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What changed in Invesco CurrencyShares Euro Trust's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Invesco CurrencyShares Euro Trust's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+43 added−39 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-24)

Top changes in Invesco CurrencyShares Euro Trust's 2023 10-K

43 paragraphs added · 39 removed · 31 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe Shares are intended to offer investors an opportunity to participate in the market for the euro through an investment in securities. The Shares are intended to provide institutional and retail investors with a simple, cost-effective means of gaining investment benefits similar to those of holding the euro.
Biggest changeThe investment objective of the Trust is for the Shares to reflect the price in USD of euro plus accrued interest, if any, less the expenses of the Trust’s operations. The Shares are intended to offer investors an opportunity to participate in the market for the euro through an investment in securities.
The Trust incurred $1,108,325 for the year ended December 31, 2022 in Sponsor’s fees. The Trustee The Bank of New York Mellon, a banking corporation with trust powers organized under the laws of the State of New York, serves as the Trustee. The Trustee is responsible for the day-to-day administration of the Trust, including keeping the Trust’s operational records.
The Trust incurred $1,034,961 for the year ended December 31, 2023 in Sponsor’s fees. The Trustee The Bank of New York Mellon, a banking corporation with trust powers organized under the laws of the State of New York, serves as the Trustee. The Trustee is responsible for the day-to-day administration of the Trust, including keeping the Trust’s operational records.
ITEM 1. BUSINESS Overview The Invesco CurrencyShares ® Euro Trust (the “Trust”) is a grantor trust that was formed on December 5, 2005. The Shares began trading on the New York Stock Exchange under the ticker symbol “FXE” on December 12, 2005. The primary listing of the Shares was transferred to NYSE Arca, Inc. (“NYSE Arca”) on October 30, 2007.
ITEM 1. B USINESS. Overview The Invesco CurrencyShares ® Euro Trust (the “Trust”) is a grantor trust that was formed on December 5, 2005. The Shares began trading on the New York Stock Exchange under the ticker symbol “FXE” on December 12, 2005. The primary listing of the Shares was transferred to NYSE Arca, Inc.
An Authorized Participant is a Depository Trust Company (“DTC”) participant that is a registered broker-dealer or other securities market participant, such as a bank or other financial institution that is not required to register as a broker-dealer to engage in securities transactions.
An Authorized Participant is a Depository Trust Company (“DTC”) participant that is a registered broker-dealer or other securities market participant, such as a bank or other financial institution that is not required to register as a broker-dealer to engage in securities transactions. 2 Before initiating a creation or redemption order, an Authorized Participant must have entered into a Participant Agreement with the Sponsor and the Trustee.
Before initiating a creation or redemption order, an Authorized Participant must have entered into a Participant Agreement with the Sponsor and the Trustee. The Participant Agreement provides the procedures for the creation and redemption of Baskets and for 2 the delivery of euro required for creations and redemptions. The Participant Agreements may be amended by the Trustee and the Sponsor.
The Participant Agreement provides the procedures for the creation and redemption of Baskets and for the delivery of euro required for creations and redemptions. The Participant Agreements may be amended by the Trustee and the Sponsor.
The Trust General The Trust holds euro and, from time to time, issues Baskets in exchange for deposits of euro and distributes euro in connection with redemptions of Baskets.
The value of the holdings of the Trust is reported on the Trust’s website, www.invesco.com/etfs, each business day. The Trust General The Trust holds euro and, from time to time, issues Baskets in exchange for deposits of euro and distributes euro in connection with redemptions of Baskets.
The Trust does not engage in any activities designed to obtain profit from, or ameliorate losses caused by, changes in the price of the euro. Investing in the Shares does not insulate the investor from certain risks, including price volatility. The value of the holdings of the Trust is reported on the Trust’s website, www.invesco.com/etfs, each business day.
The Trust is a passive investment vehicle and does not have any officers, directors or employees. The Trust does not engage in any activities designed to obtain profit from, or ameliorate losses caused by, changes in the price of the euro. Investing in the Shares does not insulate the investor from certain risks, including price volatility.
The Shares are bought and sold on NYSE Arca like any other exchange-listed security. The Shares are backed by the assets of the Trust, which does not hold or use derivative products. The Trust is a passive investment vehicle and does not have any officers, directors or employees.
The Shares are intended to provide institutional and retail investors with a simple, cost-effective means of gaining investment benefits similar to those of holding the euro. The Shares are bought and sold on NYSE Arca like any other exchange-listed security. The Shares are backed by the assets of the Trust, which does not hold or use derivative products.
