10-Q: Franklin XRP ETF Sees Strong NAV Growth on XRP Appreciation

The Franklin XRP ETF reported a substantial increase in Net Asset Value (NAV) per Share, driven by significant appreciation in XRP's market price during the quarter.

Summary

• The Franklin XRP ETF (XRPZ) reported a significant increase in its Net Asset Value (NAV) per Share from $11.39 to $16.28 for the quarter ended September 30, 2026.
• This increase is primarily attributed to a 42.95% rise in the price of XRP during the same period.
• The Fund issued 6,250,000 Shares in exchange for 67,852,278.4988 XRP during the quarter, with no Shares redeemed.
• Total assets for the Trust and Fund reached $439,668,398 as of September 30, 2026, with 293,112,265.4002 XRP held.
• The Sponsor's fee for the quarter was $148,806, with a net investment loss of $148,806.
• Net realized and unrealized gains on XRP investment for the quarter were approximately $112,662,712.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report, driven by strong performance in XRP value appreciation and significant share creation, indicating investor confidence and market demand.

Positives

• Significant appreciation in the value of XRP, leading to a 42.93% total return at NAV for the quarter.
• Substantial increase in Net Asset Value (NAV) per Share from $11.39 to $16.28.
• Issuance of 6,250,000 new Shares during the quarter, indicating strong investor demand.
• The Fund's investment in XRP grew to $439,668,398 as of September 30, 2026.
• The Sponsor waived fees on the first $5.0 billion of assets until May 31, 2026, benefiting investors.

Negatives

• The Fund experienced a net investment loss of $148,806 for the quarter, primarily due to the Sponsor's fee.
• The Fund's value is entirely dependent on the price of XRP, which is subject to high volatility.
• A realized loss of $68,022 was incurred on XRP sold to cover the Sponsor's fee.

Risks

• The Fund holds only XRP and cash, creating concentration risk due to XRP price fluctuations.
• Extreme volatility in XRP trading prices could materially adversely affect the value of the Shares, potentially leading to a loss of all or substantially all of their value.
• Factors adversely impacting XRP value include changes in global XRP supply or demand, market sentiment towards digital assets, and potential manipulation on unregulated platforms.
• Forks in the XRP Ledger could also adversely affect the value of XRP and the Shares.

Future Outlook

The Fund's performance is directly tied to the price of XRP. Future outlook depends on XRP's market performance, with no active management or leverage employed by the Sponsor.

Management Comments

• The Fund seeks to reflect generally the performance of the price of XRP before payment of the Fund's expenses and liabilities.
• The Shares are intended to offer a convenient means of making an investment similar to an investment in XRP relative to acquiring, holding and trading XRP directly.
• The Fund is a passive investment vehicle and is not a leveraged product; the Sponsor does not actively manage the XRP held by the Fund.
• The Sponsor may, at its sole discretion and from time to time, waive all or a portion of the Sponsor's fee for stated periods of time.

Industry Context

StockSavvy.ai notes that the Franklin XRP ETF operates within the growing digital asset investment product sector. Its passive strategy directly links its performance to the underlying cryptocurrency, XRP, making it highly sensitive to crypto market volatility and regulatory developments.

Comparison to Industry Standards

• The Fund's expense ratio, net of waivers, is 0.13% for the six-month period, which is competitive for passively managed digital asset ETFs.
• The total return of 42.93% for the quarter is strong, reflecting the significant market appreciation of XRP, and aligns with the performance of other digital asset-focused funds during periods of positive crypto market sentiment.
• The Fund's reliance on the CME CF XRP-Dollar Reference Rate as its primary pricing source is a standard practice for such ETFs to ensure consistent valuation.

Legal Proceedings

• As of November 13, 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

• The Sponsor, Franklin Holdings, LLC, receives a Sponsor's fee for services rendered.
• Franklin Distributors, LLC, an affiliate of the Sponsor, acts as the Marketing Agent.
• Franklin Templeton, Inc. is the ultimate parent company of the Sponsor and Marketing Agent.

Stakeholder Impact

• Shareholders benefit from the appreciation of XRP, which directly increases the NAV per Share.
• Shareholders are exposed to the volatility and potential downside risk of XRP.
• The Sponsor's fee, though partially waived initially, impacts the net returns to shareholders.
• Authorized Participants facilitate the creation and redemption of Shares, impacting market liquidity.

Next Steps

• Continue to reflect the performance of the price of XRP.
• Monitor XRP market conditions and volatility.
• Report on financial condition and results of operations in future filings.

Key Dates

Recommendation

The Fund's performance is entirely dependent on XRP's price movements. While the recent quarter showed strong gains due to XRP appreciation, the inherent volatility and lack of active management suggest a 'hold' recommendation. Investors should be aware of the significant risks associated with holding a single cryptocurrency asset.

Keywords

XRP ETF, Franklin XRP Trust, Digital Asset Fund, Cryptocurrency ETF, XRPZ, Quarterly Report, NAV Performance, Asset Management