instructions, explanations, information, specifications or documentation of any kind, as the case may be, supplied to the Administrator by any third party described abovein the Administration Agreement or by or on behalf of the Fund; (ii) action or inaction taken or omitted to be taken by the Administrator pursuant to Proper Instructions of the Fund or otherwise without gross negligence or willful misconduct; (iii) any action taken or omitted to be taken by the Administrator in good faith in accordance with the advice or opinion of counsel for the Fund or its own counsel; (iv) any improper use by the Fund or its agents, distributor or investment advisor of any valuations or computations supplied by the Administrator pursuant to the Administration Agreement; (v) the method of valuation and the method of computing NAV; or (vi) any valuations or NAV provided by the Fund.
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Notwithstanding any other provision contained in the Administration Agreement, the Administrator will have no duty or obligation with respect to, including, without limitation, any duty or obligation to determine, or advise or notify the Fund of: (a) the taxable nature of any distribution or amount received or deemed received by, or payable to the Fund; (b) the taxable nature or effect on the Fund or its shareholders of any corporate actions, class actions, tax reclaims, tax refunds, or similar events; (c) the taxable nature or taxable amount of any distribution or dividend paid, payable or deemed paid by the Fund to its shareholders; or (d) the effect under any federal, state, or foreign income tax laws of the Fund making or not making any distribution or dividend payment, or any election with respect thereto.
assets of the Fund.
The Custodian is both exculpated and indemnified under the Custody Agreement.
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The Fund will indemnify the Custodian and hold the Custodian harmless from and against any and all losses sustained or incurred by or asserted against the Custodian by reason of or as a result of any action or inaction, or arising out of the Custodian’s performance under the Custody Agreement, including reasonable fees and expenses of counsel incurred by the Custodian in a successful defense of claims by the Fund; provided however, that the Fund will not indemnify the Custodian for those losses arising out of the Custodian’s gross negligence or willful misconduct. This indemnity will be a continuing obligation of the Fund, its successors and assigns, notwithstanding the termination of the Custody Agreement.
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Prospectus, statementStatement of additional information,Additional Information, shareholder reports or other information filed or made public by the Fund (as from time-to-timetime to time amended) included an untrue
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event the Fund elects to assume the defense of any suit and retain counsel, Invesco Distributors, its officers or directors or controlling person(s), or defendant(s) in the suit, will bear the fees and expenses of any additional counsel retained by them. If the Fund does not elect to assume the defense of any suit, it will reimburse Invesco Distributors, its officers or directors or controlling person(s) or defendant(s) in the suit for the reasonable fees and expenses of any counsel retained by them. The Fund agrees to notify Invesco Distributors promptly of the commencement of any litigation or proceeding against it or any of its officers in connection with the issuance or sale of any of the Shares.
Federal Income Tax Considerations
below, which may adversely affect the Fund and/or its shareholders.
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the IRS or the courts will agree with the tax consequences described herein. A different treatment from that described below could adversely affect the amount, timing and character of items of income, gain, loss or deduction in respect of an investment in the Shares.If you are considering the purchase of Shares, we urge you to consult your own tax advisor concerning the particular U.S. federal income tax consequences to you of the purchase, ownership and disposition of Shares, as well as any consequences to you arising under the laws of any other taxing jurisdiction.
will constitute qualifying income within the meaning of Section 7704(d) of the Code.
There can be no assurance that the
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funds and certain T-Bill ETFs.
gain or loss, if any, resulting from these deemed sales (known as “marking-to-market”), together with any gain or loss resulting from any actual sales of Section 1256 Contracts (or other termination of the Fund’s obligations under such contracts), must be taken into account by the Fund in computing its taxable income for the year.
commodity futures held by the Fund that are not Section 1256 Contracts is more than one year.
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If the allocations provided by the Trust DeclarationAgreement were successfully challenged by the IRS, the amount of income or loss allocated to Shareholders for U.S. federal income tax purposes under the Trust DeclarationAgreement could be increased or reduced or the character of the income or loss could be modified or both.
than an underwriter or other person holding in a similar capacity) for U.S. federal income tax purposes will be treated as holding such Shares for this purpose as of the close of the last trading day of the preceding month. As a result, a Shareholder who has disposed of Shares prior to the close of the last trading day of a month may be allocated items of income, gain, loss and deduction realized after the date of transfer.
