UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For
the Quarterly Period Ended |
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from______________to _________________ ___ |
Commission
File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| c/o abrdn ETFs Sponsor LLC | ||
(Address of principal executive offices) |
(Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name
of each exchange on | ||
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated Filer | ☐ | ||
| Non-Accelerated Filer | ☐ | Smaller Reporting Company | ||
| Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.). ☐ Yes ☒
As of May 7, 2024, abrdn Precious Metals Basket ETF Trust had abrdn Physical Precious Metals Basket Shares ETF outstanding.
abrdn Precious Metals Basket ETF Trust
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2024
INDEX
abrdn Precious Metals Basket ETF Trust
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Assets and Liabilities
At March 31, 2024 (Unaudited) and December 31, 2023
| March 31, 2024 | December 31, 2023 | |||||||
| (Amounts in 000’s of US$, except for Share and per Share data) | ||||||||
| ASSETS | ||||||||
| Gold (cost: March 31, 2024:
$ | $ | $ | ||||||
| Palladium (cost: March 31, 2024: $ | ||||||||
| Platinum (cost: March 31, 2024: $ | ||||||||
| Silver (cost: March 31, 2024: $ | ||||||||
| Total investment in Bullion | ||||||||
| Total assets | ||||||||
| LIABILITIES | ||||||||
| Fees payable to Sponsor | ||||||||
| Total liabilities | ||||||||
| NET ASSETS(1) | $ | $ | ||||||
| (1) |
See Notes to the Financial Statements
1
abrdn Precious Metals Basket ETF Trust
Schedules of Investments
At March 31, 2024 (Unaudited) and December 31, 2023
| March 31, 2024 | ||||||||||||||||
| Description | oz | Cost | Fair Value | % of Net Assets | ||||||||||||
| Investment in Bullion (in 000’s of US$, except for oz and percentage data) | ||||||||||||||||
| Gold | $ | $ | % | |||||||||||||
| Palladium | % | |||||||||||||||
| Platinum | % | |||||||||||||||
| Silver | % | |||||||||||||||
| Total investment in Bullion | $ | $ | % | |||||||||||||
| Less liabilities | ( | ) | ( | )% | ||||||||||||
| Net Assets | $ | % | ||||||||||||||
| December 31, 2023 | ||||||||||||||||
| Description | oz | Cost | Fair Value | % of Net Assets | ||||||||||||
| Investment in Bullion (in 000’s of US$, except for oz and percentage data) | ||||||||||||||||
| Gold | $ | $ | % | |||||||||||||
| Palladium | % | |||||||||||||||
| Platinum | % | |||||||||||||||
| Silver | % | |||||||||||||||
| Total investment in Bullion | $ | $ | % | |||||||||||||
| Less liabilities | ( | ) | ( | )% | ||||||||||||
| Net Assets | $ | % | ||||||||||||||
See Notes to the Financial Statements
2
abrdn Precious Metals Basket ETF Trust
Statements of Operations (Unaudited)
For the three months ended March 31, 2024 and 2023
| Three
Months Ended March 31, 2024 | Three
Months Ended March 31, 2023 | |||||||
| (Amounts in 000’s of US$, except for Share and per Share data) | ||||||||
| EXPENSES | ||||||||
| Sponsor’s Fee | $ | $ | ||||||
| Total expenses | ||||||||
| Net investment loss | ( | ) | ( | ) | ||||
| REALIZED AND UNREALIZED GAINS / (LOSSES) | ||||||||
| Realized gain on Bullion transferred to pay expenses | ||||||||
| Realized gain on Bullion distributed for the redemption of Shares | ||||||||
| Change in unrealized gain on investment in Bullion | ||||||||
| Total gain on investment in Bullion | ||||||||
| Change in net assets from operations | $ | $ | ||||||
| Net increase / (decrease) in net assets per Share | $ | $ | ||||||
| Weighted average number of Shares | ||||||||
See Notes to the Financial Statements
3
abrdn Precious Metals Basket ETF Trust
Statements of Changes in Net Assets (Unaudited)
For the three months ended March 31, 2024 and 2023
| Three Months Ended March 31, 2024 | ||||||||
| (Amounts in 000’s of US$, except for Share data) | Shares | Amount | ||||||
| Opening balance at January 1, 2024 | $ | |||||||
| Net investment loss | ( | ) | ||||||
| Realized gain on investment in Bullion | ||||||||
| Change in unrealized gain on investment in Bullion | ||||||||
| Redemptions | ( | ) | ( | ) | ||||
| Closing balance at March 31, 2024 | $ | |||||||
| Three Months Ended March 31, 2023 | ||||||||
| (Amounts in 000’s of US$, except for Share data) | Shares | Amount | ||||||
| Opening balance at January 1, 2023 | $ | |||||||
| Net investment loss | ( | ) | ||||||
| Realized gain on investment in Bullion | ||||||||
| Change in unrealized gain on investment in Bullion | ||||||||
| Creations | ||||||||
| Redemptions | ( | ) | ( | ) | ||||
| Closing balance at March 31, 2023 | $ | |||||||
See Notes to the Financial Statements
4
abrdn Precious Metals Basket ETF Trust
Financial Highlights (Unaudited)
For the three months ended March 31, 2024 and 2023
| Three
Months Ended March 31, 2024 | Three
Months Ended March 31, 2023 | |||||||
| Per Share Performance (for a Share outstanding throughout the entire period) | ||||||||
| Net asset value per Share at beginning of period | $ | $ | ||||||
| Income from investment operations: | ||||||||
| Net investment loss | ( | ) | ( | ) | ||||
| Total realized and unrealized gains or losses on investment in Bullion | ||||||||
| Change in net assets from operations | ||||||||
| Net asset value per Share at end of period | $ | $ | ||||||
| Weighted average number of Shares | ||||||||
| Expense ratio(1) | % | % | ||||||
| Net investment loss ratio(1) | ( | )% | ( | )% | ||||
| Total return, net asset value(2) | % | % | ||||||
| (1) | |
| (2) |
See Notes to the Financial Statements
5
abrdn Precious Metals Basket ETF Trust
Notes to the Financial Statements (Unaudited)
1. Organization
The abrdn
Precious Metals Basket ETF Trust (the “Trust”) is a common law trust formed on October 18, 2010 under
New York law pursuant to a depositary trust agreement (the “Trust Agreement”) executed by abrdn ETFs Sponsor LLC (the
“Sponsor”) and The Bank of New York Mellon as Trustee (the “Trustee”). The Trust holds Bullion in
set ratios such that for every
The investment objective of the Trust is for the Shares to reflect the performance of the prices of physical of gold, silver, platinum and palladium, less the Trust’s expenses. The Trust is designed to provide an individual owner of beneficial interests in the Shares (a “Shareholder”) an opportunity to participate in the gold, silver, platinum and palladium markets through an investment in securities. The fiscal year end for the Trust is December 31.
The accompanying financial statements were prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q. In the opinion of the Trust’s management, all adjustments (which consist of normal recurring adjustments) necessary to present fairly the financial position and results of operations as of and for the three months ended March 31, 2024, and for all periods presented have been made.
These financial statements should be read in conjunction with the Trust’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results for the full year.
2. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. GAAP requires those responsible for preparing financial statements to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Trust.
2.1. Basis of Accounting
The Sponsor has determined that the Trust falls within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services—Investment Companies, and has concluded that for reporting purposes, the Trust is classified as an Investment Company. The Trust is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act.
2.2. Valuation of Bullion
The Trust follows the provisions of ASC 820, Fair Value Measurement (“ASC 820”). ASC 820 provides guidance for determining fair value and requires increased disclosure regarding the inputs to valuation techniques used to measure fair value. ASC 820 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.
6
abrdn Precious Metals Basket ETF Trust
Notes to the Financial Statements (Unaudited)
The
Trust’s Bullion is held by JPMorgan Chase Bank, N.A. (the “Custodian”), on behalf of the Trust, at its London, England
vaulting premises on a segregated basis. The Trust’s allocated Bullion may also be held by UBS AG, or any other firm selected
by the Custodian to hold the Trust’s Bullion in the Trust’s allocated account in the firm’s vault premises
on a segregated basis and whose appointment has been approved by the Sponsor. At March 31, 2024, approximately
The Trust’s Bullion is recorded, per individual metal type, at fair value. The cost of Bullion is determined according to the average cost method and the fair value is based on the relevant “London Metal Price” for each metal held by the Trust. This is the applicable “London Bullion Market Association (“LBMA”) PM Gold Price” for the price of an ounce of gold, the “LBMA Silver Price” for silver, and for platinum and palladium the applicable “London Metal Exchange (“LME”) PM Price”.
Realized gains and losses on transfers of Bullion, or Bullion distributed for the redemption of Shares, are calculated on a trade date basis as the difference between the fair value and average cost of Bullion transferred.
