|                                  
|----------------------------------
|UNITED STATES                     
|                                  
|SECURITIES AND EXCHANGE COMMISSION
|Washington,
 D.C. 20549           
|                                  
|Form 10-K                         
|                                  
|(Mark One)                        

xANNUAL REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

or

oTRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-34916

ETFS WHITE METALS BASKET TRUST


(Exact name of registrant as specified in its charter)


|                                         |                    
|---------------------------------------- | -------------------
|New York                                 | 27-2780294         
|(State or other jurisdiction of          | (I.R.S. Employer   
|incorporation or organization)           | Identification No.)
|                                         |                    
|c/o ETF
 Securities USA LLC              |                    
|48 Wall Street, 11th Floor               |                    
|New York, NY                             | 10005              
|(Address of principal executive offices) | (Zip Code)         

Registrants telephone number, including area
code:
(212) 918-4954

Securities registered pursuant to Section
12(b) of the Act:

|                               |  |                                          
|------------------------------ |  | -----------------------------------------
|Title of each class            |  | Name of each exchange on which registered
|                               |  |                                          
|ETFS Physical WM Basket Shares |  | NYSE Arca                                

Securities registered pursuant to Section
12(g) of the Act: None

Indicate by
check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


Yes o No x


Indicate by
check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act.


Yes o No x


Indicate by
check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.


Yes x No o


Indicate by
check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months.


Yes x No o


Indicate by
check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. x

Indicate by
check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of large accelerated filer, accelerated filer and smaller
reporting company in Rule 12b-2 of the Exchange Act.

|                          |  |                            
|------------------------- |  | ---------------------------
|Large accelerated filer o |  | Accelerated filer o        
|Non-accelerated filer x   |  | Smaller reporting company o

Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Act).


Yes o No x


The registrant was formed on November 29, 2010 and no shares were outstanding at June 30, 2010.

Number of the
registrants shares outstanding as of March 8, 2011: 1,100,000

DOCUMENTS INCORPORATED BY REFERENCE:
None.

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FORWARD
LOOKING STATEMENTS

This Annual Report on Form 10-K contains various 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. Forward-looking statements usually include the verbs, anticipates,
believes, estimates, expects, intends, plans, projects, understands
and other verbs suggesting uncertainty. We remind readers that forward-looking
statements are merely predictions and therefore inherently subject to
uncertainties and other factors and involve known and unknown risks that could
cause the actual results, performance, levels of activity, or our achievements,
or industry results, to be materially different from any future results,
performance, levels of activity, or our achievements expressed or implied by
such forward-looking statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
hereof. The Trust undertakes no obligation to publicly release any revisions to
these forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.

Additional significant uncertainties and other factors affecting
forward-looking statements are presented in the Risk Factors section herein.

---



TABLE OF CONTENTS

|                                                                                                                       |  |   
|---------------------------------------------------------------------------------------------------------------------- |  | --
|PART I                                                                                                                 |  | 1 
|Item 1.
 Business                                                                                                      |  | 1 
|Trust Objective                                                                                                        |  | 1 
|Secondary
 Market Trading                                                                                              |  | 2 
|Valuation of
 Bullion and Computation of Net Asset Value                                                               |  | 2 
|Trust Expenses                                                                                                         |  | 3 
|Deposit of
 Bullion; Issuance of Shares                                                                                |  | 3 
|Withdrawal of
 Bullion; Redemption of Shares                                                                           |  | 4 
|Creation and
 Redemption Transaction Fee                                                                               |  | 4 
|The Sponsor                                                                                                            |  | 4 
|The Trustee                                                                                                            |  | 5 
|The Custodian                                                                                                          |  | 6 
|Description of
 the Shares                                                                                             |  | 6 
|Custody
      of the Trusts Bullion                                                                                   |  | 7 
|United
      States Federal Income Tax Consequences                                                                    |  | 8 
|ERISA and
 Related Considerations                                                                                      |  | 10
|Item 1A. Risk
 Factors                                                                                                 |  | 11
|Item 1B.
 Unresolved Staff Comments                                                                                    |  | 19
|Item 2.
 Properties                                                                                                    |  | 19
|Item 3. Legal
 Proceedings                                                                                             |  | 19
|Item 4.
 (Removed and Reserved)                                                                                        |  | 19
|                                                                                                                       |  |   
|PART II                                                                                                                |  | 20
|Item 5. Market
 for Registrants Common Equity, Related Stockholder Matters and Issuer
 Purchases of Equity Securities |  | 20
|Item 6.
 Selected Financial Data                                                                                       |  | 21
|Item 7.
 Managements Discussion and Analysis of Financial Condition and Results of
 Operations                        |  | 21
|Item 7A.
 Quantitative and Qualitative Disclosures about Market Risk                                                   |  | 24
|Item 8.
 Financial Statements and Supplementary Data                                                                   |  | 24
|Item 9. Changes
 in and Disagreements with Accountants on Accounting and Financial Disclosure                          |  | 25
|Item 9A.
 Controls and Procedures                                                                                      |  | 25
|Item 9B. Other
 Information                                                                                            |  | 25
|                                                                                                                       |  |   
|PART III                                                                                                               |  | 26
|Item 10.
 Directors, Executive Officers and Corporate Governance                                                       |  | 26
|Item 11.
 Executive Compensation                                                                                       |  | 26
|Item 12.
 Security Ownership of Certain Beneficial Owners and Management and Related
 Stockholder Matters              |  | 26
|Item 13.
 Certain Relationships and Related Transactions, and Director Independence                                    |  | 26
|Item 14.
 Principal Accounting Fees and Services                                                                       |  | 26
|                                                                                                                       |  |   
|PART IV                                                                                                                |  | 27
|Item 15.
 Exhibits, Financial Statement Schedules                                                                      |  | 27

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PART I

Item 1. Business

The
purpose of the ETFS White Metals Basket Trust (the Trust), is to
own, in an agreed proportion, silver, platinum and palladium (collectively, Bullion)
transferred to the Trust in exchange for shares issued by the Trust (Shares).
Each share represents a fractional undivided beneficial interest in and ownership
of the Trust. The assets of the Trust are anticipated to consist solely of Bullion. The
Trust was formed on November 29, 2010 when an initial deposit of Bullion was
made in exchange for the issuance of two Baskets (a Basket consists
of 50,000 Shares).

The
sponsor of the Trust is ETF Securities USA LLC (the Sponsor). The trustee of
the Trust is The Bank of New York Mellon (the Trustee) and the custodian is
JP Morgan Chase Bank N.A., London branch (the Custodian).

The
Trusts Shares at redeemable value grew from $4,854,000 at November 29,
2010 to $37,969,441 by December 31, 2010, the Trusts fiscal year end. Outstanding
Shares in the Trust grew from 100,000 Shares at November 29, 2010 to 700,000
Shares at December 31, 2010.

The
Trust is not managed like a corporation or an active investment vehicle.The
Trust has no directors, officers or employees. It does not engage in any
activities designed to obtain a profit from or to improve the losses caused by
changes in the price of silver, platinum and palladium. The Bullion held by the
Trust will only be delivered to pay the remuneration due to the Sponsor (the
Sponsors Fee), distributed to Authorized Participants (defined below) in
connection with the redemption of Baskets or sold (1) on an as-needed basis to
pay Trust expenses not assumed by the Sponsor, (2) in the event the Trust
terminates and liquidates its assets, or (3) as otherwise required by law or
regulation. The Trust has no fixed termination date.

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. The Trust does and
will not hold or trade in commodities futures contracts regulated by the
Commodity Exchange Act (the CEA), as administered by the Commodity Futures
Trading Commission (the CFTC). The Trust is not a commodity pool for purposes
of the CEA and neither the Sponsor nor the Trustee is subject to regulation as
a commodity pool operator or a commodity trading advisor in connection with the
Shares. The Trust has no fixed termination date.

Trust Objective

The
investment objective of the Trust is for the Shares to reflect the performance
of the price of physical silver, platinum and palladium in the proportions held
by the Trust, less the expenses of the Trusts operations. The Trust holds
Bullion in a ratio such that, for every 1.0 ounce of silver, it holds 0.01 ounces
of platinum and 0.008 ounces of palladium. The Shares are intended to constitute
a simple and cost-effective means of making an investment similar to an investment
in physical Bullion. An investment in physical Bullion requires expensive and
sometimes complicated arrangements in connection with the assay, transportation,
warehousing and insurance of the metal. Traditionally, such expense and complications
have resulted in investments in physical Bullion being efficient only in amounts
beyond the reach of many investors.

The
Shares are intended to provide institutional and retail investors with a simple
and cost-efficient means, with minimal credit risk, of gaining investment
benefits similar to those of holding physical Bullion. The Shares offer an investment
that:



|  |                                                                                                                                                                                                                                                                                                                                                                 
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Is Easily Accessible.
     The Shares trade on the NYSE Arca and provide institutional and retail investors
     with indirect access to the Bullion market. The Shares are bought and sold
     on the NYSE Arca like any other exchange-listed securities. The close of
     the NYSE Arca trading session is 4:00 PM New York time.                          
|  |                                                                                                                                                                                                                                                                                                                                                                 
| | Is Relatively Cost Effective. The Sponsor expects that, for many
 investors, costs associated with buying and selling the Shares in the
 secondary market and the payment of the Trusts ongoing expenses will be
 lower than the costs associated with buying and selling Bullion and storing
 and insuring Bullion in a traditional allocated Bullion account.
|  |                                                                                                                                                                                                                                                                                                                                                                 
| | Has Minimal Credit Risk. The Shares represent an interest in
 physical Bullion owned by the Trust (other than an amount held in unallocated
 form which is not sufficient to make up a whole bar or plate or ingot which
 is held temporarily to effect a creation or redemption of Shares). Physical
 Bullion of the Trust in the Custodians                  

1

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | possession is not subject
 to borrowing arrangements with third parties. Other than the Bullion
 temporarily being held in an unallocated Bullion account with the Custodian,
 the physical Bullion of the Trust is not subject to counterparty or credit
 risks. See Risk FactorsBullion held in the Trusts unallocated Bullion
 account and any Authorized Participants unallocated Bullion account is not
 segregated from the Custodians assets.... This contrast with most other
 financial products that gain exposure to Bullion through the use of
 derivatives that are subject to counterparty and credit risks.

Investing
in the Shares does not insulate the investor from certain risks, including
price volatility. See Risk Factors.

Secondary Market Trading

While
the Trusts investment objective is for the Shares to reflect the performance
of prices of physical silver, platinum and palladium in the proportions held
by the Trust, less the expenses of the Trust, the Shares may trade in the
secondary market on the NYSE Arca at prices that are lower or higher relative
to their net asset value, which is the value of the Trusts assets less
its liabilities (NAV), per Share. The amount of the discount or premium
in the trading price relative to the NAV per Share may be influenced by non-concurrent
trading hours between the NYSE Arca and the Commodity Exchange, Inc., a
subsidiary of New York Mercantile Exchange, Inc. (COMEX), and the
London and Zurich Bullion markets. While the Shares trade on the NYSE Arca until
4:00 PM New York time, liquidity in the global Bullion markets is reduced
after the close of the COMEX at 1:30 PM New York time. As a result, during this
time, trading spreads, and the resulting premium or discount, on the Shares may
widen.

Valuation of Bullion and Computation of Net Asset Value

On
each business day, as promptly as
practicable after 4:00 p.m., New York time, on such day (the Evaluation
Time), the Trustee evaluates the Bullion held by the Trust and determines
the NAV of the Trust.

At
the Evaluation Time, the Trustee will value the Trusts Bullion on the basis
of that days London Fix for such metal (the applicable fix
for each metal of the price of an ounce of such metal and is performed in London,
England by fixing members of the London Bullion Market Association LBMA or
London Platinum and Palladium Market LPPM, as applicable) or, if
no London Fix is made for a metal on such day or has not been announced by the
Evaluation Time, the next most recent London Fix for such metal 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 London Fix or such other publicly available price as the Sponsor may
deem fairly represents the commercial value of the Trusts Bullion is not
an appropriate basis for evaluation of the Trusts Bullion,
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 London Fix or such other publicly available price
is not appropriate as a basis for evaluation of the Trusts Bullion or for
any determination as to the alternative basis for such evaluation provided that
such determination is made in good faith.

Silver
held by the Trust will be valued on the basis of the price of an ounce of
silver as set at approximately 12:00 noon London time and performed in London
by three market making members of the LBMA. Platinum held by the Trust will be
valued on the basis of the price of an ounce of platinum as set by the
afternoon session of the twice daily fix of the price of an ounce of platinum
which starts at 2:00 PM London, England time and is performed in London by the
four fixing members of the LPPM. Palladium held by the Trust will be valued on
the basis of the price of an ounce of palladium as set by the afternoon session
of the twice daily fix of the price of an ounce of palladium which starts at
2:00 PM London, England time and is performed in London by the four fixing
members of the LPPM.

Once
the value of Bullion 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), and other liabilities of the Trust from the total value of
    the Bullion 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 shall be calculated
    using the ANAV calculated for such day.
    The Trustee shall subtract 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

2

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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.

Trust Expenses

The
Trusts only ordinary recurring expense is the Sponsors Fee. In exchange for
the Sponsors Fee, the Sponsor has agreed to assume the following
administrative and marketing expenses incurred by the Trust: the Trustees
monthly fee and out-of-pocket expenses, the Custodians fee and reimbursement
of the Custodians expenses under the Custody Agreements (defined below),
Exchange listing fees, SEC registration fees, printing and mailing costs, audit
fees and up to $100,000 per annum in legal expenses. The Sponsor also paid the
costs of the Trusts organization and the initial sale of the Shares, including
the applicable SEC registration fees.

The
Sponsors Fee accrues daily at an annualized rate equal to 0.60% of the
ANAV of the Trust and is payable monthly in arrears. The Sponsors Fee is paid by
delivery of Bullion to an account maintained by the Custodian for the Sponsor
on an unallocated basis.

The
Trustee will, when directed by the Sponsor, and, in the absence of such
direction, may, in its discretion, sell Bullion in such quantity and at such
times as may be necessary to permit payment in cash of Trust expenses not
assumed by the Sponsor. The Trustee is authorized to sell Bullion at such times
and in the smallest amounts required to permit such payments as they become
due, it being the intention to avoid or minimize the Trusts holdings of assets
other than Bullion. Accordingly, the amount of Bullion to be sold will vary
from time to time depending on the level of the Trusts expenses and the market
price of silver, platinum and palladium. The Custodian is authorized to
purchase from the Trust, at the request of the Trustee, Bullion needed to cover
Trust expenses not assumed by the Sponsor at the price used by the Trustee to
determine the value of the Bullion held by the Trust on the date of the sale.

The Sponsor earned $14,675 for acting as the Sponsor during the period ended December 31, 2010.

Deposit of
Bullion; Issuance of Shares

The
Trust creates and redeems Shares from time to time, but only in one or more
Baskets of 50,000 shares. Only registered broker-dealers who have entered into
written agreements with the Sponsor and the Trustee (each an Authorized
Participant) can deposit Bullion in the specified proportion of silver,
platinum and palladium and receive Baskets of Shares in exchange. The creation
and redemption of Baskets is only made in exchange for the delivery to the Trust
or the distribution by the Trust of the amount of Bullion represented by the
Baskets being created or redeemed, the amount of which is based on the combined
NAV of the number of Shares included in the Baskets being created or redeemed
determined on the day the order to create or redeem Baskets is properly received.

All
Bullion deposited with the Custodian or for the Custodian by the Zurich Sub-Custodian
must conform to the rules, regulations practices and customs of the LBMA and
LPPM, including the specifications for a London Good Delivery Bar and Plate or
Ingot.

