# abrdn Palladium ETF Trust: Form 10-Q for the period ended Jun 30, 2023

- Company: [abrdn Palladium ETF Trust](/companies/pall.md) (CIK 1459862)
- Form: 10-Q
- Filed: 2023-08-09
- Accepted by EDGAR: Aug 9, 2023, 08:27 ET
- Period: 2023-06-30
- Accession: 0001387131-23-009447
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1459862/000138713123009447/pall-10q_063023.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1459862/000138713123009447/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Net income | 3 months, 2023-04-01 to 2023-06-30 | −$42.9m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2023-01-01 to 2023-06-30 | −$91.0m | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2023-04-01 to 2023-06-30 | −$21.68 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2023-01-01 to 2023-06-30 | −$46.47 | us-gaap:EarningsPerShareBasic |
| Total assets | at 2023-06-30 | $231.4m | us-gaap:Assets |
| Total liabilities | at 2023-06-30 | $114.0k | us-gaap:Liabilities |
| Shareholders' equity | at 2023-06-30 | $231.3m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 10,328 characters.

*This information should be read in conjunction with the financial statements and notes to the financial statements included in Item 1 of Part 1 of this Form 10-Q. The discussion and analysis that follows may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and within the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements may relate to the Trust’s financial condition, operations, future performance and business. These statements can be identified by the use of the words “may”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or similar words and phrases. These statements are based upon certain assumptions and analyses the Sponsor has made based on its perception of historical trends, current conditions and expected future developments. Neither the Trust nor the Sponsor is under a duty to update any of the forward-looking statements, to conform such statements to actual results or to reflect a change in management’s expectations or predictions.*

### Introduction

The Trust is a common law trust, formed under the laws of the state of New York on December 30, 2009. The Trust is not managed like a corporation or an active investment vehicle. It does not have any officers, directors, or employees and is administered by the Trustee pursuant to the Trust Agreement. The Trust is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act. It does not hold or trade in commodity futures contracts, nor is it a commodity pool, or subject to regulation as a commodity pool operator or a commodity trading adviser in connection with issuing Shares.

The Trust holds palladium and is expected to issue Baskets in exchange for deposits of palladium and to distribute palladium in connection with redemptions of Baskets. Shares issued by the Trust represent units of undivided beneficial interest in and ownership of the Trust. The investment objective of the Trust is for the Shares to reflect the performance of the price of palladium, less the Trust’s expenses. The Sponsor believes that, for many investors, the Shares will represent a cost effective investment relative to traditional means of investing in palladium.

The Trust issues and redeems Shares only with Authorized Participants in exchange for palladium and only in aggregations of 25,000 Shares or integral multiples thereof. A list of current Authorized Participants is available from the Sponsor or the Trustee.

Shares of the Trust trade on the New York Stock Exchange (the “NYSE”) Arca under the symbol “PALL”.

### Valuation of Palladium and Computation of Net Asset Value

On each day that the NYSE Arca is open for regular trading, as promptly as practicable after 4:00 p.m. New York time on such day (the “Evaluation Time”), the Trustee evaluates the palladium held by the Trust and determines the NAV of the Trust.

At the Evaluation Time, the Trustee values the Trust’s palladium on the basis of that day’s LME PM Fix or, if no LME PM Fix is made on such day, the next most recent LME PM Fix determined prior to the Evaluation Time will be used, unless the Sponsor determines that such price is inappropriate as a basis for evaluation. In the event the Sponsor determines that the LME PM Fix or such other publicly available price as the Sponsor may deem fairly represents the commercial value of the Trust’s palladium is not an appropriate basis for evaluation of the Trust’s palladium, it shall identify an alternative basis for such evaluation to be employed by the Trustee. Neither the Trustee nor the Sponsor shall be liable to any person for the determination that the LME PM Fix or such other publicly available price is not appropriate as a basis for evaluation of the Trust’s palladium or for any determination as to the alternative basis for such evaluation provided that such determination is made in good faith.

Once the value of the palladium has been determined, the Trustee subtracts all estimated accrued but unpaid fees (other than the fees accruing for such day on which the valuation takes place that are computed by reference to the value of the Trust or its assets), expenses and other liabilities of the Trust from the total value of the palladium and all other assets of the Trust (other than any amounts credited to the Trust’s reserve account, if established). The resulting figure is the adjusted net asset value (the “ANAV”) of the Trust. The ANAV of the Trust is used to compute the Sponsor’s Fee.

All fees accruing for the day on which the valuation takes place that are computed by reference to the value of the Trust or its assets are calculated using the ANAV calculated for such day. The Trustee subtracts from the ANAV the amount of accrued fees so computed for such day and the resulting figure is the NAV of the Trust. The Trustee also determines the NAV per Share by dividing the NAV of the Trust by the number of the Shares outstanding as of the close of trading on the NYSE Arca (which includes the net number of any Shares created or redeemed on such evaluation day).

The Trustee’s estimation of accrued but unpaid fees, expenses and liabilities is conclusive upon all persons interested in the Trust and no revision or correction in any computation made under the Trust Agreement will be required by reason of any difference in amounts estimated from those actually paid.

