UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number
811-02611
(Exact name of registrant as specified in charter)
11 Greenway Plaza, Suite 1000 Houston, Texas 77046
(Address of principal executive offices) (Zip code)
Glenn Brightman, Principal Executive Officer
11 Greenway Plaza, Suite 1000
Houston, Texas 77046
(Name and address of agent for service)
Registrant's telephone number, including area code:
(713) 626-1919
Date of fiscal year end:
December 31
Date of reporting period:
Item 1. Reports to Stockholders
(a) The Registrant's semi-annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows:
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
What Were The Fund Costs For The Last Six Months?
(Based on a hypothetical $10,000 investment)
Fund |
Costs of a $10,000 investment |
Costs paid as a percentage of a $10,000 investment* |
||
| Invesco Exchange Fund | $ |
* |
Annualized. |
What Are Key Statistics About The Fund?
(as of June 30, 2024)
| Fund net assets | $ |
| Total number of portfolio holdings | |
| Portfolio turnover rate as of the end of the reporting period | % |
What Comprised The Fund's Holdings?
The table and chart below show the investment makeup of the Fund as of June 30, 2024.
Top ten holdings (% of net
assets
) | Air Products and Chemicals, Inc. | |
| McCormick & Co., Inc. | |
| Hess Corp. | |
| Merck & Co., Inc. | |
| Intel Corp. | |
| International Flavors & Fragrances, Inc. | |
| Exxon Mobil Corp. | |
| Johnson & Johnson | |
| Honeywell International, Inc. | |
| International Business Machines Corp. |
Sector allocation (% of net assets)
Where Can I Find More Information?
You can find more information about the Fund, including the Fund's prospectus, financial information, and holdings at
invesco.com/reports
. Additionally, the Fund's proxy voting information can be found at invesco.com/proxy-voting
.What Should I Know About Delivery Of Important Regulatory Documents?
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at (800) 959-4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
For additional information, please scan the QR code at the left to navigate to additional material at
invesco.com/reports.
(b) Not applicable.
Item 2. Code of Ethics
Not applicable for a semi-annual report.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Investments
Investments in securities of unaffiliated issuers is filed under Item 7 of this Form.
Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies
| Semi-Annual Financial Statements and Other Information | June 30, 2024 |
Invesco Exchange Fund
Nasdaq:
ACEHX
Schedule of Investments(a)
June 30, 2024
(Unaudited)
Investment Abbreviations:
| ADR | – American Depositary Receipt |
| REIT | – Real Estate Investment Trust |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| 2 | Invesco Exchange Fund |
Notes to Schedule of Investments:
| (a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. |
| (b) | Non-income producing security. |
| (c) | Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the six months ended June 30, 2024. |
| Value December 31, 2023 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain (Loss) |
Value June 30, 2024 |
Dividend Income | |
| Investments in Affiliated Money Market Funds: | |||||||
| Invesco Government & Agency Portfolio, Institutional Class | $17,746 | $93,429 | $(89,708) | $- | $- | $21,467 | $942 |
| Invesco Liquid Assets Portfolio, Institutional Class | 10,687 | 66,737 | (64,078) | (4) | (4) | 13,338 | 650 |
| Invesco Treasury Portfolio, Institutional Class | 20,281 | 106,776 | (102,523) | - | - | 24,534 | 1,075 |
| Total | $48,714 | $266,942 | $(256,309) | $(4) | $(4) | $59,339 | $2,667 |
| (d) | The rate shown is the 7-day SEC standardized yield as of June 30, 2024. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| 3 | Invesco Exchange Fund |
Statement of Assets and Liabilities
June 30, 2024
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| 4 | Invesco Exchange Fund |
Statement of Operations
For the six months ended June 30, 2024
(Unaudited)
| Investment income: | |
| Interest | $433 |
| Dividends | 203,448 |
| Dividends from affiliated money market funds | 2,667 |
