EDGAR 10-K Filing

Company CIK: 1459862
Filing Year: 2022
Filename: 1459862_10-K_2022_0001387131-22-002619.json

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ITEM 1. BUSINESS
Item 1. Business
Trust Objective
Overview of the Palladium Industry
Operation of the Palladium Markets
Secondary Market Trading
Valuation of Palladium and Computation of Net Asset Value
Trust Expenses
Creation and Redemption of Shares
Creation and Redemption Transaction Fee
The Sponsor
The Trustee
The Custodian
Inspection of Palladium
Description of Shares
Custody of the Trust’s Palladium
United States Federal Income Tax Consequences
ERISA and Related Considerations

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unre solved Staff Comments
None.

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ITEM 2. PROPERTIES
Item 2. Proper ties
Not applicable.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Procee dings
None

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Discl osure
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
The Trust’s Shares have been listed on the NYSE Arca under the symbol PALL since its initial public offering on January 8, 2010.
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 years ended December 31, 2021 and 2020:
Fiscal Year Ended December 31, 2021: Quarter Ended
High Low
March 31, 2021 $ 252.00 $ 208.37
June 30, 2021 $ 279.31 $ 231.17
September 30, 2021 $ 267.23 $ 172.65
December 31, 2021 $ 204.67 $ 148.60
Fiscal Year Ended December 31, 2020: Quarter Ended
High Low
March 31, 2020 $ 272.69 $ 148.21
June 30, 2020 $ 209.20 $ 168.99
September 30, 2020 $ 224.00 $ 178.49
December 31, 2020 $ 233.30 $ 206.99
The number of outstanding Shares of the Trust as of February 24, 2022 was 1,825,000.
Monthly Share Price
The following table sets forth, for each of the most recent six months, the high and low closing prices of the Shares, as reported for NYSE Arca transactions.
Month High Low
August 2021 $ 249.90 $ 212.71
September 2021 $ 228.30 $ 172.65
October 2021 $ 199.00 $ 176.84
November 2021 $ 204.67 $ 160.91
December 2021 $ 184.98 $ 148.60
January 2022 $ 222.13 $ 169.33
Issuer Purchase of Equity Securities
The Trust issues and redeems Shares only with Authorized Participants in exchange for palladium, only in aggregations of 25,000 Shares, referred to as a Basket. A list of current Authorized Participants is available from the Sponsor or the Trustee and is included in Item 7 of this report. 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 years ended December 31, 2021 and 2020:
Month Total number of
Shares redeemed Average ounces of
palladium per Share
January 2021 - -
February 2021 - -
March 2021 100,000 0.093
April 2021 - -
May 2021 25,000 0.093
June 2021 - -
July 2021 50,000 0.093
August 2021 150,000 0.093
September 2021 150,000 0.093
October 2021 - -
November 2021 - -
December 2021 100,000 0.093
Total 575,000 0.093
Month Total number of
Shares redeemed Average ounces of
palladium per Share
January 2020 75,000 0.094
February 2020 - -
March 2020 450,000 0.094
April 2020 25,000 0.094
May 2020 25,000 0.094
June 2020 25,000 0.094
July 2020 - -
August 2020 - -
September 2020 75,000 0.094
October 2020 50,000 0.094
November 2020 25,000 0.094
December 2020 50,000 0.094
Total 800,000 0.094

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ITEM 6. SELECTED FINANCIAL DATA