Creation
and redemption orders are accepted on business days the NYSE Arca is open for
regular trading. Settlements of such orders requiring receipt or delivery, or
confirmation of receipt or delivery, of Bullion in the United Kingdom, Zurich
or another jurisdiction will occur on business days when (1) banks in the
United Kingdom, Zurich or such other jurisdiction and (2) the London or Zurich
Bullion markets are regularly open for business. If such banks or the London or
Zurich Bullion markets are not open for regular business for a full day, such a
day will only be a business day for settlement purposes if the settlement
procedures can be completed by the end of such day.

On
any business day, an Authorized Participant may place an order with the Trustee
to purchase one or more Baskets. Purchase orders must be placed no later than 3:59:59
p.m. on each business day the NYSE Arca is open for regular trading. A purchase
order so received is effective on the date it is received in satisfactory form
by the Trustee. By placing a purchase order, an Authorized Participant agrees
to deposit Bullion with the Trust, as described below. Prior to the delivery of
Baskets for a purchase order, the Authorized Participant must also have

3

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wired to the Trustee the non-refundable
transaction fee due for the purchase order (as explained under “Creation and
Redemption Transaction Fee” below).

An
Authorized Participant who places a purchase order is responsible for crediting
its Authorized Participant Unallocated Account, either loco London or loco
Zurich, with the required Bullion deposit amount   in the specified proportion
    of silver, platinum and palladium by the third business
    day in London or Zurich following the purchase order date. Upon receipt of
    the Bullion deposit amount, the Custodian, after receiving appropriate instructions
    from the Authorized Participant and the Trustee, will transfer on the third
    business day following the purchase order date the Bullion deposit amount
    from the Authorized Participant Unallocated Account to the unallocated Bullion
    account of the Trust established with the Custodian under the Unallocated
    Account Agreement between the Trustee and the Custodian (the Trust
    Unallocated Account) and the Trustee will direct DTC to credit the
    number of Baskets ordered to the Authorized Participants DTC account.
    Acting on standing instructions given by the Trustee, the Custodian will
    transfer the Bullion deposit amount from the Trust Unallocated Account to
    the allocated Bullion account of the Trust established with the Custodian
    under the Allocated Account Agreement between the Trustee and the Custodian
    (the Trust Allocated
Account), by transferring specific Bullion bars and plates or ingots from
its inventory or the inventory of the Zurich Sub-Custodian to the Trust Allocated
Account. The Trusts Unallocated Account Agreement and Allocated Account
Agreement are referred to collectively as the Custody Agreements.

Withdrawal of Bullion; Redemption of Shares

The
procedures by which an Authorized Participant can redeem one or more Baskets
mirror the procedures for the creation of Baskets. On any business day, an
Authorized Participant may place an order with the Trustee to redeem one or
more Baskets. Redemption orders must be placed no later than 3:59:59 p.m. on
each business day the NYSE Arca is open for regular trading. A redemption order
so received is effective on the date it is received in satisfactory form by the
Trustee. The redemption procedures allow Authorized Participants to redeem
Baskets and do not entitle an individual owner of beneficial interests in the
Shares (a Shareholder) to redeem any Shares in an amount less than a Basket,
or to redeem Baskets other than through an Authorized Participant.

By
placing a redemption order, an Authorized Participant agrees to deliver the
Baskets to be redeemed through DTCs book-entry system to the Trust not later
than the third business day following the effective date of the redemption
order. Prior to the delivery of the redemption distribution for a redemption
order, the Authorized Participant must also have wired to the Trustee the
non-refundable transaction fee due for the redemption order (as explained under
Creation and Redemption Transaction Fee below).

The
redemption distribution from the Trust consists of a credit to the
redeeming Authorized Participants Authorized Participant Unallocated Account,
either loco London or loco Zurich, representing the amount of the Bullion (in
the specified proportion of silver, platinum and palladium) held
by the Trust evidenced by the Shares being redeemed. Fractions of a fine ounce
of Bullion included
in the redemption distribution smaller than 0.001 of a fine ounce are disregarded.
Redemption distributions are subject to the deduction of any applicable tax or
other governmental charges which may be due.

Creation and
Redemption Transaction Fee

To
compensate the Trustee for services in processing the creation and redemption
of Baskets, an Authorized Participant is required to pay a transaction fee to
the Trustee of $500 per order to create or redeem Baskets. An order may include
multiple Baskets. The transaction fee may be reduced, increased or otherwise
changed by the Trustee with the consent of the Sponsor. The Trustee shall
notify DTC of any agreement to change the transaction fee and will not
implement any increase in the fee for the redemption of Baskets until 30 days
after the date of the notice.

The Sponsor

The
Sponsor is a Delaware limited liability company. The Sponsors office is
located at Ordinance House, 31 Pier Road, St. Helier, Jersey JE48PW, Channel
Islands. Under the Delaware Limited Liability Company Act and the governing
documents of the Sponsor, the sole member of the Sponsor, ETF Securities Limited,
is not responsible for the debts, obligations and liabilities of the Sponsor
solely by reason of being the sole member of the Sponsor.

The Sponsors Role

The
Sponsor arranged for the creation of the Trust, the registration of the Shares
for their public offering in the United States and the listing of the Shares on
the NYSE Arca. The Sponsor has agreed to assume the following administrative
and marketing expenses incurred by the Trust: the Trustees monthly fee and
out-of-pocket expenses,

4

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the
Custodians fee and the reimbursement of the Custodians expenses under the
Custody Agreements, Exchange listing fees, SEC registration fees, printing and
mailing costs, audit fees and up to $100,000 per annum in legal expenses. The
Sponsor also paid the costs of the Trusts organization and the initial sale of
the Shares, including the applicable SEC registration fees.

The
Sponsor does not exercise day-to-day oversight over the Trustee or the
Custodian. The Sponsor may remove the Trustee and appoint a successor Trustee
(i) if the Trustee ceases to meet certain objective requirements (including the
requirement that it have capital, surplus and undivided profits of at least
$150 million), (ii) if, having received written notice of a material breach of
its obligations under the Trust Agreement, the Trustee has not cured the breach
within 30 days, or (iii) if the Trustee refuses to consent to the
implementation of an amendment to the Trusts initial Internal Control Over
Financial Reporting. The Sponsor also has the right to replace the Trustee
during the 90 days following any merger, consolidation or conversion in which
the Trustee is not the surviving entity or, in its discretion, on the fifth
anniversary of the creation of the Trust or on any subsequent third anniversary
thereafter. The Sponsor also has the right to approve any new or additional
custodian that the Trustee may wish to appoint and any new or additional Zurich
Sub-Custodian that the Custodian may wish to appoint.

The
Sponsor or one of its affiliates or agents (1) develops a marketing plan for
the Trust on an ongoing basis, (2) prepares marketing materials regarding the
Shares, including the content of the Trusts website and (3) executes the
marketing plan for the Trust.

The Trustee

The
Bank of New York Mellon, a banking corporation organized under the laws of the
State of New York with trust powers (BNYM), serves as the Trustee. BNYM has a
trust office at 2 Hanson Place, Brooklyn, New York 11217. BNYM is subject to
supervision by the New York State Banking Department and the Board of Governors
of the Federal Reserve System. Information regarding creation and redemption
Basket composition, NAV of the Trust, transaction fees and the names of the
parties that have each executed an Authorized Participant Agreement may be
obtained from BNYM. A copy of the Trust Agreement is available for inspection
at BNYMs trust office identified above. Under the Trust Agreement, the Trustee
is required to maintain capital, surplus and undivided profits of $150 million.

The Trustees Role

The
Trustee is generally responsible for the day-to-day administration of the
Trust, including keeping the Trusts operational records. The Trustees
principal responsibilities include (1) transferring the Trusts Bullion as
needed to pay the Sponsors Fee in Bullion (Bullion transfers are expected to
occur approximately monthly in the ordinary course), (2) valuing the Trusts
Bullion and calculating the NAV of the Trust and the NAV per Share, (3)
receiving and processing orders from Authorized Participants to create and
redeem Baskets and coordinating the processing of such orders with the
Custodian and DTC, (4) selling the Trusts Bullion as needed to pay any
extraordinary Trust expenses that are not assumed by the Sponsor, (5) when appropriate,
making distributions of cash or other property to Shareholders, and (6)
receiving and reviewing reports from or on the Custodians custody of and
transactions in the Trusts Bullion. The Trustee shall, with respect to
directing the Custodian, act in accordance with the instructions of the
Sponsor. If the Custodian resigns, the Trustee shall appoint an additional or
replacement Custodian selected by the Sponsor. Under the Custody Agreements,
the Trustee, the Sponsor and the Sponsors auditors and inspectors may, only up
to twice a year, visit the premises of the Custodian and the Zurich
Sub-Custodians for the purpose of examining the Trusts Bullion and certain
related records maintained by the Custodian. Visits by auditors and inspectors
to the Zurich Sub-Custodians facilities will be arranged through the
Custodian. In addition, other than with respect to the Zurich Sub-Custodians,
the Trustee has no right to visit the premises of any subcustodian for the
purposes of examining the Trusts Bullion or any records maintained by the
subcustodian, and no subcustodian is obligated to cooperate in any review the
Trustee may wish to conduct of the facilities, procedures, records or
creditworthiness of such subcustodian.

The
Trustee intends to regularly communicate with the Sponsor to monitor the
overall performance of the Trust. The Trustee does not monitor the performance
of the Custodian, the Zurich Sub-Custodians, or any other subcustodian other
than to review the reports provided by the Custodian pursuant to the Custody
Agreements. The Trustee, along with the Sponsor, will liaise with the Trusts
legal, accounting and other professional service providers as needed. The
Trustee will assist and support the Sponsor with the preparation of all
periodic reports required to be filed with the SEC on behalf of the Trust.

5

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The
Trustees monthly fees and out-of-pocket expenses will be paid by the Sponsor.

Affiliates
of the Trustee may from time to time act as Authorized Participants or purchase
or sell Bullion or Shares for their own account, as agent for their customers
and for accounts over which they exercise investment discretion.

The Custodian

JPMorgan
Chase Bank, N.A. (JPMorgan) serves as the Custodian of the Trusts
Bullion. JPMorgan is a national banking association organized under the laws
of the United States of America. JPMorgan is subject to supervision by the Federal
Reserve Bank of New York and the Federal Deposit Insurance Corporation.
JPMorgans custodian office is located at 125 London Wall, London, EC2Y
5A5, United Kingdom. In addition to supervision and examination by the US federal
banking authorities, JPMorgans London custodian operations are subject
to supervision by the Financial Services Authority, an independent
non-governmental which exercises statutory regulatory power under the United
Kingdom Financial Services and Markets Act 2000 and which regulates the major
participating members of the LBMA in the United Kingdom.

The Custodians Role

The
Custodian is responsible for safekeeping for the Trust Bullion deposited
with it by Authorized Participants in connection with the creation of Baskets.
The Custodian is also responsible for selecting the Zurich Sub-Custodians and
its other subcustodians, if any. The Custodian facilitates the transfer of Bullion
in and out of the Trust through the unallocated Bullion accounts it will
maintain for each Authorized Participant and the unallocated and allocated
Bullion accounts it will maintain for the Trust. The Custodian holds at its
London, England vault premises that portion of the Trusts allocated Bullion
to be held in London. The Zurich Sub-Custodian holds at its Zurich, Switzerland
vault premises that portion of the Trusts allocated platinum and palladium
to be held in Zurich on behalf of the Custodian. The Custodian is responsible
for allocating specific bars of physical silver and specific plates or ingots
of physical platinum and palladium to the Trusts allocated Bullion account.
The Custodian will provide the Trustee with regular reports detailing the Bullion
transfers in and out of the Trusts unallocated and allocated Bullion accounts
and identifying the silver bars and the platinum and palladium plates or ingots
held in the Trusts allocated Bullion account.

The
Custodians fees and expenses under the Custody Agreements are paid by the
Sponsor.

The
Custodian and its affiliates may from time to time act as Authorized
Participants or purchase or sell Bullion or Shares for their own account, as
agent for their customers and for accounts over which they exercise investment
discretion.

Description of the Shares

General

The
Trustee is authorized under the Trust Agreement to create and issue an
unlimited number of Shares. The Trustee creates Shares only in Baskets (a
Basket equals a block of 50,000 Shares) and only upon the order of an
Authorized Participant. The Shares represent units of fractional undivided
beneficial interest in and ownership of the Trust and have no par value. Any
creation and issuance of Shares above the amount registered on the Trusts
then-current and effective registration statement with the SEC will require the
registration of such additional Shares.

Description of Limited Rights

The
Shares do not represent a traditional investment and you should not view them as
similar to shares of a corporation operating a business enterprise with
management and a board of directors. Shareholders do not have the statutory
rights normally associated with the ownership of shares of a corporation,
including, for example, the right to bring oppression or derivative
actions. All Shares are of the same class with equal rights and privileges.
Each Share is transferable, is fully paid and non-assessable and entitles the
holder to vote on the limited matters upon which Shareholders may vote under
the Trust Agreement. The Shares do not entitle their holders to any conversion
or pre-emptive rights, or, except as provided below, any redemption rights or
rights to distributions.

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Distributions

If
the Trust is terminated and liquidated, the Trustee will distribute to the
Shareholders any amounts remaining after the satisfaction of all outstanding
liabilities of the Trust and the establishment of such reserves for applicable
taxes, other governmental charges and contingent or future liabilities as the
Trustee shall determine. Shareholders of record on the record date fixed by the
Trustee for a distribution will be entitled to receive their pro rata portion
of any distribution.

Voting and Approvals

Under
the Trust Agreement, Shareholders have no voting rights, except in limited
circumstances. The Trustee may terminate the Trust upon the agreement of
Shareholders owning at least 75% of the outstanding Shares. In addition,
certain amendments to the Trust Agreement require advance notice to the
Shareholders before the effectiveness of such amendments, but no Shareholder
vote or approval is required for any amendment to the Trust Agreement.

Redemption of the Shares

The
Shares may only be redeemed by or through an Authorized Participant and only in
Baskets.

Book-Entry Form

Individual
certificates will not be issued for the Shares. Instead, one or more global
certificates is deposited by the Trustee with DTC and registered in the name of
Cede & Co., as nominee for DTC. The global certificates evidence all of the
Shares outstanding at any time. Under the Trust Agreement, Shareholders are
limited to (1) participants in DTC such as banks, brokers, dealers and trust
companies (DTC Participants), (2) those who maintain, either directly or indirectly,
a custodial relationship with a DTC Participant (Indirect Participants), and
(3) those banks, brokers, dealers, trust companies and others who hold
interests in the Shares through DTC Participants or Indirect Participants. The
Shares are only transferable through the book-entry system of DTC. Shareholders
who are not DTC Participants may transfer their Shares through DTC by
instructing the DTC Participant holding their Shares (or by instructing the
Indirect Participant or other entity through which their Shares are held) to
transfer the Shares. Transfers will be made in accordance with standard
securities industry practice.

Custody of the Trusts Bullion

Custody
of the physical silver deposited with and held by the Trust is provided by the
Custodian at its London, England vaults and by other subcustodians on a
temporary basis only in unallocated form. Custody of the physical platinum and
palladium deposited with and held by the Trust is provided by the Custodian at
its London, England vaults and by the Zurich Sub-Custodians selected by the
Custodian in their Zurich, Switzerland vaults and by other subcustodians on a
temporary basis only in unallocated form. The Custodian is a market maker,
clearer and approved weigher under the rules of the LBMA and the LPPM.

The
Custodian is the custodian of the physical Bullion credited to the Trust Allocated
Account in accordance with the Custody Agreements. The Custodian segregates the
physical Bullion credited to the Trust Allocated Account from any other
precious metal it holds or holds for others by entering appropriate entries in
its books and records, and requires each Zurich Sub-Custodian to also segregate
the physical platinum and palladium of the Trust that it holds from the other
platinum and palladium held by it for other customers of the Custodian and such
Zurich Sub-Custodians other customers. The Custodian requires each Zurich
Sub-Custodian to identify in its books and records the Trust as having the
rights to the physical platinum and palladium credited to its Trust Allocated
Account.