The LBMA PM Gold Price is set using the afternoon session of the ICE Benchmark Administration (“IBA”) equilibrium auction, an electronic, tradable and auditable over-the-counter auction market with the ability to settle trades in US Dollars, Euros or British Pounds for LBMA authorized participating gold bullion banks or market makers that establishes a reference gold price for that day’s trading. The “London Metal Price” for gold held by the Trust is the LBMA PM Gold Price.
The IBA conducts an electronic, over-the-counter silver auction in London, England to establish a fixing price for an ounce of silver once each trading day, which is disseminated by major market vendors (the “LBMA Silver Price”). The LBMA Silver Price is established by the four LBMA authorized bullion banks and market makers participating in the auction and disseminated by major market vendors. The “London Metal Price” for silver held by the Trust is the LBMA Silver Price.
The LME is responsible for the administration of the electronic platinum and palladium bullion price fixing system (“LMEbullion”) as well as providing electronic market clearing processes for platinum and palladium bullion transactions at the fixed prices established by the LME pricing mechanism. LMEbullion establishes and publishes fixed prices for troy ounces of platinum and palladium twice each London trading day during fixing sessions beginning at 9:45 a.m. London time (the “LME AM Fix”) and 2:00 p.m. London time (the “LME PM Fix”). The “London Metal Price” for platinum and palladium held by the Trust is the LME PM Fix.
Once the value of Bullion has been determined, the net asset value (the “NAV”) is computed by the Trustee by deducting all accrued fees, expenses and other liabilities of the Trust, including the remuneration due to the Sponsor (the “Sponsor’s Fee”), from the fair value of the Bullion and all other assets held by the Trust.
The Trust recognizes changes in fair value of the investment in Bullion as changes in unrealized gains or losses on investment in Bullion through the Statement of Operations.
The per Share amount of Bullion exchanged for a purchase or redemption is calculated daily by the Trustee using the London Metal Price for each metal held by the Trust to calculate the Bullion amount in respect of any liabilities for which covering Bullion sales have not yet been made, and represents the per Share amount of Bullion held by the Trust, after giving effect to its liabilities, to cover expenses and liabilities and any losses that may have occurred.
7
abrdn Precious Metals Basket ETF Trust
Notes to the Financial Statements (Unaudited)
Fair Value Hierarchy
ASC 820 establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs are as follows:
– Level 1. Unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access.
– Level 2. Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments and similar data.
– Level 3. Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Trust’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The Trust’s investment in Bullion is classified as a level 1 asset, as its value is calculated using unadjusted quoted prices from primary market sources.
The categorization of the Trust’s assets is as shown below:
| (Amounts in 000’s of US$) | March 31, 2024 | December 31, 2023 | ||||||
| Level 1 | ||||||||
| Investment in Bullion | $ | $ | ||||||
There were no transfers between levels during the three months ended March 31, 2024 or the year ended December 31, 2023.
2.3. Bullion Receivable and Payable
Bullion receivable
or payable represents the quantity of Bullion covered by contractually binding orders for the creation or redemption of Shares
respectively, where the Bullion has not yet been transferred to or from the Trust’s account. Generally, ownership of
Bullion is transferred within two business days of the trade date. At March 31, 2024, the Trust had
8
abrdn Precious Metals Basket ETF Trust
Notes to the Financial Statements (Unaudited)
The Trust expects to create and redeem Shares from time to time, but only in one or more Baskets (a Basket equals a block of Shares). The Trust issues Shares in Baskets to Authorized Participants on an ongoing basis. Individual investors cannot purchase or redeem Shares in direct transactions with the Trust. An Authorized Participant is a person who (1) is a registered broker-dealer or other securities market participant such as a bank or other financial institution which is not required to register as a broker-dealer to engage in securities transactions; (2) is a participant in The Depository Trust Company; (3) has entered into an Authorized Participant Agreement with the Trustee and the Sponsor; and (4) has established an Authorized Participant Unallocated Account with the Trust’s Custodian or other Bullion clearing bank. An Authorized Participant Agreement is an agreement entered into by each Authorized Participant, the Sponsor and the Trustee which provides the procedures for the creation and redemption of Baskets and for the delivery of the Bullion required for such creations and redemptions. An Authorized Participant Unallocated Account is an unallocated Bullion account, either loco London or loco Zurich, established with the Custodian or a Bullion clearing bank by an Authorized Participant.
The creation and redemption of Baskets is only made in exchange for the delivery to the Trust or the distribution by the Trust of the amount of Bullion represented by the Baskets being created or redeemed, the amount of which is based on the combined NAV of the number of Shares included in the Baskets being created or redeemed determined on the day the order to create or redeem Baskets is properly received.
Authorized Participants may, on any business day, place an order with the Trustee to create or redeem one or more Baskets. The typical settlement period for Shares is two business days. In the event of a trade date at period end, where a settlement is pending, a respective account receivable and/or payable will be recorded. When Bullion is exchanged in settlement of a redemption, it is considered a sale of Bullion for financial statement purposes.
The amount of Bullion represented by the Baskets created or redeemed can only be settled to the nearest 1/1000th of an ounce. As a result, the value attributed to the creation or redemption of Shares may differ from the value of Bullion to be delivered or distributed by the Trust. In order to ensure that the correct amount of Bullion is available at all times to back the Shares, the Sponsor accepts an adjustment to its Sponsor Fee in the event of any shortfall or excess on each transaction. For each transaction, this amount is not more than 1/1000th of an ounce of Bullion.
As the Shares of the Trust are subject to redemption at the option of Authorized Participants, the Trust has classified the outstanding Shares as Net Assets. Changes in the number of Shares outstanding are presented in the Statement of Changes in Net Assets.
2.5. Income Taxes
The Trust is classified as a “grantor trust” for U.S. federal income tax purposes. As a result, the Trust itself will not be subject to U.S. federal income tax. Instead, the Trust’s income and expenses will “flow through” to the Shareholders, and the Trustee will report the Trust’s proceeds, income, deductions, gains, and losses to the Internal Revenue Service on that basis.
The
Sponsor has evaluated whether or not there are uncertain tax positions that require financial statement recognition and has determined
that
9
abrdn Precious Metals Basket ETF Trust
Notes to the Financial Statements (Unaudited)
2.6. Investment in Bullion
Changes in ounces of Bullion and their respective values for the three months ended March 31, 2024 and 2023 are set out below:
| Three Months Ended March 31, 2024 | ||||||||||||||||||||
| (Amounts in 000’s of US$, except for ounces data) | ||||||||||||||||||||
| Ounces of Bullion | Gold | Palladium | Platinum | Silver | Total | |||||||||||||||
| Opening balance | ||||||||||||||||||||
| Creations | ||||||||||||||||||||
| Redemptions | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Transfers of Bullion to pay expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Closing balance | ||||||||||||||||||||
| Investment in Bullion | ||||||||||||||||||||
| Opening balance | $ | $ | $ | $ | $ | |||||||||||||||
| Creations | ||||||||||||||||||||
| Redemptions | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Realized gain / (loss) on Bullion distributed for the redemption of Shares | ( | ) | ( | ) | ||||||||||||||||
| Transfers of Bullion to pay expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Realized gain / (loss) on Bullion transferred to pay expenses | ( | ) | ( | ) | ||||||||||||||||
| Change in unrealized gain / (loss) on investment in Bullion | ( | ) | ( | ) | ||||||||||||||||
| Closing balance | $ | $ | $ | $ | $ | |||||||||||||||
| (Amounts in 000’s of US$, except for ounces data) | Three Months Ended March 31, 2023 | |||||||||||||||||||
| Ounces of Bullion | Gold | Palladium | Platinum | Silver | Total | |||||||||||||||
| Opening balance | ||||||||||||||||||||
| Creations | ||||||||||||||||||||
| Redemptions | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Transfers of Bullion to pay expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Closing balance | ||||||||||||||||||||
| Investment in Bullion | ||||||||||||||||||||
| Opening balance | $ | $ | $ | $ | $ | |||||||||||||||
| Creations | ||||||||||||||||||||
| Redemptions | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Realized gain / (loss) on Bullion distributed for the redemption of Shares | ( | ) | ( | ) | ||||||||||||||||
| Transfers of Bullion to pay expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Realized gain / (loss) on Bullion transferred to pay expenses | ( | ) | ||||||||||||||||||
| Change in unrealized gain / (loss) on investment in Bullion | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Closing balance | $ | $ | $ | $ | $ | |||||||||||||||
2.7. Expenses / Realized Gains / Losses
The primary expense of the Trust is the Sponsor’s Fee, which is paid by the Trust through in-kind transfers of Bullion to
the Sponsor.
