Invesco CurrencyShares Swiss Franc Trust (FXF) - Annual Report Summary for Investors for the Year Ended December 31, 2025

Unpack the latest performance and key insights for the Invesco CurrencyShares Swiss Franc Trust (FXF) for the fiscal year ended December 31, 2025. This summary, based on the Trust's recent 10-K filing, provides investors with a clear overview of FXF's financial performance, operations, and risks.

1. Business Overview: Trust Overview and Investment Objective

The Invesco CurrencyShares Swiss Franc Trust (FXF) offers investors a cost-effective way to access the Swiss Franc (CHF) currency market. Its primary goal is for its shares, traded on NYSE Arca as FXF, to mirror the Swiss Franc's price against the U.S. Dollar, after accounting for the Trust's operating expenses. As a passive investment, FXF holds physical Swiss Francs in a dedicated account with a custodian bank, such as JPMorgan Chase Bank, N.A., London Branch. It avoids active trading or currency speculation.

2. Financial Performance: Financial Highlights for the Year Ended December 31, 2025

• Net Asset Value (NAV) per Share: The Trust's Net Asset Value (NAV) per share declined during the year.
• Total Assets: The Trust managed approximately $503.1 million in assets as of January 31, 2026, with about 4.35 million shares outstanding.
• Interest Income: The Trust earned minimal interest income on its Swiss Franc holdings during the year. This reflects the Swiss National Bank's (SNB) prevailing low or negative interest rate environment.
• Total Operating Expenses: Operating expenses for the year totaled approximately $1,378,161. This primarily includes the Sponsor's fee, an annual 0.40% of the Trust's average daily net assets, covering administrative costs such as audit and listing fees.
• Net Loss: Because interest income fell significantly below operating expenses, the Trust incurred a net loss for the fiscal year.
• Performance: The Trust's share price delivered a negative total return for the year, underperforming the underlying CHF/USD exchange rate's change. This difference primarily reflects the impact of the Trust's operating expenses.

3. Management Discussion: Operational Performance and Expense Impact

In 2025, a key challenge for the Trust's performance was its operating expenses consistently exceeding the interest earned on its Swiss Franc holdings. Given the Swiss National Bank's (SNB) low to negative interest rate policies, the Trust's ability to generate sufficient income from its CHF deposits remains constrained. Consequently, the Trust had to sell a portion of its principal Swiss Francs to cover operating costs. This "expense drag" gradually reduced the amount of Swiss Francs each outstanding share represented. For instance, the quantity of Swiss Francs per share decreased during the year, regardless of CHF/USD exchange rate movements. This ongoing erosion of the underlying currency per share directly impacts investor returns.

4. Financial Health: Investment Strategy and Liquidity

The Trust's strategy is purely passive: it holds Swiss Francs and issues shares representing fractional ownership of these holdings. It does not employ active management or seek to outperform the Swiss Franc. The Trust holds no debt, and its financial health directly ties to its Swiss Franc holdings. A "creation and redemption" mechanism, involving "Baskets" of 50,000 shares, maintains liquidity for FXF shares. Authorized Participants (typically large financial institutions) can create new shares by depositing Swiss Francs with the Trust's custodian or redeem shares for Swiss Francs. This mechanism helps ensure that FXF shares' market price generally tracks its Net Asset Value (NAV).

5. Risk Factors: Key Risks for Investors

Investors in FXF face several significant risks:

• Currency Exchange Rate Risk: An investment in FXF depends directly on the exchange rate between the Swiss Franc and the U.S. Dollar. A strengthening U.S. Dollar relative to the Swiss Franc will negatively impact FXF shares' value.
• Expense Drag Risk: As highlighted, the Trust's operating expenses have consistently exceeded the interest income generated from its Swiss Franc holdings. This requires the Trust to sell underlying CHF to cover costs, continuously reducing the amount of Swiss Francs each share represents over time, regardless of currency market movements. This is a persistent drag on investment returns.
• Interest Rate Risk: Changes in global and, particularly, Swiss interest rates can significantly impact the Trust. A prolonged period of low or negative Swiss interest rates will continue to limit the Trust's ability to earn income and cover expenses.
• Market Volatility: Currency markets are highly volatile and can be influenced by a wide range of factors, including economic data, geopolitical events, government policies, and central bank actions (e.g., Swiss National Bank interventions).
• Custody Risk: A custodian bank holds the Trust's Swiss Francs. While the Trust aims to mitigate this risk, any failure or insolvency of the custodian could result in losses.
• Tracking Error Risk: While the Trust aims to track the Swiss Franc, factors like expenses, market inefficiencies, and operational issues can cause deviations between FXF shares' performance and the actual CHF/USD exchange rate.
• Tax Implications: Investors should consult their tax advisors regarding the specific tax treatment of FXF shares, which may be treated as "collectibles" for U.S. federal income tax purposes, potentially subject to a higher long-term capital gains tax rate.
• Limited Shareholder Rights: As an investment trust, shareholders have limited voting rights and recourse compared to traditional corporate equity ownership.

6. Future Outlook: Market Context and Future Outlook

The Swiss Franc's performance is heavily influenced by the Swiss National Bank (SNB)'s policies and its role as a safe-haven currency. In 2025, the SNB's interest rate policy continued to shape the Trust's interest income potential. While the Trust itself does not provide a specific forward-looking outlook, the ongoing dynamic of expenses outpacing interest income remains a key consideration. A significant and sustained increase in Swiss interest rates or a reduction in the Trust's expense ratio would be necessary to alleviate the current expense drag. Investors should monitor global economic conditions, SNB policy decisions, and the U.S. Dollar's relative strength for potential impacts on FXF.

7. Competitive Position

The Invesco CurrencyShares Swiss Franc Trust operates in a competitive landscape for investors seeking Swiss Franc exposure. Its primary competition includes:

• Other Currency Exchange Traded Products: While FXF is a prominent option for CHF exposure, other ETFs or ETNs may offer similar or alternative currency exposures.
• Direct Foreign Exchange Market Access: Investors can gain direct exposure to the Swiss Franc through foreign exchange brokers, which may offer different fee structures and trading capabilities.
• Other Investment Vehicles: Other financial instruments, such as futures contracts, options, or mutual funds with currency hedging strategies, can also provide exposure to foreign currencies, including the Swiss Franc.

The Trust differentiates itself as a physically-backed ETF, offering transparency and direct exposure to the underlying currency, after expenses.

8. Regulatory Environment

The 10-K filing for the year ended December 31, 2025, highlighted no significant new regulatory changes specifically impacting the Invesco CurrencyShares Swiss Franc Trust's structure or operation. The Trust continues to operate under existing SEC and other applicable regulations.