abrdn Silver ETF Trust 10-Q

Item 1. Financial Statements Statements of Assets and Liabilities At June 30, 2024 (Unaudited) and December 31, 2023 June 30, 2024 December 31, 2023 (Amounts in 000’s of US$, except for Share and per Share data) ASSETS Investment in silver (cost: June 30, 2024: $ 995,463 ; December 31, 2023: $ 966,910 ) $ 1,336,981 $ 1,060,674 Total assets 1,336,981 1,060,674 LIABILITIES Fees payable to Sponsor 328 271 Total liabilities 328 271 NET ASSETS (1) $ 1,336,653 $ 1,060,403 (1) Authorized share capital is Unlimited with no par value per Share. Shares issued and outstanding at June 30, 2024 were 47,600,000 and at December 31, 2023 were 46,550,000 . Net asset values per Share at June 30, 2024 and December 31, 2023 were $ 28.08 and $ 22.78 , respectively. See Notes to the Financial Statements 1 abrdn Silver ETF Trust Schedules of Investments At June 30, 2024 (Unaudited) and December 31, 2023 June 30, 2024 Description oz Cost Fair Value % of Net Assets Investment in silver (in 000’s of US$, except for oz and percentage data) Silver 45,521,998.2 $ 995,463 $ 1,336,981 100.02 % Total investment in silver 45,521,998.2 $ 995,463 $ 1,336,981 100.02 % Less liabilities ( 328 ) ( 0.02 )% Net Assets $ 1,336,653 100.00 % December 31, 2023 Description oz Cost Fair Value % of Net Assets Investment in silver (in 000’s of US$, except for oz and percentage data) Silver 44,584,861.0 $ 966,910 $ 1,060,674 100.03 % Total investment in silver 44,584,861.0 $ 966,910 $ 1,060,674 100.03 % Less liabilities ( 271 ) ( 0.03 )% Net Assets $ 1,060,403 100.00 % See Notes to the Financial Statements 2 abrdn Silver ETF Trust Statements of Operations (Unaudited) For the three and six months ended June 30, 2024 and 2023 Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 (Amounts in 000’s of US$, except for Share and per Share data) EXPENSES Sponsor’s Fee $ 1,446 $ 1,233 $ 2,623 $ 2,425 Less: Waiver ( 482 ) ( 411 ) ( 874 ) ( 808 ) Total expenses 964 822 1,749 1,617 Net investment loss ( 964 ) ( 822 ) ( 1,749 ) ( 1,617 ) REALIZED AND UNREALIZED GAINS / (LOSSES) Realized gain on silver transferred to pay expenses 180 73 230 134 Realized gain on silver distributed for the redemption of Shares 1,314 2,404 1,875 5,214 Change in unrealized gain / (loss) on investment in silver 215,116 ( 71,724 ) 247,755 ( 77,172 ) Total gain/(loss) on investment in silver 216,610 ( 69,247 ) 249,860 ( 71,824 ) Change in net assets from operations $ 215,646 $ ( 70,069 ) $ 248,111 $ ( 73,441 ) Net increase / (decrease) in net assets per Share $ 4.58 $ ( 1.42 ) $ 5.28 $ ( 1.51 ) Weighted average number of Shares 47,076,374 49,348,352 46,946,703 48,694,751 See Notes to the Financial Statements 3 abrdn Silver ETF Trust Statements of Changes in Net Assets (Unaudited) For the three and six months ended June 30, 2024 and 2023 Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 (Amounts in 000’s of US$, except for Share data) Shares Amount Shares Amount Opening balance 46,650,000 $ 1,095,364 48,450,000 $ 1,110,603 Net investment loss ( 964 ) ( 822 ) Realized gain on investment in silver 1,494 2,477 Change in unrealized gain/(loss) on investment in silver 215,116 ( 71,724 ) Creations 1,150,000 31,122 2,050,000 49,204 Redemptions ( 200,000 ) ( 5,479 ) ( 1,100,000 ) ( 25,241 ) Closing balance 47,600,000 $ 1,336,653 49,400,000 $ 1,064,497 Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 (Amounts in 000’s of US$, except for Share data) Shares Amount Shares Amount Opening balance 46,550,000 $ 1,060,403 48,650,000 $ 1,118,817 Net investment loss ( 1,749 ) ( 1,617 ) Realized gain on investment in silver 2,105 5,348 Change in unrealized gain/(loss) on investment in silver 247,755 ( 77,172 ) Creations 1,850,000 46,645 4,500,000 101,904 Redemptions ( 800,000 ) ( 18,506 ) ( 3,750,000 ) ( 82,783 ) Closing balance 47,600,000 $ 1,336,653 49,400,000 $ 1,064,497 See Notes to the Financial Statements 4 abrdn Silver ETF Trust Financial Highlights (Unaudited) For the three and six months ended June 30, 2024 and 2023 Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 Per Share Performance (for a Share outstanding throughout the entire period) Net asset value per Share at beginning of period $ 23.48 $ 22.92 $ 22.78 $ 23.00 Income from investment operations: Net investment loss ( 0.02 ) ( 0.02 ) ( 0.04 ) ( 0.03 ) Total realized and unrealized gains or losses on investment in silver 4.62 ( 1.35 ) 5.34 ( 1.42 ) Change in net assets from operations 4.60 ( 1.37 ) 5.30 ( 1.45 ) Net asset value per Share at end of period $ 28.08 $ 21.55 $ 28.08 $ 21.55 Weighted average number of Shares 47,076,374 49,348,352 46,946,703 48,694,751 Expense ratio (1)(2) 0.30 % 0.30 % 0.30 % 0.30 % Net investment loss ratio (1)(2) ( 0.30 )% ( 0.30 )% ( 0.30 )% ( 0.30 )% Total return, net asset value (3) 19.59 % ( 5.98 )% 23.27 % ( 6.30 )% (1) Annualized for periods less than one year. (2) The expense ratio is calculated net of the voluntary waiver (refer to Note 2.7). The Gross Expense Ratio is 0.45 %. (3) Total return is not annualized. See Notes to the Financial Statements 5 abrdn Silver ETF Trust Notes to the Financial Statements (Unaudited) 1. Organization The abrdn Silver ETF Trust (the “Trust”) is a common law trust formed on July 20, 2009 (the "Date of Inception") under New York law pursuant to a depositary trust agreement (the “Trust Agreement”) executed by abrdn ETFs Sponsor LLC (the “Sponsor”) and The Bank of New York Mellon as Trustee (the “Trustee”). The Trust holds silver and issues abrdn Physical Silver Shares ETF (“Shares”) in minimum blocks of 50,000 Shares (also referred to as “Baskets”) in exchange for deposits of silver and distributes silver 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 abrdn Inc., which is a wholly-owned indirect subsidiary of abrdn plc. 