10-Q: Franklin Responsibly Sourced Gold ETF Reports Q3 Results: Net Assets Increase Amid Gold Price Volatility

Franklin Responsibly Sourced Gold ETF reports an increase in net assets for the nine months ended December 31, 2024, driven by gold price appreciation and net capital share transactions, despite a slight decrease in NAV per share during the third quarter.

Summary

• Franklin Templeton Holdings Trust, sponsoring the Franklin Responsibly Sourced Gold ETF, released its Form 10-Q for the quarter ended December 31, 2024.
• The ETF's investment objective is to reflect the performance of gold bullion, less expenses, holding only responsibly sourced gold.
• For the nine months ended December 31, 2024, the fund's net assets increased to $107,969,989 from $62,102,631 at the beginning of the period.
• This increase was primarily driven by a rise in gold prices and net capital share transactions.
• During the quarter ended December 31, 2024, the NAV per share decreased slightly from $35.10 to $34.83, correlating with a decrease in gold prices.
• The fund's only recurring expense is the Sponsor's fee, which is 0.15% of the NAV.
• The Custodian held 41,360.171 ounces of gold on behalf of the Fund in its vault, with a market value of $107,985,202 at December 31, 2024.
• 1,750,000 Shares were created and 750,000 Shares were redeemed during the nine months ended December 31, 2024.
• The fund is classified as a grantor trust for U.S. federal income tax purposes and is not subject to federal income tax.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The fund shows growth in net assets, but the NAV per share decreased slightly. The fund is performing as expected given the market conditions.

Positives

• The fund experienced a significant increase in net assets over the nine-month period, driven by gold price appreciation and net capital share transactions.
• The fund continues to adhere to its investment objective of reflecting the performance of gold bullion, less expenses.
• The fund only invests in responsibly sourced gold, aligning with ethical investment practices.
• The fund maintains a low expense ratio with a Sponsor's fee of only 0.15% of NAV.

Negatives

• The NAV per share decreased slightly during the quarter ended December 31, 2024, due to a decrease in gold prices.
• The fund's performance is highly dependent on the price of gold, making it susceptible to market volatility.

Risks

• The fund's performance is directly tied to the price of gold, which is subject to various market factors and volatility.
• Global gold supply and demand, investor expectations regarding inflation, currency exchange rate volatility, and political/economic events can all impact the price of gold.
• There is no guarantee that gold will maintain its long-term value in terms of purchasing power.
• The fund is subject to risks associated with the custodian holding the gold bullion, although the audit findings did not identify non-conformities.

Future Outlook

The report does not provide specific forward-looking guidance, but it notes that the fund's performance is expected to continue to be closely tied to the price of gold.

Industry Context

This announcement reflects the performance of a gold-backed ETF, which is influenced by broader market trends in the gold market, including supply and demand dynamics, investor sentiment, and macroeconomic factors.

Comparison to Industry Standards

• Comparable gold ETFs include the SPDR Gold Trust (GLD) and iShares Gold Trust (IAU).
• The Sponsor's fee of 0.15% is competative with other gold ETFs.
• The fund's focus on responsibly sourced gold differentiates it from some other gold ETFs.

Related Party Transactions

• The Fund pays the Sponsor a unitary fee for services performed pursuant to the Sponsor Agreement.
• The Marketing Agent is an affiliate of the Sponsor, and expenses payable to the Marketing Agent are paid through the Sponsor's fee.
• Franklin Resources, Inc., the ultimate parent company of the Sponsor, is considered a related party.

Stakeholder Impact

• Shareholders are impacted by the fluctuations in the price of gold, which directly affect the value of their shares.
• Authorized Participants are affected by the creation and redemption of shares in Creation Units.
• The Sponsor benefits from the Sponsor's fee, which is a percentage of the fund's NAV.

Key Dates