10-K: Franklin Gold ETF Reports Strong Performance Amidst Market Volatility

The Franklin Responsibly Sourced Gold ETF (FGDL) reported a significant increase in its Net Asset Value (NAV) per share, driven by a substantial rise in gold prices during the fiscal year ended March 31, 2026.

Summary

• The Franklin Responsibly Sourced Gold ETF (FGDL) reported a 47.74% increase in its Net Asset Value (NAV) per share for the fiscal year ended March 31, 2026.
• This performance was primarily driven by a 47.94% increase in the price of gold.
• The Fund's NAV per share grew from $41.54 to $61.37.
• The total net assets of the Fund increased to approximately $475.6 million as of March 31, 2026.
• The Fund holds 103,215.624 ounces of gold, valued at $475.7 million.
• The Sponsor's fee for the year was $540,465.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing positively due to the strong performance of the Fund, directly reflecting the significant appreciation in gold prices, despite the inherent costs associated with managing such an ETF.

Positives

• The Fund experienced a significant increase in NAV per share, rising by 47.74% to $61.37.
• This growth was directly correlated with a strong performance in the gold market, with gold prices increasing by 47.94%.
• The Fund successfully issued 4.3 million shares and redeemed 1.05 million shares during the fiscal year.
• The Fund's total assets grew to $475.7 million, with net assets reaching $475.6 million.
• The auditor's report indicated no non-conformities in the Fund's gold bullion holdings.

Negatives

• The Fund's NAV per share increased slightly less than the price of gold due to the Sponsor's fee.
• The Fund is subject to market risk, and the value of shares can fluctuate significantly with gold prices.
• The gradual decline in the amount of gold represented by each share due to expenses could impact future returns if gold prices do not sufficiently compensate.

Risks

• Market risk associated with gold price fluctuations, which can be volatile and unpredictable.
• The Fund's reliance on the LBMA Gold Price PM for valuation, and potential discrepancies or manipulation in its calculation.
• Operational risks, including potential failures in electronic systems, human error, or cyberattacks.
• Custody risks, including the potential for loss or damage to gold bullion held by JPMorgan Chase Bank, N.A., with limited insurance and recourse.
• The risk that the Fund may be required to sell gold at low prices to cover expenses.
• The Sponsor may amend the Declaration of Trust without shareholder consent, potentially increasing the Sponsor's fee.
• Competition from other investment vehicles in gold.
• Potential for redemptions to be rejected, suspended, or postponed under certain circumstances.
• Shareholders do not have the same protections as investors in companies registered under the Investment Company Act of 1940 or regulated commodity pools.

Future Outlook

The Fund's performance is directly tied to the price of gold. The Sponsor expects the value of an investment in the Shares to decline proportionately if the price of gold declines. The Fund does not engage in hedging or active management to mitigate losses.

Management Comments

• The investment objective of the Fund is for the Shares to reflect the performance of the price of gold bullion, less the Funds expenses.
• The Fund seeks to hold only responsibly sourced gold in the Funds allocated account.
• The Sponsor has agreed to assume ordinary fees and expenses incurred by the Fund, including fees for the Administrator, Custodian, Trustee, listing fees, DTC fees, SEC registration fees, printing and mailing costs, audit fees, and up to $500,000 per annum in legal fees and expenses.

Industry Context

StockSavvy.ai notes that the performance of the Franklin Responsibly Sourced Gold ETF closely mirrors the fluctuations in the global gold market. The ETF's strategy of holding physical gold bullion means its value is intrinsically linked to the commodity's price, making it a direct play on gold market movements.

Legal Proceedings

• As of June 29, 2026, the Trust and the Fund are not subject to any material legal proceedings, nor, to our knowledge, are any material legal proceedings threatened against the Trust or Fund.

Related Party Transactions

• Franklin Holdings, LLC is the Sponsor and Franklin Distributors, LLC is the Marketing Agent; both are affiliates of the Sponsor and considered related parties.
• Franklin Resources, Inc. is the ultimate parent company of the Sponsor and Marketing Agent.
• As of March 31, 2026, no shares of the Fund were held by any related party.

Stakeholder Impact

• Shareholders benefit from the appreciation of gold prices, as reflected in the Fund's NAV.
• Shareholders are exposed to the risks associated with gold price volatility and the Fund's expense structure.
• The Sponsor receives a fee of 0.15% of the daily NAV, which is paid from the Fund's assets.
• Authorized Participants facilitate the creation and redemption of Creation Units, earning transaction fees.

Next Steps

• The Fund will continue to hold gold bullion and reflect the performance of the price of gold, less expenses.
• The Sponsor will continue to oversee the performance of the Fund's service providers.
• The Fund will sell gold on an as-needed basis to pay the Sponsor's fee and other expenses not assumed by the Sponsor.

Key Dates

Recommendation

The Fund's performance is directly tied to the price of gold. While the Fund has performed well due to rising gold prices, it is a passive investment with inherent costs. Investors seeking exposure to gold may find it suitable, but its passive nature and expense ratio mean it's unlikely to outperform the underlying commodity significantly. Therefore, a 'hold' recommendation is appropriate, pending further market analysis of gold.

Keywords

Franklin Responsibly Sourced Gold ETF, FGDL, Gold ETF, SEC Filing, 10-K, Annual Report, Gold Price, Net Asset Value, Franklin Holdings, JPMorgan Chase, LBMA Gold Price PM