The Trust issues shares (the “Shares”) in blocks of 50,000 (a “Basket”) in exchange for deposits of euro and distributes euro in connection with the redemption of Baskets. The investment objective of the Trust is for the Shares to reflect the price in USD of euro plus accrued interest, if any, less the expenses of the Trust’s operations.
(“NYSE Arca”) on October 30, 2007. The Trust issues shares (the “Shares”) in blocks of 50,000 (a “Basket”) in exchange for deposits of euro and distributes euro in connection with the redemption of Baskets.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeConsequently, the price of the euro could decline, which would adversely affect an investment in the Shares. REGULATORY MATTERS Changes to United States tariff and trade policies may increase the volatility of foreign exchange rates. This volatility could materially and adversely affect the performance of the Shares.
Biggest changeREGULATORY MATTERS Changes to United States tariff and trade policies may increase the volatility of foreign exchange rates. This volatility could materially and adversely affect the performance of the Shares. There have been ongoing discussions and commentary regarding potential significant changes to United States trade policies, treaties and tariffs.
Cyber security failures or breaches of the Trust’s third party service providers (including, but not limited to, the Trustee and the Sponsor) have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, the inability of Shareholders or Authorized Participants to transact business in Shares and Baskets respectively, violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, and/or additional compliance costs.
Cyber security failures or breaches of the Trust’s third party service providers (including, but not limited to, the Trustee and the Sponsor) have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, the inability of Shareholders or Authorized Participants to transact business in Shares and Baskets respectively, violations of 7 applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, and/or additional compliance costs.
Neither the Shares nor the Deposit Accounts and the euro deposited in them are deposits insured against loss by the FDIC, any other federal agency of the United States or the Financial Services Compensation Scheme of England. Shareholders do not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act of 1940.
Neither the Shares nor the Deposit Accounts and the euro deposited in them are deposits insured against loss by the FDIC, any other federal agency of the United States or the Financial Services Compensation Scheme of England. 5 Shareholders do not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act of 1940.
All other investors that desire to purchase or sell Shares must do so through NYSE Arca or in other markets, if any, in which the Shares are traded. 5 INSOLVENCY OR TERMINATION OF THE DEPOSITORY OR TRUST If the Depository becomes insolvent, its assets may not be adequate to satisfy a claim by the Trust or any Authorized Participant.
All other investors that desire to purchase or sell Shares must do so through NYSE Arca or in other markets, if any, in which the Shares are traded. INSOLVENCY OR TERMINATION OF THE DEPOSITORY OR TRUST If the Depository becomes insolvent, its assets may not be adequate to satisfy a claim by the Trust or any Authorized Participant.
For example, the resulting delay would adversely affect the value of the Shareholder’s redemption distribution if the 6 NAV were to decline during the delay. In the Depositary Trust Agreement, the Sponsor and the Trustee disclaim any liability for any loss or damage that may result from any such rejection.
For example, the resulting delay would adversely affect the value of the Shareholder’s redemption distribution if the NAV were to decline during the delay. In the Depositary Trust Agreement, the Sponsor and the Trustee disclaim any liability for any loss or damage that may result from any such rejection.
If the License Agreement is terminated and one or more of The Bank of New York Mellon’s patent applications issue as patents, then The Bank of New York Mellon may claim that the operation of the Trust violates its patent or patents and seek an injunction forcing the Trust to cease operation and the Shares to cease trading.
If the License Agreement is terminated and one or 6 more of The Bank of New York Mellon’s patent applications issue as patents, then The Bank of New York Mellon may claim that the operation of the Trust violates its patent or patents and seek an injunction forcing the Trust to cease operation and the Shares to cease trading.
ITEM 1A. RISK FACTORS You should consider carefully the risks described below before making an investment decision. You should also refer to the other information included in this report, including the Trust’s financial statements and the related notes. ECONOMIC CONDITIONS The value of the Shares relates directly to the value of the euro held by the Trust.
ITEM 1A. RISK FA CTOR S. You should consider carefully the risks described below before making an investment decision. You should also refer to the other information included in this report, including the Trust’s financial statements and the related notes. ECONOMIC CONDITIONS The value of the Shares relates directly to the value of the euro held by the Trust.
In addition, a service provider that has experienced a cyber security incident may divert resources normally devoted to servicing the Trust to addressing the incident, which would be likely to have an adverse effect on the Trust’s operations. 7 ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2.