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As with the other allocations described above, the Fund generally will use a monthly convention for purposes of theso-called reverse Section 704(c) allocations. More specifically, the Fund generally will credit or debit, respectively, the “book” capital accounts of existing Shareholders with any unrealized gain or loss in the Fund’s assets based on a calculation utilizing the average price of the Shares during the month in which the creation or redemption transaction takes place, rather than the fair market value of its assets at the time of such creation or redemption, (the “revaluation convention”).or the revaluation convention. As a result, it is possible that, for U.S. federal income tax purposes, (i) a purchaser of newly issued Shares will be allocated some or all of the unrealized gain in the Fund’s assets at the time it acquires the Shares or (ii) an existing Shareholder will not be allocated its entire share in the unrealized loss in the Fund’s assets at the time of such acquisition. Furthermore, the applicable Treasury Regulations generally require that the “book” capital accounts be adjusted based on the fair market value of partnership property on the date of adjustment and do not explicitly allow the adoption of a monthly revaluation convention.
reflected in the purchase price for the purchaser’s Shares), as if it had acquired a direct interest in the Fund’s assets. The Section 743(b) adjustment is attributed solely to a purchaser of Shares and is not added to the bases of the Fund’s assets associated with all of the other Shareholders.Shareholders in the Fund. Depending on the relationship between a Shareholder’s purchase price for Shares and its unadjusted share of the Fund’s inside basis at the time of the purchase, the Section 754 election may be either advantageous or disadvantageous to the Shareholder as compared to the amount of gain or loss a Shareholder would be allocated absent the Section 754 election.
Constructive Termination
The Fund will experience a constructive termination for tax purposes if there is a sale or exchange of 50 percent or more of the total Shares in the Fund within a 12-month period. A constructive
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termination results in the closing of the Fund’s taxable year for all Shareholders in the Fund. In the case of a Shareholder reporting on a taxable year other than the taxable year used by the Fund (which is a fiscal year ending December 31), the early closing of the Fund’s taxable year may result in more than 12 months of its taxable income or loss being includable in the Shareholder’s taxable income for the year of termination. The Fund would be required to make new tax elections after a termination, including a new election under Section 754. A termination could also result in penalties if the Fund were unable to determine that the termination had occurred.
Treatment of Distributions
Creation Units
the U.S. Shareholder’s share of the Fund’s liabilities, as well as any proceeds from the sale. The gain or loss recognized will generally be taxable as capital gain or loss. Capital gain of non-corporate U.S. Shareholders is eligible to be taxed at reduced rates where the Shares sold are considered held for more than one year. Capital gain of corporate U.S. Shareholders is taxed at the same rate as ordinary income. Any capital loss recognized by a U.S. Shareholder on a sale of Shares will generally be deductible only against capital gains, except that a non-corporate U.S. Shareholder may also offset up to $3,000 per year of ordinary income with capital losses.
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Organization, Syndication and Other Expenses
Passive Activity Income and Loss
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The beneficial owners who are of a type, as identified by the nominee through whom their Shares are held, that do not ordinarily have U.S. federal tax return filing requirements (collectively, “Certain K-1 Unitholders”), have designated the Managing Owner as their tax agent (the “Tax Agent”) in dealing with the Trust. In light of such designation and pursuant to Treasury Regulation section 1.6031(b)-1T(c), as amended from time to time, the Trust will provide to the Tax Agent Certain K-1 Unitholders’ statements (as described in Treasury Regulation section 1.6031(b)-1T(a)(3), as amended from time to time).
Any challenge by the IRS to the tax treatment by a partnership of any item must be conducted at the partnership, rather than at the partner, level. A partnership ordinarily designates a “tax matters partner” (as defined under Section 6231 of the Code with respect to taxable years of partnerships beginning before January 1, 2018) as the person to receive notices and to act on its behalf in the conduct of such a challenge or audit by the IRS.
A U.S. federal income tax audit of the Fund’s partnershipShareholders. Any tax return may result in an audit of the returns of the U.S. Shareholders, which, in turn, could result in adjustments of items of a Shareholder that are unrelated to the Fund as well as to the Fund’s related items. In particular, there can be no assurance that the IRS, uponarising from an audit of a partnershipFund tax return, as well as any resulting interest and penalties, is generally payable by the Fund in the year in which the determination becomes final unless the Fund elects to send statements (“Adjustment Statements”) to
The Bipartisan Budget Act of 2015 implements a new regime fordiscuss with their own tax advisors the U.S. federal income tax audit of partnerships that generally applies for taxable years of partnerships beginning after December 31, 2017. The Managing Owner will be appointed the “partnership representative”possible implications of the Centralized
Non-U.S. Shareholders
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Regulated Investment Companies
UBTI generally does not include passive investment income, such as dividends, interest and capital gains, whether realized by the organization directly or indirectly through a partnership (such as the Fund) in which it is a partner. This type of income is exempt, subject to the discussion of “unrelated debt-financed income” below, even if it is realized from securities trading activity that constitutes a trade or business.