The Custodian, as instructed by the Trustee, is authorized to accept,
on behalf of the Trust, deposits of Bullion in unallocated form. Acting on
standing instructions specified in the Custody Agreements, the Custodian
allocates Bullion deposited in unallocated form with the Trust by selecting
bars of silver or plates or ingots of physical platinum or palladium for
deposit to the Trust Allocated Account or, with respect to platinum or
palladium to be held in Zurich, requires the Zurich Sub-Custodians to allocate
platinum or palladium deposited in unallocated form with the Trust by selecting
plates or ingots of physical platinum or palladium for deposit for the benefit
of the Trust Allocated Amount. All physical silver allocated to the Trust must
conform to the rules, regulations, practices and customs of the LBMA. All
physical platinum and palladium allocated to the Trust must conform to the
rules, regulations, practices and customs of the LPPM.

7

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The process of withdrawing Bullion from the Trust for a redemption of a
Basket follows the same general procedure as for depositing Bullion with the
Trust for a creation of a Basket, only in reverse. Each transfer of Bullion
between the Trust Allocated Account and the Trust Unallocated Account connected
with a creation or redemption of a Basket may result in a small amount of
Bullion being held in the Trust Unallocated Account after the completion of the
transfer. In making deposits and withdrawals between the Trust Allocated
Account and the Trust Unallocated Account, the Custodian will use commercially
reasonable efforts to minimize the amounts of silver, platinum and palladium
held in the Trust Unallocated Account as of the close of each business day. See
Creation and Redemption of Shares.

United States
Federal Income Tax Consequences

The following discussion of the material US federal
    income tax consequences that generally applies to the purchase, ownership
    and disposition of Shares by a US Shareholder (as defined below), and certain
    US federal income tax consequences that may apply to an investment in Shares
    by a Non-US Shareholder (as defined below), is based on the United States
    Internal Revenue Code of 1986, as amended (the Code), United States Treasury Regulations (Treasury
Regulations) promulgated under the Code and judicial and administrative
interpretations of the Code, all as in effect on the date of this annual report
and all of which are subject to change either prospectively or retroactively.
The tax treatment of Shareholders may vary depending upon their own particular
circumstances. Certain Shareholders (including broker-dealers, traders, banks
and other financial institutions, insurance companies, real estate investment
trusts, tax-exempt entities, Shareholders whose functional currency is not the US
dollar or other investors with special circumstances) may be subject to special
rules not discussed below. In addition, the following discussion applies only
to investors who hold Shares as capital assets within the meaning of Code
section 1221 and not as part of a straddle, hedging transaction or a conversion
or constructive sale transaction. Moreover, the discussion below does not
address the effect of any state, local or foreign tax law or any transfer tax
on an owner of Shares. Purchasers of Shares are urged to consult their own tax
advisors with respect to all federal, state, local and foreign tax law or any
transfer tax considerations potentially applicable to their investment in
Shares.For purposes of this discussion, a US Shareholder is a Shareholder
that is:

|  |                                                                                                                                                                                                                             
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | An individual who is treated as a citizen or resident of the United
 States for US federal income tax purposes;                                                                                                             
| | A corporation (or other entity treated as a corporation for US
 federal tax purposes) created or organized in or under the laws of the United
 States or any political subdivision thereof;                                 
| | An estate, the income of which is includible in gross income for US
 federal income tax purposes regardless of its source; or                                                                                               
| | A trust, if a court within the United States is able to exercise
 primary supervision over the administration of the trust and one or more US
 persons have the authority to control all substantial decisions of the trust.

A Shareholder that is not a US Shareholder as defined above (other than
a partnership, or an entity treated as a partnership for US federal tax
purposes) is generally considered a Non-US Shareholder for purposes of this
discussion. For US federal income tax purposes, the treatment of any beneficial
owner of an interest in a partnership, including any entity treated as a
partnership for US federal income tax purposes, generally depends upon the
status of the partner and upon the activities of the partnership. Partnerships
and partners in partnerships should consult their tax advisors about the US
federal income tax consequences of purchasing, owning and disposing of Shares.

Taxation of the Trust

The Trust is classified as a grantor trust for
    US federal income tax purposes. As a result, the Trust itself is not subject
    to US federal income tax. Instead, the Trusts income and expenses flow
    through to the
Shareholders, and the Trustee reports the Trusts income, gains, losses
and deductions to the Internal Revenue Service (“IRS”) on that basis.

Taxation of US Shareholders

Shareholders generally are treated, for US federal
    income tax purposes, as if they directly owned a pro rata share of the underlying
    assets held in the Trust. Shareholders also are treated as if they directly
received their respective pro rata shares of the

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Trusts income, if any, and as if they directly incurred their
respective pro rata shares of the Trusts expenses. In the case of a
Shareholder that purchases Shares for cash, its initial tax basis in its pro
rata share of the assets held in the Trust at the time it acquires its Shares
is not equal to its cost of acquiring the Shares. In the case of a Shareholder
that acquires its Shares as part of a creation, the delivery of Bullion to the
Trust in exchange for the underlying Bullion represented by the Shares will not
be a taxable event to the Shareholder, and the Shareholders tax basis and
holding period for the Shareholders pro rata share of the Bullion held in the
Trust are the same as its tax basis and holding period for the Bullion
delivered in exchange therefore (except to the extent of any cash contributed
for such Shares). For purposes of this discussion, it is assumed that all of a
Shareholders Shares are acquired on the same date and at the same price per
Share. Shareholders that hold multiple lots of Shares, or that are
contemplating acquiring multiple lots of Shares, should consult their tax
advisors as to the determination of the tax basis and holding period for the
underlying Bullion related to such Shares.

When the Trust sells Bullion, for example to pay expenses, a
Shareholder generally will recognize gain or loss in an amount equal to the
difference between (1) the Shareholders pro rata share of the amount realized
by the Trust upon the sale and (2) the Shareholders tax basis for its pro rata
share of the Bullion that was sold, which gain or loss will generally be
long-term or short-term capital gain or loss, depending upon whether the
Shareholder has a holding period in its Shares of longer than one year. A
Shareholders tax basis for its share of any Bullion sold by the Trust
generally will be determined by multiplying the Shareholders total basis for
its share of all of the Bullion held in the Trust immediately prior to the
sale, by a fraction the numerator of which is the amount of Bullion sold, and
the denominator of which is the total amount of the Bullion held in the Trust
immediately prior to the sale. After any such sale, a Shareholders tax basis
for its pro rata share of the Bullion remaining in the Trust will be equal to
its tax basis for its share of the total amount of the Bullion held in the
Trust immediately prior to the sale, less the portion of such basis allocable
to its share of the Bullion that was sold.

Upon a Shareholders sale of some or all of its Shares, the Shareholder
will be treated as having sold the portion of its pro rata share of the Bullion
held in the Trust at the time of the sale that is attributable to the Shares
sold. Accordingly, the Shareholder generally will recognize gain or loss on the
sale in an amount equal to the difference between (1) the amount realized
pursuant to the sale of the Shares, and (2) the Shareholders tax basis for the
portion of its pro rata share of the Bullion held in the Trust at the time of
sale that is attributable to the Shares sold, as determined in the manner
described in the preceding paragraph.

A Redemption of some or all of a Shareholders Shares in exchange for
the underlying Bullion represented by the Shares redeemed generally will not be
a taxable event to the Shareholder. The Shareholders tax basis for the Bullion
received in the redemption generally will be the same as the Shareholders tax
basis for the portion of its pro rata share of the Bullion held in the Trust
immediately prior to the redemption that is attributable to the Shares redeemed.
The Shareholders holding period with respect to the Bullion received should
include the period during which the Shareholder held the Shares redeemed. A
subsequent sale of the Bullion received by the Shareholder will be a taxable
event.

After any sale or redemption of less than all of a Shareholders
Shares, the Shareholders tax basis for its pro rata share of the Bullion held
in the Trust immediately after such sale or redemption generally will be equal
to its tax basis for its share of the total amount of the Bullion held in the
Trust immediately prior to the sale or redemption, less the portion of such
basis which is taken into account in determining the amount of gain or loss
recognized by the Shareholder upon such sale or, in the case of a redemption,
which is treated as the basis of the Bullion received by the Shareholder in the
redemption.

In addition, recent legislation effective after December 31, 2012, if applicable to a Shareholder, would impose a new 3.8% Medicare contribution tax on net investment income. Shareholders should consult their tax advisor regarding this tax.

An Authorized Participant and other investors may
    be able to re-invest, on a tax-deferred basis, in-kind redemption proceeds
    received from exchange-traded products that are substantially similar to
    the Trust in the Trusts Shares. Authorized Participants and other investors
    should consult their tax advisors as to whether and under what circumstances
    the reinvestment in the Shares of proceeds from substantially similar exchange-traded
    products can be accomplished on a tax-deferred basis.

Maximum 28% Long-Term Capital Gains Tax Rate
for US Shareholders Who Are Individuals

Under current law, gains recognized by individuals from the sale of
collectibles, including Bullion, held for more than one year are taxed at a
maximum federal income tax rate of 28%, rather than the 15% rate applicable to
most other long-term capital gains. For these purposes, gain recognized by an
individual upon the sale of an interest in a trust that holds collectibles is
treated as gain recognized on the sale of collectibles, to the extent that the
gain is attributable to unrealized appreciation in value of the collectibles
held by the trust. Therefore, any gain recognized by an individual US
Shareholder attributable to a sale of Shares held for more than one year, or
attributable to the Trusts sale of any Bullion which the Shareholder is
treated (through its ownership of Shares) as having held for

9

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more than one year, generally will be taxed at a maximum rate of 28%.
The tax rates for capital gains recognized upon the sale of assets held by an
individual US Shareholder for one year or less or by a taxpayer other than an
individual US taxpayer are generally the same as those at which ordinary income
is taxed.

Brokerage Fees and Trust Expenses

Any brokerage or other transaction fees incurred
    by a Shareholder in purchasing Share is treated as part of the Shareholders
    tax basis in the underlying assets of the Trust. Similarly, any brokerage
    fee incurred by a Shareholder in selling Shares will reduce the amount realized
    by the Shareholder with respect to the sale.

Shareholders are required to recognize gain or
    loss upon a sale of Bullion by the Trust (as discussed above), even though
    some or all of the proceeds of such sale are used by the Trustee to pay Trust
    expenses. Shareholders may deduct their respective pro rata share of each
    expense incurred by the Trust to the same extent as if they directly incurred
    the expense. Shareholders who are individuals, estates or trusts, however,
    may be required to treat some or all of the expenses of the Trust, to the
    extent that such expenses may be deducted, as miscellaneous itemized deductions.
Individuals may deduct certain miscellaneous itemized deductions only to the
extent they exceed 2% of adjusted gross income. In addition, such deductions
may be subject to further limitations under applicable provisions of the Code,
and may not be deductible at all for alternative minimum tax purposes.

Investment by Regulated Investment Companies

Mutual funds and other investment vehicles which are regulated
investment companies within the meaning of Code section 851 should consult
with their tax advisors concerning (1) the likelihood that an investment in
Shares, although they are a security within the meaning of the Investment
Company Act of 1940, may be considered an investment in the underlying Bullion
for purposes of Code section 851(b), and (2) the extent to which an investment
in Shares might nevertheless be consistent with preservation of their
qualification under Code section 851.

United States Information Reporting and
Backup Withholding for US and Non-US Shareholders

The Trustee or the appropriate broker will file
    certain information returns with the IRS, and provides certain tax-related
    information to Shareholders, in accordance with applicable Treasury Regulations.
    Each Shareholder will be provided with information regarding its allocable
    portion of the Trusts annual income (if any) and expenses.

A US Shareholder may be subject to US backup withholding tax in certain
circumstances unless it provides its taxpayer identification number and
complies with certain certification procedures. Non-US Shareholders may have to
comply with certification procedures to establish that they are not a US person
in order to avoid the information reporting and backup withholding tax
requirements.

The amount of any backup withholding is allowed as a credit against a
Shareholders US federal income tax liability and may entitle such a
Shareholder to a refund, provided that the required information is furnished to
the IRS.

Income Taxation of Non-US Shareholders

The Trust does not expect to generate taxable income
    except for gain (if any) upon the sale of Bullion. A Non-US Shareholder generally
    is not subject to US federal income tax with respect to gain recognized upon
    the sale or other disposition of Shares, or upon the sale of Bullion by the
    Trust, unless (1) the Non-US Shareholder is an individual and is present
    in the United States for 183 days or more during the taxable year of the
    sale or other disposition, and the gain is treated as being from United States
    sources; or (2) the gain is effectively connected with the conduct by the
Non-US Shareholder of a trade or business in the United States.

Taxation in Jurisdictions other than the
United States

Prospective purchasers of Shares that are based in or acting out of a
jurisdiction other than the United States are advised to consult their own tax
advisers as to the tax consequences, under the laws of such jurisdiction (or
any other jurisdiction not being the United States to which they are subject),
of their purchase, holding, sale and redemption of or any other dealing in
Shares and, in particular, as to whether any value added tax, other consumption
tax or transfer tax is payable in relation to such purchase, holding, sale,
redemption or other dealing.

ERISA and Related
Considerations

The Employee Retirement Income Security Act of
    1974, as amended (“ERISA”), and/or Code Section 4975 impose certain
    requirements on certain employee benefit plans and other plans and arrangements,
    including individual retirement accounts and annuities, Keogh plans, and
    certain commingled investment vehicles or insurance company general or separate
    accounts in which such plans or arrangements are invested (collectively, “Plans”),
    and on persons who are fiduciaries with respect to the investment of “plan
    assets” of a Plan. Government plans and some church plans are not subject
    to the fiduciary responsibility provisions of ERISA or the provisions of
    Section 4975 of the Code, but may be subject to substantially similar rules
    under other federal law, or under state or local law (“Other Law”).

In contemplating an investment of a portion of
    Plan assets in Shares, the Plan fiduciary responsible for making such investment
    should carefully consider, taking into account the facts and circumstances
    of the Plan and the “Risk Factors” discussed above and whether
    such investment is consistent with its fiduciary responsibilities under ERISA
    or Other Law, including, but not limited to: (1) whether the investment is
    permitted under the plans governing documents, (2) whether the fiduciary
    has the authority to make the investment, (3) whether the investment is consistent
    with the plans
    funding objectives, (4) the tax effects of the investment on the Plan, and
    (5) whether the investment is prudent considering the factors discussed in
    this report. In addition, ERISA and Code Section 4975 prohibit a broad range
    of transactions involving assets of a plan and persons who are parties
    in interest under ERISA or disqualified persons under Section
    4975 of the Code. A violation of these rules may result
    in the imposition of significant excise taxes and other liabilities. Plans
    subject to Other Law may be subject to similar restrictions.

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It is anticipated that the Shares will constitute “publicly-held offered securities” as defined in the Department of Labor Plan Asset Regulations, §2510.3-101(b)(2). Accordingly, pursuant to the Plan Asset Regulations, Shares purchased by a Plan, and not an interest in the underlying assets held in the Trust, should be treated as plan assets of the Plan, for purposes of applying the “fiduciary responsibility” and “prohibited transaction” rules of ERISA and the Code. Fiduciaries of plans subject to Other Law should consult legal counsel to determine whether there would be a similar result under the Other Law.

Investment by Certain Retirement Plans

Code section 408(m) provides that the acquisition of a collectible by
an individual retirement account (IRA) or a participant-directed account
maintained under any plan that is tax-qualified under Code section 401(a) is
treated as a taxable distribution from the account to the owner of the IRA, or
to the participant for whom the plan account is maintained, of an amount equal
to the cost to the account of acquiring the collectible. The IRS has issued
private letter rulings to the effect that a purchase of shares in a trust
holding precious metals by an IRA, or by a participant-directed account under a
Code section 401(a) plan, will not be treated as resulting in a taxable
distribution to the IRA owner or plan participant under Code section 408(m).
However, if any of the Shares so purchased are distributed from the IRA or plan
account to the IRA owner or plan participant, or if any Bullion received by
such IRA or plan account upon the redemption of any of the Shares purchased by
it, the Shares or Bullion so distributed will be subject to federal income tax
in the year of distribution, to the extent provided under the applicable
provisions of Code sections 408(d), 408(m) or 402.

