Invesco CurrencyShares ® Australian Dollar Trust is a grantor trust that was formed on June 8 2006. The trust began trading on the New York Stock Exchange under the ticker symbol FXA on June 26 2006 and was transferred to NYSE Arca on October 30 2007. The trust issues shares in blocks of 50 000 known as a Basket in exchange for deposits of Australian Dollars and distributes Australian Dollars when those Baskets are redeemed. Its investment objective is for the share price to reflect the U S dollar value of the Australian Dollar plus any accrued interest less the trust’s expenses. The shares are designed to give institutional and retail investors a simple and cost effective way to gain exposure to the Australian Dollar without holding the currency directly. The trust is a passive investment vehicle and has no officers directors or employees. The value of the trust’s Australian Dollar holdings is published each business day on the website www.invesco.com/etfs.

The trust generates returns for investors through the interest earned on its Australian Dollar deposits and through changes in the foreign exchange rate between the Australian Dollar and the U S Dollar. Interest on the primary deposit account accrues daily and is paid monthly. If the interest received exceeds the sponsor’s fee and other trust expenses the excess is converted into U S Dollars and distributed to shareholders on a pro rata basis. The sponsor receives a daily fee calculated at an annual rate of 0 40 percent of the Australian Dollar assets held in the trust. This fee covers the trustee’s monthly charge depository transaction costs exchange listing fees audit and legal expenses up to a set limit and other administrative costs. The trust does not engage in any trading activity designed to profit from or hedge movements in the Australian Dollar price. Investors buy and sell the shares on NYSE Arca just like any other exchange listed security and the market price reflects the underlying currency value plus accrued interest less expenses.

Invesco CurrencyShares ® Australian Dollar Trust operates in the niche market of currency exchange traded products that aim to give investors direct exposure to a single foreign currency. Its main competitors include other single currency trusts offered by the same sponsor such as the Euro Trust the Yen Trust and the Canadian Dollar Trust as well as similar products from other issuers like Invesco’s DB US Dollar Index Bullish Fund and various exchange traded notes that track currency pairs. The trust’s competitive advantages stem from its grantor trust structure which ensures that the shares are directly backed by the actual Australian Dollar holdings rather than by derivatives or futures contracts. This structure provides transparency and eliminates counterparty risk associated with derivative based products. Additionally the trust’s low expense ratio of 0 40 percent per year and its daily publication of net asset value make it attractive to cost conscious investors seeking plain exposure to the Australian Dollar.

The typical investor in the trust is an individual or institutional participant who wants to gain exposure to the Australian Dollar without opening a foreign currency bank account or trading futures contracts. Retail investors often purchase the shares through brokerage accounts to diversify their portfolios or to hedge international investments. Institutional users such as asset managers pension funds and hedge funds may use the trust as a tool for tactical currency exposure or to satisfy client demand for simple currency products. The trust does not disclose the names of specific shareholders but its investor base includes those who seek a transparent and low cost way to participate in the Australian Dollar market. Shares are bought and sold on NYSE Arca during regular trading hours and the proceeds flow directly to or from the trust’s Australian Dollar deposits.