# Invesco CurrencyShares Australian Dollar Trust: Form 10-Q for the period ended Sep 30, 2021

- Company: [Invesco CurrencyShares Australian Dollar Trust](/companies/fxa.md) (CIK 1353614)
- Form: 10-Q
- Filed: 2021-11-05
- Accepted by EDGAR: Nov 4, 2021, 21:45 ET
- Period: 2021-09-30
- Accession: 0001564590-21-054606
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1353614/000156459021054606/fxa-10q_20210930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1353614/000156459021054606/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2021-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2021-07-01 to 2021-09-30 | $0 | us-gaap:Revenues |
| Revenue | 9 months, 2021-01-01 to 2021-09-30 | $0 | us-gaap:Revenues |
| Interest expense | 3 months, 2021-07-01 to 2021-09-30 | $0 | us-gaap:InterestExpense |
| Interest expense | 9 months, 2021-01-01 to 2021-09-30 | $0 | us-gaap:InterestExpense |
| Income tax | 9 months, 2021-01-01 to 2021-09-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2021-07-01 to 2021-09-30 | −$124.3k | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2021-01-01 to 2021-09-30 | −$429.2k | us-gaap:NetIncomeLoss |
| Operating cash flow | 9 months, 2021-01-01 to 2021-09-30 | −$445.4k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2021-09-30 | $118.4m | us-gaap:Cash |
| Total assets | at 2021-09-30 | $118.4m | us-gaap:Assets |
| Total liabilities | at 2021-09-30 | $38.9k | us-gaap:Liabilities |
| Shares outstanding | at 2021-09-30 | 1,650,000 shares | dei:EntityCommonStockSharesOutstanding |

## Management's discussion and analysis

As filed, 12,470 characters.

### Cautionary Statement Regarding Forward-Looking Information

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek,” “outlook” and “estimate” and other similar words. Forward-looking statements are based upon our current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance. Various factors may cause our actual results to differ materially from those expressed in our forward-looking statements. These factors include fluctuations in the price of the Australian Dollar, as the value of the Shares relates directly to the value of the Australian Dollars held by the Trust and price fluctuations could materially adversely affect an investment in the Shares. Readers are urged to review the “Risk Factors” section contained in the Trust’s most recent annual report on Form 10-K for a description of other risks and uncertainties that may affect an investment in the Shares.

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. The forward-looking statements are made as of the date of this report, and will not be revised or updated to reflect actual results or changes in the Sponsor’s expectations or predictions.

### Overview/Introduction

The Invesco CurrencyShares® Australian Dollar Trust (the “Trust”) is a grantor trust that was formed on June 8, 2006. The Shares began trading on the New York Stock Exchange under the ticker symbol “FXA” on June 26, 2006. The primary listing of the Shares was transferred to NYSE Arca, Inc. (“NYSE Arca”) on October 30, 2007. The Trust issues shares (the “Shares”) in blocks of 50,000 (a “Basket”) in exchange for deposits of Australian Dollars and distributes Australian Dollars in connection with the redemption of Baskets.

The investment objective of the Trust is for the Shares to reflect the price in USD of the Australian Dollar 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 Australian Dollar 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 Australian Dollar. 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 Trust does not engage in any activities designed to obtain profit from, or ameliorate losses caused by, changes in the price of the Australian Dollar. 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.

### Definition of Net Asset Value

The Trustee calculates, and the Sponsor publishes, the Trust’s Net Asset Value (“NAV”) each business day. To calculate the NAV, the Trustee adds to the amount of Australian Dollars in the Trust at the end of the preceding day accrued but unpaid interest, if any, Australian Dollars receivable under pending purchase orders and the value of other Trust assets, and subtracts the accrued but unpaid Sponsor’s fee, Australian Dollars payable under pending redemption orders and other Trust expenses and liabilities, if any. The NAV is expressed in USD based on the Australian Dollar/USD exchange rate as determined by The WM Company at 4:00 PM (London time / London fixing) (the “Closing Spot Rate”) on each day that NYSE Arca is open for regular trading. If, on a particular evaluation day, the Closing Spot Rate has not been determined and announced by 6:00 PM (London time), then the most recent Closing Spot Rate is used to determine the NAV of the Trust unless the Trustee, in consultation with the Sponsor, determines that such price is inappropriate to use as the basis for the valuation.

