10-Q: Fidelity Solana Fund Reports Strong Q3 Growth, NAV Rises

The Fidelity Solana Fund reported a significant increase in net assets for the quarter ended September 30, 2026, driven by a surge in Solana's price and substantial unrealized appreciation.

Summary

• The Fidelity Solana Fund's net assets grew to $243.9 million as of September 30, 2026, up from $127.1 million at the end of the previous quarter.
• This growth was primarily fueled by an increase in outstanding shares and a significant rise in the price of Solana (SOL), which appreciated by 57.34% during the quarter.
• The Net Asset Value (NAV) per share increased by 57.61% to $13.98 from $8.87 at the end of the prior quarter.
• For the nine-month period ended September 30, 2026, net assets increased to $243.9 million from $113.9 million at the end of 2025.
• The fund experienced a net increase in net assets from operations of $15.1 million for the nine months, largely due to unrealized appreciation on SOL investments ($19.3 million) and net investment income ($4.4 million).

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing positively due to strong growth in net assets and significant unrealized appreciation, despite a slight decrease in NAV per share over the nine-month period. The fund's performance is closely tied to the price of Solana, which has seen substantial gains.

Positives

• Net assets increased significantly to $243.9 million by September 30, 2026.
• The price of Solana (SOL) increased by 57.34% during the third quarter of 2026.
• NAV per Share saw a substantial increase of 57.61% to $13.98 in Q3 2026.
• The fund experienced a net unrealized appreciation of approximately $78.3 million in Q3 2026.
• Staking rewards contributed positively to net investment income, totaling $4.4 million for the nine months ended September 30, 2026.
• The quantity of SOL held by the fund increased from 913,562 at the end of 2025 to 2,058,204 by September 30, 2026.

Negatives

• The NAV per Share decreased by 4.64% from $14.66 at the end of 2025 to $13.98 by September 30, 2026, over the nine-month period.
• The fund incurred a net realized loss of approximately $6.2 million from the sale of SOL for redemptions and $3.2 million from SOL sold for income distributions during the nine months ended September 30, 2026.
• The market price per share traded at a discount to NAV per share during the nine-month period.

Risks

• The fund's investment strategy is concentrated in a single asset (SOL) within a single asset class, maximizing exposure to market risks associated with SOL and digital assets.
• Disruptions in staking activities by node operators could adversely impact the fund's operations, potentially leading to missed staking rewards, slashing penalties, or loss of SOL.
• Staked SOL is inaccessible during the bonding and unbonding processes, posing liquidity risks that the Sponsor manages.
• The fund relies on third-party pricing services and exchanges for valuation, and any inaccuracies or failures in these services could impact NAV calculations.
• The fund's performance is directly tied to the price of SOL, making it susceptible to significant volatility and price fluctuations in the cryptocurrency market.

Future Outlook

The fund aims to track the performance of Solana (SOL), adjusted for expenses and plus an amount based on staking rewards. The Sponsor expects the fund to outperform the Index before expenses due to staking rewards. The fund's performance is intrinsically linked to the price movements of SOL.

Management Comments

• The Sponsor believes that the Shares are designed to provide investors with a cost-effective and convenient way to invest in SOL without purchasing, holding and trading SOL directly.
• The Sponsor has established a Valuation and Liquidity Committee to carry out day-to-day fair valuation responsibilities and has adopted policies and procedures to govern the fair valuation process.
• The Sponsor does not make forward-looking statements unless it believes it has a reasonable basis for doing so, but cannot guarantee their accuracy.
• The Sponsor generally considers normal circumstances for staking to be periods when the Solana network is operating without material disruption, redemption activity is within expected ranges, and there are no extraordinary events requiring the Sponsor to reserve additional SOL for liquidity management purposes.

Industry Context

StockSavvy.ai notes that the Fidelity Solana Fund operates within the growing digital asset investment product sector. The fund's performance is directly correlated with the price of Solana (SOL), a major cryptocurrency. The increasing interest in crypto-backed ETFs and ETPs, like this one, reflects a broader trend of institutional adoption and investor demand for regulated exposure to digital assets.

Comparison to Industry Standards

• The fund's expense ratio, net of waivers, is 0.17% for the nine months ended September 30, 2026, which is competitive compared to other passively managed digital asset funds.
• The gross staking reward rate for September 30, 2026, was 5.85%, with a net rate of 4.95% after staking fees. These rates are generally in line with industry averages for Solana staking, though actual rates can fluctuate.
• The fund's strategy of holding SOL and generating staking rewards is a common approach for crypto-focused investment vehicles aiming to provide yield alongside price exposure.

Legal Proceedings

• None.

Related Party Transactions

• Fidelity Service Company, Inc. (Administrator) provides administrative, tax, and accounting services; all fees are borne by the Sponsor.
• Fidelity Distributors Company LLC (Distributor) reviews and approves marketing materials; all fees are borne by the Sponsor.
• Fidelity Product Services LLC (Index Provider) is responsible for the Index methodology; all fees are borne by the Sponsor.
• The Sponsor Fee is 0.25% of the Trusts SOL Holdings, paid to FD Funds Management LLC.
• Staking Fees are allocated from staking rewards: 15% to the Sponsor (shared with custodians and node operators), and the Trust retains 85%.

Stakeholder Impact

• Shareholders benefit from regulated exposure to Solana (SOL) and potential staking rewards.
• Shareholders may experience volatility in NAV per share due to SOL price fluctuations.
• The Sponsor (FD Funds Management LLC) receives Sponsor Fees and a portion of Staking Fees.
• Custodians and node operators receive a portion of Staking Fees for their services.

Next Steps

• The Trust intends to make cash distributions at least quarterly to comply with IRS safe harbor conditions for grantor trusts that stake digital assets.
• The Sponsor will continue to manage the Liquidity Program to monitor and manage the liquidity of the Trust's assets.
• The Trust will continue to stake SOL, subject to network conditions and liquidity management needs.
• The Sponsor will continue to waive Sponsor Fees and Staking Fees until May 18, 2026, after which these fees will begin to accrue.

Key Dates

Recommendation

The fund's performance is highly dependent on the volatile price of Solana. While recent performance has been strong due to SOL's appreciation, the inherent risks of digital assets and the slight decrease in NAV per share over the nine-month period suggest a cautious approach. A 'hold' recommendation is appropriate for investors seeking exposure to SOL via a regulated product, acknowledging the significant upside potential alongside substantial risk.

Keywords

Solana, Solana Fund, Digital Assets, Cryptocurrency, Staking Rewards, Exchange Traded Product, NAV, Investment Fund