The
Trust will transfer Bullion to the Sponsor to pay the Sponsor’s Fee that accrues daily at an annualized rate equal
to
The
Sponsor has agreed to assume administrative and marketing expenses incurred by the Trust, including the Trustee’s monthly
fee and out of pocket expenses, the Custodian’s fee and the reimbursement of the Custodian’s expenses, exchange listing
fees, United States Securities and Exchange Commission (the “SEC”) registration fees, printing and mailing costs,
audit fees and up to $
For
the three months ended March 31, 2024 and 2023, the Sponsor’s Fee was $
At March
31, 2024 and at December 31, 2023, the fees payable to the Sponsor were $
With
respect to expenses not otherwise assumed by the Sponsor, the Trustee will, at the direction of the Sponsor or in its own discretion,
sell the Trust’s Bullion as necessary to pay these expenses. When selling Bullion to pay expenses, the Trustee
will endeavor to sell the smallest amounts of Bullion needed to pay these expenses in order to minimize the Trust’s
holdings of assets other than Bullion. Other than the Sponsor’s Fee, the Trust had
Unless otherwise directed by the Sponsor, when selling Bullion the Trustee will endeavor to sell at the price established by the London Metal Price for each metal held by the Trust. The Trustee will place orders with dealers (which may include the Custodian) through which the Trustee expects to receive the most favorable price and execution of orders. The Custodian may be the purchaser of such Bullion only if the sale transaction is made at the London Metal Price for each metal held by the Trust used by the Trustee to value the Trust’s Bullion. A gain or loss is recognized based on the difference between the selling price and the average cost of the Bullion sold. Neither the Trustee nor the Sponsor is liable for depreciation or loss incurred by reason of any sale.
Realized gains and losses result from the transfer of Bullion for Share redemptions and / or to pay expenses and are recognized on a trade date basis as the difference between the fair value and average cost of Bullion transferred.
10
abrdn Precious Metals Basket ETF Trust
Notes to the Financial Statements (Unaudited)
2.8. Subsequent Events
In accordance with the provisions set forth in FASB ASC 855-10, Subsequent Events, the Trust’s management has evaluated the possibility of subsequent events impacting the Trust’s financial statements through the filing date. During this period, no material subsequent events requiring adjustment to or disclosure in the financial statements were identified.
3. Related Parties
The Sponsor and the Trustee are considered to be related parties to the Trust. The Trustee and the Custodian and their affiliates may from time to time act as Authorized Participants and purchase or sell Shares for their own account, as agent for their customers and for accounts over which they exercise investment discretion. In addition, the Trustee and the Custodian and their affiliates may from time to time purchase or sell Bullion directly, for their own account, as agent for their customers and for accounts over which they exercise investment discretion. The Trustee’s and Custodian’s fees are paid by the Sponsor and are not separate expenses of the Trust.
4. Concentration of Risk
The Trust’s sole business activity is the investment in Bullion, and substantially all the Trust’s assets are holdings of Bullion, which creates a concentration of risk associated with fluctuations in the price of Bullion. Several factors could affect the price of Bullion, including: (i) global Bullion supply and demand, which is influenced by factors such as general changes in economic conditions, such as a recession or other economic downturn, recycling, autocatalyst demand, industrial demand, jewelry demand and investment demand, central bank purchases and sales, and production and cost levels in major Bullion-producing countries; (ii) investors’ expectations with respect to the rate of inflation; (iii) currency exchange rates; (iv) interest rates; (v) investment and trading activities of hedge funds and commodity funds; and (vi) global or regional political, economic or financial events and situations. In addition, there is no assurance that Bullion will maintain its long-term value in terms of purchasing power in the future. In the event that the price of Bullion declines, the Sponsor expects the value of an investment in the Shares to decline proportionately. Each of these events could have a material effect on the Trust’s financial position and results of operations.
5. Indemnification
Under the Trust’s organizational documents, the Trustee (and its directors, employees and agents) and the Sponsor (and its members, managers, directors, officers, employees and affiliates) are indemnified by the Trust against any liability, cost or expense it incurs without gross negligence, bad faith, willful misconduct or willful malfeasance on its part and without reckless disregard on its part of its obligations and duties under the Trust’s organizational documents. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred.
11
abrdn Precious Metals Basket ETF Trust
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This information should be read in conjunction with the financial statements and notes to the financial statements included in Item 1 of Part 1 of this Form 10-Q. The discussion and analysis that follows may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and within the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements may relate to the Trust’s financial condition, operations, future performance and business. These statements can be identified by the use of the words “may”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or similar words and phrases. These statements are based upon certain assumptions and analyses the Sponsor has made based on its perception of historical trends, current conditions and expected future developments. Neither the Trust nor the Sponsor is under a duty to update any of the forward-looking statements, to conform such statements to actual results or to reflect a change in management’s expectations or predictions.
Introduction
The Trust is a common law trust, formed under the laws of the state of New York on October 18, 2010. The Trust is not managed like a corporation or an active investment vehicle. It does not have any officers, directors, or employees and is administered by the Trustee pursuant to the Trust Agreement. The Trust is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act. It does not hold or trade in commodity futures contracts, nor is it a commodity pool, or subject to regulation as a commodity pool operator or a commodity trading adviser in connection with issuing Shares.
The Trust holds Bullion (consisting of gold, silver, platinum, palladium in specified proportions) and is expected to issue Baskets in exchange for deposits of Bullion and to distribute Bullion in connection with redemptions of Baskets. Shares issued by the Trust represent units of undivided beneficial interest in and ownership of the Trust. The investment objective of the Trust is for the Shares to reflect the performance of the prices of physical of gold, silver, platinum and palladium in the proportions held by the Trust, less the Trust’s expenses. The Trust holds Bullion in a ratio such that for every 0.03 ounces of gold it holds 1.1 ounces of silver, 0.004 ounces of platinum and 0.006 ounces of palladium. The Sponsor believes that, for many investors, the Shares will represent a cost effective investment relative to traditional means of investing in Bullion.
The Trust issues and redeems Shares only with Authorized Participants in exchange for Bullion and only in aggregations of 50,000 Shares or integral multiples thereof. A list of current Authorized Participants is available from the Sponsor or the Trustee.
Shares of the Trust trade on the New York Stock Exchange (the “NYSE”) Arca under the symbol “GLTR”.
Valuation of Bullion and Computation of Net Asset Value
On each day that the NYSE Arca is open for regular trading, as promptly as practicable after 4:00 p.m. New York time on such day (the “Evaluation Time”), the Trustee will evaluate the Bullion held by the Trust and determine both the ANAV and the NAV of the Trust.
At the Evaluation Time, the Trustee values the Trust’s Bullion on the basis of that day’s London Metal Price for such metal or, if no London Metal Price is made for a metal on such day or has not been announced by the Evaluation Time, the next most recent London Metal Price announced for such metal determined prior to the Evaluation Time will be used, unless the Sponsor determines that such price is inappropriate as a basis for evaluation. In the event the Sponsor determines that the applicable London Metal Price or such other publicly available price as the Sponsor may deem fairly represents the commercial value of the Trust’s Bullion is not an appropriate basis for evaluation of the Trust’s Bullion, it shall identify an alternative basis for such evaluation to be employed by the Trustee. Neither the Trustee nor the Sponsor shall be liable to any person for the determination that the London Metal Price or such other publicly available price is not appropriate as a basis for evaluation of the Trust’s Bullion or for any determination as to the alternative basis for such evaluation provided that such determination is made in good faith.
12
Once the value of the Bullion has been determined, the Trustee subtracts all estimated accrued but unpaid fees (other than the fees accruing for such day on which the valuation takes place that are computed by reference to the value of the Trust or its assets), expenses and other liabilities of the Trust from the total value of the Bullion and all other assets of the Trust (other than any amounts credited to the Trust’s reserve account, if established). The resulting figure is the adjusted net asset value (the “ANAV”) of the Trust. The ANAV of the Trust is used to compute the Sponsor’s Fee.
All fees accruing for the day on which the valuation takes place that are computed by reference to the value of the Trust or its assets are calculated using the ANAV calculated for such day. The Trustee subtracts from the ANAV the amount of accrued fees so computed for such day and the resulting figure is the NAV of the Trust. The Trustee also determines the NAV per Share by dividing the NAV of the Trust by the number of the Shares outstanding as of the close of trading on the NYSE Arca (which includes the net number of any Shares created or redeemed on such evaluation day).
Any estimate of the accrued but unpaid fees, expenses and liabilities of the Trust for purposes of computing the NAV of the Trust and ANAV made by the Trustee in good faith shall be conclusive upon all persons interested in the Trust and no revision or correction in any computation made under the Trust Agreement will be required by reason of any difference in amounts estimated from those actually paid.
The NAV of the Trust is obtained by subtracting the Trust’s liabilities on any day from the value of the Bullion owned and receivable by the Trust on that day; the NAV per Share is obtained by dividing the NAV of the Trust on a given day by the number of Shares outstanding on that day.