The Trustee also determines the NAV per Share, which equals the NAV of the Trust divided by the number of outstanding Shares. The NAV of the Trust and the NAV per Share are published by the Sponsor on each day that NYSE Arca is open for regular trading and are posted on the Trust’s website, www.invesco.com/etfs.

### Movements in the Price of the Australian Dollar

The investment objective of the Trust is for the Shares to reflect the price in USD of the Australian Dollar plus accrued interest, if any, less the expenses of the Trust’s operations. 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 Australian Dollars. Each outstanding Share represents a proportional interest in the Australian Dollars held by the Trust. The following chart provides recent trends on the price of the Australian Dollar. The chart illustrates movements in the price of the Australian Dollar in USD and is based on the Closing Spot Rate:

### NAV per Share; Valuation of the Australian Dollar

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 Australian Dollars:

### Liquidity

The Sponsor is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to the Trust’s liquidity needs. The Trust’s Depository, JPMorgan Chase Bank, N.A., London Branch, maintains two deposit accounts for the Trust, a primary deposit account that may earn interest and a secondary deposit account that does not earn interest. Interest on the primary deposit account, if any, accrues daily and is paid monthly. The interest rate in effect as of September 30, 2021 was an annual nominal rate of 0.00%. The following chart provides the daily rate paid by the Depository since September 30, 2016:

In exchange for a fee, the Sponsor bears most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the period covered by this report was the Sponsor’s fee. Each month the Depository deposits into the secondary deposit account accrued but unpaid interest, if any, and the Trustee withdraws Australian Dollars from the secondary deposit account to pay the accrued Sponsor’s fee for the previous month plus other Trust expenses (including, without limitation, expenses resulting from negative interest rates), if any. When the interest deposited, if any, exceeds the sum of the Sponsor’s fee for the prior month plus other Trust expenses, if any, the Trustee converts the excess into USD at the prevailing market rate and distributes the USD as promptly as practicable to Shareholders on a pro-rata basis (in accordance with the number of Shares that they own). The Trust did not make any distributions during the quarter ended September 30, 2021.

### Critical Accounting Policies

The financial statements and accompanying notes are prepared in accordance with U.S. GAAP. The preparation of these financial statements relies on estimates and assumptions that impact the Trust’s financial position and results of operations. These estimates and assumptions affect the Trust’s application of accounting policies. In addition, please refer to Note 3 to the financial statements of the Trust for further discussion of the Trust’s accounting policies and Item 7 – Management’s Discussions and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies on Form 10-K for the year ended December 31, 2020.

### Results of Operations

During the nine months ended September 30, 2021, an additional 150,000 Shares were created in exchange for 14,935,112 Australian Dollars and 550,000 Shares were redeemed in exchange for 54,716,972 Australian Dollars. In addition, 582,078 Australian Dollars were withdrawn to pay the portion of the Sponsor’s fee that exceeded interest earned. As of September 30, 2021, the number of Australian Dollars owned by the Trust was 163,959,512, resulting in a redeemable capital Share value of $118,397,261. During the year ended December 31, 2020, an additional 1,150,000 Shares were created in exchange for 114,776,341 Australian Dollars and 400,000 Shares were redeemed in exchange for 39,913,155 Australian Dollars. In addition, 529,228 Australian Dollars were withdrawn to pay the Sponsor’s fee and the interest expense on currency deposits, due to the negative interest rate. As of December 31, 2020, the number of Australian Dollars owned by the Trust was 204,323,450, resulting in a redeemable capital Share value of $157,611,098.

A decrease in the Trust’s redeemable capital Share value from $157,611,098 at December 31, 2020 to $118,397,261 at September 30, 2021, was primarily the result of a decrease in the number of Shares outstanding from 2,050,000 at December 31, 2020 to 1,650,000 at September 30, 2021, coupled with a decrease in the Closing Spot Rate from 0.7717 at December 31, 2020 to 0.7224 at September 30, 2021.