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State and local tax laws often differ from U.S. federal income tax laws with respect to the treatment of specific items of income, gain, loss, deduction and credit for state net income tax purposes. For Shareholders that are taxed as entities for state or local tax income tax purposes, the taxable nexus, income, and apportionment factors of the Fund may flow through to the Shareholder and such flow-through may disproportionately impact the taxability of the Shareholder in one or more jurisdictions relative to that Shareholder’s distributive share from the Fund. For Shareholders that are individuals, the taxable nexus and apportioned income of the Fund will generally flow through to the Shareholder and the Shareholder’s distributive share of the taxable income or loss of the Fund generally will be required to be included in determining its reportable income for state and local income tax purposes in the jurisdiction in which the Shareholder is a resident.
The Fund is likely not subject
Nonresident individual ShareholdersCode. While the tax shelter disclosure rules generally do not apply to a loss recognized on the disposition of an asset in which the taxpayer has a qualifying basis (generally a basis equal to the amount of cash paid by the taxpayer for such asset), such rules will be subjectapply to New York State personal income taxa taxpayer recognizing a loss with respect to interests in a pass-through entity (such as the Shares) even if its basis in such interests is equal to the amount of cash it paid. In addition, significant penalties may be imposed in connection with a failure to comply with these reporting requirements. U.S. Shareholders are urged to consult their share oftax advisors regarding the New York source incometax shelter disclosure rules and their possible application to them.
New York State and New York City residents will be subject to New York State and New York City personal income tax on their income recognized in respect of Shares. Because the Fund may conduct its business, in part, in New York City, corporate U.S. Shareholders generally will be subject to the New York franchise tax and the New York City general corporation tax by reasonresult of their investment in the Fund, unless certain exemptions apply. However, pursuant to applicable regulations, non-New York corporate U.S. Shareholders not otherwise subject to New York State franchise taxacquisition, ownership or New York City general corporation tax should not be subject to these taxes solely by reasondisposition of investing in shares based on qualification of the Fund as a “portfolio investment partnership” under applicable rules. No ruling from the New York State Department of Taxation and Finance or the New York City Department of Finance has been, or will be, requested regarding such matters.
Pursuant to the investment partnership provisions of the Illinois Income Tax Act, if (i) 90% or more of the gross income generated by a partnership consists of interest, dividends and gains from the sale or exchange of “qualifying investment securities” for purposes of the 1.5% Illinois personal property tax replacement income tax (the “Replacement Tax”), (ii) no less than 90% of an entity’s cost of its total assets consist of qualifying investment securities, deposits at banks or other financial institutions and office space and equipment reasonably necessary to carry on its activities as an investment partnership, and (iii) the entity is not a dealer in qualifying investment securities, then the entity will meet the requirements of the investment partnership provisions of the Illinois Income Tax Act and should not be subject to the Replacement Tax.
For the purposes of claiming the Replacement Tax exemption, qualifying investment securities include common and preferred stock; bonds, debentures, and other debt securities; foreign and domestic currency deposits; mortgage or asset-backed securities; repurchase agreements and loan participations; forward currency exchange contracts and forward and futures contracts on foreign currencies; stock and bond index securities and futures contracts and other similar financial securities and futures contracts on those securities; options for the purchase or sale of the foregoing securities, currencies, or contracts; regulated futures contracts; commodities or futures, forwards, or options with respect to such commodities; derivatives; and a partnership interest in another partnership that is an investment partnership. If the tests for the Replacement Tax exemption are not met, and the Fund incurs a Replacement Tax liability, such liability will be computed on and charged and allocated to the Shareholders who do not themselves pay the Replacement Tax.
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Whether or not the Fund qualifies as an investment partnership for Replacement Tax purposes is a question of fact that could change from year to year, and there can be no assurance that the Fund will in fact qualify in any particular year as an investment partnership that is exempt from the Replacement Tax.
Backup Withholding
Tax on Net Investment Income
A 3.8% taxEuroclear System will be imposed on somedeemed to have represented to and agreed with the Fund and Euroclear Bank as a condition to Shares being in the Euroclear System to furnish to the Euroclear Bank (a) its tax identification number, (b) notice of whether it is (i) a person who is not a United States person, (ii) a foreign government, an international organization or allany wholly owned agency or instrumentality of either of the net investment income of certain individuals with modified adjusted gross income of over $200,000 ($250,000 inforegoing or (iii) a tax exempt identity, and (c) such other information as the case of joint filers) and the undistributed net investment income of certain estates and trusts. For these purposes, it is expected that all or a substantial portion of a Shareholder’s share of Fund income will be net investment income. In addition, certain Fund expensesEuroclear Bank may not be deducted in calculating a Shareholder’s net investment income.
