10-Q: abrdn Precious Metals Basket ETF Trust Reports NAV Increase in Q2 2024

abrdn Precious Metals Basket ETF Trust saw its net asset value increase by 5.23% in the second quarter of 2024, driven by rising precious metal prices and a decrease in outstanding shares.

Summary

• The abrdn Precious Metals Basket ETF Trust's NAV increased by 5.23% during the second quarter of 2024, reaching $991.2 million.
• This increase was primarily due to a rise in the price of gold, silver, platinum, and palladium, as well as a decrease in the number of outstanding shares.
• The NAV per share increased by 8.52% to $103.25.
• For the six months ended June 30, 2024, the Trust's NAV increased by 3.37% to $991.2 million.
• The NAV per share increased 12.53% from $91.75 at December 31, 2023, to $103.25 at June 30, 2024.
• 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.
• Effective June 18, 2024, the number of Shares that constitute a Basket decreased from 50,000 to 25,000.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the increase in NAV and NAV per share, indicating a positive return for investors. However, the presence of fees and the concentration of risk in bullion temper the overall sentiment.

Positives

• The Trust's NAV increased due to rising precious metal prices.
• The NAV per share increased, benefiting shareholders.
• The Trust experienced a realized gain on bullion transferred to pay expenses.
• The Trust experienced a realized gain on bullion distributed for the redemption of Shares.
• The Trust experienced an increase in unrealized gain on investment in Bullion.

Negatives

• The Trust incurred a Sponsor's Fee of $1.5 million for the quarter and $2.88 million for the six months ended June 30, 2024.
• The Trust experienced net redemptions of shares.

Risks

• The Trust's value is concentrated in bullion, making it susceptible to price fluctuations.
• Several factors could affect the price of Bullion, including: (i) global Bullion supply and demand, (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.
• There is no assurance that Bullion will maintain its long-term value in terms of purchasing power in the future.

Future Outlook

The discussion and analysis in the report contain forward-looking statements regarding the Trust's financial condition, operations, future performance, and business, based on the Sponsor's assumptions and analyses of historical trends, current conditions, and expected future developments.

Management Comments

• The Sponsor believes that, for many investors, the Shares will represent a cost effective investment relative to traditional means of investing in Bullion.

Industry Context

This announcement reflects the performance of a precious metals ETF, which is influenced by broader market trends in precious metal prices, investor sentiment, and macroeconomic factors. Competitors include other precious metals ETFs, such as those focusing on individual metals like gold or silver, or those tracking a basket of precious metals.

Comparison to Industry Standards

• The expense ratio of 0.60% is within the typical range for precious metals ETFs.
• Comparable ETFs include the SPDR Gold Trust (GLD) and the iShares Silver Trust (SLV), which focus on individual metals, and the Invesco DB Precious Metals Fund (DBP), which tracks a basket of precious metals futures contracts.
• The performance of GLTR is directly tied to the spot prices of gold, silver, platinum, and palladium, similar to other physically-backed precious metals ETFs.

Related Party Transactions

• 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.

Stakeholder Impact

• Shareholders benefited from the increase in NAV and NAV per share.
• Authorized Participants are involved in the creation and redemption of shares.
• The Sponsor receives fees for its services.
• The Trustee and Custodian provide services to the Trust.

Key Dates

Keywords

precious metals, ETF, gold, silver, platinum, palladium, NAV, abrdn, bullion