10-Q/A: Franklin Responsibly Sourced Gold ETF Reports Q2 Results: NAV Impacted by Gold Price Decline

Franklin Responsibly Sourced Gold ETF's Q2 performance was affected by a decrease in gold prices, leading to a lower net asset value per share.

Summary

• Franklin Responsibly Sourced Gold ETF filed an amendment to its Form 10-Q for the quarter ended September 30, 2023, to include separately stated financial statements and schedules for the Trust and the Fund.
• The Fund's investment objective is to reflect the performance of the price of gold bullion, less expenses.
• As of September 30, 2023, the Fund held 34,753.193 ounces of gold, with a market value of $65,005,848.
• The NAV per Share decreased from $25.57 to $25.00 during the quarter, primarily due to a decrease in the price of gold.
• For the three months ended September 30, 2023, (1,050,000) Shares were redeemed in exchange for ounces (14,037.996) of gold.
• The net decrease in net assets resulting from operations for the quarter was $(1,329,179).
• The Fund's only recurring expense is the Sponsor's fee, which is 0.15% of the NAV.
• The Fund is classified as a grantor trust for U.S. federal income tax purposes and is not subject to federal income tax.
• The Fund seeks to hold only responsibly sourced gold bullion bars that were refined on or after January 1, 2012.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the fund experienced a decrease in NAV due to lower gold prices, it maintains a commitment to responsibly sourced gold and has a competitive expense ratio. The report is factual and does not express strong positive or negative views.

Positives

• The Fund seeks to hold only responsibly sourced gold, adhering to LBMA's Responsible Gold Guidance.
• The Sponsor covers most of the Fund's ordinary fees and expenses, including administration, custody, trustee, and listing fees.
• The Fund is transparently valued based on the LBMA Gold Price PM.

Negatives

• The NAV per Share decreased due to a decline in gold prices.
• The Fund experienced a net decrease in net assets resulting from operations.
• The Fund is subject to risks associated with fluctuations in the price of gold.

Risks

• The Fund's performance is directly tied to the price of gold, which is subject to various market factors.
• Fluctuations in global gold supply and demand, inflation expectations, currency exchange rates, and political events can impact the price of gold.
• There is no guarantee that gold will maintain its long-term value in terms of purchasing power.

Future Outlook

The report contains forward-looking statements regarding future gold prices, market conditions, and the Fund's operations, which are subject to risks and uncertainties.

Industry Context

This announcement provides insight into the performance of a gold-backed ETF, reflecting broader trends in the gold market and investor sentiment towards precious metals as an investment.

Comparison to Industry Standards

• The Franklin Responsibly Sourced Gold ETF competes with other gold-backed ETFs such as GLD (SPDR Gold Trust) and IAU (iShares Gold Trust).
• Unlike some competitors, FGDL focuses on responsibly sourced gold, potentially appealing to ESG-conscious investors.
• The Sponsor fee of 0.15% is competitive within the gold ETF market, but investors should compare total expenses and tracking error to assess overall value.

Related Party Transactions

• Franklin Holdings, LLC is the Sponsor of the Trust and is responsible for establishing the Trust and registering the Shares.
• Franklin Distributors, LLC serves as the Marketing Agent of the Fund and is an affiliate of the Sponsor.
• The Sponsor has agreed to assume the ordinary fees and expenses incurred by the Fund in exchange for the Sponsor's fee.

Stakeholder Impact

• Shareholders are impacted by the fluctuations in the price of gold, which directly affect the value of the Fund's Shares.
• Authorized Participants are affected by the creation and redemption processes, which involve the exchange of gold for Creation Units.
• The Sponsor and service providers (Administrator, Custodian, Trustee) are impacted by the Fund's operations and their respective roles and responsibilities.

Key Dates

Keywords

Gold ETF, Franklin Responsibly Sourced Gold ETF, Gold Bullion, NAV, LBMA Gold Price, Sponsor Fee, Redemption, Creation Units, Financial Statements