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
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. 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.
Introduction.
The Aberdeen Standard Palladium ETF 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 Aberdeen Standard Investments ETFs Sponsor 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 palladium 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 for the value of each Share to approximately reflect, at any given time, the price of the palladium 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 palladium.
The Trust issues and redeems Shares only in exchange for palladium, only in aggregations of 25,000 Shares effective April 1, 2019 (prior to April 1, 2019, the number of Shares that constituted a Basket was 50,000 Shares) or integral multiples thereof (each, a “Basket”), and only in transactions with registered broker-dealers (or other securities market participants not required to register as broker-dealers, such as a bank or other financial institution) that (1) are participants in DTC and (2) have previously entered into an agreement with the Trust governing the terms and conditions of such issuance (such dealers, the “Authorized Participants”).
As of the date of this annual report the Authorized Participants that have signed an Authorized Participant Agreement with the Trust are Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, HSBC Securities (USA) Inc., J.P. Morgan Securities Inc., Merrill Lynch Professional Clearing Corp., Mizuho Securities USA LLC, Morgan Stanley & Co. Inc., Scotia Capital (USA) Inc., UBS Securities LLC and Virtu Financial BD, LLC.
Shares of the Trust trade on the NYSE Arca under the symbol “PALL.”
Investing in the Shares does not insulate the investor from certain risks, including price volatility. The following table illustrates the movement in the NAV of the Shares against the corresponding palladium price (per 1/10 of an oz. of palladium) since inception:
NAV per Share vs. Palladium Price from December 30, 2011 (the Date of Inception) to December 31, 2021
The divergence of the NAV per Share from the palladium price over time reflects the cumulative effect of the Trust expenses that arise if an investment had been held since inception.
Critical Accounting Policy
The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements relies on estimates and assumptions that impact the Trust’s financial position and results of operations. These estimates and assumptions affect the Trust’s application of accounting policies. Below we describe the valuation of palladium bullion, a critical accounting policy that we believe is important to understanding the 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 Palladium
Palladium is held by JPMorgan Chase Bank, N.A. (the “Custodian”) on behalf of the Trust, at its London, England vaulting premises. Palladium may also be held by UBS AG, or any other firm selected by the Custodian to hold the Trust’s palladium in the Trust’s allocated account in the firm’s Zurich vault premises and whose appointment has been approved by the Sponsor, at its Zurich, Switzerland vaulting premises. Palladium is recorded at fair value. The cost of palladium is determined according to the average cost method and the fair value is based on the LME PM Fix (the afternoon session of LME’s twice daily electronic price fixing process). Realized gains and losses on transfers of palladium, or palladium distributed for the redemption of Shares, are calculated on a trade date basis as the difference between the fair value and cost of palladium transferred.
December 31, 2021
December 31, 2020
December 31, 2019
(Amounts in 000’s of US$)
Investment in palladium - cost $ 334,434 $ 224,166 $ 170,040
Unrealized gain on investment in palladium 23,727 132,258 130,598
Investment in palladium- fair value $ 358,161 $ 356,424 $ 300,638
Inspection of Palladium
Under the Custody Agreements, the Trustee, the Sponsor and the Trust’s auditors and inspectors may, only up to twice a year, visit the premises of the Custodian and the Zurich Sub-Custodian for the purpose of examining the Trust’s palladium and certain related records maintained by the Custodian. Under the Allocated Account Agreement, the Custodian agreed to procure similar inspection rights from the Zurich Sub-Custodian. Any such inspection rights with respect to the Zurich Sub-Custodian are expected to be granted in accordance with the normal course of dealing between the Custodian and the Zurich Sub-Custodian. Visits by auditors and inspectors to the Zurich Sub-Custodian’s facilities will be arranged through the Custodian. Other than with respect to the Zurich Sub-Custodian, the Trustee and the Sponsor have no right to visit the premises of any sub-custodian for the purposes of examining the Trust’s palladium or any records maintained by the sub-custodian, and no sub-custodian is obligated to cooperate in any review the Trustee or the Sponsor may wish to conduct of the facilities, procedures, records or creditworthiness of such sub-custodian.
The Sponsor has exercised its right to visit the Custodian and the Zurich Sub-Custodian, in order to examine the palladium and the records maintained by them. Inspections were conducted by Inspectorate International Limited, a leading commodity inspection and testing company retained by the Sponsor, as of July 23, 2021 and December 31, 2021.
There can be no guarantee that the Sponsor or the Trust’s auditors and inspectors will be able to perform physical inspections of the Trust’s palladium as planned. Local policies, regulations, or ordinances, as well as polices or restrictions adopted by the Custodian or a sub-custodian, may temporarily prevent, or otherwise impair the ability of, the Sponsor or the Trust’s auditors and inspectors, from performing a physical inspection of the Trust’s palladium on a desired date. In those situations, the Sponsor or the Trust’s auditors and inspectors may seek to verify the palladium held by the Trust by alternate means, including through virtual inspections of the Trust’s palladium and/or a review of pertinent records.
