10-K/A: abrdn Palladium ETF Trust Amends 10-K, Adds KPMG Audit Report

abrdn Palladium ETF Trust filed an amendment to its 2025 Annual Report to include KPMG's audit opinion on internal controls over financial reporting, while reporting significant growth in net assets and palladium prices for the year.

Summary

• The filing is an Amendment No. 1 to the Annual Report on Form 10-K for the fiscal year ended December 31, 2025, solely to include KPMG's Report on Internal Controls over Financial Reporting, which was inadvertently omitted.
• No other changes or updates were made to the original filing, and it does not provide a discussion of developments subsequent to the original filing date.
• The Trust's investment objective is for its Shares to reflect the performance of the price of physical palladium, less expenses.
• For the year ended December 31, 2025, the Trust's Net Asset Value (NAV) increased by 192.46% to $1,035,462,345, driven by an increase in outstanding shares and a 72.39% rise in the price of palladium.
• The NAV per Share increased by 71.36% to $142.33 at December 31, 2025, compared to $83.06 at December 31, 2024.
• Net assets from operations for 2025 were $321,948,064, primarily due to a change in unrealized appreciation of $339,753,509.
• The Sponsor's Fee for 2025 was $3,203,228, representing an annualized rate of 0.60% of the Adjusted Net Asset Value (ANAV).
• The number of Shares comprising a Basket for creation and redemption was reduced to 12,500 Shares effective June 18, 2024.
• ICBC Standard Bank Plc became the Custodian of the Trust's palladium effective May 23, 2024, replacing JPMorgan Chase Bank N.A.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this filing positively due to the strong financial performance of the Trust in 2025, marked by significant increases in NAV and palladium prices, driven by favorable market dynamics. The inclusion of the KPMG audit report on internal controls also reinforces confidence in the Trust's operational integrity.

Positives

• Net Asset Value (NAV) increased significantly by 192.46% to $1,035,462,345 for the year ended December 31, 2025.
• The price per ounce of palladium rose by 72.39% from $909.00 at December 31, 2024, to $1,567.00 at December 31, 2025.
• Net Asset Value per Share increased by 71.36% to $142.33 at December 31, 2025.
• Net assets from operations showed a substantial increase of $321,948,064 for the year ended December 31, 2025, primarily from unrealized appreciation.
• The palladium market in 2025 benefited from a deficit-driven, supply-constrained environment, with prices rebounding off 2024 lows.
• Waning U.S. government support for EV subsidies accelerated automakers' decisions to offer more fossil fuel and hybrid vehicles, increasing palladium demand for pollution control.
• KPMG LLP issued an unqualified opinion on the effectiveness of the Trust's internal control over financial reporting as of December 31, 2025, indicating strong financial controls.
• Management concluded that disclosure controls and procedures were effective as of December 31, 2025.

Negatives

• The price of palladium experienced significant volatility in 2024, falling 19.98% to $909.00 per ounce by year-end.
• In 2023, the price of palladium fell 36.00% to $1,136.00 per ounce, despite a supply deficit, due to investor short-selling based on electric vehicle expectations and a disappointing Chinese economic rebound.
• Net assets from operations were negative in 2024 ($67,646,310 loss) and 2023 ($111,381,953 loss), primarily due to realized losses on palladium distributed for redemptions and, in 2023, unrealized losses.
• The Trust's NAV per Share fell slightly more than the price per ounce of palladium on a percentage basis in 2024 and 2023 due to the Sponsors Fee.

Risks

• The price of palladium is volatile and fluctuations directly impact the value of the Shares.
• Large redemptions of other exchange-traded vehicles (ETVs) tracking palladium markets could negatively affect physical palladium bullion prices.
• Crises may motivate large-scale distress sales of palladium, negatively impacting prices.
• Factors such as increased palladium hedging, negative speculative sentiment, central bank sales, or widening interest rate differentials could cause a decline in palladium prices.
• A decline in the global automotive industry or a shift from gasoline-powered to electric vehicles could decrease demand for palladium, as autocatalysts account for a significant portion of demand.
• The Trust's growth could impact palladium supply and demand, affecting Share prices in a manner unrelated to other market factors.
• Unanticipated operational or trading problems could arise, adversely affecting the investment in Shares.
• Discrepancies, disruptions, or unreliability of the LBMA Palladium Price PM could impact the valuation of the Trust's palladium and Share prices.
• Difficulties in the creation and redemption process could hinder arbitrage, causing Share prices to deviate from palladium prices.
• A possible short squeeze due to sudden demand exceeding supply could lead to price volatility in Shares.
• Withdrawal of one or more Authorized Participants could decrease Share liquidity.
• Shareholders lack protections associated with investment companies or commodity pools.
• The Trust may be required to terminate and liquidate at a disadvantageous time for Shareholders.
• The lack of an active trading market for Shares could result in losses upon disposition.
• Competition from other investment methods in palladium could limit the market for Shares.
• The amount of palladium represented by each Share will decrease over time due to the Sponsors Fee and other expenses, requiring palladium price increases to maintain Share value.
• Increased Trust expenses or unexpected liabilities could lead to more rapid decreases in palladium per Share.
• The sale of palladium at low prices to cover expenses could adversely affect Share value.
• The value of Shares could be adversely affected if the Trust is required to indemnify the Sponsor or Trustee.
• Shares may trade at a premium or discount to NAV, which could widen due to non-concurrent trading hours.
• Purchasing/selling activity related to Basket creations/redemptions may affect palladium prices and Share trading prices.
• The Trust's palladium is subject to loss, damage, theft, or restricted access.
• The Trust lacks insurance protection, and Shareholders have limited legal recourse against service providers for losses.
• The Custodian's limited liability under Custody Agreements and English law may impair recovery of losses.
• The Trust relies on information and technology systems of service providers, vulnerable to interruptions or cybersecurity attacks.
• Geopolitical events (e.g., Russia-Ukraine war) and public health emergencies (e.g., pandemics) can cause volatility in palladium prices, disrupt supply chains, and impact Trust operations.