| Total investment income | 206,548 |
| Expenses: | |
| Advisory fees | 34,656 |
| Administrative services fees | 1,686 |
| Custodian fees | 580 |
| Transfer agent fees | 3,244 |
| Trustees’ and officers’ fees and benefits | 9,336 |
| Reports to shareholders | 3,664 |
| Professional services fees | 24,965 |
| Other | (112) |
| Total expenses | 78,019 |
| Less: Fees waived | (56) |
| Net expenses | 77,963 |
| Net investment income | 128,585 |
| Realized and unrealized gain (loss) from: | |
| Net realized gain (loss) from: | |
| Unaffiliated investment securities | 284,017 |
| Affiliated investment securities | (4) |
| 284,013 | |
| Change in net unrealized appreciation (depreciation) of: | |
| Unaffiliated investment securities | (856,576) |
| Affiliated investment securities | (4) |
| (856,580) | |
| Net realized and unrealized gain (loss) | (572,567) |
| Net increase (decrease) in net assets resulting from operations | $(443,982) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| 5 | Invesco Exchange Fund |
Statement of Changes in Net Assets
For the six months ended June 30, 2024 and the year ended December 31, 2023
(Unaudited)
| June 30, 2024 |
December 31, 2023 |
|
| Operations: | ||
| Net investment income | $128,585 | $637,740 |
| Net realized gain | 284,013 | 29,052,572 |
| Change in net unrealized appreciation (depreciation) | (856,580) | (31,849,570) |
| Net increase (decrease) in net assets resulting from operations | (443,982) | (2,159,258) |
| Distributions to shareholders from distributable earnings | (178,567) | (683,373) |
| Net increase (decrease) in net assets resulting from share transactions | (260,506) | (29,777,287) |
| Net increase (decrease) in net assets | (883,055) | (32,619,918) |
| Net assets: | ||
| Beginning of period | 23,658,089 | 56,278,007 |
| End of period | $22,775,034 | $23,658,089 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| 6 | Invesco Exchange Fund |
Financial Highlights
(Unaudited)
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Six Months Ended June 30, 2024 |
Years Ended December 31, |
|||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||
| Net asset value, beginning of period | $658.61 | $683.26 | $694.63 | $609.25 | $637.32 | $545.26 |
| Net investment income(a) | 3.59 | 11.62 | 13.92 | 11.70 | 10.74 | 12.50 |
| Net gains (losses) on securities (both realized and unrealized) | (15.90) | (20.28) | (1.19) | 86.37 | (23.66) | 107.79 |
| Total from investment operations | (12.31) | (8.66) | 12.73 | 98.07 | (12.92) | 120.29 |
| Less: | ||||||
| Dividends from net investment income | (5.00) | (14.68) | (14.25) | (12.07) | (11.10) | (11.90) |
| Distributions from net realized gains | — | (1.31) | (9.85) | (0.62) | (4.05) | (16.33) |
| Total distributions | (5.00) | (15.99) | (24.10) | (12.69) | (15.15) | (28.23) |
| Net asset value, end of period | $641.30 | $658.61 | $683.26 | $694.63 | $609.25 | $637.32 |
| Total return(b) | (1.89)% | (1.17)% | 1.91% | 16.21% | (1.85)% | 22.30% |
| Net assets, end of period (000’s omitted) | $22,775 | $23,658 | $56,278 | $57,421 | $55,702 | $58,544 |
| Portfolio turnover rate(c) | 0% | 0% | 0% | 0% | 0% | 0% |
| Ratios/supplemental data based on average net assets: | ||||||
| Ratio of expenses: | ||||||
| With fee waivers and/or expense reimbursements | 0.68%(d) | 0.57% | 0.47% | 0.49% | 0.45% | 0.48% |
| Without fee waivers and/or expense reimbursements | 0.68%(d) | 0.57% | 0.47% | 0.49% | 0.45% | 0.48% |
| Ratio of net investment income to average net assets | 1.11%(d) | 1.77% | 2.08% | 1.78% | 1.81% | 2.06% |
| (a) | Calculated using average shares outstanding. |
| (b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Not annualized for periods less than one year, if applicable. |
| (c) | Portfolio turnover is not annualized for periods less than one year, if applicable. |
| (d) | Annualized. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| 7 | Invesco Exchange Fund |
Notes to Financial Statements
June 30, 2024
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Exchange Fund, (the “Fund” or the "Trust"), is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company.