The Quarter Ended March 31, 2024
The Trust’s NAV decreased from $958,830,648 at December 31, 2023 to $941,863,819 at March 31, 2024, a 1.77% decrease for the quarter. The change in the Trust’s NAV resulted from an increase in the price per ounce of gold, silver, platinum and palladium in the proportions held by the Trust (the “Proportionate Price”), which rose 3.84% from $99.34 at December 31, 2023 to $103.15 at March 31, 2024 and a decrease in outstanding Shares, which fell from 10,450,000 Shares at December 31, 2023 to 9,900,000 Shares at March 31, 2024, as a result of 550,000 Shares (11 Baskets) being redeemed. There were no Shares created during the quarter ended March 31, 2024.
The NAV per Share increased 3.69% from $91.75 at December 31, 2023 to $95.14 at March 31, 2024. The Trust’s NAV per Share rose slightly less than Proportionate Price on a percentage basis due to the Sponsor’s Fee, which was $1,376,799 for the quarter, or 0.60% of the Trust’s ANAV on an annualized basis.
The NAV per Share of $95.14 at March 31, 2024 was the highest during the quarter, compared with a low of $85.65 at February 14, 2024.
The increase in net assets from operations for the quarter ended March 31, 2024 was $31,556,022, resulting from a realized gain of $132,693 on the transfer of Bullion to pay expenses, a realized gain of $4,075,434 on Bullion distributed for the redemption of Shares and an increase in unrealized gain on investment in Bullion of $28,724,694, offset by the Sponsor’s Fee of $1,376,799. Other than the Sponsor’s Fee, the Trust had no expenses during the quarter ended March 31, 2024.
The Quarter Ended March 31, 2023
The Trust’s NAV increased from $1,007,501,383 at December 31, 2022 to $1,014,772,272 at March 31, 2023, a 0.72% increase for the quarter. The change in the Trust’s NAV resulted from an increase in the price per ounce of gold, silver, platinum and palladium in the proportions held by the Trust (the “Proportionate Price”), which rose 2.96% from $95.70 at December 31, 2022 to $98.53 at March 31, 2023 and a decrease in outstanding Shares, which fell from 11,350,000 Shares at December 31, 2022 to 11,100,000 Shares at March 31, 2023, as a result of 100,000 Shares (2 Baskets) being created and 350,000 Shares (7 Baskets) being redeemed.
13
The NAV per Share increased 2.99% from $88.77 at December 31, 2022 to $91.42 at March 31, 2023. The Trust’s NAV per Share rose slightly less than Proportionate Price on a percentage basis due to the Sponsor’s Fee, which was $1,495,232 for the quarter, or 0.60% of the Trust’s ANAV on an annualized basis.
The NAV per Share of $92.12 at January 18, 2023 was the highest during the quarter, compared with a low of $82.45 at March 8, 2023.
The increase in net assets from operations for the quarter ended March 31, 2023 was $28,958,218, resulting from a realized gain of $132,586 on the transfer of Bullion to pay expenses, a realized gain of $2,606,653 on Bullion distributed for the redemption of Shares, an increase in unrealized gain on investment in Bullion of $27,714,211, offset by the Sponsor’s Fee of $1,495,232. Other than the Sponsor’s Fee, the Trust had no expenses during the quarter ended March 31, 2023.
Liquidity & Capital Resources
The Trust is not aware of any trends, demands, commitments, events or uncertainties that are reasonably likely to result in material changes to its liquidity needs. In exchange for the Sponsor’s Fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the period covered by this report was the Sponsor’s Fee.
The Trustee will, at the direction of the Sponsor or in its own discretion, sell the Trust’s Bullion, only in the specified proportion of gold, silver, platinum and palladium held by the Trust, as necessary to pay the Trust’s expenses not otherwise assumed by the Sponsor. The Trustee will not sell Bullion to pay the Sponsor’s Fee but will pay the Sponsor’s Fee through in-kind transfers of Bullion to the Sponsor. At March 31, 2024, the Trust did not have any cash balances.
Off-Balance Sheet Arrangements
The Trust has no off-balance sheet arrangements.
Critical Accounting Policies
The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements relies on estimates and assumptions that impact the Trust’s financial position and results of operations. These estimates and assumptions affect the Trust’s application of accounting policies. Refer to Note 2 to the Financial Statements for further information on accounting policies.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures
The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer of the Sponsor, and to the audit committee, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer of the Sponsor, the Sponsor conducted an evaluation of the Trust’s disclosure controls and procedures, as defined under Exchange Act Rules 13a-15(e) and 15d-15(e). Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer of the Sponsor concluded that, as of March 31, 2024, the Trust’s disclosure controls and procedures were effective.
There have been no changes in the Trust’s or Sponsor’s internal control over financial reporting during the quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Trust’s or Sponsor’s internal control over financial reporting.
14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
There have been no material changes to the risk factors previously disclosed in the Trust’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 2(a). None.
Item 2(b). Not applicable.
Item 2(c). For the three months ended March 31, 2024:
0 Baskets were created.
11 Baskets were redeemed.
| Total Baskets | Total Shares | Average ounces of Bullion per Share | |||||||
| Period | Redeemed |
Redeemed |
Gold | Palladium | Platinum | Silver | |||
| January 2024 | 2 | 100,000 | 0.028 | 0.006 | 0.004 | 1.016 | |||
| February 2024 | 7 | 350,000 | 0.028 | 0.006 | 0.004 | 1.016 | |||
| March 2024 | 2 | 100,000 | 0.028 | 0.006 | 0.004 | 1.015 | |||
| 11 | 550,000 | ||||||||
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Item 6. Exhibits
| 31.1 | Chief Executive Officer’s Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2 | Chief Financial Officer’s Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1 | Chief Executive Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 32.2 | Chief Financial Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 101 | The following financial statements from the Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL: (i) Statements of Assets and Liabilities, (ii) Statements of Operations, (iii) Statements of Changes in Net Assets, and (iv) Notes to the Financial Statements. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definitions Document |
| 101.LAB | Inline XBRL Taxonomy Extension Labels Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Document |
| 104 | The cover page from the Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL (included as Exhibit 101). |
15
abrdn Precious Metals Basket ETF Trust
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned in the capacities thereunto duly authorized.
| abrdn ETFs Sponsor LLC | |
| Date: May 9, 2024 | /s/ Steven Dunn* |
| Steven Dunn** | |
| President and Chief Executive Officer | |
| (Principal Executive Officer) | |
| Date: May 9, 2024 | /s/ Brian Kordeck* |
| Brian Kordeck ** | |
| Chief Financial Officer and Treasurer | |
| (Principal Financial Officer and Principal Accounting Officer) |
| * | The originally executed copy of this Certification will be maintained at the Sponsor’s offices and will be made available for inspection upon request. |
| ** | The Registrant is a trust and the persons are signing in their capacities as officers of abrdn ETFs Sponsor LLC, the Sponsor of the Registrant. |
16
abrdn Precious Metals Basket ETF Trust 10-Q
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steven Dunn, certify that:
1. I have reviewed this Report on Form 10-Q of abrdn Precious Metals Basket ETF Trust;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: May 9, 2024 | /s/ Steven Dunn* |
| Steven Dunn** | |
| President and Chief Executive Officer | |
| (Principal Executive Officer) |
| * |
The originally executed copy of this Certification will be maintained at the Sponsor’s offices and will be made available for inspection upon request.
|
| ** | The Registrant is a trust and Mr. Dunn is signing in his capacity as an officer of abrdn ETFs Sponsor LLC, the Sponsor of the Registrant. |
abrdn Precious Metals Basket ETF Trust 10-Q
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Brian Kordeck, certify that:
1. I have reviewed this Report on Form 10-Q of abrdn Precious Metals Basket ETF Trust;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: May 9, 2024 | /s/ Brian Kordeck* |
| Brian Kordeck** | |
| Chief Financial Officer and Treasurer | |
| (Principal Financial Officer and Principal Accounting Officer) |
| * |
The originally executed copy of this Certification will be maintained at the Sponsor’s offices and will be made available for inspection upon request.
