NYSE: PALL

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 not and will not hold or trade in commodities futures contracts, “commodity interests” or
any other instruments regulated by the Commodity Exchange Act (the “CEA”), as administered by the Commodity Futures
Trading Commission (the “CFTC”) and the National Futures Association (“NFA”). The Trust is not a commodity
pool for purposes of the CEA and the Shares are not “commodity interests,” 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.

The
Sponsor of the registrant maintains an Internet website at www.abrdn.com/us/etf through which the registrant’s annual reports
on Form 10-K, quarterly reports on Form 10-Q, and amendments to those reports filed or furnished pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, are made available free of charge as soon as reasonably
practicable after they have been filed or furnished to the Securities and Exchange Commission (the “SEC”). The SEC
maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that
file electronically at www.sec.gov.

Trust
Objective

The
investment objective of the Trust is for the Shares to reflect the performance of the price of physical palladium, less the
Trust’s expenses. The Shares are intended to constitute a simple and cost-effective means of making an investment
similar to an investment in physical palladium. An investment in physical palladium 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 palladium being efficient only in amounts beyond the
reach of many investors.

2

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 palladium bullion. The Shares offer an investment that:

● Easily
Accessible and Relatively Cost Effective. Investors can access the palladium bullion market through a traditional brokerage
account. The Sponsor believes that investors will be able to more effectively implement strategic and tactical asset allocation
strategies that use palladium bullion by using the Shares instead of using the traditional means of purchasing, trading and holding
palladium bullion and for many investors, transaction costs related to the Shares will be lower than those associated with the
purchase, storage and insurance of physical palladium bullion.

● Exchange
Traded and Transparent. The Shares trade on the NYSE Arca, providing investors with an efficient means to implement various
investment strategies. The Shares are eligible for margin accounts and are backed by the assets of the Trust and the Trust does
not hold or employ any derivative securities. Furthermore, the value of the Trust’s holdings are reported on the Trust’s
website daily.

● Minimal
Credit Risk. The Shares represent an interest in physical palladium owned by the Trust (other than an amount held in unallocated
form which is not sufficient to make up a whole plate or ingot of which is held temporarily to effect a creation or redemption
of Shares). Physical palladium of the Trust in the Custodian’s possession is not subject to borrowing arrangements with
third parties. Other than the palladium temporarily being held in an unallocated palladium account with the Custodian, the physical
palladium of the Trust is not subject to counterparty or credit risks. See “Risk Factors—Palladium held in the
Trust’s unallocated palladium account and any Authorized Participant’s unallocated palladium account is not segregated
from the Custodian’s assets...” This contrasts with most other financial products that gain exposure to palladium
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.”

Overview
of the Palladium Industry

This
section provides a brief introduction to the palladium industry by looking at some of the key participants, detailing the primary
sources of demand and supply.

In
this annual report, the term “ounces” refers to troy ounces.

Platinum
Group Metals

Platinum
and palladium are the two best known metals of the six platinum group metals (“PGMs”). Platinum and palladium have
the greatest economic importance and are found in the largest quantities. The other four—iridium, rhodium, ruthenium and
osmium—are produced only as co-products of platinum and palladium. PGMs are known for their purity, high melting points
and unique catalytic properties. In addition to their oxidation and reduction properties, they are also extremely resistant to
corrosion. PGMs are utilized in a number of industrial processes, technologies and commercial applications. Their unique chemical
and physical properties make PGMs an excellent raw material, catalyst and ingredient for manufacturing processes. Consumer and
industrial products made with palladium and other PGMs include flat panel monitors, glass fiber, medical tools, computer hard
drives, nylon and razors, among others. PGMs play a critical role in autocatalysis and pollution control in the automotive sector.

PGM
mining is heavily concentrated in southern Africa (South Africa and Zimbabwe), with smaller percentages coming from the United
States, Russia and other locations. South Africa is the world’s leading platinum producer and one of the largest palladium
producers. Russia is the second largest producer of platinum. All of South Africa’s production is sourced from the Bushveld
Igneous Complex, which hosts the world’s largest resource of PGMs. Together, South Africa and Russia accounted for over
77% of palladium supply in 2024.

