10-Q: Invesco CurrencyShares Swiss Franc Trust Reports Mixed Results for Q2 2024 Amid Currency Volatility

The Invesco CurrencyShares Swiss Franc Trust experienced a net comprehensive loss of $14,061 for the six months ended June 30, 2024, influenced by market volatility and central bank actions.

Summary

• Invesco CurrencyShares Swiss Franc Trust reported its financial results for the quarter ended June 30, 2024.
• The Trust's investment objective is to reflect the price of the Swiss Franc in U.S. Dollars, less expenses.
• The Trust primarily holds Swiss Francs in deposit accounts.
• For the six months ended June 30, 2024, the Trust reported a net comprehensive loss of $14,061, compared to a loss of $395,860 for the same period in 2023.
• The Trust's assets decreased from $190.37 million on December 31, 2023, to $138.62 million on June 30, 2024.
• The number of outstanding shares decreased from 1,800,000 on December 31, 2023, to 1,400,000 on June 30, 2024.
• The interest rate on the primary deposit account was 0.25% as of June 30, 2024.
• The Sponsor's fee is accrued daily at an annual rate of 0.40% of the Swiss Francs in the Trust.
• The Trust distributes excess interest earned, if any, to shareholders on a monthly basis.
• The Swiss Franc (CHF/USD) posted a gain in the second quarter of 2024.
• The Swiss Franc (CHF/USD) posted a loss in the first half of 2024, with the pair down nearly 7%.

Sentiment

Score: 4

Explanation: The report indicates a net loss and a decrease in assets, but also a smaller loss compared to the previous year. The sentiment is slightly negative due to the overall loss, but tempered by the improvement year-over-year.

Positives

• The Trust's net comprehensive loss decreased significantly from $395,860 for the six months ended June 30, 2023, to $14,061 for the same period in 2024.
• The Swiss Franc (CHF/USD) posted a gain in the second quarter of 2024.

Negatives

• The Trust experienced a net comprehensive loss of $14,061 for the six months ended June 30, 2024.
• The Trust's assets decreased from $190.37 million to $138.62 million.
• The number of outstanding shares decreased from 1,800,000 to 1,400,000.
• The Swiss Franc (CHF/USD) posted a loss in the first half of 2024, with the pair down nearly 7%.

Risks

• Fluctuations in the price of the Swiss Franc could materially adversely affect an investment in the Shares.
• A decline in the Swiss Franc to USD exchange rate will have an adverse effect on the value of the Shares.
• Substantial sales of Swiss Francs by the official sector could adversely affect an investment in the Shares.
• The concentration of the Trust's assets in accounts held by a single financial institution increases the potential for loss if the Depository becomes insolvent.

Future Outlook

The report contains forward-looking statements regarding future developments and their potential effects, which are subject to various factors that may cause actual results to differ materially.

Management Comments

• The management of the Sponsor concluded that the Trust's disclosure controls and procedures were effective.
• Neither Invesco Specialized Products, LLC (the Sponsor) nor any other person assumes responsibility for the accuracy or completeness of forward-looking statements contained in this report.

Industry Context

The performance of the Invesco CurrencyShares Swiss Franc Trust is directly tied to the value of the Swiss Franc relative to the U.S. dollar, making it susceptible to global economic events, central bank policies, and market sentiment regarding safe-haven currencies.

Comparison to Industry Standards

• The Invesco CurrencyShares Swiss Franc Trust (FXF) is designed to track the price of the Swiss Franc, similar to other currency ETFs like the Invesco CurrencyShares Euro Trust (FXE) or the CurrencyShares Japanese Yen Trust (FXY).
• Unlike broad market ETFs, currency ETFs are highly sensitive to interest rate differentials and monetary policy decisions of the respective central banks.
• The 0.40% expense ratio is typical for currency ETFs, but investors should compare this to the potential returns based on currency movements.
• The decrease in assets under management (AUM) reflects broader trends in currency markets, where investor sentiment can shift rapidly based on macroeconomic developments.

Related Party Transactions

• The Trust pays the Sponsor a Sponsors fee, which accrues daily at an annual nominal rate of 0.40 % of the Swiss Francs in the Trust (including all unpaid interest but excluding unpaid fees, each as accrued through the immediately preceding day) and is paid monthly.

Stakeholder Impact

• Shareholders are exposed to the risk of fluctuations in the Swiss Franc/USD exchange rate.
• Shareholders may receive monthly distributions if interest earned exceeds the Sponsor's fee and other expenses.
• Authorized Participants are able to create and redeem Baskets of Shares.

Key Dates

Keywords

Swiss Franc, Invesco CurrencyShares, Currency ETF, FXF, Foreign Exchange, Swiss National Bank, CHF/USD, Sponsor's Fee, Interest Rate, Net Asset Value