Invesco FXA Offers Australian Dollar Exposure in US Market
The Invesco CurrencyShares Australian Dollar Trust (FXA) is an exchange-traded product designed to track the price of the Australian dollar in US dollars. This fund, launched on June 21, 2006, offers investors a way to trade the AUD/USD pair like an ETF.
With an expense ratio of 0.40%, FXA distributes interest earned on its deposits monthly, net of fees. The trust holds two deposit accounts in Australian dollars at the London branch of JPMorgan Chase Bank and doesn't hold any futures or derivatives on the AUD. Its shares represent units of beneficial interest and ownership of the trust.
As a grantor trust under New York law, FXA's structure is designed for tax efficiency. However, US taxpayers may face ordinary income tax treatment on profits and losses from FXA share price and distributions, while Non-Resident Aliens may need to navigate withholding taxes.