|
| ** | The Registrant is a trust and Mr. Kordeck is signing in his capacity as an officer of abrdn ETFs Sponsor LLC, the Sponsor of the Registrant. |
abrdn Precious Metals Basket ETF Trust 10-Q
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of abrdn Precious Metals Basket ETF Trust (the “Registrant”) on Form 10-Q for the quarter ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
| Date: May 9, 2024 | /s/ Steven Dunn* | |
| Steven Dunn** | ||
| President and Chief Executive Officer | ||
| (Principal Executive Officer) |
| * | The originally executed copy of this Certification will be maintained at the Sponsor’s offices and will be made available for inspection upon request. |
| ** | The Registrant is a trust and Mr. Dunn is signing in his capacity as an officer of abrdn ETFs Sponsor LLC, the Sponsor of the Registrant. |
abrdn Precious Metals Basket ETF Trust 10-Q
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of abrdn Precious Metals Basket ETF Trust (the “Registrant”) on Form 10-Q for the quarter ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
| Date: May 9, 2024 | /s/ Brian Kordeck* | |
| Brian Kordeck** | ||
| Chief Financial Officer and Treasurer | ||
| (Principal Financial Officer and Principal Accounting Officer) |
| * | The originally executed copy of this Certification will be maintained at the Sponsor’s offices and will be made available for inspection upon request. |
| ** | The Registrant is a trust and Mr. Kordeck is signing in his capacity as an officer of abrdn ETFs Sponsor LLC, the Sponsor of the Registrant. |
Statements of Assets and Liabilities (Unaudited) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
||
|---|---|---|---|---|
| ASSETS | ||||
| Total investment in Bullion | $ 942,346 | $ 959,323 | ||
| Total assets | 942,346 | 959,323 | ||
| LIABILITIES | ||||
| Fees payable to Sponsor | 482 | 492 | ||
| Total liabilities | 482 | 492 | ||
| NET ASSETS | [1] | 941,864 | 958,831 | |
| Gold [Member] | ||||
| ASSETS | ||||
| Total investment in Bullion | 606,862 | 602,149 | ||
| Palladium [Member] | ||||
| ASSETS | ||||
| Total investment in Bullion | 55,743 | 65,824 | ||
| Platinum [Member] | ||||
| ASSETS | ||||
| Total investment in Bullion | 33,143 | 38,629 | ||
| Silver [Member] | ||||
| ASSETS | ||||
| Total investment in Bullion | $ 246,598 | $ 252,721 | ||
| ||||
Statements of Assets and Liabilities (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
|---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
| Total investment in bullion, at cost | $ 799,851 | $ 845,552 |
| Common stock, shares authorized | Unlimited | Unlimited |
| Common stock, par value (in dollars per share) | $ 0 | $ 0 |
| Common stock, shares issued | 9,900,000 | 10,450,000 |
| Common stock, shares outstanding | 9,900,000 | 10,450,000 |
| Net asset value per share | $ 95.14 | $ 91.75 |
| Gold [Member] | ||
| Total investment in bullion, at cost | $ 446,373 | $ 471,878 |
| Palladium [Member] | ||
| Total investment in bullion, at cost | 97,449 | 103,017 |
| Platinum [Member] | ||
| Total investment in bullion, at cost | 37,693 | 39,846 |
| Silver [Member] | ||
| Total investment in bullion, at cost | $ 218,336 | $ 230,811 |
Schedules of Investments (Unaudited) $ in Thousands |
Mar. 31, 2024
USD ($)
oz
|
Dec. 31, 2023
USD ($)
oz
|
||
|---|---|---|---|---|
| Schedule of Investments [Line Items] | ||||
| Investment in Bullion | oz | 10,414,228.8 | 11,009,276.4 | ||
| Cost | $ 799,851 | $ 845,552 | ||
| Fair Value | $ 942,346 | $ 959,323 | ||
| Fair Value, % of Net Assets | 100.05% | 100.05% | ||
| Other assets less liabilities | $ (482) | $ (492) | ||
| Other assets less liabilities, % of Net Assets | (0.05%) | (0.05%) | ||
| Net Assets | [1] | $ 941,864 | $ 958,831 | |
| Net Assets, % of Net Assets | 100.00% | 100.00% | ||
| Gold [Member] | ||||
| Schedule of Investments [Line Items] | ||||
| Investment in Bullion | oz | 274,058.6 | 289,717.8 | ||
| Cost | $ 446,373 | $ 471,878 | ||
| Fair Value | $ 606,862 | $ 602,149 | ||
| Fair Value, % of Net Assets | 64.43% | 62.79% | ||
| Palladium [Member] | ||||
| Schedule of Investments [Line Items] | ||||
| Investment in Bullion | oz | 54,811.7 | 57,943.6 | ||
| Cost | $ 97,449 | $ 103,017 | ||
| Fair Value | $ 55,743 | $ 65,824 | ||
| Fair Value, % of Net Assets | 5.92% | 6.87% | ||
| Platinum [Member] | ||||
| Schedule of Investments [Line Items] | ||||
| Investment in Bullion | oz | 36,541.2 | 38,629.0 | ||
| Cost | $ 37,693 | $ 39,846 | ||
| Fair Value | $ 33,143 | $ 38,629 | ||
| Fair Value, % of Net Assets | 3.52% | 4.03% | ||
| Silver [Member] | ||||
| Schedule of Investments [Line Items] | ||||
| Investment in Bullion | oz | 10,048,817.3 | 10,622,986.0 | ||
| Cost | $ 218,336 | $ 230,811 | ||
| Fair Value | $ 246,598 | $ 252,721 | ||
| Fair Value, % of Net Assets | 26.18% | 26.36% | ||
| ||||
Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| EXPENSES | ||
| Sponsor’s Fee | $ 1,376,799 | $ 1,495,232 |
| Total expenses | 1,377,000 | 1,495,000 |
| Net investment loss | (1,377,000) | (1,495,000) |
| REALIZED AND UNREALIZED GAINS / (LOSSES) | ||
| Realized gain on Bullion transferred to pay expenses | 133,000 | 133,000 |
| Realized gain on Bullion distributed for the redemption of Shares | 4,075,000 | 2,606,000 |
| Change in unrealized gain on investment in Bullion | 28,725,000 | 27,714,000 |
| Total gain on investment in Bullion | 32,933,000 | 30,453,000 |
| Change in net assets from operations | $ 31,556,000 | $ 28,958,000 |
| Net increase / (decrease) in net assets per Share | $ 3.11 | $ 2.57 |
| Weighted average number of Shares | 10,162,637 | 11,254,444 |
Statements of Changes in Net Assets (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Statement of Stockholders' Equity [Abstract] | ||
| Opening balance (in shares) | 10,450,000 | 11,350,000 |
| Opening balance | $ 958,831 | $ 1,007,501 |
| Net investment loss | (1,377) | (1,495) |
| Realized gain on investment in Bullion | 4,208 | 2,739 |
| Change in unrealized gain on investment in Bullion | $ 28,725 | $ 27,714 |
| Creations (in shares) | 100,000 | |
| Creations | $ 9,142 | |
| Redemptions (in shares) | (550,000) | (350,000) |
| Redemptions | $ (48,523) | $ (30,829) |
| Closing balance (in shares) | 9,900,000 | 11,100,000 |
| Closing balance | $ 941,864 | $ 1,014,772 |
Financial Highlights (Unaudited) - $ / shares |
3 Months Ended | |||||
|---|---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|||||
| Per Share Performance (for a Share outstanding throughout the entire period) | ||||||
| Net asset value per Share at beginning of period | $ 91.75 | $ 88.77 | ||||
| Income from investment operations: | ||||||
| Net investment loss | (0.14) | (0.13) | ||||
| Total realized and unrealized gains or losses on investment in Bullion | 3.53 | 2.78 | ||||
| Change in net assets from operations | 3.39 | 2.65 | ||||
| Net asset value per Share at end of period | $ 95.14 | $ 91.42 | ||||
| Weighted average number of Shares | 10,162,637 | 11,254,444 | ||||
| Expense ratio | [1] | 0.60% | 0.60% | |||
| Net investment loss ratio | [1] | (0.60%) | (0.60%) | |||
| Total return, net asset value | [2] | 3.69% | 2.99% | |||
| ||||||
Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Pay vs Performance Disclosure [Table] | ||
| Net Income (Loss) | $ 31,556 | $ 28,958 |
Insider Trading Arrangements |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Trading Arrangements, by Individual [Table] | |
| Rule 10b5-1 Arrangement Adopted | false |
| Non-Rule 10b5-1 Arrangement Adopted | false |
| Rule 10b5-1 Arrangement Terminated | false |
| Non-Rule 10b5-1 Arrangement Terminated | false |
Organization |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Organization | 1. Organization
The abrdn Precious Metals Basket ETF Trust (the “Trust”) is a common law trust formed on October 18, 2010 under New York law pursuant to a depositary trust agreement (the “Trust Agreement”) executed by abrdn ETFs Sponsor LLC (the “Sponsor”) and The Bank of New York Mellon as Trustee (the “Trustee”). The Trust holds Bullion in set ratios such that for every 0.03 ounces of gold it holds 1.1 ounces of silver, 0.004 ounces of platinum and 0.006 ounces of palladium (together, "Bullion"). The Trust issues abrdn Physical Precious Metals Basket Shares ETF (“Shares”) in minimum blocks of Shares (also referred to as “Baskets”) in exchange for deposits of Bullion and distributes Bullion in connection with the redemption of Baskets. Shares represent units of fractional undivided beneficial interest in and ownership of the Trust which are issued by the Trust. The Sponsor is a Delaware limited liability company and a wholly-owned subsidiary of abrdn Inc., which is a wholly-owned indirect subsidiary of abrdn plc. The Trust is governed by the Trust Agreement.