Item 1A. Risk
Factors

You should consider carefully the risks described below before making
an investment decision. You should also refer to the other information included
in this report, including the Trusts financial statements and the related
notes.

The value of the Shares relates directly to
the value of the Bullion held by the Trust and fluctuations in the price of
silver, platinum or palladium could materially adversely affect an investment
in the Shares.

The Shares are designed to mirror as closely as possible the
performance of the price of physical silver, platinum or palladium in the
proportions held by the Trust, and the value of the Shares relates directly to
the value of the Bullion held by the Trust, less the Trusts liabilities
(including estimated accrued but unpaid expenses). The prices of physical
silver, platinum and palladium has fluctuated widely over the past several
years. Several factors may affect the price of these metals, including:

|  |                                                                                
|- | -------------------------------------------------------------------------------
| | Investors expectations with respect to the rate of inflation;                 
| | Currency exchange rates;                                                       
| | Interest
 rates;                                                               
| | Investment and trading activities of hedge funds and commodity funds;          
| | Global or regional political, economic or financial events and
 situations; and
| | Global
 Bullion supply and demand.                                             

Global supply and demand for silver is influenced by general changes in
economic conditions, such as a recession or other economic downturn, because of
the wide use of silver in a range of industrial applications. Global platinum
supply and demand is influenced by such factors as forward selling by platinum
producers, purchases made by platinum producers to unwind platinum hedge
positions, and production and cost levels in major platinum-producing
countries, such as South Africa, which accounted for 64% of the worlds
platinum supply in 2008. Global palladium supply and demand, which is
influenced by such factors as forward selling by palladium producers, purchases
made

11

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by palladium producers to unwind palladium hedge positions, and
production and cost levels in major palladium-producing countries such as South
Africa, the United States and Australia.

In addition, investors should be aware that there is no assurance that
silver, platinum or palladium will maintain their long-term value in terms of
purchasing power in the future. In the event that the price any metal declines,
the Sponsor expects the value of an investment in the Shares to decline proportionately.

The Shares may trade at a price which is at,
above or below the NAV per Share and any discount or premium in the trading
price relative to the NAV per Share may widen as a result of non-concurrent
trading hours between the NYSE Arca and London, Zurich and COMEX.

The Shares may trade at, above or below the NAV per Share. The NAV per
Share fluctuates with changes in the market value of the Trusts assets. The
trading price of the Shares fluctuates in accordance with changes in the NAV
per Share as well as market supply and demand. The amount of the discount or
premium in the trading price relative to the NAV per Share may be influenced by
non-concurrent trading hours between the NYSE Arca and the major Bullion
markets. While the Shares trade on the NYSE Arca until 4:00 PM New York time,
liquidity in the market for platinum and palladium is reduced after the close
of the major world markets for platinum and palladium,, including London,
Zurich and the COMEX and liquidity in the market for silver will be reduced
after the close of the major world silver markets, including London and the
COMEX. As a result, during this time, trading spreads, and the resulting
premium or discount on the Shares, may widen.

A possible short squeeze due to a sudden
increase in demand of Shares that largely exceeds supply may lead to price
volatility in the Shares.

Investors may purchase Shares to hedge existing exposure to Bullion or
to speculate on the price of Bullion. Speculation on the price of Bullion may
involve long and short exposures. To the extent aggregate short exposure
exceeds the number of Shares available for purchase (for example, in the event
that large redemption requests by Authorized Participants dramatically affect
Share liquidity), investors with short exposure may have to pay a premium to
repurchase Shares for delivery to Share lenders. Those repurchases may in turn,
dramatically increase the price of the Shares until additional Shares are
created through the creation process. This is often referred to as a short
squeeze. A short squeeze could lead to volatile price movements in Shares that
are not directly correlated to the price of Bullion.

Purchasing activity in the platinum and
palladium markets associated with Basket creations or selling activity
following Basket redemptions may affect the prices of platinum and palladium
and Share trading prices. These price changes may adversely affect an
investment in the shares.

Purchasing activity associated with acquiring the Bullion required for
deposit into the Trust in connection with the creation of Baskets may increase
the market prices of platinum and palladium, which will result in higher prices
for the Shares. Increases in the market prices of platinum and palladium may
also occur as a result of the purchasing activity of other market participants.
Other market participants may attempt to benefit from an increase in the market
prices of platinum and palladium that may result from increased purchasing
activity of platinum and palladium connected with the issuance of Baskets. If
the prices of platinum and palladium decline, the trading price of the Shares
will also decline.

Selling activity associated with sales of platinum and palladium
withdrawn from the Trust in connection with the redemption of Baskets may
decrease the market price of platinum and palladium, which will result in lower
prices for the Shares. Decreases in the market price of platinum and palladium
may also occur as a result of the selling activity of other market
participants. If the price of platinum and palladium declines, the trading
price of the Shares will also decline.

Although the Trust has no prior trading history
    and therefore has not had an impact on the prices of platinum and palladium,
    the Sponsor acts as the sponsor to the ETFS Platinum Trust and the ETFS Palladium
    Trust. Trading activity of the ETFS Platinum Trust and ETFS Palladium Trust
    may have impacted the market prices of platinum and palladium, respectively.

From the effectiveness of the ETFS Platinum Trust’s
    initial public offering of its shares on January 6, 2010 through March 8,
    2011, the ETFS Platinum Trust engaged in basket creations totaling approximately
    $995 million. Of this amount, approximately $328 million in basket creations
    occurred over the nine trading days of the period from January 8, 2010 (the
    date its shares began trading on the Exchange) to January 21, 2010. London
    PM Fix platinum per ounce prices were $1,556 on January 6, 2010 and $1,808
    on March 8, 2011 and, during this period, reached a high of $1,858 on February
9, 2011 and a low of $1,475 on February 5, 2010.

12

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From the effectiveness of the ETFS Palladium
    Trust’s initial public offering of its shares on January 6, 2010 through
    March 8, 2011, the ETFS Palladium Trust engaged in basket creations totaling
    approximately $804 million. Of this amount, approximately $173 million in
    basket creations occurred over the eight trading days of the period from
    January 8, 2010 (the date its shares began trading on the Exchange) to January
    20, 2010. London PM Fix palladium per ounce prices were $422 on January 6,
    2010 and $781 on March 8, 2011 and, during this period, reached a high of
$858 on February 21, 2011 and a low of $395 on February 5, 2010.

The Sponsor is unable to ascertain whether the platinum and palladium
price movements during this period were attributable to the basket creation and
redemption processes of the ETFS Platinum Trust and ETFS Palladium Trust,
respectively, or independent metal market forces or both. Nevertheless, the
Trust and the Sponsor cannot assure you that future Basket creations or
redemptions will have a similar effect or will have no effect on the platinum
and palladium metal prices and, consequently, Share trading prices.

Since there is no limit on the amount of
platinum and palladium that the Trust may acquire, the Trust, as it grows, may
have an impact on the supply and demand of platinum and palladium that
ultimately may affect the price of the Shares in a manner unrelated to other
factors affecting the global markets for platinum and palladium.

The Trust Agreement places no limit on the amount of platinum and palladium the Trust may hold. Moreover, the Trust may issue an unlimited number of Shares, subject to registration requirements, and thereby acquire an unlimited amount of platinum and palladium. The global market for platinum and palladium is characterized by supply and demand constraints that are generally not present in the markets for other precious metals such as gold and silver. From 1999 to 2010, world platinum supply averaged 6.76 million ounces and world palladium supply averaged 8.12 million ounces. In 2010, supply measured 7.07 million ounces of platinum and 8.43 million ounces of palladium. If the amount of platinum and palladium acquired by the Trust is large enough in relation to global platinum and palladium supply and demand, further in-kind creations and redemptions of Shares could have an impact on the supply and demand of platinum and palladium unrelated to other factors affecting the global markets for platinum and palladium. Such an impact could affect the prices for platinum and palladium that would directly affect the price at which Shares are traded on the Exchange or the price of future Baskets created or redeemed by the Trust.

As of March 8, 2011, the Trust held approximately
    476,709 ounces of platinum that it acquired since it was formed on December
    30, 2009, representing approximately 7.0% of the 1999-2010 average annual
    world platinum supply or approximately 6.7% of 2010 world platinum supply.
    As of March 8, 2011, the Trust held approximately 1,147,086 ounces of palladium
    that it acquired since it was formed on December 30, 2009, representing approximately
    14.1% of the 1999-2010 average annual world palladium supply or approximately
    13.6% of 2010 world palladium supply. Although the March 8, 2011 London Fix
    of $1,808 for platinum and $781 for palladium represent an increase from
    the London Fixes of $1,556 and $432, respectively, when the ETFS Platinum
    Trust’s and ETFS Palladium Trust’s initial share offerings became effective
    on January 6, 2010, the Sponsor is unable to conclude that a long-term metal
    market price impact has been caused by their holdings. Nevertheless, the
    Trust and the Sponsor cannot provide you any assurance that the metal holdings
    of the Trust will have a similar impact or have no long-term metal price
impact thereby affecting Share trading prices.

Nevertheless, the Trust and the Sponsor cannot provide you any
assurance that the metal holdings of the Trust will have a similar impact or
have no long-term metal price impact thereby affecting Share trading prices.

As the Sponsor and its management have a
limited history of operating investment vehicles like the Trust, their
experience may be inadequate or unsuitable to manage the Trust.

The Sponsor was formed to be the Sponsor of the Trust and has a limited
history of past performance in managing investment vehicles like the Trust. The
past performances of the Sponsors management in other positions are no
indication of their ability to manage an investment vehicle such as the Trust.
If the experience of the Sponsor and its management is not adequate or suitable
to manage an investment vehicle such as the Trust, the operations of the Trust
may be adversely affected.

The Shares and their value could decrease if
unanticipated operational or trading problems arise.

There may be unanticipated problems or issues with respect to the
mechanics of the Trusts operations and the trading of the Shares that could
have a material adverse effect on an investment in the Shares. In addition,
although the Trust is not actively managed by traditional methods, to the
extent that unanticipated operational or trading

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problems or issues arise, the Sponsors past experience and
qualifications may not be suitable for solving these problems or issues.

If the process of creation and redemption of
Baskets encounters any unanticipated difficulties, the possibility for arbitrage
transactions intended to keep the price of the Shares closely linked to the
price of the underlying Bullion may not exist and, as a result, the price of
the Shares may fall.

If the processes of creation and redemption of Shares (which depend on
timely transfers of Bullion to and by the Custodian) encounter any
unanticipated difficulties, potential market participants who would otherwise
be willing to purchase or redeem Baskets to take advantage of any arbitrage
opportunity arising from discrepancies between the price of the Shares and the
price of the underlying Bullion may not take the risk that, as a result of
those difficulties, they may not be able to realize the profit they expect. If
this is the case, the liquidity of Shares may decline and the price of the
Shares may fluctuate independently of the price the underlying Bullion and may
fall.

The liquidity of the Shares may be affected
by the withdrawal from participation of one or more Authorized Participants.

In the event that one or more Authorized Participants having
substantial interests in Shares or otherwise responsible for a significant
portion of the Shares daily trading volume on the Exchange withdraw from
participation, the liquidity of the Shares will likely decrease which could
adversely affect the market price of the Shares and result in your incurring a
loss on your investment.

Shareholders do not have the protections
associated with ownership of shares in an investment company registered under
the Investment Company Act of 1940 or the protections afforded by the Commodity
Exchange Act (CEA).

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.
Consequently, Shareholders do not have the regulatory protections provided to
investors in investment companies. The Trust does and will not hold or trade in
commodity futures contracts regulated by the CEA, as administered by the CFTC.
Furthermore, the Trust is not a commodity pool for purposes of the CEA, and
neither the Sponsor nor the Trustee is subject to regulation by the CFTC as a
commodity pool operator or a commodity trading advisor in connection with the
Shares. Consequently, Shareholders do not have the regulatory protections
provided to investors in CEA-regulated instruments or commodity pools.

The Trust may be required to terminate and
liquidate at a time that is disadvantageous to Shareholders.

If the Trust is required to terminate and liquidate, such termination
and liquidation could occur at a time which is disadvantageous to Shareholders,
such as when Bullion prices are lower than the Bullion prices at the time when
Shareholders purchased their Shares. In such a case, when the Trusts Bullion
is sold as part of the Trusts liquidation, the resulting proceeds distributed
to Shareholders will be less than if Bullion prices were higher at the time of
sale.

The lack of an active trading market for the
Shares may result in losses on investment at the time of disposition of the
Shares.

Although Shares are listed for trading on the NYSE Arca, it cannot be
assumed that an active trading market for the Shares will develop or be
maintained. If an investor needs to sell Shares at a time when no active market
for Shares exists, such lack of an active market will most likely adversely
affect the price the investor receives for the Shares (assuming the investor is
able to sell them).

Shareholders do not have the rights enjoyed
by investors in certain other vehicles.

As interests in an investment trust, the Shares have none of the
statutory rights normally associated with the ownership of shares of a
corporation (including, for example, the right to bring oppression or
derivative actions). In addition, the Shares have limited voting and
distribution rights (for example, Shareholders do not have the right to elect
directors and do not receive dividends).

An investment in the Shares may be adversely
affected by competition from other methods of investing in Bullion.

The Trust competes with other financial vehicles, including traditional
debt and equity securities issued by companies in the silver, platinum and
palladium industries and other securities backed by or linked to Bullion,
direct investments in Bullion and investment vehicles similar to the Trust.
Market and financial conditions, and other conditions beyond the Sponsors
control, may make it more attractive to invest in other financial vehicles or
to invest in Bullion directly, which could limit the market for the Shares and
reduce the liquidity of the Shares.

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The price of Bullion may be affected by the
sale of ETVs tracking Bullion markets.

To the extent existing exchange traded vehicles (ETVs) tracking the
silver, platinum or palladium markets represent a significant proportion of
demand for physical Bullion, large redemptions of the securities of these ETVs
could negatively affect physical Bullion prices and the price and NAV of the
Shares.

Crises may motivate large-scale sales of
silver, platinum or palladium which could decrease the price of such Bullion and
adversely affect an investment in the Shares.

The possibility of large-scale distress sales of Bullion in times of
crisis may have a short-term negative impact on the price of Bullion and
adversely affect an investment in the Shares. For example, the 2008 financial
credit crisis resulted in significantly depressed prices of silver, platinum
and palladium largely due to forced sales and deleveraging from institutional
investors such as hedge funds and pension funds. Crises in the future may
impair Bullions price performance which would, in turn, adversely affect an
investment in the Shares.

Several factors may have the effect of
causing a decline in the prices of Bullion and a corresponding decline in the
price of Shares. Among them:

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A
 significant increase in Bullion hedging activity by Bullion producers. Should
 there be an increase in the level of hedge activity of Bullion producing
 companies, it could cause a decline in world Bullion prices, adversely
 affecting the price of the Shares.                                                                                                                                                           
| |  | A
 significant change in the attitude of speculators and investors towards
 Bullion. Should the speculative community take a negative view towards
 Bullion metals, it could cause a decline in world prices for such Bullion
 metals, negatively impacting the price of the Shares.                                                                                                                                             
| |  | A
 widening of interest rate differentials between the cost of money and the
 cost of Bullion could negatively affect the price of Bullion which, in turn,
 could negatively affect the price of the Shares.                                                                                                                                                                                                                     
| |  | A
 combination of rising money interest rates and a continuation of the current
 low cost of borrowing Bullion could improve the economics of selling Bullion
 forward. This could result in an increase in hedging by Bullion mining
 companies and short selling by speculative interests, which would negatively
 affect the price of Bullion. Under such circumstances, the price of the
 Shares would be similarly affected.