The Fund’s principal investment objective is long-term growth of capital, while the production of current income is an important secondary objective.
The Fund does not currently offer shares to the public for purchase.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services – Investment Companies.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.
Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.
Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.
Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.
Non-traded rights and warrants shall be valued at intrinsic value if the terms of the rights and warrants are available, specifically the subscription or exercise price and the ratio. Intrinsic value is calculated as the daily market closing price of the security to be received less the subscription price, which is then adjusted by the exercise ratio. In the case of warrants, an option pricing model supplied by an independent pricing service may be used based on market data such as volatility, stock price and interest rate from the independent pricing service and strike price and exercise period from verified terms.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used. Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.
| B. | Securities Transactions and Investment Income – Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are |
| 8 | Invesco Exchange Fund |
| computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Pay-in-kind interest income and non-cash dividend income received in the form of securities in lieu of cash are recorded at the fair value of the securities received. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and the Statement of Changes in Net Assets, or the net investment income per share and the ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
| C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues, the country that has the primary market for the issuer’s securities and its "country of risk" as determined by a third party service provider, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
| D. | Distributions - Distributions from net investment income, if any, are declared and paid quarterly and are recorded on the ex-dividend date. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. |
| E. | Federal Income Taxes – The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
| F. | Accounting Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| G. | Indemnifications – Under the Fund’s organizational documents, each Trustee, officer, employee or other agent of the Fund is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Fund has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly an annual fee of 0.30% based on the average daily net assets of the Fund.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. and separate sub-advisory agreements with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited (collectively, the "Affiliated Sub-Advisers") the Adviser, not the Fund, will pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Affiliated Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2026, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended June 30, 2024, the Adviser waived advisory fees of $56.
The Fund has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended June 30, 2024, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Fund, SSB also serves as the Fund’s custodian.
The Fund has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. For the six months ended June 30, 2024, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
Certain officers and trustees of the Fund are officers and directors of the Adviser and IIS.
NOTE 3—Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
Level 1 — Prices are determined using quoted prices in an active market for identical assets.
| 9 | Invesco Exchange Fund |
Level 2 — Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 — Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Adviser’s assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.
As of June 30, 2024, all of the securities in this Fund were valued based on Level 1 inputs (see the Schedule of Investments for security categories). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
NOTE 4—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. Such balances, if any at period-end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 5—Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund did not have a capital loss carryforward as of December 31, 2023.
During the six months ended June 30, 2024, 391 shares with an aggregate value of $250,000, were redeemed by significant shareholders and settled through redemption-in-kind transactions, of which $2,076 consisted of cash, which resulted in a realized gain of $244,251 to the Fund for book purposes. From a federal income tax perspective, the realized gains are not recognized.
NOTE 6—Investment Transactions
There were no securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased or sold by the Fund during the six months ended June 30, 2024. Cost of investments, including any derivatives, on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
| Unrealized Appreciation (Depreciation) of Investments on a Tax Basis | |
| Aggregate unrealized appreciation of investments | $22,380,164 |
| Aggregate unrealized (depreciation) of investments | — |
| Net unrealized appreciation of investments | $22,380,164 |
Cost of investments for tax purposes is $394,548.
NOTE 7—Share Information
| Summary of Share Activity | |||||
| Six Months Ended June 30, 2024(a) |
Year Ended December 31, 2023 |
||||
| Shares | Amount | Shares | Amount | ||
| Issued as reinvestment of dividends | — | $— | (5) | $(3,259) | |
| Reacquired | (407) | (260,506) | (46,441) | (29,774,028) | |
| Net increase (decrease) in share activity | (407) | $(260,506) | (46,446) | $(29,777,287) | |
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 55% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
| 10 | Invesco Exchange Fund |
lending services provided to the Fund by Invesco Advisers and the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.
| 13 | Invesco Exchange Fund |
Proxy Results
A Special Joint Meeting (“Meeting”) of Shareholders of Invesco Exchange Fund, a Delaware statutory trust (“Trust”), was held on January 16, 2024. The Meeting was held for the following purpose:
(1) Elect 14 trustees to the Board of Trustees of the Trust, each of whom will serve until his or her successor is duly elected and qualified.