The investment objective of the Trust is for the Shares to reflect the performance of the prices of physical of gold, silver, platinum and palladium, less the Trust’s expenses. The Trust is designed to provide an individual owner of beneficial interests in the Shares (a “Shareholder”) an opportunity to participate in the gold, silver, platinum and palladium markets through an investment in securities. The fiscal year end for the Trust is December 31.
The accompanying financial statements were prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q. In the opinion of the Trust’s management, all adjustments (which consist of normal recurring adjustments) necessary to present fairly the financial position and results of operations as of and for the three months ended March 31, 2024, and for all periods presented have been made.
These financial statements should be read in conjunction with the Trust’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results for the full year. |
Significant Accounting Policies |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Significant Accounting Policies | 2. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. GAAP requires those responsible for preparing financial statements to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Trust.
2.1. Basis of Accounting
The Sponsor has determined that the Trust falls within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services—Investment Companies, and has concluded that for reporting purposes, the Trust is classified as an Investment Company. The Trust is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act.
2.2. Valuation of Bullion
The Trust follows the provisions of ASC 820, Fair Value Measurement (“ASC 820”). ASC 820 provides guidance for determining fair value and requires increased disclosure regarding the inputs to valuation techniques used to measure fair value. ASC 820 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.
The Trust’s Bullion is held by JPMorgan Chase Bank, N.A. (the “Custodian”), on behalf of the Trust, at its London, England vaulting premises on a segregated basis. The Trust’s allocated Bullion may also be held by UBS AG, or any other firm selected by the Custodian to hold the Trust’s Bullion in the Trust’s allocated account in the firm’s vault premises on a segregated basis and whose appointment has been approved by the Sponsor. At March 31, 2024, approximately 0.94% of the Trust’s palladium and 0.93% of the Trust’s platinum was held by one or more sub-custodians. At March 31, 2024 none of the Trust’s gold or silver was held by a sub-custodian.
The Trust’s Bullion is recorded, per individual metal type, at fair value. The cost of Bullion is determined according to the average cost method and the fair value is based on the relevant “London Metal Price” for each metal held by the Trust. This is the applicable “London Bullion Market Association (“LBMA”) PM Gold Price” for the price of an ounce of gold, the “LBMA Silver Price” for silver, and for platinum and palladium the applicable “London Metal Exchange (“LME”) PM Price”.
Realized gains and losses on transfers of Bullion, or Bullion distributed for the redemption of Shares, are calculated on a trade date basis as the difference between the fair value and average cost of Bullion transferred.
The LBMA PM Gold Price is set using the afternoon session of the ICE Benchmark Administration (“IBA”) equilibrium auction, an electronic, tradable and auditable over-the-counter auction market with the ability to settle trades in US Dollars, Euros or British Pounds for LBMA authorized participating gold bullion banks or market makers that establishes a reference gold price for that day’s trading. The “London Metal Price” for gold held by the Trust is the LBMA PM Gold Price.
The IBA conducts an electronic, over-the-counter silver auction in London, England to establish a fixing price for an ounce of silver once each trading day, which is disseminated by major market vendors (the “LBMA Silver Price”). The LBMA Silver Price is established by the four LBMA authorized bullion banks and market makers participating in the auction and disseminated by major market vendors. The “London Metal Price” for silver held by the Trust is the LBMA Silver Price.
The LME is responsible for the administration of the electronic platinum and palladium bullion price fixing system (“LMEbullion”) as well as providing electronic market clearing processes for platinum and palladium bullion transactions at the fixed prices established by the LME pricing mechanism. LMEbullion establishes and publishes fixed prices for troy ounces of platinum and palladium twice each London trading day during fixing sessions beginning at 9:45 a.m. London time (the “LME AM Fix”) and 2:00 p.m. London time (the “LME PM Fix”). The “London Metal Price” for platinum and palladium held by the Trust is the LME PM Fix.
Once the value of Bullion has been determined, the net asset value (the “NAV”) is computed by the Trustee by deducting all accrued fees, expenses and other liabilities of the Trust, including the remuneration due to the Sponsor (the “Sponsor’s Fee”), from the fair value of the Bullion and all other assets held by the Trust.
The Trust recognizes changes in fair value of the investment in Bullion as changes in unrealized gains or losses on investment in Bullion through the Statement of Operations.
The per Share amount of Bullion exchanged for a purchase or redemption is calculated daily by the Trustee using the London Metal Price for each metal held by the Trust to calculate the Bullion amount in respect of any liabilities for which covering Bullion sales have not yet been made, and represents the per Share amount of Bullion held by the Trust, after giving effect to its liabilities, to cover expenses and liabilities and any losses that may have occurred.
Fair Value Hierarchy
ASC 820 establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs are as follows:
– Level 1. Unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access.
– Level 2. Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments and similar data.
– Level 3. Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Trust’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The Trust’s investment in Bullion is classified as a level 1 asset, as its value is calculated using unadjusted quoted prices from primary market sources.
The categorization of the Trust’s assets is as shown below:
There were no transfers between levels during the three months ended March 31, 2024 or the year ended December 31, 2023.
2.3. Bullion Receivable and Payable
Bullion receivable or payable represents the quantity of Bullion covered by contractually binding orders for the creation or redemption of Shares respectively, where the Bullion has not yet been transferred to or from the Trust’s account. Generally, ownership of Bullion is transferred within two business days of the trade date. At March 31, 2024, the Trust had no Bullion receivable or payable for the creation or redemption of Shares. At December 31, 2023, the Trust had no Bullion receivable or payable for the creation or redemption of Shares.
The Trust expects to create and redeem Shares from time to time, but only in one or more Baskets (a Basket equals a block of Shares). The Trust issues Shares in Baskets to Authorized Participants on an ongoing basis. Individual investors cannot purchase or redeem Shares in direct transactions with the Trust. An Authorized Participant is a person who (1) is a registered broker-dealer or other securities market participant such as a bank or other financial institution which is not required to register as a broker-dealer to engage in securities transactions; (2) is a participant in The Depository Trust Company; (3) has entered into an Authorized Participant Agreement with the Trustee and the Sponsor; and (4) has established an Authorized Participant Unallocated Account with the Trust’s Custodian or other Bullion clearing bank. An Authorized Participant Agreement is an agreement entered into by each Authorized Participant, the Sponsor and the Trustee which provides the procedures for the creation and redemption of Baskets and for the delivery of the Bullion required for such creations and redemptions. An Authorized Participant Unallocated Account is an unallocated Bullion account, either loco London or loco Zurich, established with the Custodian or a Bullion clearing bank by an Authorized Participant.
The creation and redemption of Baskets is only made in exchange for the delivery to the Trust or the distribution by the Trust of the amount of Bullion represented by the Baskets being created or redeemed, the amount of which is based on the combined NAV of the number of Shares included in the Baskets being created or redeemed determined on the day the order to create or redeem Baskets is properly received.
Authorized Participants may, on any business day, place an order with the Trustee to create or redeem one or more Baskets. The typical settlement period for Shares is two business days. In the event of a trade date at period end, where a settlement is pending, a respective account receivable and/or payable will be recorded. When Bullion is exchanged in settlement of a redemption, it is considered a sale of Bullion for financial statement purposes.
The amount of Bullion represented by the Baskets created or redeemed can only be settled to the nearest 1/1000th of an ounce. As a result, the value attributed to the creation or redemption of Shares may differ from the value of Bullion to be delivered or distributed by the Trust. In order to ensure that the correct amount of Bullion is available at all times to back the Shares, the Sponsor accepts an adjustment to its Sponsor Fee in the event of any shortfall or excess on each transaction. For each transaction, this amount is not more than 1/1000th of an ounce of Bullion.
As the Shares of the Trust are subject to redemption at the option of Authorized Participants, the Trust has classified the outstanding Shares as Net Assets. Changes in the number of Shares outstanding are presented in the Statement of Changes in Net Assets.
2.5. Income Taxes
The Trust is classified as a “grantor trust” for U.S. federal income tax purposes. As a result, the Trust itself will not be subject to U.S. federal income tax. Instead, the Trust’s income and expenses will “flow through” to the Shareholders, and the Trustee will report the Trust’s proceeds, income, deductions, gains, and losses to the Internal Revenue Service on that basis.
The Sponsor has evaluated whether or not there are uncertain tax positions that require financial statement recognition and has determined that no reserves for uncertain tax positions are required as of March 31, 2024 or December 31, 2023.
2.6. Investment in Bullion
Changes in ounces of Bullion and their respective values for the three months ended March 31, 2024 and 2023 are set out below:
2.7. Expenses / Realized Gains / Losses
The Trust will transfer Bullion to the Sponsor to pay the Sponsor’s Fee that accrues daily at an annualized rate equal to 0.60% of the adjusted daily net asset value (“ANAV”) of the Trust, paid monthly in arrears.