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 physical silver, less the Trust’s expenses. The Trust is designed to provide an individual owner of beneficial interests in the Shares (a “Shareholder”) an opportunity to participate in the silver market through an investment in securities. The fiscal year end of the Trust is December 31. The accompanying financial statements were prepared in accordance with the accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions for Form 10-Q. In the opinion of the Trust's management, all adjustments (which consist of normal recurring adjustments) necessary to present fairly the financial position and results of operations as of and for the three and six months ended June 30, 2024, and for all periods presented have been made. These financial statements should be read in conjunction with the Trust's Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the operating results for the full year. 2. Significant Accounting Policies The preparation of financial statements in accordance with U.S. GAAP 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. Basis of Accounting The Sponsor has determined that the Trust falls within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services—Investment Companies, and has concluded that for reporting purposes, the Trust is classified as an Investment Company. 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. 2.2. Valuation of Silver The Trust follows the provisions of ASC 820, Fair Value Measurement (“ASC 820”). ASC 820 provides guidance for determining fair value and requires increased disclosure regarding the inputs to valuation techniques used to measure fair value. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Effective May 23, 2024, the Trustee, at the direction of the Sponsor, entered into an Allocated Account Agreement and Unallocated Account Agreement with ICBC Standard Bank Plc ("ICBC"), providing for the custody of the Trust's silver. Prior to May 23, 2024, JPMorgan Chase Bank N.A. ("JPMorgan") served as custodian of the Trust's silver, and will continue to provide custody services until all of the Trust's silver is transferred to ICBC. At June 30, 2024, approximately 83.52 % of the Trust's silver remained at JPMorgan, while 16.48 % had been transferred to ICBC. At June 30, 2024, none of the Trust's silver was held by a sub-custodian. 6 abrdn Silver ETF Trust Notes to the Financial Statements (Unaudited) The Trust's silver is recorded at fair value. The cost of silver is determined according to the average cost method and the fair value is based on the London Bullion Market Association ("LBMA") Silver Price. Realized gains and losses on transfers of silver, or silver distributed for the redemption of Shares, are calculated on a trade date basis as the difference between the fair value and average cost of silver transferred. The ICE Benchmark Administration (“IBA”) conducts an electronic, over-the-counter silver auction in London, England to establish a fixing price for an ounce of silver once each trading day, which is disseminated by major market vendors (the “LBMA Silver Price”). The LBMA Silver Price is established by the LBMA-authorized bullion banks and market makers participating in the auction. Once the value of silver has been determined, the net asset value (the “NAV”) is computed by the Trustee by deducting all accrued fees, expenses and other liabilities of the Trust, including the remuneration due to the Sponsor (the “Sponsor’s Fee”), from the fair value of the silver and all other assets held by the Trust. The Trust recognizes changes in fair value of the investment in silver as changes in unrealized gains or losses on investment in silver through the Statement of Operations. The per Share amount of silver exchanged for a purchase or redemption is calculated daily by the Trustee using the LBMA Silver Price to calculate the silver amount in respect of any liabilities for which covering silver sales have not yet been made, and represents the per Share amount of silver held by the Trust, after giving effect to its liabilities, to cover expenses and liabilities and any losses that may have occurred. Fair Value Hierarchy ASC 820 establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs are as follows: – Level 1. Unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access. – Level 2. Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments and similar data. – Level 3. Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Trust’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety. 7 abrdn Silver ETF Trust Notes to the Financial Statements (Unaudited) The Trust’s investment in silver is classified as a level 1 asset, as its value is calculated using unadjusted quoted prices from primary market sources. The categorization of the Trust’s assets is as shown below: (Amounts in 000’s of US$) June 30, 2024 December 31, 2023 Level 1 Investment in silver $ 1,336,981 $ 1,060,674 There were no transfers between levels during the six months ended June 30, 2024 or the year ended December 31, 2023. 2.3. Silver Receivable and Payable Silver receivable or payable represents the quantity of silver covered by contractually binding orders for the creation or redemption of Shares respectively, where the silver has not yet been transferred to or from the Trust’s account. Generally, ownership of silver is transferred within two business days of the trade date. At June 30, 2024, the Trust had no silver receivable or payable for the creation or redemption of Shares. At December 31, 2023, the Trust had no silver receivable or payable for the creation or redemption of Shares. 2.4. 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 Depository Trust Company; (3) has entered into an Authorized Participant Agreement with the Trustee and the Sponsor; and (4) has established an Authorized Participant Unallocated Account with the Trust’s Custodian or other silver bullion clearing bank. An Authorized Participant Agreement is an agreement entered into 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 silver required for such creations and redemptions. An Authorized Participant Unallocated Account is an unallocated silver account established with the Custodian or a silver 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 silver 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. Effective May 28, 2024, the standard settlement period for Shares is one business day. Prior to May 28, 2024, the settlement period for Shares was two 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 silver is exchanged in settlement of a redemption, it is considered a sale of silver for financial statement purposes. 8 abrdn Silver ETF Trust Notes to the Financial Statements (Unaudited) The amount of silver represented by the Baskets created or redeemed can only be settled to the nearest 1/1000th of an ounce. As a result, the value attributed to the creation or redemption of Shares may differ from the value of silver to be delivered or distributed by the Trust. In order to ensure that the correct amount of silver is available at all times to back the Shares, the Sponsor accepts an adjustment to its Sponsor Fee in the event of any shortfall or excess on each transaction. For each transaction, this amount is not more than 1/1000th of an ounce of silver. As the Shares of the Trust are subject to redemption at the option of Authorized Participants, the Trust has classified the outstanding Shares as Net Assets. Changes in the number of Shares outstanding are presented in the Statement of Changes in Net Assets. 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. The Sponsor has evaluated whether or not there are uncertain tax positions that require financial statement recognition and has determined that no reserves for uncertain tax positions are required as of June 30, 2024 or December 31, 2023. 2.6. Investment in Silver Changes in ounces of silver and their respective values for the three and six months ended June 30, 2024 and 2023 are set out below: Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 (Amounts in 000’s of US$, except for ounces data) Ounces of silver Opening balance 44,647,220.4 46,509,653.6 Creations 1,099,903.6 1,966,847.9 Redemptions ( 191,302.0 ) ( 1,055,168.6 ) Transfers of silver to pay expenses ( 33,823.8 ) ( 35,432.0 ) Closing balance 45,521,998.2 47,385,900.9 Investment in silver Opening balance $ 1,095,643 $ 1,110,883 Creations 31,122 49,204 Redemptions ( 5,479 ) ( 25,241 ) Realized gain on silver distributed for the redemption of Shares 1,314 2,404 Transfers of silver to pay expenses ( 915 ) ( 838 ) Realized gain on silver transferred to pay expenses 180 73 Change in unrealized gain / (loss) on investment in silver 215,116 ( 71,724 ) Closing balance $ 1,336,981 $ 1,064,761 9 abrdn Silver ETF Trust Notes to the Financial Statements (Unaudited) Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 (Amounts in 000’s of US$, except for ounces data) Ounces of silver Opening balance 44,584,861.0 46,496,067.9 Creations 1,770,079.8 4,558,938.0 Redemptions ( 765,605.6 ) ( 3,599,530.1 ) Transfers of silver to pay expenses ( 67,337.0 ) ( 69,574.9 ) Closing balance 45,521,998.2 47,385,900.9 Investment in silver Opening balance $ 1,060,674 $ 1,113,348 Creations 46,645 107,653 Redemptions ( 18,506 ) ( 82,783 ) Realized gain on silver distributed for the redemption of Shares 1,875 5,214 Transfers of silver