3

World
Palladium Supply and Demand 2015-2024

The
following table sets forth a summary of the world palladium supply and demand from 2015 - 2024 and is based on information reported
by Johnson Matthey, PGM Market Report. Information for the calendar year ended 2025 is not available as of the date of this report.

(thousands
of ounces)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

Supply

South Africa
2,683
2,570
2,547
2,543
2,571
1,975
2,645
2,288
2,360
2,420

Russia
2,434
2,781
2,452
2,976
2,987
2,636
2,689
2,200
2,700
2,750

North America
874
917
956
1,035
1,042
990
908
832
863
814

Zimbabwe
320
396
386
393
379
410
392
409
427
419

Others
144
129
131
135
140
185
212
235
247
251

Total
Supply
6,455
6,793
6,472
7,082
7,119
6,196
6,846
5,964
6,597
6,654

Secondary
supply

Automotive
1,952
1,986
2,357
2,624
2,916
2,689
2,886
2,790
2,389
2,449

Electronics/other
475
481
479
475
477
430
444
457
466
481

Jewellery
46
21
21
12
12
9
9
10
10
10

Total
secondary supply
2,473
2,488
2,857
3,111
3,405
3,128
3,339
3,257
2,865
2,940

Total
combined supply
8,928
9,281
9,329
10,193
10,524
9,324
10,185
9,221
9,462
9,594

Demand
by Application

Auto
7,657
8,019
8,423
8,837
9,675
8,534
8,452
8,413
8,767
8,313

Chemical
449
419
435
605
530
498
593
602
539
546

Dental & Biomedical
474
435
398
364
320
228
208
189
192
177

Electrical & Electronics
903
872
844
768
711
636
649
547
516
535

Investment
(659 )
(646 )
(386 )
(574 )
(87 )
(190 )
17
(109 )
61
229

Jewellery
220
189
167
148
128
85
88
87
87
85

Pollution Control
56
71
78
86
88
75
92
102
123
124

Other
104
114
91
117
120
93
96
82
85
86

Total
Demand
9,204
9,473
10,050
10,351
11,485
9,959
10,195
9,913
10,370
10,095

Movements
in stocks
(276 )
(192 )
(721 )
(158 )
(961 )
(635 )
(10 )
(692 )
(908 )
(501 )

Source:
Johnson Matthey PGM Market Reports (2015 – 2025).

The
following are some of the main characteristics of the palladium market illustrated by the table:

Russia
has traditionally been the largest producer of palladium, providing on average 40% of supply over the past 10 years. South Africa
has, on average, supplied approximately 37% of production over the past 10 years. In 2024, Russia provided 41.3% of mine supplies,
while South Africa produced 36.4%. North America contributed approximately 13.9% of mine supply in 2024. Scrap supply, from recycling
of autocatalyst and other sources, accounted for roughly 30.6% of total supply in 2024 in line with the value from 2023.

Autocatalysts
continue to be the largest component of palladium demand, averaging 84.2% of total demand from 2015 to 2024, compared to 83.2%
in 2015. Jewelry demand for palladium has tapered off considerably over the last 10 years, contributing only 0.8% of total demand
in 2024, down from a high of 2.4% in 2015. Other industrial demand (chemical, dental and electrical) has fallen from 19.8% of
total demand in 2015 to 12.5% of total demand in 2024. Since 2015, pollution control demand has increased from 0.6% to 1.2% of
total demand. Pollution control demand captures the production demand for emissions control in non-automotive applications.

Historical
Chart of the Price of Palladium

The
price of palladium is volatile and fluctuations are expected to have a direct impact on the value of the Shares. However, movements
in the price of palladium in the past are not a reliable indicator of future movements. The following chart illustrates the movements
in the price of an ounce of palladium in U.S. Dollars from December 31, 2015 to December 31, 2025 and is based on information
provided by Bloomberg:

Source: Bloomberg, Aberdeen. Chart data from 12/31/2015 to 12/31/2025. Spot Palladium Price = PLDMLNPM Index.