Tax Agent
The beneficial owners who are of a type, as identified by the nominee through whom their Shares are held, that do not ordinarily have U.S. federal tax return filing requirements (collectively, “Certain K-1 Unitholders”) have designated the Managing Owner as their tax agent (the “Tax Agent”) in dealing with the Trust. In light of such designation and pursuant to Treasury Regulation section 1.6031(b)-1T(c), as amendedrequest from time to time in order to comply with its United States tax reporting obligations. If a participant in the Trust willEuroclear System fails to provide tosuch information, Euroclear Bank may, among other courses of action, block trades in the Tax Agent Certain K-1 Unitholders’ statements (asShares and related income distributions of such term is defined under Treasury Regulation section 1.6031(b)-1T(a)(3)), as amended from time to time).
participant.
BENEFIT PLANS
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“Material “Material U.S. Federal Income Tax Considerations—Considerations — ‘Tax-Exempt Organizations’” at page 90.below. In addition, because they are not taxpaying entities, employee benefit plans are not subject to paying annual tax on profits (if any) of the Fund.
BEFORE DOING SO. AN INVESTMENT IN THE FUND IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. THE FUND IS NOT INTENDED AS A COMPLETE INVESTMENT PROGRAM.
apply.
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Code absent an available exemption from the prohibited transaction rules.
Unless otherwise agreed to by the Managing Owner and the Authorized Participant as provided in the next sentence, the
creation order settlement date as of 2:45 p.m., Eastern time, on the business day immediately following the date on which a valid order to create a BasketCreation Unit is accepted by the Fund,Fund. The creation or redemption will be at the NAV of 200,000100,000 Shares as of the closing time of the NYSE Arca or the last to close of the exchanges on which the Fund’s futures contracts are traded, whichever is later, on the date that a valid order to create a BasketCreation Unit is accepted by the Fund. Upon submission of a creation order, the Authorized Participant may request the Managing Owner to agree to a creation order settlement date up to 3two business days after the creation order date.
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Nature of Payment | Recipient | Payor | Amount of Payment | Services Provided | ||||||||||||
Selling Commission | Authorized Participants | Shareholders | No greater than 0.99% of the gross offering proceeds. | Brokering purchases and sales of the Shares and creating and redeeming | ||||||||||||
Distribution Services Fee | Invesco Distributors | Managing Owner | Capped at $25,000 per annum, not to exceed 0.25% of the gross offering proceeds | Assisting the Managing Owner with certain functions and duties relating to distribution and marketing, including reviewing and approving marketing materials, consulting with FINRA and ensuring compliance with FINRA marketing rules and maintaining certain books and records pertaining to the Fund. | ||||||||||||
|
agreed to reimburse such parties, solely from and to the extent of the Fund’s assets, for indemnification and contribution amounts due from the Managing Owner in respect of such liabilities to the extent the Managing Owner has not paid such amounts when due.
of the gross offering proceeds of the Fund’s Shares.
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Pursuant to theThe Distribution Services Agreement provides for Invesco Distributors willto be paid by the$25,000 per annum ($6,250 per quarter). The Managing Owner pays these fees to the Distributor out of the Management Fee of the Fund in an amount capped up to $25,000 per annum.
The Marketing Agent will be paid a marketing services fee by the Managing Owner. For each year ending on or prior to the sixth anniversary of the date of the Services Agreement, the marketing services fee will equal to the sum of: (i) 0.00345 times the lesser of Total Average Net Assets and $6,000,000,000, plus (ii) If such Total Average Net Assets were greater than $6,000,000,000, 0.002625 times the lesser of (A) the excess of such Total Average Net Assets over $6,000,000,000 and (B) $3,000,000,000, plus (iii) If such Total Average Net Assets were greater than $9,000,000,000, 0.000975 times the lesser of (A) the excess of such Total Average Net Assets over $9,000,000,000 and (B) $3,000,000,000, plus (iv) If such Total Average Net Assets were greater than $12,000,000,000, 0.00015 times the excess of such Total Average Net Assets over $12,000,000,000. For each year ending on or after to the sixth anniversary of the date of the Services Agreement, the marketing services fee will equal to 0.0005 times Total Average Net Assets. “Total Average Net Assets” means the sum of the “Average Net Assets” of all “Funds” for such period. “Average Net Assets” means in respect of any Fund, the average of the total NAV of such Fund (determined as described in its prospectus) as of the close of trading on each day of the applicable determination year during which the market on which such Fund is or was listed for trading was open for trading. For the avoidance of doubt, if a Fund was opened or terminated, or the applicable marketing services from the Marketing Agent were initiated or terminated, in the course of a determination year, the Average Net Assets will continue to be calculated with respect to all trading days in such determination year but with a value of zero for days on which the Fund did not exist or the Marketing Agent’s marketing services had been terminated or not yet initiated. For purposes of this paragraph only, “Funds” means, collectively, PowerShares DB Agriculture Fund, PowerShares DB Base Metals Fund, PowerShares DB Commodity Index Tracking Fund, PowerShares DB Energy Fund, PowerShares DB G10 Currency Harvest Fund, PowerShares DB Gold Fund, PowerShares DB Oil Fund, PowerShares DB Precious Metals Fund, PowerShares DB Silver Fund, PowerShares DB US Dollar Index Bearish Fund, PowerShares DB US Dollar Index Bullish Fund, and “New Invesco ETFs”. New Invesco ETF means, in part, any fund that both (i) is formed and sponsored or advised on or after the date of the