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 palladium.
The Trustee will, at the direction of the Sponsor or in its own discretion, sell the Trust’s palladium as necessary to pay the Trust’s expenses not otherwise assumed by the Sponsor. The Trustee will not sell palladium to pay the Sponsor’s Fee but will pay the Sponsor’s Fee through in-kind transfers of palladium to the Sponsor. At December 31, 2021 and 2020, the Trust did not have any cash balances.
Review of Financial Results
Financial Highlights
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Year Ended
December 31, 2019
(Amounts in 000’s of US$)
Total gain/(loss) on palladium $ (70,471 ) $ 62,621 $ 90,140
Net change assets from operations $ (72,918 ) $ 60,608 $ 88,748
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 palladium 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.
The year ended December 31, 2021
The Trust’s NAV increased from $356,238,300 at December 31, 2020 to $357,971,468 at December 31, 2021, a 0.49% increase for the year. The increase in the Trust’s NAV resulted primarily from an increase in outstanding shares, which rose from 1,625,000 at December 31, 2020 to 1,950,000 at December 31, 2021, a result of 900,000 Shares (36 baskets) being created and 575,000 Shares (23 Baskets) being redeemed during the year. There was a decrease in the price per ounce of palladium, which fell 15.76% from $2,342.00 at December 31, 2020 to $1,973.00 at December 31, 2021.
The NAV per Share decreased 16.26% from $219.22 at December 31, 2020 to $183.58 at December 31, 2021. The Trust’s NAV per Share fell slightly more than the price per ounce of palladium on a percentage basis due to the Sponsor’s Fee, which was $2,447,225 for the year, or 0.60% of the Trust’s ANAV.
The NAV per Share of $280.24 at May 4, 2021 was the highest during the year, compared with a low of $146.68 at December 15, 2021.
The decrease in net assets from operations for the year ended December 31, 2021 was $72,918,240, resulting from a realized gain of $742,787 on the transfer of palladium to pay expenses and a realized gain of $37,316,892 on palladium distributed for the redemption of Shares, offset by a change in unrealized loss on investment in palladium of $108,530,694 and the Sponsor’s Fee of $2,447,225. Other than the Sponsor’s Fee, the Trust had no expenses during the year ended December 31, 2021.
The year ended December 31, 2020
The Trust’s NAV increased from $300,485,250 at December 31, 2019 to $356,238,300 at December 31, 2020, an 18.55% increase for the year. The increase in the Trust’s NAV resulted primarily from an increase in the price per ounce of palladium, which rose 22.94% from $1,905.00 at December 31, 2019 to $2,342.00 at December 31, 2020.
There was a decrease in outstanding Shares, which fell from 1,675,000 Shares at December 31, 2019 to 1,625,000 Shares at December 31, 2020, a result of 750,000 Shares (30 Baskets) being created and 800,000 Shares (32 Baskets) being redeemed during the year.
The NAV per Share increased 22.20% from $179.39 at December 31, 2019 to $219.22 at December 31, 2020. The Trust’s NAV per Share rose slightly less than the price per ounce of palladium on a percentage basis due to the Sponsor’s Fee, which was $2,012,865 for the year, or 0.60% of the Trust’s ANAV.
The NAV per Share of $261.67 at February 19, 2020 was the highest during the year, compared with a low of $146.44 at March 16, 2020.
The increase in net assets from operations for the year ended December 31, 2020 was $60,607,957, resulting from a realized gain of $772,814 on the transfer of palladium to pay expenses, a realized gain of $60,188,024 on palladium distributed for the redemption of Shares, a change in unrealized gain on investment in palladium of $1,659,984, offset by the Sponsor’s Fee of $2,012,865. Other than the Sponsor’s Fee, the Trust had no expenses during the year ended December 31, 2019.
The year ended December 31, 2019
The Trust’s NAV increased from $185,465,009 at December 31, 2018 to $300,485,250 at December 31, 2019, a 62.02% increase for the year. The increase in the Trust’s NAV resulted primarily from an increase in outstanding Shares, which rose from 1,550,000 Shares at December 31, 2018 to 1,675,000 Shares at December 31, 2019, a result of 750,000 Shares (30 Baskets) being created and 625,000 Shares (25 Baskets) being redeemed during the year.
There was an increase in the price per ounce of palladium, which rose 50.83% from $1,263.00 at December 31, 2018 to $1,905.00 at December 31, 2019.
The NAV per Share increased 49.92% from $119.66 at December 31, 2018 to $179.39 at December 31, 2019. The Trust’s NAV per Share rose slightly less than the price per ounce of palladium on a percentage basis due to the Sponsor’s Fee, which was $1,392,218 for the year, or 0.60% of the Trust’s ANAV.
The NAV per Share of $185.66 at December 13, 2019 was the highest during the year, compared with a low of $120.03 at January 2, 2019.
The increase in net assets from operations for the year ended December 31, 2019 was $88,747,092, resulting from a realized gain of $519,521 on the transfer of palladium to pay expenses, a realized gain of $32,232,847 on palladium distributed for the redemption of Shares, a change in unrealized gain on investment in palladium of $57,386,942, offset by the Sponsor’s Fee of $1,392,218. Other than the Sponsor’s Fee, the Trust had no expenses during the year ended December 31, 2019.
Off-Balance Sheet Arrangements
