10-Q: Franklin Gold ETF Sees Strong Asset Growth, Gold Price Surge

Franklin Responsibly Sourced Gold ETF reports significant asset growth and strong performance driven by a substantial increase in gold prices during the quarter ended September 30, 2025.

Summary

• Net assets increased to $377,214,947 at September 30, 2025, from $186,935,761 at March 31, 2025.
• Shares issued and outstanding grew to 7,400,000 at September 30, 2025, from 4,500,000 at March 31, 2025.
• Net asset value (NAV) per Share rose to $50.97 at September 30, 2025, from $41.54 at March 31, 2025.
• The total return at NAV for the six months ended September 30, 2025, was 22.70%.
• The total return at NAV for the three months ended September 30, 2025, was 16.32%.
• Gold holdings increased to 98,620.181 ounces at September 30, 2025, from 60,016.277 ounces at March 31, 2025.
• Net increase in net assets resulting from operations was $51,484,595 for the six months ended September 30, 2025, and $41,479,994 for the three months ended September 30, 2025.
• The price of gold appreciated by 22.80% from $3,115.10 per ounce at March 31, 2025, to $3,825.30 per ounce at September 30, 2025.
• The Fund's investment objective is to reflect the performance of the price of gold bullion, less expenses, and it holds only responsibly sourced gold (post-2012 LBMA Good Delivery bars).

Sentiment

Score: 8

Explanation: The Fund demonstrated strong financial performance driven by significant gold price appreciation and substantial asset growth, indicating successful execution of its investment objective.

Positives

• Net assets more than doubled, increasing from $186,935,761 at March 31, 2025, to $377,214,947 at September 30, 2025.
• NAV per Share experienced strong growth, rising from $41.54 to $50.97 over the six-month period.
• The Fund delivered a high total return of 22.70% at NAV for the six months ended September 30, 2025.
• Gold holdings significantly increased from 60,016.277 ounces to 98,620.181 ounces, indicating strong investor interest and inflows.
• Net realized and unrealized gains on investment in gold totaled $51,666,407 for the six months ended September 30, 2025, driven by gold price appreciation.
• The Fund's NAV performance closely tracked the underlying gold price, demonstrating effective management of its investment objective with minimal tracking error.

Negatives

• The Fund incurred a net investment loss of $181,812 for the six months ended September 30, 2025, primarily due to the Sponsor's fee.
• The Fund's NAV increased slightly less than the price of gold on a percentage basis due to the impact of the Sponsor's fee.

Risks

• The Fund's sole business activity is investment in gold bullion, making its value highly susceptible to fluctuations in gold prices.
• Gold prices are influenced by global supply and demand, investor expectations regarding inflation, currency exchange rate volatility, interest rate volatility, and political/economic events.
• There is no assurance that gold will maintain its long-term value in terms of purchasing power.
• Gold bullion held in an unallocated account is not segregated from the Custodian's assets, meaning the account holder is an unsecured creditor at risk of the bullion dealer's insolvency.
• As an emerging growth company, the Trust may take advantage of certain exemptions from reporting requirements, potentially leading to less disclosure than other public companies.
• The Sponsor is not required to pay extraordinary or non-routine expenses, which the Fund would be responsible for, potentially impacting net assets.

Future Outlook

The report includes general forward-looking statements regarding future gold prices, market conditions, and the Fund's operations. However, it explicitly cautions that actual events or results may differ materially due to various risks and uncertainties, and no specific guidance or predictions are provided by management.

Management Comments

• The disclosure controls and procedures of the Trust operated effectively at reasonable assurance levels.
• 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.

Industry Context

The Fund's performance is directly correlated with the price of gold bullion. The significant appreciation in gold prices during the reported periods suggests strong market demand for the commodity, potentially influenced by global economic uncertainties, inflationary pressures, or geopolitical factors. This aligns with broader trends where gold often serves as a safe-haven asset. The Fund's commitment to holding 'responsibly sourced gold' also positions it favorably within the growing landscape of ESG-conscious investing.

Comparison to Industry Standards

• The Fund's investment objective is to reflect the performance of the price of gold bullion, less expenses. For the three months ended September 30, 2025, the NAV per Share increased by 16.32%, closely tracking the 16.36% increase in the LBMA Gold Price PM, indicating effective performance relative to its benchmark.
• For the six months ended September 30, 2025, the NAV per Share increased by 22.70%, aligning well with the 22.80% increase in the LBMA Gold Price PM, demonstrating strong adherence to its investment objective.
• The Sponsor's annual fee of 0.15% of the daily net asset value is a competitive expense ratio for a physical gold exchange-traded fund, contributing to efficient tracking of gold prices.

Corporate Governance

Legal Proceedings

• As of November 13, 2025, the Trust and the Fund are not subject to any material legal proceedings, nor are any material legal proceedings threatened against them.

Related Party Transactions

• Franklin Holdings, LLC is the Sponsor of the Trust and the Fund.
• Franklin Distributors, LLC, an affiliate of the Sponsor, serves as the Marketing Agent of the Fund.
• Franklin Resources, Inc. (FRI), the ultimate parent company of the Sponsor and Marketing Agent, is considered a related party.
• Expenses payable to the Marketing Agent are covered through the Sponsor's fee.
• No shares of the Fund were held by any related party as of September 30, 2025, and March 31, 2025.

Stakeholder Impact

• Shareholders benefited significantly from the substantial appreciation in NAV per share and total return, driven by rising gold prices.
• The Sponsor (Franklin Holdings, LLC) saw increased fee revenue due to the substantial growth in the Fund's net asset value.
• Authorized Participants engaged in significant creation activity, indicating strong market demand for the ETF shares and facilitating liquidity.

Key Dates

Recommendation

The Franklin Responsibly Sourced Gold ETF has demonstrated exceptional performance, with net assets doubling and NAV per share increasing by over 22% in six months, directly reflecting a robust gold market. Its low expense ratio (0.15%) and commitment to responsibly sourced gold make it an attractive, well-managed vehicle for gaining exposure to gold. Given the strong gold price momentum and the ETF's efficient tracking, it represents a compelling 'strong buy' for investors seeking gold exposure.

Keywords

Gold ETF, FGDL, Franklin Templeton, Gold Bullion, Commodity ETF, Investment Fund, Precious Metals, Responsible Sourcing, LBMA Gold Price, SEC Filing, Quarterly Report, Financial Performance