Company: DBE
Filing Date: 2025-08-26
Form Type: 424B3
Source: 0001193125-25-188734
Chunk: 11

Company: Invesco DB Energy Fund
Filing Date: 2025-08-26
Form: 424B3
Chunk 11
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 that may be experienced by conventional commodities indexes. “Negative roll yield” is a term that describes the adverse impact of an upward-sloping price curve for futures contracts, which makes it more expensive to replace expiring contracts with new contracts. However, the Optimum Yield TM methodology may not be successful, and in such instances, the Fund, by tracking the Index, may be negatively impacted. The Fund pursues its investment objective by investing in a portfolio of exchange-traded futures on one or more Index Commodities. The Fund being offered pursuant to this Prospectus is designed to track the Index, which is intended to reflect the changes in market value of the energy sector. The Index Commodities consist of Light, Sweet Crude Oil (WTI); Ultra-Low Sulphur Diesel (also commonly known as Heating Oil); Brent Crude Oil; RBOB Gasoline and Natural Gas. The Index is composed of the notional amount of the underlying Index Commodities. The closing level of the Index is calculated by the Index Sponsor based on the closing price of the futures contracts on the Index Commodities (“Index Contracts”) and the notional amount of the Index Commodities. The composition of the Index may be adjusted in the event that the Index Sponsor is not able to calculate the closing prices of the Index Commodities. The Index includes provisions for the replacement of futures contracts as they approach maturity. This replacement takes place over a period of time in order to lessen the impact on the market for the futures contracts being replaced. With respect to each Index Commodity, the Fund employs a rule-based approach when it ‘rolls’ from one futures contract to another. Rather than select a new futures contract based on a predetermined schedule (e.g., monthly), each Index Commodity rolls from one contract to another futures contract that is intended to generate the most favorable ‘implied roll yield’ under prevailing market conditions. Where there is an upward-sloping price curve for futures contracts, the implied roll yield is expected to be negative, which is a market condition called “contango.” Contango exists when contract prices are higher in distant delivery months than in nearer delivery months, typically due to costs associated with storing a given physical commodity for a longer period. Rolling in a contangoed market will tend to cause a drag on returns from futures trading. The Index’s selection of a new futures contract on each Index Commodity in such market conditions is designed to minimize the impact of negative roll yield. Additionally, in instances of particular market stress, futures contracts for the month