The Trust is not a party to any off-balance sheet arrangements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The Trust Agreement 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.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data (Unaudited)
Quarterly Income Statements
Year Ended December 31, 2021
Three months ended Year ended
(Amounts in 000’s of US$, except for Share and per Share data) March 31 June 30 September 30 December 31 December 31
EXPENSES
Sponsor’s Fee $ 563 $ 679 $ 649 $ 556 $ 2,447
Total expenses 556 2,447
Net investment loss (563 ) (679 ) (649 ) (556 ) (2,447 )
REALIZED AND UNREALIZED GAINS / (LOSSES)
Realized gain on palladium transferred to pay expenses 39
Realized gain / (loss) on palladium distributed for the redemption of Shares 9,510 3,197 24,682 (72 ) 37,317
Change in unrealized gain on investment in palladium 34,733 8,862 (163,964 ) 11,838 (108,531 )
Change in unrealized gain on unsettled creations or redemptions - (159 ) - -
Total gain / (loss) on investment in palladium 44,442 12,487 (139,205 ) 11,805 (70,471 )
Change in net assets from operations $ 43,879 $ 11,808 $ (139,854 ) $ 11,249 $ (72,918 )
Net increase in net assets per Share $ 26.57 $ 6.65 $ (73.38 ) $ 5.72 $ (39.95 )
Weighted average number of Shares 1,651,389 1,774,725 1,905,978 1,964,946 1,825,342
Year Ended December 31, 2020
Three months ended Year ended
(Amounts in 000’s of US$, except for Share and per Share data) March 31 June 30 September 30 December 31 December 31
EXPENSES
Sponsor’s Fee $ 548 $ 376 $ 530 $ 559 $ 2,013
Total Expenses 559 2,013
Net investment loss (548 ) (376 ) (530 ) (559 ) (2,013 )
REALIZED AND UNREALIZED GAINS / (LOSSES)
Realized gain on palladium transferred to pay expenses 210
Realized gain on palladium distributed for the redemption of Shares 39,238 4,647 5,940 10,363 60,188
Change in unrealized gain on investment in palladium 8,711 (57,866 ) 60,054 (9,239 ) 1,660
Total gain on investment in palladium 48,207 (53,059 ) 66,139 1,334 62,621
Change in net assets from operations $ 47,659 $ (53,435 ) $ 65,609 $ 775 $ 60,608
Net increase in net assets per Share $ 28.84 $ (37.93 ) $ 38.35 $ 0.46 $ 37.51
Weighted average number of shares 1,652,473 1,408,791 1,710,870 1,689,130 1,615,779
Note: Quarterly balances may not add to totals due to independent rounding.
The financial statements required by Regulation S-X, together with the report of the Trust’s independent registered public accounting firm appear on pages to of this filing.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
None.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures
The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer of the Sponsor, and to the audit committee, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer of the Sponsor, the Sponsor conducted an evaluation of the Trust’s disclosure controls and procedures, as defined under Exchange Act Rules 13a-15(e) and 15d-15(e). Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer of the Sponsor concluded that, as of December 31, 2021, the Trust’s disclosure controls and procedures were effective.
Internal controls over financial reporting have been maintained throughout the Trust’s fiscal year ended December 31, 2021. There have been no changes that have materially affected, or are reasonably likely to materially affect, the Trust’s or Sponsor’s internal control over financial reporting.
Management’s Report on Internal Control over Financial Reporting
The Sponsor’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 15d-15(f). The Trust’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes those policies and procedures that:
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Trust’s assets;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that the Trust’s receipts and expenditures are being made only in accordance with appropriate authorizations; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Trust’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become ineffective because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Chief Executive Officer and Chief Financial Officer of the Sponsor assessed the effectiveness of the Trust’s internal control over financial reporting as of December 31, 2021. In making this assessment, they used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Their assessment included an evaluation of the design of the Trust’s internal control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting. Based on their assessment and those criteria, the Chief Executive Officer and Chief Financial Officer of the Sponsor concluded that the Trust maintained effective internal control over financial reporting as of December 31, 2021.
KPMG LLP, the independent registered public accounting firm that audited and reported on the financial statements included in this Form 10-K, as stated in their report which is included herein, issued an attestation report on the effectiveness of the Trust’s internal control over financial reporting as of December 31, 2021.
Report of Independent Registered Public Accounting Firm
To the Sponsor, Trustee and Shareholders
Aberdeen Standard Palladium ETF Trust:
Opinion on Internal Control Over Financial Reporting
We have audited Aberdeen Standard Palladium ETF Trust's (the Trust) internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the statements of assets and liabilities of the Trust, including the schedules of investments, as of December 31, 2021 and 2020, the related statements of operations and changes in net assets and the financial highlights for each of the years in the three-year period ended December 31, 2021, and the related notes (collectively, the financial statements), and our report dated February 28, 2022 expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Trust’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Trust’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP
New York, New York
February 28, 2022