In addition, a service provider that has experienced a cyber security incident may divert resources normally devoted to servicing the Trust to addressing the incident, which would be likely to have an adverse effect on the Trust’s operations. 8 ITEM 1B. UNRESOLV ED STAFF COMMENTS. None.
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There have been ongoing discussions and commentary regarding potential significant changes to United States trade policies, treaties and tariffs.
Added
Consequently, the price of the euro could decline, which would adversely affect an investment in the Shares. International Armed Conflicts May Result in Volatility in Currency Prices that Could Adversely Affect the Fund's Performance.
Removed
COVID-19 PANDEMIC The ongoing COVID-19 pandemic continues to impact global, regional and national economies in unexpected and unpredictable ways that could materially and adversely affect the value of the Shares.
Added
As a result of increasingly interconnected global economies and financial markets, armed conflict between countries or in a geographic region, for example the current conflicts between Russia and Ukraine in Europe and Hamas and Israel in the Middle East, may impact the value of the currencies held by the Fund.
Removed
The ongoing COVID-19 pandemic continues to have material adverse effects on the global economy and has increased economic uncertainty and financial market volatility and caused a decline in consumer and business confidence.
Added
Such conflicts, and other corresponding events, have had, and could continue to have, severe effects on regional and global economic and financial markets, including increased volatility, reduced liquidity, and overall uncertainty. Pandemics and other public health emergencies could disrupt the global economy and adversely impact the Trust's performance.
Removed
No assurance can be given that the disruption will end soon or that the value of the Shares will not be affected materially and adversely by the pandemic and its ongoing global economic impact. Escalation or prolonged continuation of the pandemic could exacerbate other risk factors identified in this Report and materially and adversely affect the value of the Shares.
Added
The impact of the COVID-19 pandemic was extensive in many aspects of society. The outbreak resulted in a significant number of deaths, adversely impacted global commercial activity, and led to significant uncertainty and disruptions in the global economy and financial markets.
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PROPERTIES The Trust does not own or use physical properties in the conduct of its business. The Sponsor’s headquarters are located at 3500 Lacey Road, Suite 700, Downers Grove, Illinois 60515. ITEM 3. LEGAL PROCEEDINGS None. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 8 PART II
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Many countries reacted by instituting quarantines, prohibitions on travel and the closure of offices, businesses, schools, retail stores and other public venues. Businesses also implemented similar precautionary measures. While restrictions have eased, it is possible that they may be reinstated in the future in response to new variants or new public health emergencies.
Added
Such measures, as well as the general uncertainty surrounding the dangers and impact of a future public health crisis, may result in significant disruption in supply chains and economic activity. Consumer, corporate and financial confidence may be materially adversely affected by a future outbreak. Such erosion of confidence may lead to or extend to a localized or global economic downturn.
Added
Future pandemics and other public health emergencies 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 value of the currency held by the Trust, which may adversely affect an investment in the Shares.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(c) Although the Trust did not redeem Shares directly from its shareholders, the Trust redeemed Baskets from Authorized Participants during the three months ended December 31, 2022 as follows: Period of Redemption Total Number of Shares Redeemed Average Price Paid per Share October 1, 2022 to October 31, 2022 1,050,000 $ 91.41 November 1, 2022 to November 30, 2022 1,300,000 $ 94.80 December 1, 2022 to December 31, 2022 950,000 $ 98.01 Total 3,300,000 $ 94.64 ITEM 6.
Biggest change(c) Although the Trust did not redeem Shares directly from its shareholders, the Trust redeemed Baskets from Authorized Participants during the three months ended December 31, 2023 as follows: Period of Redemption Total Number of Shares Redeemed Average Price Paid per Share October 1, 2023 to October 31, 2023 250,000 $ 97.01 November 1, 2023 to November 30, 2023 200,000 $ 99.74 December 1, 2023 to December 31, 2023 50,000 $ 101.38 Total 500,000 $ 98.54 ITEM 6.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The Shares began trading on the New York Stock Exchange on December 12, 2005 under the symbol “FXE.” The primary listing of the Shares was transferred to NYSE Arca on October 30, 2007.
ITEM 5. Market for Re gistrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information The Shares began trading on the New York Stock Exchange on December 12, 2005 under the symbol “FXE.” The primary listing of the Shares was transferred to NYSE Arca on October 30, 2007.