Future Outlook

The filing explicitly states that it does not provide an update or a discussion of any developments subsequent to the original filing. Forward-looking statements are merely predictions and inherently subject to uncertainties and known and unknown risks. The Trust undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Management Comments

• Steven Dunn, President and Chief Executive Officer of abrdn ETFs Sponsor LLC, certified that the report does not contain any untrue statement of a material fact or omit to state a material fact, and that financial statements fairly present the financial condition and results of operations.
• Sharon Ferrari, Chief Financial Officer and Treasurer of abrdn ETFs Sponsor LLC, provided similar certifications regarding the accuracy and fair presentation of the financial information.

Industry Context

StockSavvy.ai notes that the palladium market experienced a significant rebound in 2025, driven by a supply deficit and a shift in automotive demand. The reported 72.39% increase in palladium price contrasts sharply with the declines seen in 2023 and 2024, indicating a strong recovery influenced by reduced mining operations and a resurgence in demand for internal combustion engine and hybrid vehicles due to waning EV subsidies. This highlights the continued sensitivity of palladium to automotive sector trends and supply chain disruptions, particularly from major producers like Russia and South Africa.

Comparison to Industry Standards

• The 72.39% increase in palladium price in 2025 significantly outperforms the -19.98% decline in 2024 and -36.00% decline in 2023, indicating a strong market reversal for the metal itself.
• The Trust's NAV per Share increase of 71.36% in 2025 closely tracks the palladium price performance, demonstrating effective mirroring of the underlying asset, consistent with its objective.
• The Sponsor's Fee of 0.60% of ANAV is a standard expense ratio for physically-backed commodity ETFs, comparable to similar products in the precious metals space, ensuring cost-effectiveness for investors.

Corporate Governance

Related Party Transactions

• The Sponsor and the Trustee are considered related parties to the Trust.
• Affiliates of the Trustee may act as Authorized Participants or purchase/sell palladium or Shares for their own account or as agents.
• The Custodian and its affiliates may act as Authorized Participants or purchase/sell palladium or Shares for their own account or as agents.
• The Trustee's and Custodian's fees are paid by the Sponsor and are not separate expenses of the Trust.

Stakeholder Impact

• Shareholders: Directly impacted by the performance of palladium prices and the Trust's expenses, with significant positive returns in 2025.
• Authorized Participants: Continue to facilitate creation and redemption of Baskets, subject to transaction fees and specific agreements with the Custodian.
• Sponsor (abrdn ETFs Sponsor LLC): Receives a Sponsors Fee (0.60% annualized) and assumes most administrative and marketing expenses, benefiting from increased Trust assets.
• Trustee (The Bank of New York Mellon): Responsible for day-to-day administration, valuation, and processing orders, with fees paid by the Sponsor.
• Custodian (ICBC Standard Bank Plc): Responsible for safekeeping palladium, with fees paid by the Sponsor; its insolvency could pose a risk to unallocated palladium.

Next Steps

• LBMA intends to appoint ICE Benchmark Administration (IBA) to replace the LME as the third-party administrator of the LBMA Palladium prices in mid-2026.

Key Dates

Recommendation

Based on the strong financial performance for the year ended December 31, 2025, which saw a 192.46% increase in NAV and a 72.39% rise in palladium prices, the Trust demonstrates significant upside potential. The positive market dynamics for palladium, including a supply deficit and a shift in automotive demand away from pure EVs, suggest a favorable environment. The unqualified audit opinion on internal controls also provides assurance regarding the Trust's operational integrity. A seasoned investor would view these results and market conditions as a compelling opportunity.

Keywords

Palladium ETF, PALL, abrdn, SEC Filing, Annual Report Amendment, Internal Controls, Financial Reporting, Precious Metals, Commodity ETF, Investment Trust, Palladium Price, Autocatalysts, Supply Demand, KPMG Audit