A continued decline in the automobile industry may have the effect of
causing a decline in the prices of platinum and palladium and a corresponding
decline in the price of Shares. Among them:

Auto catalysts, automobile components that
use platinum and palladium, accounted for approximately 56% of the global
demand in platinum and 55% of the global demand in palladium in 2008. The
global automotive industry is currently experiencing declining demand and, in
certain cases, solvency concerns. Reduced automotive industry sales may result
in a decline in auto catalyst demand. A continued decline in the global
automotive industry may impact the price of platinum and palladium and affect
the price of the Shares.

The Trusts Bullion may be subject to loss,
damage, theft or restriction on access.

There is a risk that part or all of the Trusts Bullion could be lost,
damaged or stolen. Access to the Trusts Bullion could also be restricted by
natural events (such as an earthquake) or human actions (such as a terrorist
attack). Any of these events may adversely affect the operations of the Trust
and, consequently, an investment in the Shares.

The Trusts lack of insurance protection and
the Shareholders limited rights of legal recourse against the Trust, the
Trustee, the Sponsor, the Custodian, any Zurich Sub-Custodian and any other
sub-custodian exposes the Trust and its Shareholders to the risk of loss of the
Trusts Bullion for which no person is liable.

The Trust does not insure its Bullion. The Custodian maintains
insurance with regard to its business on such terms and conditions as it
considers appropriate in connection with its custodial obligations and is
responsible for all costs, fees and expenses arising from the insurance policy
or policies. The Trust is not a beneficiary of any such insurance and does not
have the ability to dictate the existence, nature or amount of coverage. Therefore,
Shareholders cannot be assured that the Custodian maintains adequate insurance
or any insurance with respect to the Bullion held by the Custodian on behalf of
the Trust. In addition, the Custodian and the Trustee do not require the Zurich
Sub-Custodian or any other direct or indirect sub-custodians to be insured or
bonded with respect to their custodial activities or in respect of the Bullion
held by them on behalf of the Trust. Further, Shareholders recourse against
the Trust, the Trustee and the Sponsor, under New York law, the Custodian, the
Zurich Sub-Custodian and any other sub-custodian, under English law, and any
sub-custodians under the law governing their custody operations is limited.

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Consequently, a loss may be suffered with respect to the Trusts
Bullion which is not covered by insurance and for which no person is liable in
damages.

The Custodians limited liability under the
Custody Agreements and English law may impair the ability of the Trust to
recover losses concerning its Bullion and any recovery may be limited, even in
the event of fraud, to the market value of the Bullion at the time the fraud is
discovered.

The liability of the Custodian is limited under the Custody Agreements.
Under the Custody Agreements between the Trustee and the Custodian which
establish the Trusts unallocated Bullion account (Unallocated Account
Agreement) and the Trusts allocated Bullion account (Allocated Account
Agreement), the Custodian is only liable for losses that are the direct result
of its own negligence, fraud or willful default in the performance of its
duties. Any such liability is further limited, in the case of the Allocated
Account Agreement, to the market value of the Bullion held in the Trust
Allocated Account at the time such negligence, fraud or willful default is
discovered by the Custodian and, in the case of the Unallocated Account
Agreement, to the amount of Bullion credited to the Trust Unallocated Account
at the time such negligence, fraud or willful default is discovered by the
Custodian. Under each Authorized Participant Unallocated Bullion Account
Agreement (between the Custodian or other Bullion clearing bank and an
Authorized Participant establishing an Authorized Participant Unallocated
Account), the Custodian is not contractually or otherwise liable for any losses
suffered by any Authorized Participant or Shareholder that are not the direct
result of its own gross negligence, fraud or willful default in the performance
of its duties under such agreement, and in no event will its liability exceed
the market value of the balance in the Authorized Participant Unallocated
Account at the time such gross negligence, fraud or willful default is
discovered by the Custodian. In addition, the Custodian will not be liable for
any delay in performance or any non-performance of any of its obligations under
the Allocated Account Agreement, the Unallocated Account Agreement or the
Authorized Participant Unallocated Bullion Account Agreement by reason of any
cause beyond its reasonable control, including acts of God, war or terrorism.
As a result, the recourse of the Trustee or the investor, under English law, is
limited. Furthermore, under English common law, the Custodian, the Zurich
Sub-Custodian or any subcustodian will not be liable for any delay in the
performance or any non-performance of its custodial obligations by reason of
any cause beyond its reasonable control.

The obligations of the Custodian, the Zurich
Sub-Custodian and any other subcustodians are governed by English law, which
may frustrate the Trust in attempting to receive legal redress against the
Custodian, the Zurich Sub-Custodian or any subcustodian concerning its Bullion.

The obligations of the Custodian under the Custody Agreements are, and
the Authorized Participant Unallocated Bullion Account Agreements may be,
governed by English law. The Custodian has entered into arrangements with the
Zurich Sub-Custodian and may enter into arrangements with any other
subcustodians for all or a significant portion of the Trusts Bullion, which
arrangements may also be governed by English law. The Trust is a New York
common law trust. Any United States, New York or other court situated in the
United States may have difficulty interpreting English law (which, insofar as
it relates to custody arrangements, is largely derived from court rulings
rather than statute), LBMA or LPPM rules or the customs and practices in the
London custody market. It may be difficult or impossible for the Trust to sue
the Zurich Sub-Custodian or any other subcustodian in a United States, New York
or other court situated in the United States. In addition, it may be difficult,
time consuming and/or expensive for the Trust to enforce in a foreign court a
judgment rendered by a United States, New York or other court situated in the
United States.

Although the relationship between the
Custodian and the Zurich Sub-Custodian concerning the Trusts allocated Bullion
is expressly governed by English law, a court hearing any legal dispute
concerning that arrangement may disregard that choice of law and apply Swiss
law, in which case the ability of the Trust to seek legal redress against the
Zurich Sub-Custodian may be frustrated.

The obligations of the Zurich Sub-Custodian under its arrangement with
the Custodian with respect to the Trusts allocated Bullion is expressly
governed by English law. Nevertheless, a court in the United States, England or
Switzerland may determine that English law should not apply and, instead, apply
Swiss law to that arrangement. Not only might it be difficult or impossible for
a United States or English court to apply Swiss law to the Zurich
Sub-Custodians arrangement, but application of Swiss law may, among other
things, alter the relative rights and obligations of the Custodian and the Zurich
Sub-Custodian to an extent that a loss to the Trusts Bullion may not have
adequate or any legal redress. Further, the ability of the Trust to seek legal
redress against the Zurich Sub-Custodian may be frustrated by application of
Swiss law.

16

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The Trust may not have adequate sources of
recovery if its Bullion is lost, damaged, stolen or destroyed.

If the Trusts Bullion is lost, damaged, stolen or destroyed under
circumstances rendering a party liable to the Trust, the responsible party may
not have the financial resources sufficient to satisfy the Trusts claim. For
example, as to a particular event of loss, the only source of recovery for the
Trust might be limited to the Custodian, the Zurich Sub-Custodian or any other
sub custodians or, to the extent identifiable, other responsible third parties
(e.g., a thief or terrorist), any of which may not have the financial resources
(including liability insurance coverage) to satisfy a valid claim of the Trust.

Shareholders and Authorized Participants lack
the right under the Custody Agreements to assert claims directly against the
Custodian, the Zurich Sub-Custodian and any subcustodian.

Neither the Shareholders nor any Authorized Participant have a right
under the Custody Agreements to assert a claim of the Trustee against the
Custodian, the Zurich Sub-Custodian or any subcustodian. Claims under the
Custody Agreements may only be asserted by the Trustee on behalf of the Trust.

The Custodian is reliant on the Zurich
Sub-Custodians for the safekeeping of all the Trusts platinum and palladium
held in Zurich on an allocated basis. Furthermore, the Custodian has limited
obligations to oversee or monitor the Zurich Sub-Custodians. As a result,
failure by any Zurich Sub-Custodian to exercise due care in the safekeeping of
the Trusts platinum and palladium could result in a loss to the Trust.

While some trading occurs in London, platinum and palladium generally
trade on a loco Zurich basis whereby the physical precious metal is held in
vaults located in Zurich or is transferred into accounts established in Zurich.
The Custodian does not have a vault in Zurich and is reliant on the Zurich
Sub-Custodians for the safekeeping of all or a substantial portion of the
Trusts allocated platinum and palladium that is held in Zurich. Other than
obligations to (1) use reasonable care in appointing the Zurich Sub-Custodian,
(2) require any Zurich Sub-Custodians to segregate the platinum and palladium
held by it for the Trust from any other platinum and palladium held by it for the
Custodian and any other customers of the Custodian by making appropriate
entries in its books and records and (3) ensure that the Zurich Sub-Custodian
provide confirmation to the Trustee that it has undertaken to segregate the
platinum and palladium held by it for the Trust, the Custodian is not liable
for the acts or omissions of the Zurich Sub-Custodian. Other than as described
above, the Custodian does not undertake to monitor the performance by the
Zurich Sub-Custodians of their custody functions. The Trustees obligation to
monitor the performance of the Custodian is limited to receiving and reviewing
the reports of the Custodian. The Trustee does not monitor the performance of
the Zurich Sub-Custodians or any other subcustodian. In addition, the ability
of the Trustee and the Sponsor to monitor the performance of the Custodian may
be limited because under the Custody Agreements, the Trustee and the Sponsor
have only limited rights to visit the premises of the Custodian or the Zurich
Sub-Custodians for the purpose of examining the Trusts platinum and palladium
and certain related records maintained by the Custodian or Zurich
Sub-Custodians.

As a result of the above, any failure by any Zurich Sub-Custodian to
exercise due care in the safekeeping of the Trusts platinum or palladium may
not be detectable or controllable by the Custodian or the Trustee and could
result in a loss to the Trust.

Because neither the Trustee nor the Custodian
oversees or monitors the activities of subcustodians who may hold the Trusts
Bullion, failure by the subcustodians to exercise due care in the safekeeping
of the Trusts Bullion could result in a loss to the Trust.

Under the Allocated Account Agreement, the Custodian may appoint from
time to time one or more subcustodians to hold the Trusts Bullion on a
temporary basis pending delivery to the Custodian. The subcustodians which the
Custodian currently uses are (1) in London only for all Bullion, Barclays Bank
plc, The Bank of Nova Scotia  ScotiaMocatta, HSBC Bank USA, N.A and Deutsche
Bank A.G (2) in London and Zurich for all Bullion, Union Bank of Switzerland
(UBS), Brinks Global Services Inc., Via Mat International and (3) in Zurich
only for platinum and palladium only, Credit Suisse, and the custodian may use
LBMA and LPPM market-making members that provide bullion vaulting and clearing
services to third parties. The Custodian has selected the Zurich
Sub-Custodians, and the Zurich Sub-Custodians maintain custody of that portion
of the Trusts allocated platinum and palladium to be held in Zurich for the
Custodian. The Custodian is required under the Allocated Account Agreement to
use reasonable care in appointing the Zurich Sub-Custodians and any other
subcustodians, making the Custodian liable only for negligence or bad faith in
the selection of such subcustodians, and has an obligation to use commercially
reasonable efforts to obtain delivery of the Trusts Bullion from any
subcustodians appointed by the Custodian. Otherwise, the Custodian is not
liable for the acts or omissions of its subcustodians. These subcustodians may
in turn appoint further subcustodians, but the Custodian is not responsible for
the appointment of these further subcustodians. The Custodian does not
undertake to monitor the performance by subcustodians of their custody

17

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functions or their selection of further subcustodians. The Trustee does
not monitor the performance of the Custodian other than to review the reports
provided by the Custodian pursuant to the Custody Agreements and does not undertake
to monitor the performance of any subcustodian. Furthermore, except for the
Zurich Sub-Custodian, the Trustee may have no right to visit the premises of
any subcustodian for the purposes of examining the Trusts Bullion or any
records maintained by the subcustodian, and no subcustodian will be obligated
to cooperate in any review the Trustee may wish to conduct of the facilities,
procedures, records or creditworthiness of such subcustodian. In addition, the
ability of the Trustee to monitor the performance of the Custodian may be
limited because under the Allocated Account Agreement and the Unallocated
Account Agreement the Trustee has only limited rights to visit the premises of
the Custodian and the Zurich Sub-Custodian for the purpose of examining the
Trusts Bullion and certain related records maintained by the Custodian and the
Zurich Sub-Custodian.

The obligations of any subcustodian of the
Trusts Bullion are not determined by contractual arrangements but by LBMA and
LPPM rules and London or Zurich bullion market customs and practices, which may
prevent the Trusts recovery of damages for losses on its Bullion custodied
with subcustodians.

Except for the Custodians arrangement with the Zurich Sub-Custodians,
there are expected to be no written contractual arrangements between
subcustodians that hold the Trusts Bullion and the Trustee or the Custodian
because traditionally such arrangements are based on the LBMAs and the LPPMs
rules and on the customs and practices of the London or Zurich bullion market.
In the event of a legal dispute with respect to or arising from such
arrangements, it may be difficult to define such customs and practices. The
LBMAs and the LPPMs rules may be subject to change outside the control of the
Trust. Under English law, neither the Trustee nor the Custodian would have a
supportable breach of contract claim against a subcustodian for losses relating
to the safekeeping of Bullion. If the Trusts Bullion is lost or damaged while
in the custody of a subcustodian, the Trust may not be able to recover damages
from the Custodian or the subcustodian. Whether a subcustodian will be liable
for the failure of subcustodians appointed by it to exercise due care in the
safekeeping of the Trusts Bullion will depend on the facts and circumstances
of the particular situation. Shareholders cannot be assured that the Trustee
will be able to recover damages from subcustodians whether appointed by the
Custodian or by another subcustodian for any losses relating to the safekeeping
of Bullion by such subcustodian.

Physical Bullion allocated to the Trust in
connection with the creation of a Basket may not meet the Good Delivery
Standards and, if a Basket is issued against such Bullion, the Trust may suffer
a loss.

Neither the Trustee nor the Custodian independently confirms the
fineness of the physical silver, platinum or palladium allocated to the Trust
in connection with the creation of a Basket. The Bullion allocated to the Trust
by the Custodian may be different from the reported fineness or weight required
by the LBMAs standards for silver bars or the LPPMs standards for platinum
and palladium plates and ingots delivered in settlement of a Bullion trade
(Good Delivery Standards), the standards required by the Trust. If the Trustee
nevertheless issues a Basket against such Bullion, and if the Custodian fails
to satisfy its obligation to credit the Trust the amount of any deficiency, the
Trust may suffer a loss.

Bullion held in the Trusts unallocated
Bullion account and any Authorized Participants unallocated Bullion account is
not segregated from the Custodians assets. If the Custodian becomes insolvent,
its assets may not be adequate to satisfy a claim by the Trust or any
Authorized Participant. In addition, in the event of the Custodians
insolvency, there may be a delay and costs incurred in identifying the silver
bars and platinum and palladium plates or ingots held in the Trusts allocated
Bullion account.

Bullion which is part of a deposit for a purchase
    order or part of a redemption distribution is held for a time in the Trust
    Unallocated Account and, previously or subsequently in, the Authorized Participant
Unallocated Account of the purchasing or redeeming Authorized Participant.
During those times, the Trust and the Authorized Participant, as the case may
be, have no proprietary rights to any specific bars of silver or plates
    or ingots of platinum or palladium held by the Custodian and are each
    an unsecured creditor of the Custodian with respect to the amount of Bullion
    held in such unallocated accounts. In addition, if the Custodian fails to
    allocate the Trusts Bullion in a timely manner, in the proper amounts
    or otherwise in accordance with the terms of the Unallocated Account Agreement,
    or if a subcustodian fails to so segregate Bullion held by it on behalf of
    the Trust, unallocated Bullion will not be segregated from the Custodians
    assets, and the Trust will be an unsecured creditor of the Custodian with
    respect to the amount so held in the event of the insolvency of the Custodian.
    In the event the Custodian becomes insolvent, the Custodians assets
    might not be adequate to satisfy a claim by the Trust or the Authorized Participant
    for the amount of Bullion held in their respective unallocated Bullion accounts.