Services Agreement by the Managing Owner or an affiliate and (ii) meets all of the following criteria: (1) is a any vehicle that both (a) is listed, traded or sold in North America, Central America or South America and (b) either (i) has an investment strategy substantially similar to that of a Fund or (ii) satisfies (or would, if sponsored by the Managing Owner, satisfy) all of the criteria set forth in clauses (ii)(1) and (b) herein; (2) is marketed as having a principal investment objective of providing exposure to certain designated commodities or derivatives thereof, whether long, short, or otherwise; and (3) (A) invests, is permitted to invest in, or which has as a principal investment strategy the investment of, more than 51% of its net assets in certain designated commodities, or (B) establishes or maintains, is permitted to establish or maintain, or which has as a principal investment strategy to establish or maintain, exposure to derivatives of certain designated commodities with a gross aggregate notional value greater than 51% of its NAV.
The payments to Invesco Distributors and the Marketing Agent will not, in the aggregate, exceed 0.25% and 8.75%, respectively, of the gross offering proceeds of the offering (or in an aggregate amount equal to $5,000,000 and $175,000,000, respectively, of the aggregate $2,000,000,000 registered on the initial Registration Statement on Form S-1, SEC Registration Number 333-132484).offering. Invesco Distributors and the Marketing Agent will monitor compensation received in connection with the Fund to determine if the payments described hereunder must be limited, when combined with selling commissions charged and any price spreads realized by other FINRA members, in order to comply with the 10% limitation on total underwriters’ compensation pursuant to FINRA Rule 2310.
TheFund’s Shares trade on the NYSE Arca under the symbol “DBV.”
Sidley Austin llp
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the sections “Material U.S. Federal Income Tax Considerations” and “Purchases By Employee Benefit Plans” with respect to ERISA. Sidley Austin llpMorgan, Lewis & Bockius LLP has not represented, nor will it represent, the Fund or the Shareholders in matters relating to the Fund and no other counsel has been engaged to act on their behalf. Certain opinions of counsel have been filed with the SEC as exhibits to the Registration Statement of which this Prospectus is a part.
statements and other information regarding registrants that file electronically with the SEC. The address of such site ishttp://www.sec.gov.
AND ANNUAL REPORTS
www.sec.gov.
REFERENCE OF CERTAIN
DOCUMENTS
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We
We file
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Currency Harvest Fund A DISCLOSURE DOCUMENT AND A STATEMENT OF IMPORTANT STATEMENT OF ADDITIONAL INFORMATION IN CONJUNCTION WITH THE DISCLOSURE DOCUMENT. their expertise. To learn more, visit https://www.invesco.com/us. trader. Certain futures contracts, such as those for stock, establishes for violation of the Brokerage firms carrying accounts for traders in futures PART TWOSTATEMENT OF ADDITIONAL INFORMATIONPOWERSHARES
Part TwoCURRENCY HARVEST FUND“The Risks You Face”“Risk Factors” beginning at page 2112 in Part One. , 2016 PowerShares Capital Management LLC-107-PART TWOSTATEMENT OF ADDITIONAL INFORMATIONTABLE OF CONTENTSGENERAL INFORMATION RELATING TOINVESCO POWERSHARES CAPITALMANAGEMENT
General Information Relating to Invesco Capital Management LLCPowerShares is Leading the Intelligent ETF Revolution® through its familyan independent firm dedicated to delivering an investment experience that helps people get more out of life. We are privileged to manage more than 140 domestic$1,505 billion in assets on behalf of clients in more than 120 countries. Our capabilities span global regions, asset classes and international ETFs, with franchise assets of approximately $98 billion as of December 31, 2015. PowerShares ETFs tradeinvestment vehicles, and our investment teams have the intellectual freedom to capitalize on US stock exchanges, as well as exchanges throughout Canada and Europe.Invesco PowerShares is anchored on a vision of delivering investment performance through the ETF structure. With this vision, Invesco PowerShares focuses on offering value-added and innovative ETFs; starting with the inception of the first two Dynamic ETFs in May 2003. Integration with Invesco Ltd. since 2006 continues to give Invesco PowerShares a global presence.Invesco PowerShares is a part of Invesco Ltd., a leading independent global investment management company that provides comprehensive investment solutions and is listed on the New York Stock Exchange under the symbol IVZ.
