$68.50
$76.49
bear $68.50
base $73.71
bull $76.49
margin of safety $57.00
market price* $68.78
Business condition attached to the margin of safety
The market price must be at least about 17% below the trust's net asset value per share published the same day. A lower Australian dollar exchange rate on its own does not count, because the net asset value falls with it.
Invesco CurrencyShares Australian Dollar Trust is not an operating company. It is a trust whose only asset is Australian dollars on deposit with JPMorgan Chase Bank, N.A., London Branch. Each share represents a fixed slice of those deposits, so the trust's value in US dollars moves one-for-one with the Australian dollar exchange rate. Our figures are not a forecast of the exchange rate. We take the rate as it stood at the latest balance sheet and value only what the trust itself adds or takes away while the shares are held. Starting point. At June 30, 2026 the trust held about $103.0 million of assets against $3.5 million of liabilities, with 1,450,000 shares outstanding. That is net assets of $99.6 million, or $68.66 per share at that day's exchange rate. What the trust adds and takes away. The deposits earn interest at a rate the bank sets at its own discretion, and the bank is not obliged to pay the highest rate available. The rate was 1.32% a year at December 31, 2025. The sponsor charges 0.40% a year. When interest is higher than the fee, the difference is paid out to holders each month: 76 cents per share in 2025 and $1.03 in 2024. When interest is lower than the fee, the fee comes out of the Australian dollars themselves. Using the audited income statements, we worked out the net rate the trust actually kept in each of the last ten years. It ranged from about minus 0.40% in 2021, when the bank paid no interest (minus 0.33% in 2020 and minus 0.20% in 2022), up to about plus 1.55% in 2024. The median was about 1.0%. In 2025 the net income per share fell from $1.02 to $0.74 as the rate came down. In the first half of 2026 it was $0.45, against $0.41 a year earlier, a pace of about 1.3%. There are no operations, no capital spending and no stock-based pay, so the usual measure of a company's owner earnings does not apply. Instead we value the trust as its deposits plus ten years of net interest, discounted at 6%. We assume nothing beyond ten years, because the bank can change its rate at any time. The trust is also scheduled to end in June 2046. Base case ($73.71). The net rate averages the ten-year median of about 1.0% of assets, roughly 69 cents per share a year. That is a little below the 74 cents earned in 2025 and below the first-half 2026 pace. It adds about $5.05 per share to the $68.66 of deposits. Bear case ($68.50). The years 2020 to 2022, when the bank paid little or nothing, repeat and last five years. In that stretch the fee takes about 0.40% of the deposits each year. The following five years earn the 2019 net rate of about 0.46%. The two periods roughly cancel, which leaves value just under the deposits themselves. We did not assume any loss of the deposits. The trust is an unsecured creditor of the bank's London branch and would share in any bank failure, but nothing in the filings suggests that is likely. Bull case ($76.49). The net rate stays at the 2024 level of about 1.55% for ten years. The second quarter of 2026 was already running at about 1.5%. This adds about $7.83 per share. What the shares are worth. All three cases fall between roughly the value of the deposits and about 11% above it, because the interest stream is small next to the deposits. The share price will be driven almost entirely by the Australian dollar, which we do not try to predict. Large dealers can create and redeem shares directly with the trust, and that keeps the price close to the daily net asset value. So a high return from this trust is only realistic in one situation: a price at a real discount to the published net asset value, with that gap later closing. The margin-of-safety price of $57 is about 17% below the June 30 deposit value per share. It applies only when the market price is at least that far below the net asset value published the same day, not simply because the Australian dollar has fallen. Other points. The trust would end early if the bank resigned or was removed. Holders would then receive Australian dollars and might pay costs to convert them. The trust is small, at about $100 million, and its size has moved with creations and redemptions: 1,050,000 shares at the end of 2024, 1,300,000 at the end of 2025 and 1,450,000 at mid-2026.