to pay expenses ( 1,692 ) ( 1,633 ) Realized gain on silver transferred to pay expenses 230 134 Change in unrealized gain / (loss) on investment in silver 247,755 ( 77,172 ) Closing balance $ 1,336,981 $ 1,064,761 2.7. Expenses / Realized Gains / Losses The primary expense of the Trust is the Sponsor’s Fee, which is paid by the Trust through in-kind transfers of silver to the Sponsor. The Trust will transfer silver to the Sponsor to pay the Sponsor’s Fee that accrues daily at an annualized rate equal to 0.45 % of the adjusted daily net asset value (“ANAV”) of the Trust, paid monthly in arrears. Presently, the Sponsor is continuing to voluntarily waive a portion of its fee and reduce the Sponsor’s Fee to 0.30 % (which it has done since the Date of Inception). 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 up to $ 100,000 per annum in legal expenses. For the three months ended June 30, 2024 and 2023, the Sponsor’s Fee, net of fees waived by the Sponsor, was $ 964,425 and $ 822,253 , respectively. For the six months ended June 30, 2024 and 2023, the Sponsor's Fee was $ 1,748,795 and $ 1,616,831 , respectively. At June 30, 2024 and at December 31, 2023, the fees payable to the Sponsor were $ 328,021 and $ 271,244 , respectively. As a result of the waiver, the Sponsor’s Fee waived for the three months ended June 30, 2024 and 2023 was $ 482,213 and $ 411,127 , respectively. The Sponsor’s Fee waived for the six months ended June 30, 2024, and 2023 was $ 874,399 and $ 808,416 , respectively. 10 abrdn Silver ETF Trust Notes to the Financial Statements (Unaudited) 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 silver as necessary to pay these expenses. When selling silver to pay expenses, the Trustee will endeavor to sell the smallest amounts of silver needed to pay these expenses in order to minimize the Trust’s holdings of assets other than silver. Other than the Sponsor’s Fee, the Trust had no expenses during the three and six months ended June 30, 2024 and 2023. Unless otherwise directed by the Sponsor, when selling silver the Trustee will endeavor to sell at the LBMA Silver Price. 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 silver only if the sale transaction is made at the next LBMA Silver Price or such other publicly available price that the Sponsor deems fair, in each case as set following the sale order. A gain or loss is recognized based on the difference between the selling price and the average cost of the silver sold. Neither the Trustee nor the Sponsor is liable for depreciation or loss incurred by reason of any sale. Realized gains and losses result from the transfer of silver for Share redemptions and / or to pay expenses and are recognized on a trade date basis as the difference between the fair value and average cost of silver transferred. 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 impacting the Trust’s financial statements through the filing date. During this period, no material subsequent events requiring adjustment to or disclosure in the financial statements were identified. 3. Related Parties The Sponsor and the Trustee are considered to be related parties to the Trust. The Trustee and the Custodian and their affiliates may from time to time act as Authorized Participants and purchase or sell Shares for their own account, as agent for their customers and for accounts over which they exercise investment discretion. In addition, the Trustee and the Custodian and their affiliates may from time to time purchase or sell silver directly, for their own account, as agent for their customers and for accounts over which they exercise investment discretion. The Trustee’s and Custodian’s fees are paid by the Sponsor and are not separate expenses of the Trust. 4. Concentration of Risk The Trust’s sole business activity is the investment in silver, and substantially all the Trust’s assets are holdings of silver, which creates a concentration of risk associated with fluctuations in the price of silver. Several factors could affect the price of silver, including: (i) global silver supply and demand, which is influenced by factors such as forward selling by silver producers, purchases made by silver producers to unwind silver hedge positions, central bank purchases and sales, and production and cost levels in major global silver-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 silver will maintain its long-term value in terms of purchasing power in the future. In the event that the price of silver 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. 11 abrdn Silver ETF Trust Notes to the Financial Statements (Unaudited) 5. Indemnification Under the Trust’s organizational documents, the Trustee (and its directors, employees and agents) and the Sponsor (and its members, managers, directors, officers, employees and affiliates) are indemnified by the Trust against any liability, cost or expense it incurs without gross negligence, bad faith, willful misconduct or willful malfeasance 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. 12 abrdn Silver ETF Trust