18

---



In the case of the insolvency of the Custodian, a liquidator may seek
to freeze access to the Bullion held in all of the accounts held by the
Custodian, including the Trust Allocated Account. Although the Trust would be
able to claim ownership of properly allocated Bullion, the Trust could incur
expenses in connection with asserting such claims, and the assertion of such a
claim by the liquidator could delay creations and redemptions of Baskets.

In issuing Baskets, the Trustee relies on
certain information received from the Custodian which is subject to
confirmation after the Trustee has relied on the information. If such
information turns out to be incorrect, Baskets may be issued in exchange for an
amount of Bullion which is more or less than the amount of Bullion which is
required to be deposited with the Trust.

The Custodians definitive records are prepared after the close of its
business day. However, when issuing Baskets, the Trustee relies on information
reporting the amount of Bullion credited to the Trusts accounts which it
receives from the Custodian during the business day and which is subject to
correction during the preparation of the Custodians definitive records after
the close of business. If the information relied upon by the Trustee is incorrect,
the amount of Bullion actually received by the Trust may be more or less than
the amount required to be deposited for the issuance of Baskets.

The sale of the Trusts Bullion to pay
expenses not assumed by the Sponsor at a time of low Bullion prices could
adversely affect the value of the Shares.

The Trustee sells Bullion held by the Trust to pay Trust expenses not
assumed by the Sponsor on an as-needed basis irrespective of then-current
silver, platinum and palladium prices. The Trust is not actively managed and no
attempt will be made to buy or sell Bullion to protect against or to take
advantage of fluctuations in the price of any Bullion metal. Consequently, the
Trusts Bullion may be sold at a time when the Bullion prices is low, resulting
in a negative effect on the value of the Shares.

The value of the Shares will be adversely
affected if the Trust is required to indemnify the Sponsor or the Trustee under
the Trust Agreement.

Under the Trust Agreement, each of the Sponsor and the Trustee has a
right to be indemnified from the Trust for any liability or expense it incurs
without gross negligence, bad faith or willful misconduct on its part. That
means the Sponsor or the Trustee may require the assets of the Trust to be sold
in order to cover losses or liability suffered by it. Any sale of that kind
would reduce the NAV of the Trust and the value of the Shares.

Item 1B.
Unresolved Staff Comments

None.

Item 2.
Properties

Not applicable.

Item 3. Legal
Proceedings

None.

Item 4. (Removed
and Reserved)

19

---



PART II

Item 5. Market
for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.

On December 3, 2010, the Trusts Shares commenced
    trading on the NYSE Arca under the symbol WITE, and the Trust commenced operations,
    began accruing expenses and began the calculation of NAV. The following tables
    set out the range of high and low closing prices for the Shares as reported
    for NYSE Arca transactions for each of the quarters during the fiscal period
 commencing November 29, 2010 and ending December 31, 2010:

|                                                  |  |      |       |     |   |       | 
|------------------------------------------------- |  | ---- | ----- | --- | - | ----- | 
|Period Ended December 31, 2010:
 Quarter Ended    |  | High |       | Low |  
|                                                  |  |      |       |     |  
|December 31,
 2010 (commencing November 29, 2010) |  | $    | 54.99 |     | $ | 51.07 | 

The number of Shares of record of the Trust as of March 8,
2011 was approximately $1,100,000.

Monthly Share Price

The following table sets forth the high and low closing prices of the
Shares, as reported for NYSE Arca transactions.

|               |  |      |       |     |   |       | 
|-------------- |  | ---- | ----- | --- | - | ----- | 
|Month          |  | High |       | Low |  
|               |  |      |       |     |  
|December
 2010 |  | $    | 54.99 |     | $ | 51.07 | 
|January 2011   |  | $    | 54.74 |     | $ | 50.91 | 
|February
 2011 |  | $    | 58.27 |     | $ | 53.19 | 

20

---



Issuer Purchase of Equity Securities

The Trust issues and redeems Shares only with Authorized
    Participants in exchange for bullion, only in aggregations of 50,000 or integral
    multiples thereof. A list of current Authorized Participants is available
    from the Sponsor or the Trustee. Although the Trust does not purchase Shares
    directly from its shareholders in connection with the redemption of Baskets,
    the Trust redeemed as follows during the period ended December 31, 2010:

|                      |  |                                  |   |                                       |  |   | 
|--------------------- |  | -------------------------------- | - | ------------------------------------- |  | - | 
|Period                |  | Total Number of
 Shares Redeemed |   | Average Ounces
 of Bullion Per
 Share | 
|                      |  |                                  |   |                                       | 
|11/29/10 to
 12/31/10 |  |                                  |  |                                       |  |  | 
|                      |  |                                  |   |                                       |  |   | 
|                      |  |                                  |   |                                       |  |   | 
|Total                 |  |                                  |  |                                       |  |  | 

Item 6. Selected
Financial Data.

The following selected financial data for the Reporting Period should
be read in conjunction with the Trusts financial statements and related notes
and Managements Discussion and Analysis of Financial Condition and Results of
Operations.

|                                  |  |                     |            |  
|--------------------------------- |  | ------------------- | ---------- | -
|                                  |  | December 31,
 2010* |           
|                                  |  |                     |           
|Total assets                      |  | $                   | 36,026,622 |  
|Total gain
 on Bullion            |  | $                   |           |  
|Net loss from operations          |  | $                   | (14,675    | )
|Weighted average number of Shares |  | $                   | 527,273    |  
|Net loss per Share                |  | $                   | (0.03      | )
|Net cash
  provided by operations |  | $                   |           |  

|  |                                                              | 
|- | ------------------------------------------------------------ | 
| 
|* | For the
 period from November 29, 2010 to December 31, 2010.

Item 7.
Managements Discussion and Analysis of Financial Condition and Results of
Operations.

This information should be read in
conjunction with the financial statements and notes to the financial statements
included with this report. The discussion and analysis that follows may contain
statements that relate to future events or future performance. In some cases,
such forward-looking statements can be identified by terminology such as may,
should, expect, plan, anticipate, believe, estimate,
 predict, potential or the negative of these terms or other comparable terminology.
Neither the Sponsor, nor any other person assumes responsibility for the
accuracy or completeness of forward-looking statements. 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 a change in the Sponsors
expectations or predictions.

Introduction.

The ETFS White Metals Basket Trust (the “Trust”) is a trust formed under the laws of the State of New York. The Trust does not have any officers, directors, or employees, and is administered by The Bank of New York Mellon (the “Trustee”) acting as trustee pursuant to the Depositary Trust Agreement (the “Trust Agreement”) between the Trustee and ETF Securities USA LLC, the sponsor of the Trust (the “Sponsor”). The Trust issues shares (“Shares”) representing fractional undivided beneficial interests in its net assets. The assets of the Trust consist of silver, platinum and palladium bullion (“Bullion”) held by a custodian as an agent of the Trust and responsible only to the Trustee.

The Trust is a passive investment vehicle and
    the objective of the Trust is merely for the value of each Share to approximately
    reflect, at any given time, the price of the Bullion owned by the Trust,
    less the Trust’s liabilities (anticipated to be principally for accrued operating
    expenses), divided by the number of outstanding Shares. The Trust does not
    engage in any activities designed to obtain a profit from, or ameliorate
losses caused by, changes in the price of Bullion.

21

---



The Trust issues and redeems Shares only in exchange for Bullion, only in aggregations of 50,000 or integral multiples thereof (each, a “Basket”), and only in transactions with registered broker-dealers that have previously entered into an agreement with the Trust governing the terms and conditions of such issuance (such dealers, the “Authorized Participants”). A list of current Authorized Participants is available from the Sponsor or the Trustee.

Shares of the Trust trade on the NYSE Arca under
the symbol “WITE.”

Investing in the Shares does not insulate the investor
    from certain risks, including price volatility. The following table illustrates
    the movement in the price of the Shares and NAV of the Shares against
the price per ounce of silver, platinum and palladium in the proportions held
by the Trust (the Proportionate Price) since inception.

(LINE GRAPH)

Critical Accounting Estimates

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 assumption that impact the Trusts financial position and results of operations.
These estimates and assumptions affect the Trusts application of accounting
policies. Below we describe the valuation of Bullion, a critical accounting
policy that we believe is important to the understanding of our results of
operations and financial position. In addition, please refer to Note 2 to the
Financial Statements for further discussion of our accounting policies.

Valuation of Bullion

Bullion is valued, for financial statement purposes,
    at the lower of cost or market. The cost of Bullion is determined according
    to the average cost method and the market value is based on the London Fix
    for each metal held by the Trust used to determine the NAV
    of the Trust. Realized gains and losses on transfers of Bullion to pay the
    Sponsors
    Fee, or Bullion distributed for the redemption of Shares, are calculated
    on a trade date basis using average cost.

Once the value of Bullion has been determined, the NAV is computed by
the Trustee by deducting all accrued fees and other liabilities of the Trust,
including the remuneration due to the Sponsor (the Sponsors Fee), from the
fair value of the Bullion and all other assets held by the Trust.

22

---



The table below summarizes the unrealized gains or losses on the
Trusts Bullion holdings as of December 31, 2010:

|                                         |  |                   |            | 
|---------------------------------------- |  | ----------------- | ---------- | 
|                                         |  | December 31, 2010 |           
|                                         |  |                   |           
|Investment in Bullion -
 average cost    |  | $                 | 36,026,662 | 
|Unrealized gain on investment in Bullion |  | $                 | 1,957,454  | 
|                                         |  |                   |            | 
|Investment in Bullion -
 market value    |  | $                 | 37,984,116 | 

Liquidity

The Trust is not aware of any trends, demands, conditions, 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
expense of the Trust during the period covered by this report was the Sponsors
Fee. The Trusts only source of liquidity is its transfers and sales of
Bullion.

The Trustee will, at the direction of the Sponsor
    or in its own discretion, sell the Trust’s Bullion (only in the specified proportion of silver, platinum and palladium held by the Trust) as necessary to pay the Trust’s expenses not otherwise assumed by the Sponsor. The Trustee will not sell Bullion to pay the Sponsor’s Fee but will pay the Sponsor’s
    Fee through in-kind transfers of Bullion to the Sponsor. At December 31,
2010, the Trust did not have any cash balances.

23

---



Review of Financial
Results

Financial Highlights

|                                           |  |                   |         |  
|------------------------------------------ |  | ----------------- | ------- | -
|                                           |  | December 31, 2010 |        
|                                           |  |                   |        
|Total gain
 on Bullion                     |  | $                 |        |  
|Net loss
 from operations                  |  | $                 | (14,675 | )
|Net cash
 provided by operating activities |  | $                 |        |  

The net asset value (NAV) of the Trust
    is obtained by subtracting the Trusts expenses and liabilities on any
    day from the value of the Bullion owned 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.

Period ended December 31, 2010

The Trust was formed as a legal entity on November
    29, 2010 with an initial deposit of Bullion. NAV at November 29, 2010 was
    $4,854,000.

The Trusts Shares commenced trading on the NYSE Arca under the symbol
WITE on December 3, 2010. The Trust began accruing expenses and calculating NAV
from this date.

The Trusts NAV grew from $4,854,000 at November
    29, 2010 to $37,969,441 at December 31, 2010, a 682.23% increase for the
    period. The increase in the Trusts NAV relates to increases in the
    price per ounce of silver, platinum and palladium, and an increase in outstanding
    Shares, which rose from 100,000 Shares at November 29, 2010 to 700,000 Shares
    at December 31, 2010, a consequence of 600,000 Shares (12 Baskets) being
    created and no Shares being redeemed during the period.

The 4.35% increase in the Trusts NAV per Share from $51.98 at December
3, 2010 to $54.24 at December 31, 2010 directly relates to the price per ounce
of silver, platinum and palladium in the proportions held by the Trust (the
Proportionate Price), which rose 4.39%.

The Trusts NAV per share rose slightly less
    than the Proportionate Price on a percentage basis due to the Sponsors
    Fee, which was $14,675 for the period, or 0.60% of the Trusts assets
    on an annualized basis.

The NAV per Share of $54.60 on December 30, 2010 was the highest during
the period compared with a low of $51.28 on December 9, 2010.

Net loss for the period ended December 31, 2010 was $14,675 which
comprises of the Sponsors Fee. Other than the Sponsors Fee, the Trust had no
expenses during the period ended December 31, 2010.

Item 7A.
Quantitative and Qualitative Disclosures about Market Risk.

The
Trust Ageement does not authorize the Trustee to borrow for payment of
the Trusts ordinary expenses. The Trust does not engage in transactions
in foreign currencies which could expose the Trust or holders of Shares to any
foreign currency related market risk. The Trust invests in no derivative
financial instruments and has no foreign operations or long-term debt
instruments.

Item 8. Financial Statements and Supplementary Data

|                                                      |  |                                                      |         |  
|----------------------------------------------------- |  | ---------------------------------------------------- | ------- | -
|Period Ended December 31, 2010                        |  |                                                      |         |  
|                                                      |  | Period from November 29, 2010 to 
 December 31, 2010 |        
|                                                      |  |                                                      |        
|Revenues                                              |  |                                                      |         |  
|Value of
 Bullion transferred to pay expenses         |  | $                                                    |        |  
|Cost of
 Bullion transferred to pay expenses          |  |                                                      |        |  
|                                                      |  |                                                      |         |  
|Gain on
 Bullion transferred to pay expenses          |  |                                                      |        |  
|Gain on
 Bullion distributed for redemption of Shares |  |                                                      |        |  
|Unrealized
 gain on investment in Bullion             |  |                                                      |        |  
|                                                      |  |                                                      |         |  
|Total gain
 on Bullion                                |  |                                                      |        |  
|                                                      |  |                                                      |         |  
|Expenses                                              |  |                                                      |         |  
|Sponsors
 Fee                                        |  |                                                      | 14,675  |  
|                                                      |  |                                                      |         |  
|Total expenses                                        |  |                                                      | 14,675  |  
|                                                      |  |                                                      |         |  
|Net loss
 from operations                             |  | $                                                    | (14,675 | )
|                                                      |  |                                                      |         |  
|                                                      |  |                                                      |         |  
|Net loss per
 Share                                   |  | $                                                    | (0.03   | )
|                                                      |  |                                                      |         |  
|Weighted
 average number of Shares                    |  |                                                      | 527,273 |  

24

---



Item 9. Changes
in and Disagreements with Accountants on Accounting and Financial Disclosure.

There have been no changes in accountants and no disagreements with
accountants on any matter of accounting principles or practices or financial
statement disclosures during the year ended December 31, 2010.

Item 9A. Controls
and Procedures.

The authorized officers of the Sponsor performing functions equivalent
to those that a principal executive officer and principal financial officer of
the Trust would perform if the Trust had any officers, and with the
participation of the Trustee, have evaluated the effectiveness of the Trusts
disclosure controls and procedures, and have concluded that the disclosure
controls and procedures of the Trust were effective as of December 31, 2010.

There have been no changes in the Trusts or Sponsors internal control
over financial reporting that occurred during the Trusts fourth fiscal quarter
that have materially affected, or are reasonably likely to materially affect,
the Trusts or Sponsors internal control over financial reporting.

This Annual Report does not include a report of managements assessment
regarding internal control over financial reporting or an attestation report of
the Trusts registered public accounting firm due to a transition period
established by rules of the SEC for newly public companies.

Item 9B. Other Information.

Not applicable.

25

---



PART III

Item 10.
Directors, Executive Officers and Corporate Governance.

Not
applicable.

Item 11.
Executive Compensation.

The Trust has
no directors or executive officers. The only ordinary expense paid by the Trust
    is the Sponsors Fee.

Item 12. Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.

Security Ownership of Certain Beneficial
Owners

The Sponsor has no knowledge of any person being the beneficial
    holder of more than 5% of the Shares of the Trust.

