10-Q: Gold ETF Sees Value Drop Amidst Price Decline

The Franklin Responsibly Sourced Gold ETF reported a significant decrease in its Net Asset Value (NAV) per share for the quarter ended June 30, 2026, primarily driven by a decline in the price of gold.

Summary

• The Franklin Responsibly Sourced Gold ETF (FGDL) experienced a substantial decline in its Net Asset Value (NAV) per share during the quarter ended June 30, 2026.
• The NAV per share decreased from $61.37 at the beginning of the period to $53.59 at the end of the period, representing a 12.68% drop.
• This decline is directly attributed to a 12.64% decrease in the price of gold during the same period.
• The Fund's total net assets decreased from $475,584,035 to $415,331,632.
• The Sponsor Fee for the quarter was $174,426.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the significant depreciation in the value of gold, leading to a substantial decrease in the Fund's Net Asset Value (NAV) per share and overall net assets.

Positives

• The Fund continues to hold only responsibly sourced gold, adhering to LBMA Responsible Gold Guidance.
• No material legal proceedings are currently pending against the Trust or Fund.
• Disclosure controls and procedures are reported to be operating effectively.
• The Sponsor has agreed to assume ordinary fees and expenses, including administrator, custodian, trustee, listing fees, and up to $500,000 annually in legal fees.

Negatives

• The Fund's Net Asset Value (NAV) per share decreased by 12.68% during the quarter, from $61.37 to $53.59.
• The total value of the Fund's investment in gold decreased by approximately $60.3 million, from $475,653,721 to $415,381,577.
• The Fund experienced a net realized and unrealized loss of $60,077,977 on its investment in gold.
• The Fund's net assets decreased by approximately $60.25 million during the quarter.

Risks

• Global gold supply and demand dynamics, including producer actions, central bank activities, and production costs, can affect gold prices.
• Investor expectations regarding future inflation rates can influence gold prices.
• Volatility in currency exchange rates and interest rates can impact the price of gold.
• Political, economic, global, or regional incidents, including tariffs and sanctions, can affect gold prices.
• There is no assurance that gold will maintain its long-term purchasing power.
• A decline in the price of gold is expected to result in a proportionate decline in the value of the Fund's shares.

Future Outlook

The filing does not provide specific forward-looking guidance on future performance. However, it reiterates that the Fund's objective is for its shares to reflect the performance of the price of gold bullion, less expenses, and that movements in the gold price are expected to directly affect the share price.

Management Comments

• "All statements (other than statements of historical fact) included in this report that address activities, events or developments that may occur in the future... are forward-looking statements. These statements are only predictions. Actual events or results may differ materially."
• "We do not intend to update any forward-looking statements even if new information becomes available or other events occur in the future, except as required by the federal securities laws."
• "The Fund's only ordinary recurring expense is the Sponsors annual fee of 0.15% of the net asset value (NAV) of the Fund."
• "In the event that the price of gold declines, the Sponsor expects the value of an investment in the shares to decline proportionately."

Industry Context

StockSavvy.ai notes that the performance of the Franklin Responsibly Sourced Gold ETF is intrinsically tied to the volatile price of gold. The significant unrealized loss reported in this quarter reflects broader market trends impacting gold prices, which can be influenced by macroeconomic factors such as inflation expectations, interest rates, and geopolitical events.

Comparison to Industry Standards

• The Fund's expense ratio of 0.15% is competitive within the gold ETF industry.
• The Fund's strategy of holding physical gold bullion is standard for commodity ETFs tracking precious metals.
• The focus on 'responsibly sourced gold' aligns with growing investor demand for ESG-compliant investments, though direct comparables for this specific sourcing standard are limited across the broader ETF market.

Legal Proceedings

• As of August 14, 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 of the Trust and the Fund.
• Franklin Distributors, LLC serves as the Marketing Agent and is an affiliate of the Sponsor.
• Franklin Resources, Inc. (FRI) is the ultimate parent company of the Sponsor and Marketing Agent.
• No shares of the Fund were held by any related party as of June 30, 2026, and March 31, 2026.

Stakeholder Impact

• Shareholders have experienced a significant decrease in the value of their investment due to the decline in gold prices.
• The Fund's performance is directly linked to gold price fluctuations, impacting investor returns.
• The Sponsor continues to receive its fee, which reduces the Fund's NAV.

Next Steps

• Continue to monitor the price of gold and its impact on the Fund's NAV.
• The Sponsor will continue to oversee the performance of service providers.
• The Fund will continue to hold responsibly sourced gold bullion.
• The Sponsor will continue to prepare and file periodic reports with the SEC.

Key Dates

Recommendation

The filing indicates a significant decline in the Fund's value due to the drop in gold prices, which is a primary risk factor for this ETF. While the expense ratio is competitive and the sourcing of gold is responsible, the negative performance trend and inherent volatility of gold warrant a cautious approach. A 'hold' recommendation reflects the expectation that the Fund will continue to track gold prices, making it suitable for investors with a bullish outlook on gold and a tolerance for its volatility, but not for aggressive buying given the recent downturn.

Keywords

Gold ETF, Franklin Responsibly Sourced Gold ETF, FGDL, Gold Bullion, Commodity ETF, Investment Fund, SEC Filing, Quarterly Report