The Futures Markets2016 wheat on a commodityfutures exchange may be fulfilled at any time before delivery of the commodity is required by the purchase of one contract of December 2016 wheat on the same exchange. The difference between the price at which the futures contract is sold or purchased and the price paid for the offsetting purchase or sale, after allowance for brokerage commissions, constitutes the profit or loss to the or other financial or economic indices approved by the CFTC, or Eurodollar contracts, settle in cash (irrespective of whether any attempt is made to offset such contracts) rather than delivery of any physical commodity.interest contracts are “hedgers” and “speculators.” Commercial interests, including farmers, that market or process commodities, and financial institutions that market or deal in commodities, including interest rate sensitive instruments, foreign currencies and stocks, and which are exposed to currency, interest rate and stock market risks, may use the futures markets for hedging. Hedging is a protective procedure designed to minimize losses that may occur because of price fluctuations occurring, for example, between the time a processor makes a contract to buy or sell a raw or processed commodity at a certain price and the time he must perform the contract. The futures markets enable the hedger to shift the risk of price fluctuations to the speculator. The speculator risks his capital with the hope of making profits from price fluctuations in futures interests contracts. Speculators rarely take delivery of commodities, but rather close out their positions by entering into offsetting purchases or sales of futures interests contracts. Since the speculator may take either a long or short position in the futures markets, it is possible for him to make profits or incur losses regardless of whether prices go up or down.(butthereon (but not forward contracts). Members of, and trades executed on, a particular exchange are subject to the rules of that exchange. Among the principal exchanges in the United States are the Chicago Board of Trade, the Chicago Mercantile Exchange, the New York Mercantile Exchange, and ICE Futures U.S.-109-some sort of security ora guarantee fund to which all clearing members of the exchange must contribute; this fund acts as an emergency buffer that enables the clearing house, at least to a large degree, to meet its obligations with regard to the “other side” of an insolvent clearing member’s contracts. Furthermore, clearing houses require margin deposits and continuously mark positions to market to provide some assurance that their members will be able to fulfill their contractual obligations. Thus, a central function of the clearing houses is to ensure the integrity of trades, and memberstrades. Members effecting futures transactions on an organized exchange typically need not worry about the solvency of the party on the opposite side of the trade;trade but, rather, their only remaining concerns are the respective solvencies of their commodity broker and the clearing house. The clearing house “guarantee” of performance on open positions does not run to customers. If a member firm goes bankrupt, customers could lose money.Foreign futures exchanges differ in certain respects from their U.S. counterparts. In contrast to U.S. exchanges, certain foreign exchanges are “principals’ markets,” where trades remain the liability of the traders involved, and the exchange clearing house does not become substituted for any party.Most U.S. futures exchanges (but generally not foreign exchanges or banks or dealers in the case of forward contracts) limit the amount of fluctuation in futures interests contract prices during a single trading day by regulation. These regulations specify what are referred to as “daily price fluctuation limits” or more commonly “daily limits.” The daily limits establish the maximum amount that the price of a futures interests contract may vary either up or down from the previous day’s settlement price. Once the daily limit has been reached in a particular futures interest, no trades may be made at a price beyond the limit. See “The Risks You Face – (37) The NAV Calculation of the Fund May Be Overstated or Understated Due to the Valuation Method Employed When a Settlement Price is not Available on the Date of NAV Calculation.”Although the Eligible Index Currencies that the Fund will invest in from time-to-time are not currently subject to “daily limits,” the terms and conditions of these contracts may change in the future.or CEAct, by the CFTC, the governmental agency having responsibility for regulation of futures exchanges and trading on those exchanges. (Investors should be aware that no governmental U.S. agency regulates the OTC foreign exchange markets.)CEActCommodity Exchange Act and the CFTC also regulate the activities of “commodity trading advisors” and “commodity pool operators” and the CFTC has adopted regulations with respect to certain of such persons’ activities. Pursuant to its authority, the CFTC requires a commodity pool operator (such as the Managing Owner) to keep accurate, current and orderly records with respect to each pool it operates. The CFTC may suspend the registration of a commodity pool operator