The Sponsor has agreed to assume administrative and marketing expenses incurred by the Trust, including the Trustee’s monthly fee and out of pocket expenses, the Custodian’s fee and the reimbursement of the Custodian’s expenses, exchange listing fees, United States Securities and Exchange Commission (the “SEC”) registration fees, printing and mailing costs, audit fees and up to $100,000 per annum in legal expenses.
For the three months ended March 31, 2024 and 2023, the Sponsor’s Fee was $1,376,799 and $1,495,232, respectively.
At March 31, 2024 and at December 31, 2023, the fees payable to the Sponsor were $482,250 and $492,555, respectively.
With respect to expenses not otherwise assumed by the Sponsor, the Trustee will, at the direction of the Sponsor or in its own discretion, sell the Trust’s Bullion as necessary to pay these expenses. When selling Bullion to pay expenses, the Trustee will endeavor to sell the smallest amounts of Bullion needed to pay these expenses in order to minimize the Trust’s holdings of assets other than Bullion. Other than the Sponsor’s Fee, the Trust had no expenses during the three months ended March 31, 2024 and 2023.
Unless otherwise directed by the Sponsor, when selling Bullion the Trustee will endeavor to sell at the price established by the London Metal Price for each metal held by the Trust. The Trustee will place orders with dealers (which may include the Custodian) through which the Trustee expects to receive the most favorable price and execution of orders. The Custodian may be the purchaser of such Bullion only if the sale transaction is made at the London Metal Price for each metal held by the Trust used by the Trustee to value the Trust’s Bullion. A gain or loss is recognized based on the difference between the selling price and the average cost of the Bullion sold. Neither the Trustee nor the Sponsor is liable for depreciation or loss incurred by reason of any sale.
Realized gains and losses result from the transfer of Bullion for Share redemptions and / or to pay expenses and are recognized on a trade date basis as the difference between the fair value and average cost of Bullion transferred.
2.8. Subsequent Events
In accordance with the provisions set forth in FASB ASC 855-10, Subsequent Events, the Trust’s management has evaluated the possibility of subsequent events impacting the Trust’s financial statements through the filing date. During this period, no material subsequent events requiring adjustment to or disclosure in the financial statements were identified.
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Related Parties |
3 Months Ended |
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Mar. 31, 2024 | |
| Related Party Transactions [Abstract] | |
| Related Parties | 3. Related Parties
The Sponsor and the Trustee are considered to be related parties to the Trust. The Trustee and the Custodian and their affiliates may from time to time act as Authorized Participants and purchase or sell Shares for their own account, as agent for their customers and for accounts over which they exercise investment discretion. In addition, the Trustee and the Custodian and their affiliates may from time to time purchase or sell Bullion directly, for their own account, as agent for their customers and for accounts over which they exercise investment discretion. The Trustee’s and Custodian’s fees are paid by the Sponsor and are not separate expenses of the Trust. |
Concentration of Risk |
3 Months Ended |
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Mar. 31, 2024 | |
| Risks and Uncertainties [Abstract] | |
| Concentration of Risk | 4. Concentration of Risk
The Trust’s sole business activity is the investment in Bullion, and substantially all the Trust’s assets are holdings of Bullion, which creates a concentration of risk associated with fluctuations in the price of Bullion. Several factors could affect the price of Bullion, including: (i) global Bullion supply and demand, which is influenced by factors such as general changes in economic conditions, such as a recession or other economic downturn, recycling, autocatalyst demand, industrial demand, jewelry demand and investment demand, central bank purchases and sales, and production and cost levels in major Bullion-producing countries; (ii) investors’ expectations with respect to the rate of inflation; (iii) currency exchange rates; (iv) interest rates; (v) investment and trading activities of hedge funds and commodity funds; and (vi) global or regional political, economic or financial events and situations. In addition, there is no assurance that Bullion will maintain its long-term value in terms of purchasing power in the future. In the event that the price of Bullion declines, the Sponsor expects the value of an investment in the Shares to decline proportionately. Each of these events could have a material effect on the Trust’s financial position and results of operations. |
Indemnification |
3 Months Ended |
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Mar. 31, 2024 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Indemnification | 5. Indemnification
Under the Trust’s organizational documents, the Trustee (and its directors, employees and agents) and the Sponsor (and its members, managers, directors, officers, employees and affiliates) are indemnified by the Trust against any liability, cost or expense it incurs without gross negligence, bad faith, willful misconduct or willful malfeasance on its part and without reckless disregard on its part of its obligations and duties under the Trust’s organizational documents. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. |
Significant Accounting Policies (Policies) |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Accounting | 2.1. Basis of Accounting
The Sponsor has determined that the Trust falls within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services—Investment Companies, and has concluded that for reporting purposes, the Trust is classified as an Investment Company. The Trust is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act. |
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| Valuation of Bullion | 2.2. Valuation of Bullion
The Trust follows the provisions of ASC 820, Fair Value Measurement (“ASC 820”). ASC 820 provides guidance for determining fair value and requires increased disclosure regarding the inputs to valuation techniques used to measure fair value. ASC 820 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.
The Trust’s Bullion is held by JPMorgan Chase Bank, N.A. (the “Custodian”), on behalf of the Trust, at its London, England vaulting premises on a segregated basis. The Trust’s allocated Bullion may also be held by UBS AG, or any other firm selected by the Custodian to hold the Trust’s Bullion in the Trust’s allocated account in the firm’s vault premises on a segregated basis and whose appointment has been approved by the Sponsor. At March 31, 2024, approximately 0.94% of the Trust’s palladium and 0.93% of the Trust’s platinum was held by one or more sub-custodians. At March 31, 2024 none of the Trust’s gold or silver was held by a sub-custodian.
The Trust’s Bullion is recorded, per individual metal type, at fair value. The cost of Bullion is determined according to the average cost method and the fair value is based on the relevant “London Metal Price” for each metal held by the Trust. This is the applicable “London Bullion Market Association (“LBMA”) PM Gold Price” for the price of an ounce of gold, the “LBMA Silver Price” for silver, and for platinum and palladium the applicable “London Metal Exchange (“LME”) PM Price”.
Realized gains and losses on transfers of Bullion, or Bullion distributed for the redemption of Shares, are calculated on a trade date basis as the difference between the fair value and average cost of Bullion transferred.
The LBMA PM Gold Price is set using the afternoon session of the ICE Benchmark Administration (“IBA”) equilibrium auction, an electronic, tradable and auditable over-the-counter auction market with the ability to settle trades in US Dollars, Euros or British Pounds for LBMA authorized participating gold bullion banks or market makers that establishes a reference gold price for that day’s trading. The “London Metal Price” for gold held by the Trust is the LBMA PM Gold Price.
The IBA conducts an electronic, over-the-counter silver auction in London, England to establish a fixing price for an ounce of silver once each trading day, which is disseminated by major market vendors (the “LBMA Silver Price”). The LBMA Silver Price is established by the four LBMA authorized bullion banks and market makers participating in the auction and disseminated by major market vendors. The “London Metal Price” for silver held by the Trust is the LBMA Silver Price.
The LME is responsible for the administration of the electronic platinum and palladium bullion price fixing system (“LMEbullion”) as well as providing electronic market clearing processes for platinum and palladium bullion transactions at the fixed prices established by the LME pricing mechanism. LMEbullion establishes and publishes fixed prices for troy ounces of platinum and palladium twice each London trading day during fixing sessions beginning at 9:45 a.m. London time (the “LME AM Fix”) and 2:00 p.m. London time (the “LME PM Fix”). The “London Metal Price” for platinum and palladium held by the Trust is the LME PM Fix.
Once the value of Bullion has been determined, the net asset value (the “NAV”) is computed by the Trustee by deducting all accrued fees, expenses and other liabilities of the Trust, including the remuneration due to the Sponsor (the “Sponsor’s Fee”), from the fair value of the Bullion and all other assets held by the Trust.
The Trust recognizes changes in fair value of the investment in Bullion as changes in unrealized gains or losses on investment in Bullion through the Statement of Operations.
The per Share amount of Bullion exchanged for a purchase or redemption is calculated daily by the Trustee using the London Metal Price for each metal held by the Trust to calculate the Bullion amount in respect of any liabilities for which covering Bullion sales have not yet been made, and represents the per Share amount of Bullion held by the Trust, after giving effect to its liabilities, to cover expenses and liabilities and any losses that may have occurred.
Fair Value Hierarchy
ASC 820 establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs are as follows:
– Level 1. Unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access.
– Level 2. Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments and similar data.
– Level 3. Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Trust’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The Trust’s investment in Bullion is classified as a level 1 asset, as its value is calculated using unadjusted quoted prices from primary market sources.
