Invesco DB Energy Fund

What they do

The Fund seeks to track the performance of the DBIQ Optimum Yield Energy Index Excess Return, which reflects investing in energy futures contracts. It invests primarily in exchange-traded futures on commodities such as WTI crude oil, Brent crude oil, heating oil, gas oil, RBOB gasoline, and natural gas. The Fund also holds U.S. Treasury Obligations, money market mutual funds, and T-Bill ETFs as collateral for margin and cash management.

Revenue drivers

• Energy futures trading — The Fund's performance is driven primarily by price changes in its portfolio of energy futures contracts, which are selected to track the Index.
• Treasury Income — Interest income from holdings of U.S. Treasury Obligations contributes to the Fund's returns, though it is secondary to futures trading.
• Money Market Income and T-Bill ETF Income — Dividends and capital gains distributions from money market mutual funds and T-Bill ETFs provide additional income, but are not the primary driver.

Recent performance

For fiscal year 2025, the Fund reported a net loss of $1.1 million, compared to net income of $2.4 million in 2024. Operating cash flow decreased from $30.4 million in 2024 to $3.5 million in 2025. As of June 30, 2026, net assets totaled $82.1 million, with a one-day 99% VaR of $3.66 million. During the six months ended June 30, 2026, VaR was exceeded 8 times, and for the year ended December 31, 2025, it was exceeded 11 times.

Strategy

The Fund's strategy is to invest in a portfolio of exchange-traded futures contracts that track the Index, rebalanced annually in November. It may invest in substitute futures contracts if index contracts become impractical or illiquid. The Fund also holds short-term Treasuries or T-Bill ETFs as collateral for margin and cash management.

Risks

• Commodity price volatility — Market movements can produce frequent changes in the fair value of open positions, leading to potential trading losses.
• Position limits — The CFTC and exchanges impose position limits on futures contracts, which may force the Fund to use substitute contracts that could correlate imperfectly.
• Tracking error — The Fund may not perfectly track the Index due to fees, expenses, and the use of substitute futures contracts, potentially causing performance divergence.
• Market risk of collateral — Although non-trading market risk from Treasury and T-Bill ETF holdings is expected to be immaterial, there is still exposure to interest rate and credit changes.

Outlook

Management notes that the Fund's performance is subject to market risks and forward-looking statements are not guaranteed. The Fund's net assets as of June 30, 2026 grew to $82.1 million from $41.0 million at December 31, 2025. The Index composition was updated effective November 10, 2025, and the Fund will continue to rebalance annually.