Holders As of January 31, 2023, the Trust had 93 holders of record of its Shares. Sales of Unregistered Securities and Use of Proceeds of Registered Securities (a) There have been no unregistered sales of the Shares. No Shares are authorized for issuance by the Trust under equity compensation plans. (b) Not applicable.
Holders As of January 31, 2024, the Trust had 88 holders of record of its Shares. Sales of Unregistered Securities and Use of Proceeds of Registered Securities (a) There have been no unregistered sales of the Shares. No Shares are authorized for issuance by the Trust under equity compensation plans. (b) Not applicable.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeDistributions paid during the current reporting period follow (annualized yield reflects the estimated annual yield an investor would receive if a monthly distribution stayed the same for the entire year going forward, and is calculated by annualizing the monthly distribution and dividing by the Trust NAV for the dates listed below): FXE Distribution History Date Value NAV Yield Annualized Yield 12/1/2022 $ 0.01480 $ 95.01 0.02% 0.19% Results of Operations During the years ended December 31, 2022 and 2021, the Trust’s net comprehensive income (loss) was, in part, impacted by market volatility and uncertainty caused by the novel coronavirus known as COVID-19, which is considered to be an unusual or infrequent event.
Biggest changeDistributions paid during the current reporting period follow (annualized yield reflects the estimated annual yield an investor would receive if a monthly distribution stayed the same for the entire year going forward, and is calculated by annualizing the monthly distribution and dividing by the Trust NAV for the dates listed below): FXE Distribution History Date Value NAV Yield Annualized Yield 10/2/2023 $ 0.17430 $ 97.86 0.18% 2.17% 11/1/2023 $ 0.19348 $ 97.72 0.20% 2.33% 12/1/2023 $ 0.19276 $ 100.86 0.19% 2.33% Results of Operations During the years ended December 31, 2023 and 2022, the Trust's net comprehensive income (loss) was, in part, impacted by market volatility resulting from the US banking sector turmoil, ambiguity around the Federal Reserve's tightening cycle, and rising geopolitical concerns from the conflict in the Middle East, for 2023, and uncertainty caused by the novel coronavirus known as COVID-19, as well as the Russia-Ukraine conflict, for 2022, which are considered to be unusual or infrequent events.
In addition to the description below, please refer to Note 3 to the financial statements for further discussion of our accounting policies. The functional currency of the Trust is the euro in accordance with ASC 830, Foreign Currency Translation.
In addition to the description below, please refer to Note 3 to the financial statements for further discussion of our accounting policies. The functional currency of the Trust is the euro in accordance with ASC 830, Foreign Currency Translation. 14
The chart illustrates movements in the price of euro in USD and is based on the Closing Spot Rate: 10 NAV per Share; Valuation of the Euro The following chart illustrates the movement in the price of the Shares based on (1) NAV per Share, (2) the “bid” and “ask” midpoint offered on NYSE Arca and (3) the Closing Spot Rate, expressed as a multiple of 100 euro: Liquidity and Capital Resources The Trust does not have any material cash requirements as of the end of the latest fiscal period.
The chart illustrates movements in the price of euro in USD and is based on the Closing Spot Rate: 12 NAV per Share; Valuation of the Euro The following chart illustrates the movement in the price of the Shares based on (1) NAV per Share, (2) the “bid” and “ask” midpoint offered on NYSE Arca and (3) the Closing Spot Rate, expressed as a multiple of 100 euro: Liquidity and Capital Resources The Trust does not have any material cash requirements as of the end of the latest fiscal period.
As long as the Sponsor’s fee and the interest expense on currency deposits, if any, exceed interest income, the Trust will incur a net comprehensive loss.
As long as the interest income, if any, exceed the Sponsor's fee and the interest expense on currency deposits, the Trust will incur a net comprehensive income.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Introduction The following discussion and analysis was prepared to supplement information contained in the accompanying financial statements and is intended to explain certain items regarding the Trust's financial condition as of December 31, 2022, and its results of operations for the fiscal years ended December 31, 2022 and December 31, 2021.
Introduction The following discussion and analysis was prepared to supplement information contained in the accompanying financial statements and is intended to explain certain items regarding the Trust's financial condition as of December 31, 2023, and its results of operations for the fiscal years ended December 31, 2023 and December 31, 2022.
The interest rate in effect as of December 31, 2022 was an annual nominal rate of 0.60%. The following chart provides the daily rate paid by the Depository since December 31, 2017: 11 In exchange for a fee, the Sponsor bears most of the expenses incurred by the Trust.