The categorization of the Trust’s assets is as shown below:
There were no transfers between levels during the three months ended March 31, 2024 or the year ended December 31, 2023. |
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| Bullion Receivable and Payable | 2.3. Bullion Receivable and Payable
Bullion receivable or payable represents the quantity of Bullion covered by contractually binding orders for the creation or redemption of Shares respectively, where the Bullion has not yet been transferred to or from the Trust’s account. Generally, ownership of Bullion is transferred within two business days of the trade date. At March 31, 2024, the Trust had no Bullion receivable or payable for the creation or redemption of Shares. At December 31, 2023, the Trust had no Bullion receivable or payable for the creation or redemption of Shares. |
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| Creations and Redemptions of Shares |
The Trust expects to create and redeem Shares from time to time, but only in one or more Baskets (a Basket equals a block of Shares). The Trust issues Shares in Baskets to Authorized Participants on an ongoing basis. Individual investors cannot purchase or redeem Shares in direct transactions with the Trust. An Authorized Participant is a person who (1) is a registered broker-dealer or other securities market participant such as a bank or other financial institution which is not required to register as a broker-dealer to engage in securities transactions; (2) is a participant in The Depository Trust Company; (3) has entered into an Authorized Participant Agreement with the Trustee and the Sponsor; and (4) has established an Authorized Participant Unallocated Account with the Trust’s Custodian or other Bullion clearing bank. An Authorized Participant Agreement is an agreement entered into by each Authorized Participant, the Sponsor and the Trustee which provides the procedures for the creation and redemption of Baskets and for the delivery of the Bullion required for such creations and redemptions. An Authorized Participant Unallocated Account is an unallocated Bullion account, either loco London or loco Zurich, established with the Custodian or a Bullion clearing bank by an Authorized Participant.
The creation and redemption of Baskets is only made in exchange for the delivery to the Trust or the distribution by the Trust of the amount of Bullion represented by the Baskets being created or redeemed, the amount of which is based on the combined NAV of the number of Shares included in the Baskets being created or redeemed determined on the day the order to create or redeem Baskets is properly received.
Authorized Participants may, on any business day, place an order with the Trustee to create or redeem one or more Baskets. The typical settlement period for Shares is two business days. In the event of a trade date at period end, where a settlement is pending, a respective account receivable and/or payable will be recorded. When Bullion is exchanged in settlement of a redemption, it is considered a sale of Bullion for financial statement purposes.
The amount of Bullion represented by the Baskets created or redeemed can only be settled to the nearest 1/1000th of an ounce. As a result, the value attributed to the creation or redemption of Shares may differ from the value of Bullion to be delivered or distributed by the Trust. In order to ensure that the correct amount of Bullion is available at all times to back the Shares, the Sponsor accepts an adjustment to its Sponsor Fee in the event of any shortfall or excess on each transaction. For each transaction, this amount is not more than 1/1000th of an ounce of Bullion.
As the Shares of the Trust are subject to redemption at the option of Authorized Participants, the Trust has classified the outstanding Shares as Net Assets. Changes in the number of Shares outstanding are presented in the Statement of Changes in Net Assets. |
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| Income Taxes | 2.5. Income Taxes
The Trust is classified as a “grantor trust” for U.S. federal income tax purposes. As a result, the Trust itself will not be subject to U.S. federal income tax. Instead, the Trust’s income and expenses will “flow through” to the Shareholders, and the Trustee will report the Trust’s proceeds, income, deductions, gains, and losses to the Internal Revenue Service on that basis.
The Sponsor has evaluated whether or not there are uncertain tax positions that require financial statement recognition and has determined that no reserves for uncertain tax positions are required as of March 31, 2024 or December 31, 2023. |
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| Investment in Bullion | 2.6. Investment in Bullion
Changes in ounces of Bullion and their respective values for the three months ended March 31, 2024 and 2023 are set out below:
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| Expenses / Realized Gains / Losses | 2.7. Expenses / Realized Gains / Losses
The Trust will transfer Bullion to the Sponsor to pay the Sponsor’s Fee that accrues daily at an annualized rate equal to 0.60% of the adjusted daily net asset value (“ANAV”) of the Trust, paid monthly in arrears.
The Sponsor has agreed to assume administrative and marketing expenses incurred by the Trust, including the Trustee’s monthly fee and out of pocket expenses, the Custodian’s fee and the reimbursement of the Custodian’s expenses, exchange listing fees, United States Securities and Exchange Commission (the “SEC”) registration fees, printing and mailing costs, audit fees and up to $100,000 per annum in legal expenses.
For the three months ended March 31, 2024 and 2023, the Sponsor’s Fee was $1,376,799 and $1,495,232, respectively.
At March 31, 2024 and at December 31, 2023, the fees payable to the Sponsor were $482,250 and $492,555, respectively.
With respect to expenses not otherwise assumed by the Sponsor, the Trustee will, at the direction of the Sponsor or in its own discretion, sell the Trust’s Bullion as necessary to pay these expenses. When selling Bullion to pay expenses, the Trustee will endeavor to sell the smallest amounts of Bullion needed to pay these expenses in order to minimize the Trust’s holdings of assets other than Bullion. Other than the Sponsor’s Fee, the Trust had no expenses during the three months ended March 31, 2024 and 2023.
Unless otherwise directed by the Sponsor, when selling Bullion the Trustee will endeavor to sell at the price established by the London Metal Price for each metal held by the Trust. The Trustee will place orders with dealers (which may include the Custodian) through which the Trustee expects to receive the most favorable price and execution of orders. The Custodian may be the purchaser of such Bullion only if the sale transaction is made at the London Metal Price for each metal held by the Trust used by the Trustee to value the Trust’s Bullion. A gain or loss is recognized based on the difference between the selling price and the average cost of the Bullion sold. Neither the Trustee nor the Sponsor is liable for depreciation or loss incurred by reason of any sale.
Realized gains and losses result from the transfer of Bullion for Share redemptions and / or to pay expenses and are recognized on a trade date basis as the difference between the fair value and average cost of Bullion transferred. |
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| Subsequent Events | 2.8. Subsequent Events
In accordance with the provisions set forth in FASB ASC 855-10, Subsequent Events, the Trust’s management has evaluated the possibility of subsequent events impacting the Trust’s financial statements through the filing date. During this period, no material subsequent events requiring adjustment to or disclosure in the financial statements were identified. |
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Significant Accounting Policies (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The categorization of the Trust’s assets is as shown below: | The categorization of the Trust’s assets is as shown below:
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| Changes in ounces of Bullion and their respective values for the three months ended March 31, 2024 and 2023 are set out below: | Changes in ounces of Bullion and their respective values for the three months ended March 31, 2024 and 2023 are set out below:
|
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Organization (Details Narrative) |
3 Months Ended |
|---|---|
|
Mar. 31, 2024
oz
shares
| |
| Schedule of Investments [Line Items] | |
| Minimum block of shares issued redeemed against bullion | shares | 50,000 |
| Gold [Member] | |
| Schedule of Investments [Line Items] | |
| Investment holding ratio | 0.03 |
| Silver [Member] | |
| Schedule of Investments [Line Items] | |
| Investment holding ratio | 1.1 |
| Platinum [Member] | |
| Schedule of Investments [Line Items] | |
| Investment holding ratio | 0.004 |
| Palladium [Member] | |
| Schedule of Investments [Line Items] | |
| Investment holding ratio | 0.006 |
Significant Accounting Policies (Details Narrative) - USD ($) |
3 Months Ended | ||||
|---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|||
| Bullion receivable | $ 0 | $ 0 | |||
| Bullion payable | $ 0 | 0 | |||
| Minimum block of shares issued redeemed against bullion | 50,000 | ||||
| Reserve for uncertain tax positions | $ 0 | 0 | |||
| Expense ratio | [1] | 0.60% | 0.60% | ||
| Maximum sponsor fee for legal expenses | $ 100,000 | ||||
| Sponsor's Fee | 1,376,799 | $ 1,495,232 | |||
| Fees payable to Sponsor | 482,000 | 492,000 | |||
| All other expenses | 0 | $ 0 | |||
| Sponsor [Member] | |||||
| Fees payable to Sponsor | $ 482,250 | $ 492,555 | |||
| Palladium [Member] | |||||
| Percentage of assets held by sub-custodians | 0.94% | ||||
| Platinum [Member] | |||||
| Percentage of assets held by sub-custodians | 0.93% | ||||
| Gold [Member] | |||||
| Percentage of assets held by sub-custodians | 0.00% | ||||
| Silver [Member] | |||||
| Percentage of assets held by sub-custodians | 0.00% | ||||
| |||||
The categorization of the Trust’s assets is as shown below: (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Fair Value, Inputs, Level 1 [Member] | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Investment in Bullion | $ 942,346 | $ 959,323 |