The results of the voting on the above matter were as follows:
| Matter | Votes For | Votes Against/Withheld |
|
| (1)* |
Beth Ann Brown
|
22,330.60 | 250.00 |
|
Carol Deckbar
|
22,580.60 | 0.00 | |
|
Cynthia Hostetler
|
22,580.60 | 0.00 | |
|
Dr. Eli Jones
|
22,330.60 | 250.00 | |
|
Elizabeth Krentzman
|
22,580.60 | 0.00 | |
|
Jeffrey H. Kupor
|
22,580.60 | 0.00 | |
|
Anthony J. LaCava, Jr.
|
22,330.60 | 250.00 | |
|
James Liddy
|
22,330.60 | 250.00 | |
|
Dr. Prema Mathai-Davis
|
22,580.60 | 0.00 | |
|
Joel W. Motley
|
22,330.60 | 250.00 | |
|
Teresa M. Ressel
|
22,330.60 | 250.00 | |
|
Douglas Sharp
|
22,330.60 | 250.00 | |
|
Robert C. Troccoli
|
22,330.60 | 250.00 | |
|
Daniel S. Vandivort
|
22,330.60 | 250.00 |
* Proposal 1 required approval by a combined vote of all the portfolios of Invesco Exchange Fund.
| 14 | Invesco Exchange Fund |
Other Information Required in Shareholder Reports
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies
Not applicable.
Item 9. Proxy Disclosures for Open-End Management Investment Companies
Matters submitted during the period covered by this report to a vote of shareholders can be found in the Proxy Results section of this report.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies
The aggregate remuneration paid to directors, officers and others is disclosed within the financial statements.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contracts
The statement regarding basis for approval of investment advisory contracts can be found in the Approval of Investment Advisory and Sub-Advisory Contracts section of this report.
| 15 | Invesco Exchange Fund |
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies
This information is filed under Item 7 of this Form.
Item 9. Proxy Disclosures for Open-End Management Investment Companies
This information is filed under Item 7 of this Form.
Item 10. Remuneration Paid to Directors, Officers, and Others for Open-End Management Investment Companies
This information is filed under Item 7 of this Form.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract
This information is filed under Item 7 of this Form.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 13. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 15. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 16. Controls and Procedures
(a) As of a date within 90 days of the filing date of this report, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the Principal Executive Officer ("PEO") and Principal Financial Officer ("PFO"), to assess the effectiveness of the Registrant's disclosure controls and procedures, as that term is defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act"), as amended. Based on that evaluation, the Registrant's officers, including the PEO and PFO, concluded that the Registrant's disclosure controls and procedures were reasonably designed to ensure: (1) that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission; and (2) that material information relating to the Registrant is made known to the PEO and PFO as appropriate to allow timely decisions regarding required disclosure.
(b) There have been no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 17. Disclosure of Securities Lending Activity for Closed-End Management Investment Companies
Not applicable.
Item 18. Recovery of Erroneously Awarded Compensation
Not applicable.
Item 19. Exhibits
19(a)(1) Not applicable.
19(a)(2) Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: Invesco Exchange Fund
|
By: |
/s/ Glenn Brightman |
|
|
Glenn Brightman |
|
|
Principal Executive Officer |
|
|
|
|
Date: |
August 30, 2024 |
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
|
By: |
/s/ Glenn Brightman |
|
|
Glenn Brightman |
|
|
Principal Executive Officer |
|
|
|
|
Date: |
August 30, 2024 |
|
By: |
/s/ Adrien Deberghes |
|
|
Adrien Deberghes |
|
|
Principal Financial Officer |
|
|
|
|
Date: |
August 30, 2024 |