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information
Not applicable
PART III

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance
The Trust has no directors or executive officers. The biographies of the President and Chief Executive Officer of the Sponsor and the Chief Financial Officer and Treasurer of the Sponsor are set out below:
Steven Dunn - President and Chief Executive Officer
Mr. Dunn, CIMA®, is the Head of Exchange Traded Funds at abrdn Inc.. Mr. Dunn guides the firm’s strategic direction and distribution strategy for ETFs. Previously, he was a Director with Deutsche Asset and Wealth Management in charge of managing relationships with US ETF Strategists and overseeing the Eastern Division sales team. Prior to that, Mr. Dunn was a consultant at Brandywine Global Investment Management and has also held sales and distribution strategy positions at iShares, Blackrock and Vanguard. Mr. Dunn holds a B.A. degree in Public Administration from Shippensburg University of Pennsylvania and has completed his MBA at Pennsylvania State University. He holds the Series 7, 24, and 63 registrations as well as the Certified Investment Management Analyst® (CIMA®).
Andrea Melia - Chief Financial Officer and Treasurer
Ms. Melia is Vice President and Senior Director of Product Management for abrdn Inc. Ms. Melia has managed the fund administration team since joining abrdn Inc. in September 2009. Prior to joining abrdn Inc., Ms. Melia was Director of fund administration and accounting oversight for Princeton Administrators LLC, a division of BlackRock Inc. and had worked with Princeton Administrators since 1992. Ms. Melia holds a BS in Accounting from University of Scranton and a MBA from Rider University.
As described under Item 1 above, abrdn Inc. is the parent of the Sponsor.

