Invesco CurrencyShares Euro Trust (NYSE: FXE)

Invesco CurrencyShares ® Euro Trust is a grantor trust that was formed on December 5 2005 and began trading on the New York Stock Exchange under the ticker symbol FXE on December 12 2005. The trust was later transferred to NYSE Arca where it continues to trade. The trust issues shares in blocks of 50 000 known as baskets in exchange for deposits of euro and delivers euro when baskets are redeemed. Its investment objective is for the shares to reflect the price in United States dollars of euro plus any accrued interest less the trust’s operating expenses. The trust is designed to give investors a straightforward and cost effective way to obtain exposure to the euro without holding the currency directly. Shares are bought and sold on the exchange like any other listed security and are backed solely by the euro held in the trust. The trust has no officers directors or employees and is administered by a trustee and a sponsor. The net asset value is calculated each business day and published on the trust’s website www.invesco.com/etfs.

The trust does not generate sales revenue from goods or services. Its economic return to shareholders comes from interest earned on the euro deposits held with the depository and from changes in the euro to United States dollar exchange rate. Interest on the primary deposit account accrues daily and is paid monthly; after the sponsor’s fee and other trust expenses are deducted any excess interest is distributed to shareholders on a pro rata basis. The sponsor receives an annual fee of 0 . 40 percent of the trust’s euro assets which covers the trustee’s fee depository costs listing fees audit fees legal expenses up to 100 000 dollars per year and other administrative costs. Authorized participants who create or redeem baskets pay a fixed transaction fee of 500 dollars to the trustee for each basket order and a variable fee to the sponsor that does not exceed 2 000 dollars for orders involving two or more baskets. These fee flows and interest income constitute the sources of return available to investors who hold the shares.

Within the niche of currency exchange traded products the Invesco CurrencyShares ® Euro Trust occupies a position as one of the earliest and most transparent vehicles for euro exposure. It competes with other single currency trusts offered by the same sponsor such as the Invesco CurrencyShares ® Swiss Franc Trust and the Invesco CurrencyShares ® British Pound Trust. It also faces competition from products that use futures or swaps to achieve currency exposure including the ProShares Ultra Euro exchange traded fund and the Invesco DB US Dollar Index Bullish Fund. The trust’s competitive advantages stem from its physical backing by actual euro deposits its lack of derivative use and its low expense ratio of 0 . 40 percent which is clearly disclosed to investors. Daily net asset value calculations and publication on the trust’s website provide additional transparency that many alternative currency products do not offer. The trust’s structure as a grantor trust means that investors hold a direct claim on the underlying euro rather than a claim on a fund that may use leverage or complex derivatives.

The trust’s investors include both institutional and retail participants who seek a simple means to gain euro exposure without the complexities of opening foreign bank accounts or trading currency pairs directly. Typical investors are financial advisors asset managers pension funds individual traders and corporations that need to hedge euro denominated revenues or expenses. The shares are also used by hedge funds and other speculative traders who take directional positions in the euro market based on macroeconomic views or interest rate differentials. While the filing does not disclose specific client names the investor base is broadly diversified across geographies and investment styles reflecting the trust’s design as an accessible exchange traded product that can be bought and sold through standard brokerage accounts.