Invesco DB US Dollar Index Bearish Fund

What they do

The Fund is a series of Invesco DB US Dollar Index Trust, formed in 2006, that establishes short positions in DX Contracts, futures linked to the six Index Currencies of the ICE U.S. Dollar Index (Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc). It aims to track the Deutsche Bank Short USD Currency Portfolio Index Excess Return. Collateral is held in U.S. Treasury Obligations, money market mutual funds and T-Bill ETFs, and shares are offered only to Authorized Participants in 50,000-share Creation Units.

Revenue drivers

• Short DX futures positions — The Fund's performance, positive or negative, is driven primarily by its short positions in DX Contracts, which are intended to track the inverse of the Index.
• Treasury Income — Interest income from holdings of United States Treasury Obligations, which the Fund may invest in directly, contributes to the excess of income over expenses.
• Money Market Income — Dividends from holdings in money market mutual funds (affiliated or otherwise) held for margin and/or cash management purposes.
• T-Bill ETF Income — Dividends or distributions of capital gains from holdings of T-Bill ETFs, which are ETFs tracking indexes of U.S. Treasury Obligations with remaining maturity up to 12 months.

Recent performance

Annual net income was $9.0M in 2025, a swing from a $3.4M loss in 2024 and a $2.4M gain in 2023. Operating cash flow was negative $78.5M in 2025, versus positive $10.9M in 2024. At June 30, 2026, total assets were $112.6M, total liabilities $5.4M and shareholder equity $107.2M, with no cash and equivalents reported. The 10-Q discloses net assets of $107,178,163 at June 30, 2026, one-day 99th percentile VaR of $788,393 and 16 VaR exceedances for the six-month period.

Strategy

The Fund's stated objective is to track changes, whether positive or negative, in the level of the Deutsche Bank Short USD Currency Portfolio Index Excess Return by establishing short positions in DX Contracts. Performance is also intended to reflect the sum of Treasury Income, Money Market Income and T-Bill ETF Income over Fund expenses. If the Managing Owner judges it impracticable or inefficient to gain exposure to a specific DX Contract, the Fund may use a different month DX Contract, another substantially similar futures contract, futures on the Index Currencies, or a forward, swap or OTC derivative referencing the Index Currencies. The Fund holds U.S. Treasury Obligations, money market funds and T-Bill ETFs as collateral for margin and cash management.

Risks

• Currency market risk — The Fund's market risk is primarily influenced by changes in the prices of currencies underlying the USDX, and its short positions can lose value if the U.S. dollar strengthens.
• VaR exceedance and risk of ruin — The 10-Q states actual trading or non-trading losses could far exceed the disclosed VaR or the Fund's experience to date, and it reported 16 VaR exceedances for the six months ended June 30, 2026.
• Futures market liquidity — The Managing Owner may judge it impracticable to gain exposure to a DX Contract in scenarios where the futures market is thinly traded.
• Cash flow volatility — Operating cash flow swung from positive $10.9M in 2024 to negative $78.5M in 2025, and the June 30, 2026 balance sheet reported no cash and equivalents.

Outlook

The 10-Q contains no material forward-looking estimates beyond the Quantitative and Qualitative Disclosures About Market Risk, which state that the Fund is designed to track the Index and that its market risk is primarily influenced by currency prices. Management states that no material estimates involving significant estimation uncertainty were used in preparing the financial statements. No specific guidance on future performance is provided in the excerpts.