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ITEM 11. EXECUTIVE COMPENSATION
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.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Security Ownership of Certain Beneficial Owners
There are no persons known by the Trust to own directly or indirectly beneficially more than 5% of the outstanding Shares of the Trust.
Security Ownership of Management
Not applicable.
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.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence
The Trust has no directors or executive officers.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accounting Fees and Services
Fees for services performed by KPMG LLP for the years ended December 31, 2021 and 2020
New York, NY Auditor ID: 185
December 31, 2021 December 31, 2020
Audit fees - KPMG $ 77,250 $ 77,825
Audit related fees - KPMG - 10,000
$ 77,250 $ 87,825
Audit Fees are fees paid by the Sponsor to KPMG LLP for professional services for the audit of the Trust’s financial statements included in the Form 10-K and review of financial statements included in the Form 10-Qs, and for services that are normally provided by the accountants in connection with regulatory filings or engagements. Audit Related Fees are paid by the Sponsor to KPMG LLP for assurance and related services that are reasonably related to the performance of the audit or review of the Trust’s financial statements. These services include the accountant providing a consent letter related to the Trust’s registration statement filing.
Pre-Approval 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 KPMG LLP. Such determinations are made by the Sponsor.

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits, Financial Statement Schedules
1. Financial Statements
See Index to Financial Statements on Page 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.
Exhibit No. Description
4.1(a) Depositary Trust Agreement, incorporated by reference to Exhibit 4.1 filed with Registration Statement No. 333-158380 on December 31,
4.1(b) Amendment to the Depositary Trust Agreement effective September 20, 2018, incorporated by reference to Exhibit 4.1 filed with the Trust’s Current Report on Form 8-K on October 5, 2018
4.2 Form of Authorized Participant Agreement, effective as of September 5, 2017, incorporated by reference to Exhibit 4.2 filed with the Trust’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017
4.3 Certificate of Beneficial Interest, incorporated by reference to Exhibit 4.3 filed with Registration Statement No. 333-158380 on December 31, 2009
10.1(a) Allocated Account Agreement, incorporated by reference to Exhibit 10.1 filed with Registration Statement No. 333-158380 on December 31, 2009
10.1(b) Amendment to the Allocated Account Agreement effective October 1, 2018, incorporated by reference to Exhibit 10.1 filed with the Trust’s Current Report on Form 8-K on October 5, 2018
10.1(c) Second amendment to the Allocated Account Agreement effective May 7, 2020, incorporated by reference to Exhibit 10.1(c) filed with Registration Statement No. 333-238125 on May 8, 2020
10.2(a) Unallocated Account Agreement, incorporated by reference to Exhibit 10.2 filed with Registration Statement No. 333-158380 on December 31, 2009
10.2(b) Amendment to the Unallocated Account Agreement, incorporated by reference to Exhibit 10.2 filed with the Trust’s Current Report on Form 8-K on October 5, 2018
10.2(c) Second amendment to the Unallocated Account Agreement effective May 7, 2020, incorporated by reference to Exhibit 10.2(c) filed with Registration Statement No. 333-238125 on May 8, 2020
10.3 Depository Agreement, incorporated by reference to Exhibit 10.3 filed with Registration Statement No. 333-158380 on December 31, 2009
10.4(a) Marketing Agent Agreement, incorporated by reference to Exhibit 10.4 filed with Registration Statement No. 333-158380 on December 31,
10.4(b) Novation of and Amendment No. 1 to the Marketing Agent Agreement effective as of October 1, 2018
23.1 Consent of KPMG LLP, Independent Registered Public Accounting Firm
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
The following financial statements from the Trust’s Annual Report on Form 10-K for the year ended December 31, 2021, formatted in Inline XBRL: (i) Statements of Assets and Liabilities, (ii) Statements of Operations, (iii) Statements of Changes in Net Assets, and (iv) Notes to the Financial Statements.
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Document
101.DEF Inline XBRL Taxonomy Extension Definitions Document
101.LAB Inline XBRL Taxonomy Extension Labels Document
101.PRE Inline XBRL Taxonomy Extension Presentation Document
The cover page from the Trust’s Annual Report on Form 10-K for the year ended December 31, 2021, formatted in Inline XBRL (included as Exhibit 101).