The NAV of the Trust is obtained by subtracting the Trust’s liabilities on any day from the value of the palladium owned and receivable by the Trust on that day; the NAV per Share is obtained by dividing the NAV of the Trust on a given day by the number of Shares outstanding on that day.

### The Quarter Ended June 30, 2023

The Trust’s NAV decreased from $275,197,768 at March 31, 2023 to $231,262,151 at June 30, 2023, a 15.97% decrease for the quarter. The change in the Trust’s NAV resulted from a decrease in the price per ounce of palladium, which fell 15.84% from $1,490.00 at March 31, 2023 to $1,254.00 at June 30, 2023, and no increase nor decrease in outstanding Shares, which stayed the same from 2,000,000 Shares at March 31, 2023 to 2,000,000 Shares at June 30, 2023, as a result of 50,000 Shares (2 Baskets) being created and 50,000 Shares (2 Baskets) being redeemed during the quarter.

The NAV per Share decreased 15.97% from $137.60 at March 31, 2023 to $115.63 at June 30, 2023. The Trust’s NAV per Share fell slightly more than the price per ounce of palladium on a percentage basis due to the Sponsor’s Fee, which was $381,658 for the quarter, or 0.60% of the Trust’s ANAV on an annualized basis.

The NAV per Share of $150.30 at April 18, 2023 was the highest during the quarter, compared with a low of $112.77 at June 29, 2023.

The decrease in net assets from operations for the quarter ended June 30, 2023 was $42,927,734, resulting from a realized loss of $125,191 on the transfer of palladium to pay expenses, a realized loss of $1,351,515 on palladium distributed for the redemption of Shares, a change in unrealized loss on investment in palladium of $41,069,370 and the Sponsor’s Fee of $381,658. Other than the Sponsor’s Fee, the Trust had no expenses during the quarter ended June 30, 2023.

### The Six Months Ended June 30, 2023

The Trust’s NAV decreased from $295,490,794 at December 31, 2022 to $231,262,151 at June 30, 2023, a 21.74% decrease for the period. The change in the Trust’s NAV resulted from a decrease in the price per ounce of palladium, which fell 29.35% from $1,775.00 at December 31, 2022 to $1,254.00 at June 30, 2023, and an increase in outstanding Shares, which rose from 1,800,000 Shares at December 31, 2022 to 2,000,000 Shares at June 30, 2023, as a result of 425,000 Shares (17 Baskets) being created and 225,000 Shares (9 Baskets) being redeemed.

The NAV per Share decreased 29.56% from $164.16 at December 31, 2022 to $115.63 at June 30, 2023. The Trust’s NAV per Share fell slightly more than the price per ounce of palladium on a percentage basis due to the Sponsor’s Fee, which was $801,153 for the period, or 0.60% of the Trust’s ANAV on an annualized basis.

The NAV per Share of $166.63 at January 10, 2023 was the highest during the period, compared with a low of $112.77 at June 29, 2023.

The decrease in net assets from operations for the period ended June 30, 2023 was $90,988,095, resulting from a realized loss of $198,038 on the transfer of palladium to pay expenses, a realized loss of $7,884,611 on palladium distributed for the redemption of Shares, a change in unrealized loss on investment in palladium of $82,104,293, and the Sponsor’s Fee of $801,153. Other than the Sponsor’s Fee, the Trust had no expenses during the period ended June 30, 2023.

### Liquidity & Capital Resources

The Trust is not aware of any trends, demands, commitments, events or uncertainties that are reasonably likely to result in material changes to its liquidity needs. In exchange for the Sponsor’s Fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the period covered by this report was the Sponsor’s Fee.

The Trustee will, at the direction of the Sponsor or in its own discretion, sell the Trust’s palladium as necessary to pay the Trust’s expenses not otherwise assumed by the Sponsor. The Trustee will not sell palladium to pay the Sponsor’s Fee but will pay the Sponsor’s Fee through in-kind transfers of palladium to the Sponsor. At June 30, 2023, the Trust did not have any cash balances.

### Off-Balance Sheet Arrangements

The Trust has no off-balance sheet arrangements.

### Critical Accounting Policies

The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements relies on estimates and assumptions that impact the Trust’s financial position and results of operations. These estimates and assumptions affect the Trust’s application of accounting policies. Refer to Note 2 to the Financial Statements for further information on accounting policies.

## Controls and procedures

As filed, 1,321 characters.

The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer of the Sponsor, and to the audit committee, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer of the Sponsor, the Sponsor conducted an evaluation of the Trust’s disclosure controls and procedures, as defined under Exchange Act Rules 13a-15(e) and 15d-15(e). Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer of the Sponsor concluded that, as of June 30, 2023, the Trust’s disclosure controls and procedures were effective.

There have been no changes in the Trust’s or Sponsor’s internal control over financial reporting during the quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, the Trust’s or Sponsor’s internal control over financial reporting.

## Risk factors

As filed, 163 characters.

There have been no material changes to the risk factors previously disclosed in the Trust’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Filed Aug 9, 2023.
Source: SEC EDGAR, the filing index for accession 0001387131-23-009447. Last ingested by Listed: Oct 24, 2026, 15:08 ET. No prices; not investment advice.