Company: DBO
Filing Date: 2025-11-10
Form Type: 424B3
Source: 0001193125-25-273330
Chunk: 54

Company: Invesco DB Oil Fund
Filing Date: 2025-11-10
Form: 424B3
Chunk 54
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 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 the 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 next to occur (e.g., the December 2025 futures contract available in November 2025) may trade significantly lower than futures contracts with delivery in later months, typically indicating an oversupply of the reference commodity, in what is referred to as a “super contango” market. See the “Risk Factors” section above for a discussion of the risks associated with a “super contango” market. Conversely, where there is a downward-sloping price curve for futures contracts, the implied roll yield is expected to be positive, which is a market condition called “backwardation.” Backwardation exists when prices are higher for contracts with shorter-term expirations than those with longer-term expirations, a condition that is typically associated with commodities that are consumed quickly instead of being put in storage. Rolling in a backwardated market will tend to enhance returns from futures trading. The Index’s selection of a new futures contract on the Index Commodity in such market conditions is designed to maximize the impact of positive roll yield. Returns from futures trading are called excess return, which is the combined return based on the spot prices of the Index Commodity and the roll yield from trading Index Contracts. The Index takes the impact of implied roll yield into consideration by selecting, as the replacement for an expiring futures contract, from a predetermined set of eligible contracts the futures contract that generates the most favorable implied roll yield under current market conditions. The Managing Owner may determine to invest in other futures contracts if at any time it is impractical, including in scenarios wherein the futures market for an Index Contract is thinly traded, or inefficient to gain full or partial exposure to the Index Commodity through the use of Index Contracts or other futures contracts, such as approaching or reaching position limits with respect to the Index Commodity. These other futures contracts may or may not be based on the Index Commodity. When they are not, the Managing Owner may seek to select futures contracts that it reasonably believes tend to exhibit trading prices that correlate with the Index Contract. The Index is calculated in USD on an excess return (unfunded) basis, which means that the Index reflects only the return associated with spot prices for the Index Commodity and the roll yield associated with trading Index Contracts.