The interest rate in effect as of December 31, 2023 was an annual nominal rate of 2.70%. The following chart provides the daily rate paid by the Depository since December 31, 2018: 13 In exchange for a fee, the Sponsor bears most of the expenses incurred by the Trust.
Although the full and direct impact of COVID-19 on the Trust’s net comprehensive income (loss) during the years ended December 31, 2022 and 2021 cannot be known, it is believed that COVID-19 has impacted the Closing Spot Rate, the interest rate paid by the Depository, and the global economy and markets generally, including the number of Shares created and redeemed by the Trust.
Although the full and direct impact of the COVID-19 pandemic, the Russia-Ukraine conflict, the US banking sector turmoil, and the Israel-Gaza conflict on the Trust's net comprehensive income (loss) during the years ended December 31, 2023 and 2022 cannot be known, it is believed that they have each independently impacted the Closing Spot Rate, the interest rate paid by the Depository, and the global economy and markets generally, including the number of Shares created and redeemed by the Trust.
Furthermore, higher interest rates boost demand for the country’s currency (in this case, boosting the USD). The deepening energy crisis in Europe, following the announcement of its upcoming ban of Russian oil and refined products in Q2, and then the indefinite halt of Russian gas pipeline flows in Q3, also raised probabilities for a regional recession.
The deepening energy crisis in Europe, following the announcement of its upcoming ban of Russian oil and refined products in the second quarter, and then the indefinite halt of Russian gas pipeline flows in the third quarter, also raised probabilities for a regional recession.
While the Euro (EUR/USD) posted a negative annual performance in 2022, it did make a strong comeback to end the year. Heightened geopolitical tensions in Q1 and rising recession fears in Q2 and Q3 boosted investor demand for safe haven currencies like the US dollar, while simultaneously weighed on its European counterparts.
Heightened geopolitical tensions in the first quarter and rising recession fears in the second and third quarter boosted investor demand for safe haven currencies like the US dollar, while simultaneously weighing on its European counterparts. Furthermore, higher interest rates boost demand for the country’s currency (in this case, boosting the USD).
Additionally, the interest rate paid by the Depository has generally trended downward over the past several years, slightly offset by improvements this quarter, to the current interest rate of 0.60%, as set forth in the FXE Rate Chart above.
However, the EUR appreciated in the fourth quarter as the dollar retreated on expectations for a dovish U.S. Federal Reserve System (the “Fed”) pivot. Additionally, the interest rate paid by the Depository has generally trended upward over the past year from sub-zero, to the current interest rate of 2.70%, as set forth in the FXE Rate Chart above.
Removed
However, the EUR appreciated in Q4 as the dollar retreated on expectations for a dovish U.S. Federal Reserve System (the “Fed”) pivot. In 2021, the euro had its largest annual decline against the U.S. Dollar since 2015.
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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Removed
Reimposed activity restrictions in several European Union member states to control the spread of the COVID-19 Omicron variant and a deteriorating Eurozone trade balance, coupled with the European Central Bank’s (ECB) policy divergence with other major central banks in terms of normalizing monetary policy, weighed on the currency.
Added
The euro (EUR/USD) ended 2023 higher with US dollar moves accounting for the bulk of the price action though the European Central Bank’s persistently hawkish rhetoric provided some support in the second quarter.
Removed
While the ECB has remained relatively dovish and is not expected to increase interest rates until early 2023, other central banks, such as the Fed and the Bank of England, have already raised rates or announced plans to raise rates by the end of 2022.
Added
The greenback swayed sharply between gains and losses through most of the period as expectations that the Fed will soon start to back down from its aggressive rate hikes grew, and then dimmed repeatedly as a result of the banking sector turmoil, US debt ceiling debacle, inflation prints and Fed comments.
Added
This sent the USD, and hence the pair on a mini rollercoaster ride through the first half of the year. The currency pair depreciated in the third quarter, pressured by renewed dollar strength – the Fed’s hawkish-for-longer rhetoric compared to the ECB and US economic resilience helped the dollar rebound to its highest since November 2022.
Added
However, much of that was reversed in the fourth quarter as dollar weakness ensued amid strengthening rate cut expectations in the US. While the Euro (EUR/USD) posted a negative annual performance in 2022, it did make a strong comeback to end the year.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Trust does not hold securities and does not invest in derivative instruments. 12
Biggest changeThe Trust does not hold securities and does not invest in derivative instruments. 15

Other FXE 10-K year-over-year comparisons