10-Q: VanEck Merk Gold ETF Reports NAV Decline Amidst Gold Price Drop

The VanEck Merk Gold ETF (OUNZ) reported a significant decrease in Net Asset Value (NAV) for the quarter ended July 31, 2026, primarily driven by a substantial depreciation in the value of its gold bullion holdings.

Summary

• The VanEck Merk Gold ETF (OUNZ) experienced a notable decline in its Net Asset Value (NAV) and NAV per share for the quarter and six months ended July 31, 2026.
• For the three months ended July 31, 2026, the Trust's NAV decreased by 10.18% to $2,537,708,291, with NAV per share falling 12.30% to $38.94.
• Over the six months ended July 31, 2026, the NAV decreased by 12.59% to $2,537,708,291, and NAV per share decreased by 16.37% to $38.94.
• This decline is attributed to a significant decrease in the value of gold bullion holdings, resulting in a net change in unrealized depreciation of $358,602,522 for the quarter and $508,077,242 for the six months.
• Sponsor fees, amounting to $1,679,188 for the quarter and $3,478,886 for the six months, also contributed to the net investment loss.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative score due to the significant depreciation in the value of gold bullion during the period, leading to a substantial decrease in Net Asset Value (NAV) per share and overall NAV.

Positives

• The Trust continues to operate with a single, clear investment strategy focused on physical gold bullion.
• The Sponsor covers most administrative and marketing expenses, with the primary ordinary expense being the Sponsor's fee.
• The Trust has received a private letter ruling from the IRS, indicating that IRA or Tax-Qualified Account ownership of Shares will not be treated as a taxable distribution.

Negatives

• The Net Asset Value (NAV) of the Trust decreased by 10.18% for the three months ended July 31, 2026, and by 12.59% for the six months ended July 31, 2026.
• The NAV per share decreased by 12.30% for the three months and 16.37% for the six months ended July 31, 2026.
• There was a substantial net change in unrealized depreciation on investment in gold bullion of $358,602,522 for the quarter and $508,077,242 for the six months ended July 31, 2026.
• Total expenses for the three months ended July 31, 2026, were $1,679,188, and for the six months ended July 31, 2026, were $3,478,886, primarily due to Sponsor fees.

Risks

• Global gold supply and demand dynamics, including forward selling by producers, central bank activities, and production costs, can affect gold prices.
• Investor expectations regarding inflation rates can influence gold's value.
• Currency exchange rates and interest rates are factors that can impact the price of gold.
• Investment and trading activities by hedge funds and commodity funds may affect gold prices.
• Global or regional political, economic, or financial events and situations can lead to volatility in gold prices.
• There is no assurance that gold will maintain its long-term value in terms of purchasing power.
• A decline in the price of gold is expected to result in a proportionate decline in the value of the shares.

Future Outlook

The filing does not provide specific forward-looking guidance on future performance. However, it reiterates that the Trust's secondary objective is for the shares to reflect the performance of the price of gold less the expenses of the Trust's operations. Fluctuations in gold prices are expected to directly impact the value of the shares.

Management Comments

• The Trusts primary objective is to provide investors with an opportunity to invest in gold through the shares and be able to take delivery of physical gold bullion and gold coins (physical gold) in exchange for their shares.
• The Trusts secondary objective is for the shares to reflect the performance of the price of gold less the expenses of the Trusts operations.
• The Sponsor has evaluated whether or not there are uncertain tax positions and has determined that no reserves for uncertain tax positions are required.
• The Sponsor has agreed to assume most of the expenses incurred by the Trust, with the Sponsor's fee being the primary ordinary expense.

Industry Context

StockSavvy.ai notes that the performance of the VanEck Merk Gold ETF is intrinsically tied to the spot price of gold. The significant depreciation in gold bullion value reported in this filing reflects broader market trends impacting gold as an asset class during the period. The shift in pricing index to the Solactive Gold Spot Index from the LBMA Gold Price in August 2023 is a key operational detail for tracking performance.

Comparison to Industry Standards

• The filing does not provide direct comparisons to other gold ETFs or industry benchmarks. Performance is measured against the Solactive Gold Spot Index.
• The expense ratio, represented by Sponsor fees, is 0.25% annualized, which is competitive within the gold ETF industry.
• The T+1 settlement cycle for creations and redemptions is becoming a more common standard in the ETF market.

Related Party Transactions

• The Sponsor, Merk Investments LLC, provides services to the Trust and is compensated via Sponsor fees, which are paid in Shares.
• Van Eck Securities Corporation (VanEck), an affiliate of the Sponsor, acts as the Marketing Agent for the Trust, with fees payable from the Sponsor's fee.
• Affiliates of the Trustee and Custodian may act as Authorized Participants.

Stakeholder Impact

• Shareholders will experience a decrease in the value of their investment due to the decline in the price of gold and the Trust's NAV.
• The Sponsor's fee, paid in shares, will dilute existing shareholders' holdings to some extent.
• Authorized Participants may adjust their creation and redemption activities based on market conditions and the Trust's NAV performance.

Next Steps

• The Trust will continue to hold physical gold bullion as its primary asset.
• The Sponsor will continue to oversee the performance of service providers and manage the Trust's operations.
• The Trustee will continue to value the gold held by the Trust based on the Solactive Gold Spot Index and determine the NAV per Share daily.
• Authorized Participants will continue to create and redeem Shares in Baskets in exchange for gold.

Key Dates

Recommendation

The filing indicates a significant decline in the Trust's Net Asset Value due to depreciation in gold prices, which is a direct negative for investors. However, the Trust's core function is to track gold prices, and the current market conditions are the primary driver of the negative performance, not fundamental operational issues within the Trust itself. Given gold's role as a potential inflation hedge and safe-haven asset, holding the ETF allows investors to maintain exposure to gold price movements. Without a clear indication of a sustained downturn in gold or specific issues with the ETF's structure, a 'hold' recommendation is appropriate, pending broader market sentiment and gold price recovery.

Keywords

Gold ETF, Physical Gold, Commodity ETF, OUNZ, Investment Company, Gold Bullion, Net Asset Value, Solactive Gold Spot Index