Security Ownership of Management

The Trustee
does not beneficially own any of the Trust Shares.

Change in Control

Neither the
Sponsor nor the Trustee knows of any arrangements which may subsequently result
in a change in control of the Trust.

Item 13. Certain
Relationships and Related Transactions, and Director Independence.

The Trust has
no directors or executive officers.

Item 14.
Principal Accounting Fees and Services.

Fees for
services performed by Deloitte & Touche LLP for the period ended December
31, 2010 were as follows:

|                    |  |  |  |  |                   |        | 
|------------------- |  |  |  |  | ----------------- | ------ | 
|                    |  |  |  |  | December 31, 2010 |       
|                    |  |  |  |  |                   |        | 
|Audit fees          |  |  |  |  | $                 | 37,500 | 
|Audit-related
 fees |  |  |  |  |                   |       | 
|                    |  |  |  |  |                   |        | 
|                    |  |  |  |  | $                 | 37,500 | 

Pre-Approved Policies and Procedures

As referenced in Item 10 above,
the Trust has no board of directors, and as a result, has no
pre-approval policies or procedures with respect to fees paid to Deloitte &
Touche LLP. Such determinations are made by the Sponsor.

None of the
hours expended by Deloitte & Touche LLP to audit the Trusts financial
statements for the fiscal period ended December 31, 2010 were attributable to
work performed by persons other than the principal accountants full-time,
permanent employees.

26

---



PART IV

Item 15.
Exhibits, Financial Statement Schedules

1. Financial
Statements

See Index to
Financial Statements on Page F-1 for a list of the financial statements being
filed herein.

2. Financial
Statement Schedules

Schedules have
been omitted since they are either not required, not applicable, or the
information has otherwise been included.

3. Exhibits

|            |                                                                                                                                                                    
|----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. | Description                                                                                                                                                        
|            |                                                                                                                                                                    
|            |                                                                                                                                                                    
|4.1         | Depositary Trust Agreement, incorporated by reference to Exhibit 4.1 filed with Registration Statement No. 333-167166 on November 30, 2010                         
|            |                                                                                                                                                                    
|4.2         | Form
    of Authorized Participant Agreement                                                                                                                       
|            |                                                                                                                                                                    
|4.3         | Global Certificate, incorporated by reference to Exhibit 4.3 filed with Registration Statement No. 333-167166 on November 30, 2010                                 
|            |                                                                                                                                                                    
|10.1        | Allocated Account Agreement, incorporated by reference to Exhibit 10.1 filed with Registration Statement No. 333-167166 on November 30, 2010                       
|            |                                                                                                                                                                    
|10.2        | Unallocated Account Agreement, incorporated by reference to Exhibit 10.2 filed with Registration Statement No. 333-167166 on November 30, 2010                     
|            |                                                                                                                                                                    
|10.3        | Depository Agreement, incorporated by reference to Exhibit 10.3 filed with Registration Statement No. 333-167166 on November 30, 2010                              
|            |                                                                                                                                                                    
|10.4        | Marketing Agent Agreement, incorporated by reference to Exhibit 10.4 filed with Registration Statement No. 333-167166 on November 30, 2010                         
|            |                                                                                                                                                                    
|31.1        | Chief
        Executive Officer’s Certificate, pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002                                                       
|            |                                                                                                                                                                    
|31.2        | Chief
        Financial Officer’s Certificate, pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002                                                       
|            |                                                                                                                                                                    
|32.1        | Chief
        Executive Officer’s Certificate, pursuant to 18 U.S.C. Section
        1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002
|            |                                                                                                                                                                    
|32.2        | Chief
        Financial Officer’s Certificate, pursuant to 18 U.S.C. Section
        1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002

27

---



ETFS
WHITE METALS BASKET TRUST

FINANCIAL STATEMENTS AS OF DECEMBER 31, 2010

INDEX

|                                                                                                          |  |     
|--------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                          |  | Page
|                                                                                                          |  |     
|Report of Independent Registered Public Accounting Firm                                                   |  | F-2 
|                                                                                                          |  |     
|Statement of Financial Condition at
      December 31, 2010                                               |  | F-3 
|                                                                                                          |  |     
|Statement of Operations for the period November 29, 2010 through
 December 31, 2010                       |  | F-4 
|                                                                                                          |  |     
|Statement of Cash Flows for the period November 29, 2010 through
 December 31, 2010                       |  | F-5 
|                                                                                                          |  |     
|Statement of Changes in Shareholders Deficit for the period November
 29, 2010 through December 31, 2010 |  | F-6 
|                                                                                                          |  |     
|Notes to the Financial Statements                                                                         |  | F-7 

F-1

---



REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Sponsor, Trustee and the Shareholders of the ETFS White
Metals Basket Trust:

We have audited the accompanying statement of
financial condition of ETFS White Metals Basket Trust (the Trust)
as of December 31, 2010, and the related statements of operations, changes in
shareholders
deficit, and cash flows for the period November 29, 2010 (date of inception)
to December 31, 2010. These financial statements are the responsibility of the
Trusts management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with the
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. The Trust is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Trusts internal control over financial reporting. Accordingly, we express
no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, such financial statements
present fairly, in all material respects, the financial position of ETFS White
    Metals Basket Trust at December 31, 2010, and the results of its operations
    and its cash flows for the period November 29, 2010 (date of inception)
    to December 31, 2010, in conformity with accounting principles generally
    accepted in the United States of America.

/s/ DELOITTE & TOUCHE LLP

New York, New York
March 28, 2011

F-2

---



ETFS WHITE METALS BASKET TRUST

|                                
|--------------------------------
|Statement of Financial
Condition
|                                
|At
December 31, 2010            

|                                                              |  |                    |            |  
|------------------------------------------------------------- |  | ------------------ | ---------- | -
|                                                              |  | December 31,
 2010 |           
|                                                              |  |                    |           
|ASSETS                                                        |  |                    |            |  
|Investment in Bullion, at
 cost (1)                           |  |                    |            |  
|Silver                                                        |  | $                  | 20,136,128 |  
|Platinum                                                      |  |                    | 11,802,916 |  
|Palladium                                                     |  |                    | 4,087,618  |  
|                                                              |  |                    |            |  
|                                                              |  |                    | 36,026,662 |  
|                                                              |  |                    |            |  
|                                                              |  |                    |            |  
|Total assets                                                  |  | $                  | 36,026,662 |  
|                                                              |  |                    |            |  
|                                                              |  |                    |            |  
|LIABILITIES                                                   |  |                    |            |  
|Accounts payable to
 Sponsor                                  |  | $                  | 14,675     |  
|                                                              |  |                    |            |  
|Total liabilities                                             |  | $                  | 14,675     |  
|                                                              |  |                    |            |  
|                                                              |  |                    |            |  
|Redeemable Shares:                                            |  |                    |            |  
|Shares at redemption value
 to investors (2)                  |  |                    | 37,969,441 |  
|                                                              |  |                    |            |  
|Shareholders deficit                                         |  | $                  | (1,957,454 | )
|                                                              |  |                    |            |  
|Total liabilities,
 redeemable Shares & shareholders deficit |  | $                  | 36,026,662 |  
|                                                              |  |                    |            |  

|    |                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------
|(1) | The market value of
 investment in Bullion at December 31, 2010 is $37,984,116. Refer to note 2.1
 for a breakdown by metal.           
|(2) | Authorized share capital
 is unlimited and no par value per Share. Shares issued and outstanding as of
 December 31, 2010 were 700,000.

See Notes to the Financial Statements.

F-3

---



ETFS WHITE METALS BASKET TRUST

|                                                           
|-----------------------------------------------------------
|Statement of Operations                                    
|                                                           
|For the period November 29, 2010*
through December 31, 2010
|                                                           
|                                                           

|                                                          |  |                                                            |         |  
|--------------------------------------------------------- |  | ---------------------------------------------------------- | ------- | -
|                                                          |  | For the periodNovember
 29, 2010*throughDecember
 31, 2010 |        
|                                                          |  |                                                            |         |  
|REVENUES                                                  |  |                                                            |         |  
|                                                          |  |                                                            |         |  
|Value of Bullion
 transferred to pay expenses             |  | $                                                          |        |  
|Cost of Bullion
 transferred to pay expenses              |  |                                                            |        |  
|                                                          |  |                                                            |         |  
|Gain on Bullion
 transferred to pay expenses              |  |                                                            |        |  
|                                                          |  |                                                            |         |  
|Gain on Bullion
 distributed for the redemption of Shares |  |                                                            |        |  
|                                                          |  |                                                            |         |  
|                                                          |  |                                                            |         |  
|                                                          |  |                                                            |         |  
|Total gain on Bullion                                     |  | $                                                          |        |  
|                                                          |  |                                                            |         |  
|                                                          |  |                                                            |         |  
|EXPENSES                                                  |  |                                                            |         |  
|                                                          |  |                                                            |         |  
|Sponsors Fee                                             |  |                                                            | 14,675  |  
|                                                          |  |                                                            |         |  
|                                                          |  |                                                            |         |  
|Total expenses                                            |  |                                                            | 14,675  |  
|                                                          |  |                                                            |         |  
|                                                          |  |                                                            |         |  
|Net loss from operations                                  |  | $                                                          | (14,675 | )
|                                                          |  |                                                            |         |  
|                                                          |  |                                                            |         |  
|Net loss per Share                                        |  | $                                                          | (0.03   | )
|                                                          |  |                                                            |         |  
|Weighted average number of
 Shares                        |  |                                                            | 527,273 |  

---

* Date of Inception.

See Notes to the Financial Statements.

F-4

---



ETFS WHITE METALS BASKET TRUST

|                                                           
|-----------------------------------------------------------
|Statement of Cash Flows                                    
|                                                           
|For the
period November 29, 2010* through December 31, 2010
|                                                           
|                                                           

|                                                                         |  |                                                            |            | 
|------------------------------------------------------------------------ |  | ---------------------------------------------------------- | ---------- | 
|                                                                         |  | For the periodNovember
 29, 2010*throughDecember
 31, 2010 |           
|                                                                         |  |                                                           
|INCREASE
 / (DECREASE) IN CASH FROM OPERATIONS:                          |  |                                                            |            | 
|                                                                         |  |                                                            |            | 
|Cash proceeds received
 from transfer of Bullion                         |  | $                                                          |           | 
|                                                                         |  |                                                            |            | 
|Cash expenses paid                                                       |  |                                                            |           | 
|                                                                         |  |                                                            |            | 
|                                                                         |  |                                                            |            | 
|                                                                         |  |                                                            |            | 
|Increase in cash resulting
 from operations                              |  |                                                            |           | 
|                                                                         |  |                                                            |            | 
|Cash and cash equivalents
 at beginning of period                        |  |                                                            |           | 
|                                                                         |  |                                                            |            | 
|                                                                         |  |                                                            |            | 
|                                                                         |  |                                                            |            | 
|Cash and cash equivalents
 at end of period                              |  | $                                                          |           | 
|                                                                         |  |                                                            |            | 
|                                                                         |  |                                                            |            | 
|SUPPLEMENTAL
 DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:               |  |                                                            |            | 
|                                                                         |  |                                                            |            | 
|Value of
 Bullion received for creation of Shares                        |  | $                                                          | 36,026,662 | 
|                                                                         |  |                                                            |            | 
|                                                                         |  |                                                            |            | 
|Value of
 Bullion distributed for redemption of Shares - at average cost |  | $                                                          |           | 
|                                                                         |  |                                                            |            | 

|                                                                                               |  |                                                            |             |  
|---------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------- | ----------- | -
|                                                                                               |  | For the periodNovember
 29, 2010*throughDecember
 31, 2010 |            
|                                                                                               |  |                                                            |            
|RECONCILIATION OF NET GAIN/(LOSS) TO NET CASH
 PROVIDED BY OPERATING ACTIVITIES:               |  |                                                            |             |  
|                                                                                               |  |                                                            |             |  
|Net loss from operations                                                                       |  | $                                                          | (14,675     | )
|Adjustments
     to reconcile net loss to net cash provided by/(used in) operating activities: |  |                                                            |             |  
|Increase in Bullion assets                                                                     |  |                                                            | (36,026,662 | )
|Increase in accounts payable to Sponsor                                                        |  |                                                            | 14,675      |  
|Increase in redeemable Shares:                                                                 |  |                                                            |             |  
|Creations                                                                                      |  |                                                            | 36,026,662  |  
|Redemptions                                                                                    |  |                                                            |            |  
|                                                                                               |  |                                                            |             |  
|Net cash provided by operating activities                                                      |  | $                                                          |            |  
|                                                                                               |  |                                                            |             |  
|                                                                                               |  |                                                            |             |  
|Supplemental disclosure of
 non-cash item:                                                     |  |                                                            |             |  
|Value of Bullion transferred to pay expenses                                                   |  | $                                                          |            |  

---

* Date of Inception.

See Notes to the Financial Statements.

F-5

---



ETFS WHITE METALS BASKET TRUST

Statement of Changes in Shareholders Deficit

For the
period November 29, 2010* through December 31, 2010

|                                                     |  |                                                            |            |  
|---------------------------------------------------- |  | ---------------------------------------------------------- | ---------- | -
|                                                     |  | For the periodNovember
 29, 2010*throughDecember
 31, 2010 |           
|                                                     |  |                                                            |           
|Shareholders deficit -
 opening balance             |  | $                                                          |           |  
|Net loss for the period                              |  |                                                            | (14,675    | )
|Adjustment of redeemable
 Shares to redemption value |  |                                                            | (1,942,779 | )
|                                                     |  |                                                            |            |  
|Shareholders deficit 
 closing balance             |  | $                                                          | (1,957,454 | )
|                                                     |  |                                                            |            |  

---

* Date of Inception.

See Notes to the Financial Statements.

