10-Q: Franklin Responsibly Sourced Gold ETF Sees Net Asset Value Increase in Q1 2024

The Franklin Responsibly Sourced Gold ETF (FGDL) reported an increase in net asset value (NAV) for the quarter ended June 30, 2024, driven by rising gold prices and creation of new shares.

Summary

• Franklin Templeton Holdings Trust, sponsoring the Franklin Responsibly Sourced Gold ETF (FGDL), released its Form 10-Q for the quarter ended June 30, 2024.
• The fund's investment objective is to reflect the performance of the price of gold bullion, less expenses, holding only responsibly sourced gold.
• The NAV per share increased from $29.57 at the beginning of the quarter to $31.12 at the end of the quarter.
• This increase was primarily due to a rise in the price of gold, which increased by 5.26% during the quarter.
• During the quarter, 100,000 shares were issued in exchange for 1,335.464 ounces of gold.
• The fund's total net assets increased from $62,102,631 to $68,459,081 during the quarter.
• The fund's only recurring expense is the sponsor's fee, which is 0.15% of the NAV.
• For the three months ended June 30, 2024, the net increase in net assets resulting from operations was $3,209,963.
• As of June 30, 2024, the fund held 29,373.939 ounces of gold with a fair value of $68,467,714.
• 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 report indicates positive performance due to rising gold prices and increased net assets, but also acknowledges risks associated with gold price volatility and market conditions.

Positives

• The fund experienced an increase in NAV per share and total net assets.
• The rise in gold prices positively impacted the fund's performance.
• The fund continues to attract investment, as evidenced by the creation of new shares.
• The fund's commitment to responsibly sourced gold may appeal to socially conscious investors.
• The fund's low expense ratio of 0.15% is competitive within the gold ETF market.

Negatives

• The fund's performance is highly dependent on the price of gold, which can be volatile.
• The fund's expenses, although low, will reduce the overall return to investors.
• The fund's concentration in a single commodity (gold) exposes investors to specific risks associated with the gold market.

Risks

• Fluctuations in the price of gold can significantly impact the value of the fund's shares.
• Global gold supply and demand, investor expectations regarding inflation, currency exchange rate volatility, and political/economic events can all affect the price of gold.
• There is no assurance that gold will maintain its long-term value in terms of purchasing power.
• The fund's reliance on a single custodian (JPMorgan Chase Bank, N.A.) for its gold bullion exposes it to potential risks associated with the custodian's operations.

Future Outlook

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

Industry Context

The Franklin Responsibly Sourced Gold ETF competes with other gold ETFs, offering investors exposure to gold bullion while adhering to responsible sourcing standards.

Comparison to Industry Standards

• The fund's expense ratio of 0.15% is competitive with other physically-backed gold ETFs, such as the SPDR Gold Trust (GLD) and iShares Gold Trust (IAU).
• The fund's focus on responsibly sourced gold differentiates it from some other gold ETFs that do not have specific sourcing requirements.
• Comparable gold ETFs include GLDM, BAR, and SGOL.

Stakeholder Impact

• Shareholders benefited from the increase in NAV per share.
• The sponsor continues to receive fees for managing the fund.
• Authorized participants are able to create and redeem shares in Creation Units.
• The custodian is responsible for the safekeeping of the fund's gold bullion.

Key Dates

Keywords

gold, ETF, Franklin Responsibly Sourced Gold ETF, FGDL, gold bullion, net asset value, responsible sourcing, Franklin Templeton, investment, commodities