if the CFTC finds that the operator has violated the CEActCommodity Exchange Act or regulations thereunder and in certain other circumstances. Suspension, restriction or termination of the Managing Owner’s registration as a commodity pool operator would prevent it, until such time (if any) as such registration were to be reinstated, from managing, and might result in the termination of, the Fund. The CEActCommodity Exchange Act gives the CFTC similar authority with respect to the activities of commodity trading advisors, such as the Managing Owner. If the registration of athe Managing Owner as a commodity trading advisor were to be terminated, restricted or suspended, the Managing Owner would be unable, until such time (if any) as such registration were to be reinstated, to render trading advice to the Fund. The Fund itself is not registered with the CFTC in any capacity.CEActCommodity Exchange Act requires all “futures commission merchants,” such as the Commodity Broker, to meet and maintain specified fitness and financial requirements, segregate customer funds from proprietary funds and account separately for all customers’ funds and positions, and to maintain specified book and records open to inspection by the staff of the CFTC.CEActCommodity Exchange Act also gives the states certain powers to enforce its provisions and the regulations of the CFTC.CEAct.Commodity Exchange Act. Shareholders may also be able to maintain a private right of action for certain violations of the CEAct.Commodity Exchange Act. The CFTC has adopted rules implementing the reparation provisions of the CEActCommodity Exchange Act which provide that any person may file a complaint for a reparations award with the CFTC-110-CEActCommodity Exchange Act against a floor broker, futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, and their respective associated persons.CEAct,Commodity Exchange Act, the NFA has been formed and registered with the CFTC as a “registered futures association.” At the present time, the NFA is the only non-exchange self-regulatory organization for commoditiesderivatives professionals. NFA members are subject to NFA standards relating to fair trade practices, financial condition,market integrity, and consumer protection. As the self-regulatory body of the commoditiesderivatives industry, the NFA promulgates rules governing the conduct of commodityderivatives professionals and disciplines those professionals who do not comply with such standards. The CFTC has delegated to the NFA responsibility for the registration of commodity trading advisors, commodity pool operators, futures commission merchants, introducing brokers, and swap dealers, among others, and their respective associated persons, as applicable, and floor brokers. The Commodity Broker and the Managing Owner are members of the NFA (the Fund itself is not required to become membersa member of the NFA).commodityfutures exchanges and markets.access to such markets from the United States with respect to foreign boards of trade that are registered as such with the CFTC.interests which contracts hecontract that the trader purchases or sells. Futures interestscontracts are customarily bought and sold on marginsmargin that representrepresents a very small percentage (ranging upward from less than 2%) of the purchase price of the underlying commodity being traded. Because of such low margins, price fluctuations occurring in the futures markets may create profits and losses that are greater, in relation to the amount invested, than are customary in other forms of investments. The minimum amount of margin required in connection with a particular futures interests contract is set from time-to-timetime to time by the exchange on which such contract is traded, and may be modified fromtime-to-time time to time by the exchange during the term of the contract.interests contracts may not accept lower, and generally require higher, amounts of margin as a matter of policy in order to afford further protection for themselves. interests contract position changes to a point where the margin on deposit does not satisfy maintenance margin requirements, a margin call is made by the commodity broker. If the margin call is not met within a reasonable time, the broker may close out the Fund’s position. With respect to the Managing Owner’s trading, only the Managing Owner, and not the Fund or its Shareholders personally, will be subject to margin calls.intentionally.intentionally]
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PART II
Information Not Required in Prospectus
Item 13.
Item 13. | Other Expenses of Issuance and Distribution. |
The following expenses reflect the estimated amounts required to prepare and file this Registration Statement (other than selling commissions).
Approximate | ||||||||
Amount | Approximate Amount | |||||||
Securities and Exchange Commission Registration Fee* | $ | 76,122 | $ | 71,743 | ||||
Financial Industry Regulatory Authority Filing Fee* | 0 | |||||||
Printing Expenses | 50,000 | $ | 125,000 | |||||
Fees of Independent Registered Public Accounting Firm | 10,750 | $ | 27,500 | |||||
Fees of Counsel | 20,000 | $ | 93,000 | |||||
|
| |||||||
Total | $ | 156,872 | $ | 317,243 | ||||
|
* | The filing fee in |
Item 14.