F-6

---



ETFS WHITE METALS BASKET TRUST

Notes to the Financial Statements

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.   | Organization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | The ETFS White Metals Basket Trust (the Trust)
     is an investment trust formed on November 29, 2010, under New York law pursuant
     to a depositary trust agreement (the Trust Agreement) executed
     by ETF Securities USA LLC (the Sponsor) and the Bank of New
     York Mellon (the Trustee) at
 the time of the Trusts organization. The Trust holds silver, platinum
 and palladium in set ratios (together, Bullion) and issues shares
 (Shares)
 (in minimum blocks of 50,000 Shares, referred to as Baskets) in
 exchange for deposits of Bullion and distributes Bullion in connection with
 the redemption of Baskets. Shares represent units of fractional undivided
 beneficial interest in and ownership of the Trust which are issued by the
 Trust. The Sponsor is a Delaware limited liability company and a wholly-owned
 subsidiary of ETF Securities Limited, a Jersey, Channel Islands based
 company. The Trust is governed by the Trust Agreement. The investment
 objective of the Trust is for the Shares to reflect the performance of the
 price of silver, platinum and palladium, less the Trusts expenses and
 liabilities. The Trust is designed to provide an individual owner of
 beneficial interests in the Shares (a Shareholder) an opportunity
 to participate in the silver, platinum and palladium market through an
 investment in securities. The fiscal year end for the Trust is December 31.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2.   | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | The preparation of financial statements in accordance with accounting
 principles generally accepted in the United States of America requires those
 responsible for preparing financial statements to make estimates and
 assumptions that affect the reported amounts and disclosures. Actual results
 could differ from those estimates. The following is a summary of significant
 accounting policies followed by the Trust.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2.1. | Valuation of
 Bullion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | Bullion is held by JPMorgan Chase Bank, N.A. (the Custodian),
     on behalf of the Trust, at its London, England vaulting premises on a segregated
 basis. The allocated platinum and palladium is held by UBS AG (the Zurich
 Sub-Custodian) at its Zurich, Switzerland vaulting premises on a segregated
 basis. The Trusts Bullion is valued, per individual metal type, for financial
 statement purposes, the lower of cost or market. The cost of Bullion is determined
 according to the average cost method and the market value is based on the London
 Fix for each metal held by the Trust used to determine the NAV of
 the Trust. Realized gains and losses on sales of Bullion, or Bullion distributed
 for the redemption of Shares, are calculated on a trade date basis using average
 cost.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | Once the value of Bullion has been determined, the NAV is computed by
 the Trustee by deducting all accrued fees, expenses and other liabilities of
 the Trust, including the remuneration to the Sponsor (Sponsors Fee), from
 the fair value of the Bullion and all other assets held by the Trust.The
 table below summarizes the unrealized gains on the Trusts Bullion holdings
 as of December 31, 2010:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

|                                          |  |                   |            |          |   |            |  |       |           |  |   |            | 
|----------------------------------------- |  | ----------------- | ---------- | -------- | - | ---------- |  | ----- | --------- |  | - | ---------- | 
|                                          |  | December 31, 2010 |           
|                                          |  | Silver            |            | Platinum |   | Palladium  |  | Total |          
|                                          |  |                   |            |          |   |            |  |       |           |  |   |            | 
|Investment in
 Bullion - average cost     |  | $                 | 20,136,128 |          | $ | 11,802,916 |  | $     | 4,087,618 |  | $ | 36,026,662 | 
|Unrealized gain on
 investment in Bullion |  |                   | 1,302,903  |          |   | 312,978    |  |       | 341,573   |  |   | 1,957,454  | 
|                                          |  |                   |            |          |   |            |  |       |           |  |   |            | 
|Investment
     in Bullion - market value |  | $                 | 21,439,031 |          | $ | 12,115,894 |  | $     | 4,429,191 |  | $ | 37,984,116 | 
|                                          |  |                   |            |          |   |            |  |       |           |  |   |            | 

F-7

---



ETFS WHITE METALS BASKET TRUST

Notes to the Financial Statements

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.   | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.1. | Valuation of
 Bullion (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | The Trust recognizes the diminution in value of the investment in
 Bullion which arises from market declines on an interim basis. Increases in the
 value of the investment in Bullion through market price recoveries in later
 interim periods of the same fiscal year are recognized in the later interim
 period. Increases in value recognized on an interim basis may not exceed the
 previously recognized diminution in value.
 The per share amount of Bullion
 exchanged for a purchase or redemption is calculated daily by the Trustee,
 using the London Fix for each metal held by the Trust to calculate the Bullion
 amount in respect of any liabilities for which covering Bullion sales have not
 yet been made, and represents the per-share amount of Bullion held by the Trust,
 after giving effect to its liabilities, to cover expenses and liabilities and
 any losses that may have occurred.                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.2. | Bullion Receivable
 and Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | Bullion receivable or payable represents the quantity of Bullion
 covered by contractually binding orders for the creation or redemption of
 Shares respectively, where the Bullion has not yet been transferred to or
 from the Trusts account. Generally, ownership of the Bullion is transferred
 within three days of the trade date.
 At December 31, 2010 there was no
 Bullion receivable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.3. | Creations and
 Redemptions of Shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | The Trust expects to create and redeem Shares from time to time, but
 only in one or more Baskets (a Basket equals a block of 50,000 Shares). The
 Trust issues Shares in Baskets to Authorized Participants on an ongoing
 basis. Individual investors cannot purchase or redeem Shares in direct
 transactions with the Trust. An Authorized Participant is a person who (1) is
 a registered broker-dealer or other securities market participant such as a
 bank or other financial institution which is not required to register as a
 broker-dealer to engage in securities transactions, (2) is a participant in
 The Depositary Trust Company, (3) has entered into an Authorized Participant
 Agreement with the Trustee, and (4) has established an Authorized Participant
 Unallocated Account with the Trusts Custodian. An Authorized Participant
 Agreement is an agreement entered by each Authorized Participant, the Sponsor
 and the Trustee which provides the procedures for the creation and redemption
 of Baskets and for the delivery of the Bullion required for such creations
 and redemptions. An Authorized Participant Unallocated Account is an
 unallocated Bullion account, either loco London or loco Zurich, established
 with the Custodian or a Bullion clearing bank by an Authorized Participant.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | The creation and redemption of Baskets is only made in exchange for
 the delivery to the Trust or the distribution by the Trust of the amount of
 Bullion and any cash represented by the Baskets being created or redeemed,
 the amount of which is based on the combined NAV of the number of Shares
 included in the Baskets being created or redeemed determined on the day the
 order to create or redeem Baskets is properly received.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | Authorized Participants may, on any business day, place an order with
 the Trustee to create or redeem one or more Baskets. The typical settlement
 period for Shares is three business days. In the event of a trade date at
 period end, where a settlement is pending, a respective account receivable
 and/or payable will be recorded. When Bullion is exchanged in settlement of
 redemption, it is considered a sale of Bullion for financial statement
 purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | The Shares of the Trust are classified as Redeemable Capital Shares
 for financial statement purposes, since they are subject to redemption at the
 option of Authorized Participants. Outstanding Shares are reflected at
 redemption value, which represents the maximum obligation (based on NAV per
 Share), with the difference from historical cost recorded as an offsetting
 amount to retained earnings. Changes in the Shares for the period November
 29, 2010 (the Date of Inception) through December 31, 2010:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

F-8

---



ETFS WHITE METALS BASKET TRUST

Notes to the Financial Statements

|     |                                                 
|---- | ------------------------------------------------
|2.3. | Creations and Redemptions of Shares
 (continued)

|                              |  |                                                                |         | 
|----------------------------- |  | -------------------------------------------------------------- | ------- | 
|                              |  | For the period
 November 29, 2010*
 through
 December 31, 2010 |        
|                              |  |                                                                |        
|Number of
 redeemable Shares: |  |                                                                |         | 
|Opening balance               |  |                                                                |        | 
|Creations                     |  |                                                                | 700,000 | 
|Redemptions                   |  |                                                                |        | 
|                              |  |                                                                |         | 
|Closing balance               |  |                                                                | 700,000 | 
|                              |  |                                                                |         | 

|                                          |  |                                                                |            | 
|----------------------------------------- |  | -------------------------------------------------------------- | ---------- | 
|                                          |  | For the period
 November 29, 2010*
 through
 December 31, 2010 |           
|                                          |  |                                                                |           
|Redeemable
 Shares:                       |  |                                                                |            | 
|Opening balance                           |  | $                                                              |           | 
|Creations                                 |  |                                                                | 36,026,662 | 
|Redemptions                               |  |                                                                |           | 
|Adjustment to redemption
 value           |  |                                                                | 1,942,779  | 
|                                          |  |                                                                |            | 
|Closing balance                           |  | $                                                              | 37,969,441 | 
|                                          |  |                                                                |            | 
|                                          |  |                                                                |            | 
|Redemption value per Share
 at period end |  | $                                                              | 54.24      | 

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | *Date of inception.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|2.4. | Revenue
 Recognition Policy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     | The primary expense of the Trust is the Sponsors Fee, which is paid
 by the Trust through in-kind transfers of Bullion to the Sponsor. With
 respect to expenses not otherwise assumed by the Sponsor, the Trustee will,
 at the direction of the Sponsor or in its own discretion, sell the Trusts
 Bullion as necessary to pay these expenses. When selling Bullion to pay
 expenses, the Trustee will endeavor to sell the smallest amounts of Bullion
 needed to pay these expenses in order to minimize the Trusts holdings of
 assets other than Bullion.                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     | Unless otherwise directed by the Sponsor, when
     selling Bullion the Trustee will endeavor to sell at the price established
     by the London Fix for each metal held by the Trust. The Trustee will place
     orders with dealers (which may include the Custodian) through which the
     Trustee expects to receive the most favorable price and execution of orders.
     The Custodian may be the purchaser of such Bullion only if the sale transaction
     is made at the London Fix  for each metal held by the Trust used by the
     Trustee to value the Trusts
     Bullion. A gain or loss is recognized based on the difference between the
     selling price and the average cost of the Bullion sold. Neither the Trustee
     nor the Sponsor is liable for depreciation or loss incurred by reason of
     any sale.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|2.5. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     | The Trust is classified as a grantor trust for U.S. federal income
 tax purposes. As a result, the Trust itself will not be subject to U.S.
 federal income tax. Instead, the Trusts income and expenses will flow
 through to the Shareholders, and the Trustee will report the Trusts
 proceeds, income, deductions, gains, and losses to the Internal Revenue
 Service on that basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                

F-9

---



ETFS WHITE METALS BASKET TRUST

Notes to the Financial Statements

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.5. | Income Taxes (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     | The Trust
 has adopted Financial Accounting Standards Board (FASB) Accounting
 Standards Codification (ASC) 740-10, Income
 Taxes (formerly FASB Interpretation Number 48, Accounting for Uncertainty in Income Taxes).
 The Sponsor has evaluated the application of ASC 740 to the Trust, to
 determine whether or not there are uncertain tax positions that require
 financial statement recognition. Based on this evaluation, the Trust has
 determined no reserves for uncertain tax positions are required to be
 recorded as a result of the application of ASC 740. As a result, no income
 tax liability or expense has been recorded in the accompanying financial
 statements.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2.6. | Investment in
 Bullion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     | The
 following represents the changes in ounces of Bullion and the respective
 values for the period November 29, 2010 (the Date of Inception) through
 December 31, 2010:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

|                                                  |  |                                                        |            |          |   |            |  |       |           |  |   |            | 
|------------------------------------------------- |  | ------------------------------------------------------ | ---------- | -------- | - | ---------- |  | ----- | --------- |  | - | ---------- | 
|                                                  |  | For the period November 29, 2010* to December 31, 2010 |           
|                                                  |  |                                                        |           
|                                                  |  | Silver                                                 |            | Platinum |   | Palladium  |  | Total |          
|                                                  |  |                                                        |            |          |   |            |  |       |          
|Ounces of
 Bullion:                               |  |                                                        |            |          |   |            |  |       |           |  |   |            | 
|Opening balance                                   |  |                                                        |           |          |   |           |  |       |          |  |   |           | 
|Creations                                         |  |                                                        | 699,935.7  |          |   | 6,999.4    |  |       | 5,599.5   |  |   | 712,534.6  | 
|Redemptions                                       |  |                                                        |           |          |   |           |  |       |          |  |   |           | 
|Transfers of Bullion                              |  |                                                        |           |          |   |           |  |       |          |  |   |           | 
|                                                  |  |                                                        |            |          |   |            |  |       |           |  |   |            | 
|Closing balance                                   |  |                                                        | 699,935.7  |          |   | 6,999.4    |  |       | 5,599.5   |  |   | 712,534.6  | 
|                                                  |  |                                                        |            |          |   |            |  |       |           |  |   |            | 
|Investment
 in Bullion (lower of cost or market): |  |                                                        |            |          |   |            |  |       |           |  |   |            | 
|Opening balance                                   |  | $                                                      |           |          | $ |           |  | $     |          |  | $ |           | 
|Creations                                         |  |                                                        | 20,136,128 |          |   | 11,802,916 |  |       | 4,087,618 |  |   | 36,026,662 | 
|Redemptions                                       |  |                                                        |           |          |   |           |  |       |          |  |   |           | 
|Transfers of Bullion                              |  |                                                        |           |          |   |           |  |       |          |  |   |           | 
|                                                  |  |                                                        |            |          |   |            |  |       |           |  |   |            | 
|Closing balance                                   |  | $                                                      | 20,136,128 |          | $ | 11,802,916 |  | $     | 4,087,618 |  | $ | 36,026,662 | 
|                                                  |  |                                                        |            |          |   |            |  |       |           |  |   |            | 
|                                                 
|* Date of
  inception.                           

|     |                                                                                                                                                                                                                                                                                                                                                                                                                     
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                     
|2.7. | Expenses                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | The Trust
 will transfer Bullion to the Sponsor to pay the Sponsors Fee that will
 accrue daily at an annualized rate equal to 0.60% of the adjusted daily net
 asset value (the ANAV) of the Trust, paid monthly in arrears.                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | The Sponsor
 has agreed to assume administrative and marketing expenses incurred by the
 Trust, including the Trustees monthly fee and out of pocket expenses, the
 Custodians fee and the reimbursement of the Custodians expenses, exchange
 listing fees, United States Securities and Exchange Commission (the SEC)
 registration fees, printing and mailing costs, audit fees and certain legal
 expenses.

F-10

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ETFS WHITE METALS BASKET TRUST

Notes
to the Financial Statements

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.8. | Subsequent Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | In accordance with the provisions set forth in
     FASB ASC 855-10, Subsequent Events, the Trusts
 management has evaluated the possibility of subsequent events existing in the
 Trusts financial statements through the issuance. Management has
determined that there were no material events that would require adjustment
to or disclosure in the Trusts financial statements through this date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3.   | Related Parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | The Sponsor and the Trustee are considered to be related parties to
 the Trust. The Trustees fee is paid by the Sponsor and is not a separate
 expense of the Trust. The Custodian and its affiliates may from time to time
 act as Authorized Participants or purchase or sell Bullion or Shares for
 their own account, as agent for their customers and for accounts over which
 they exercise investment discretion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | For the period ended December 31, 2010, the
       Sponsor's fee was $14,675. At December 31, 2010, there was $14,675 payable
     in fees to the Sponsor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4.   | Concentration of Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | The Trusts sole business activity is the investment in Bullion, and
 substantially all the Trusts assets are holdings of Bullion which creates a
 concentration risk associated with fluctuations in the price of Bullion.
 Several factors could affect the price of Bullion, including: (i) global
 Bullion supply and demand, which is influenced by factors such as forward
 selling by Bullion producers, purchases made by Bullion producers to unwind
 Bullion hedge positions, central bank purchases and sales, and production and
 cost levels in major Bullion-producing countries; (ii) investors
 expectations with respect to the rate of inflation; (iii) currency exchange
 rates; (iv) interest rates; (v) investment and trading activities of hedge
 funds and commodity funds; and (vi) global or regional political, economic or
 financial events and situations. In addition, there is no assurance that
 Bullion will maintain its long-term value in terms of purchasing power in the
 future. In the event that the price of Bullion declines, the Sponsor expects
 the value of an investment in the Shares to decline proportionately. Each of
 these events could have a material effect on the Trusts financial position
 and results of operations.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|5.   | Indemnification                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | Under the Trusts organizational documents, each of the Trustee (and
 its directors, employees and agents) and the Sponsor (and its members,
 managers, directors, officers, employees, and affiliates) is indemnified by
 the Trust against any liability, cost or expense it incurs without gross
 negligence, bad faith or willful misconduct on its part and without reckless
 disregard on its part of its obligations and duties under the Trusts
 organizational documents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | The Trusts maximum exposure under these arrangements is unknown as
 this would involve future claims that may be made against the Trust that have
 not yet occurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

F-11

---



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned in the capacities* indicated thereunto duly authorized.

|                                |                                                                 | 
|------------------------------- | --------------------------------------------------------------- | 
|                                | ETF
 SECURITIES USA LLC                                         | 
|                                | Sponsor of
 the ETFS White
 Metals Basket Trust                
|                                | (Registrant)                                                    | 
|                                |                                                                 | 
|                                | /s/ Graham
 Tuckwell                                            | 
|                                |                                                                 | 
|                                | Graham Tuckwell                                                 | 
|                                | President
 and Chief Executive Officer                          | 
|                                | (Principal
 Executive Officer)                                  | 
|                                |                                                                 | 
|Date:           March 28,
 2011 |                                                                 | 
|                                |                                                                 | 
|                                | /s/ Thomas
 Quigley                                             | 
|                                |                                                                 | 
|                                | Thomas
 Quigley                                                 | 
|                                | Chief
 Financial Officer and Treasurer                         
|                                | (Principal
 Financial Officer and Principal Accounting Officer)
|                                |                                                                 | 
|Date:           March 28,
 2011 |                                                                 | 

* The Registrant is a trust and
the persons are signing in their capacities as officers of ETF Securities USA
LLC, the Sponsor of the Registrant.

---