No interest income was earned during the three months ended September 30, 2021 and 2020 due to an annual nominal interest rate which remained at or below 0.00% through those periods, and interest income decreased from $84,292 for the nine months ended September 30, 2020 to $0 for the nine months ended September 30, 2021, attributable primarily to a decrease in the annual nominal interest rate paid by the Depository, as set forth in the FXA Daily Rate chart above.

The Sponsor’s fee accrues daily at an annual nominal rate of 0.40% of the Australian Dollars in the Trust. Due primarily to a decrease in the weighted-average Australian Dollars in the Trust, the Sponsor’s fee decreased from $137,269 for the three months ended September 30, 2020 to $124,292 for the three months ended September 30, 2021. Due primarily to an increase in the weighted-average Australian Dollars in the Trust, the Sponsor’s fee increased from $306,089 for the nine months ended September 30, 2020 to $429,242 for the nine months ended September 30, 2021. Because the annual interest rate paid by the Depository fell briefly below 0.00% during the nine months ended September 30, 2020 (as set forth in the chart above), the Trust incurred interest expense on currency deposits. Due primarily to an increase in the interest rate (from a negative rate to 0.00%), interest expense on currency deposits decreased from $18,141 for the nine months ended September 30, 2020 to $0 for the nine months ended September 30, 2021. The only expense of the Trust during the three and nine months ended September 30, 2021 and the three months ended September 30, 2020 was the Sponsor’s fee. The only expenses of the Trust during the nine months ended September 30, 2020 were the Sponsor’s fee and interest expense on currency deposits.

The Trust’s net comprehensive income (loss) for the three months ended September 30, 2021 was $(124,292) due to the Sponsor’s fee of $124,292 exceeding interest income of $0. The Trust’s net comprehensive income (loss) for the three months ended September 30, 2020 was $(137,269) due to the Sponsor’s fee of $137,269 exceeding interest income of $0. The Trust’s net comprehensive income (loss) for the nine months ended September 30, 2021 was $(429,242) due to the Sponsor’s fee of $429,242 exceeding interest income of $0. The Trust’s net comprehensive income (loss) for the nine months ended September 30, 2020 was $(239,938) due to the Sponsor’s fee of $306,089 and interest expense on currency deposits of $18,141 exceeding interest income of $84,292.

Cash dividends were not paid by the Trust for the three months ended September 30, 2021 and 2020, and decreased from $0.02 per Share for the nine months ended September 30, 2020 to $0.00 per Share for the nine months ended September 30, 2021. The decrease in cash dividends per Share was primarily due to a decrease in the annual nominal interest rate paid by the Depository.

## Market risk

As filed, 332 characters.

Except as described above with respect to fluctuations in the Australian Dollar/USD exchange rate and changes in the nominal annual interest rate paid by the Depository on Australian Dollars held by the Trust, the Trust is not subject to market risk. The Trust does not hold securities and does not invest in derivative instruments.

## Controls and procedures

As filed, 1,875 characters.

Under the supervision and with the participation of the management of the Sponsor, including Anna Paglia, its Principal Executive Officer, and Kelli Gallegos, its Principal Financial and Accounting Officer, Investment Pools, the Trust carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report, and, based upon that evaluation, Anna Paglia, the Principal Executive Officer of the Sponsor, and Kelli Gallegos, the Principal Financial and Accounting Officer, Investment Pools, of the Sponsor, concluded that the Trust's disclosure controls and procedures were effective to provide reasonable assurance that information the Trust is required to disclose in the reports that it files or submits with the Securities and Exchange Commission (the “SEC”) under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, and to provide reasonable assurance that information required to be disclosed by the Trust in the reports that it files or submits under the Exchange Act is accumulated and communicated to management of the Sponsor, including its Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

### Changes in Internal Control Over Financial Reporting

There has been no change in internal control over financial reporting (as defined in the Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the Trust’s quarter ended September 30, 2021 that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.

## Risk factors

As filed, 172 characters.

There are no material changes from the risk factors as previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020, filed February 26, 2021.

Filed Nov 5, 2021.
Source: SEC EDGAR, the filing index for accession 0001564590-21-054606. Last ingested by Listed: Oct 24, 2026, 15:11 ET. No prices; not investment advice.