Item 14. | Indemnification of Directors and Officers. |
Section 4.7 of the Fifth Amended and Restated Declaration of Trust and Trust Agreement of the Fund, as amended from time-to-time,Trust filed as an exhibit to this Registration Statement, and, as amended from time-to-time or the Trust Agreement, (the “Trust Agreement”), provides for the indemnification of Covered PersonsInvesco Capital Management (the “Managing Owner”) and its Affiliates (as such term is defined in the Trust Agreement) (the Managing Owner and its Affiliates collectively, “Covered Persons”). EachUnder the Trust Agreement, each Covered Person shall be indemnified by the FundTrust to the fullest extent permitted by law against any losses, judgments, liabilities, expenses, and amounts paid in settlement of any claims sustained by it in connection with its activities for the Fund,Trust, except with respect to any matter as to which such Covered Person shall have been finally adjudicated in any action, suit, or other proceeding not to have acted in good faith in the reasonable belief that such Covered Person’s action was in the best interest of the FundTrust and except that no Covered Person shall be indemnified against any liability to the FundTrust or to the Limited Owners (as such term is defined in the Trust Agreement) by reason of willful misconduct or gross negligence of such Covered Person. Any such indemnification will only be recoverable from the Trust Estate (as such term is defined in the Trust Agreement). All rights to indemnification permitted therein and payment of associated expenses shall not be affected by the dissolution or other cessation to exist of the Managing Owner, or the withdrawal, adjudication of bankruptcy or insolvency of the Managing Owner, or the filing of a voluntary or involuntary petition in bankruptcy under Title 11 of the Code by or against the Managing Owner. The source of payments made in respect of indemnification under the Trust Agreement shall be the assets of the Fund.Trust.
Item 15. | Recent Sales of Unregistered Securities. |
None.
II-1
Item 15. Recent Sales of Unregistered Securities.
None.
Item 16. | Exhibits and Financial Statement Schedules.
|
(a) Exhibits. The following documents (unless otherwise indicated) are filed herewith and made a part of this Registration Statement:
1 | Previously filed as an exhibit to |
2 | Previously filed as an exhibit to Form 8-K on February 25, 2015 and incorporated herein by reference. |
3 | Previously filed as an exhibit to Form 8-K on June 20, 2016 and incorporated herein by reference. |
Previously filed as an exhibit to Form 8-Kon |
5 | Previously filed as an exhibit to Form 10-Q on November 6, 2020 and incorporated herein by reference. |
6 | Previously filed as an exhibit to Form 8-K on November 28, 2016 and incorporated herein by reference. |
7 | Previously filed as an exhibit to Form 8-K on October 1, 2019 and incorporated herein by reference. |
8 | Previously filed as an exhibit to Form S-1 on March 16, 2006 and incorporated herein by reference. |
9 | Previously filed as an exhibit to Form 8-K on May 19, 2020 and incorporated herein by reference. |
(b) The following financial statements are included in the Prospectus:
The financial statements of the Fund are incorporated by reference as described under “Incorporation by Reference of Certain Documents”
.
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Item 17. |
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(a) | The undersigned registrant hereby undertakes: |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement; |
(i) | To include any prospectus required by |
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; |
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
Provided, however, That:
(A) Paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration statement is on Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to sectionSection 13 or sectionSection 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement; and
(B) Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3S-1 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to sectionSection 13 or sectionSection 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be thebona fide offering thereof. |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
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(4) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
(i) | If the registrant is relying on Rule 430B: |
(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to
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Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by sectionSection 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initialbona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or
(ii) | If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(5) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: |
(a) The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
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(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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(c) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c)(d) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers directors or controlling persons of the registrant pursuant to the foregoing provisions or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by ana director, officer director, or controlling person of the registrant in the successful defense of any such action, suit or proceeding) is asserted by such director, officer director or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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Pursuant to the requirements of the Securities Act of 1933, the Managing Owner of the Registrant hashave duly caused this Registration Statement on Form S-1 to be signed on itstheir behalf by the undersigned, thereunto duly authorized, in the City of Downers Grove, State of Illinois, on the 25th21st day of October, 2016.June, 2021.
Invesco DB G10 Currency Harvest Fund | ||
By: | Invesco | |
its Managing Owner | ||
By: | /s/ | |
Name: | ||
Title: Chief Executive Officer of the Managing Owner |
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints each of Anna Paglia, Melissa Nguyen and Adam Henkel, Anita De Frank and William McAllister as his or her true and lawful attorneys-in-fact with full power to sign on behalf of such person, in the capacities indicated below, a registration statement on Form S-1 (or other appropriate form) for filing with the Securities and Exchange Commission under the Securities Act of 1933, as amended, and any other documents in support thereof or supplemental or amendatory thereto, and any and all other amendments (including post-effective amendments) to such registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and all further amendments, including post-effective amendments, thereto)), and each hereby ratifies and confirms the signature of such person as it may be signed by said attorneys-in-fact, and each of them individually, on any and all amendments to this registration statement or any such subsequent related registration statement.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-1 has been signed by the following persons on behalf of the Managing Owner of the Registrant in the capacities and on the date indicated.
/s/ Name: | Chief Executive Officer
| |||
/s/ Name: | Principal Financial and Accounting Officer,
(principal financial officer and principal accounting officer) | |||
/s/ Name: | Manager | |||
/s/ John Zerr Name: John Zerr | Manager |
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