The
following is a discussion of the movements in the price of Palladium illustrated by the table:

The
strong rally in 2014 palladium prices was completely unwound in 2015, when South African mine supply resumed back to pre-strike
levels and pessimism about industrial demand in China overwhelmed the true tightness in the market. Palladium was then the top
performer of the precious metals complex for 3 consecutive years from 2017 to 2019, where it rose nearly 182% from $676 per troy
ounce on December 31, 2016 to $1,905 per troy ounce on December 31, 2019. The price of palladium reached an all-time high of $2,781/oz
on February 19, 2020, before closing out the year at a price of $2,342/oz on December 31, 2020. Similar to other precious metals,
palladium took a step back in 2021 as it returned -16% (as of December 31, 2021). A decline in autocatalyst demand due to the
pandemic was a big reason for the negative performance seen during the year.

The
price of palladium reached a record high of $3,015 per ounce on March 7, 2022, as Russian’s invasion of Ukraine infused uncertainty
into global markets and created additional price pressure that pushed the price of palladium nearly 53% above its 2021 close.
While each of the precious metals (gold, silver, platinum) saw prices fluctuate throughout the year, the price of palladium showed
greater correlation with the price of Platinum during the first quarter. The price of palladium fell by roughly 25% between March
8th and March 31st, ending the first quarter at a price of $2,259 per ounce. On June 14th, 2022, the price of palladium fell as
low as $1,810 per ounce, as aggressive interest rate policies from the U.S. Federal Reserve drove the U.S. Dollar higher. Contrary
to the other three precious metals, the price of palladium increased as high as $2,315 per ounce on October 4th, 2022, as supplies
were further constrained by operational challenges in South African and North American mines, as well as a weaker automotive recycling
market. Throughout the year, tailwinds from supply disruptions were countered by weaker automotive and investment demand, higher
interest rates and the risk of a potential recession. As a result, while the other three precious metals rallied to end the year,
the price of palladium reversed course during the fourth quarter to end the year at $1,775 per ounce, down 10% from the end of
2021.

4

In
2023, palladium production in Russia and South Africa continued to impact global supply. Russian production was relatively flat
compared to 2020 and 2021, however sanctions imposed in 2022 constrained the production capacity of Russian metals producer Nornickel,
the world’s largest palladium producer. In contrast, South Africa continued to experience power supply disruptions along with
rising electricity prices. Coupled with labor strikes, political instability, inflation and volatile prices, which compressed
profit margins and subsequently led to a decrease in expected supply from the world’s second leading producer. However, despite
the supply deficit, investors sold short a large amount of palladium that year, in hopes that electric vehicles would curtail
the demand for palladium in gasoline-powered automobiles. Additionally, while a positive outlook at the beginning of the year,
fueled by China’s loosening of COVID-19 related restrictions, drove the price as high as $1,628 per ounce on April 21, 2023, the
Chinese economic rebound disappointed investors. As a result of these two factors, the price of palladium continued on a downward
trend throughout most of the year before reaching a low of $957 per ounce on December 6, 2023. Fears of additional Russian sanctions
sparked a year-end rally that saw the price climb as high as $1,221 per ounce on December 20, 2023, but the precious metal ultimately
ended the year at $1,136 per ounce, 36% below its 2022 closing price.

In
2024, palladium markets continued to be volatile as the market remained net short and prices did not respond to the existing supply
side deficit as the market worked through above ground stockpiles. While autocatalyst demand continued to be the largest component
of palladium demand, it has not yet returned to pre-pandemic levels, and the price remained between $850 and $1,050 per ounce
for much of the year. In October, the threat of potential new sanctions on Russian exports, which accounts for roughly 40% of
new mined supply, sent the price as high as $1,222 per ounce on October 29, 2024, as short sellers bought long contracts to reduce
their positions. However, once market fears about disruptions in supply dissipated the spot price retreated and ultimately ended
the year at $909 per ounce on December 31, 2024 (-19.98%).

In
2025, palladium markets remained volatile, but benefited from a deficit-driven, supply-constrained environment that saw prices
rebound off 2024 lows. While the palladium market has been in deficit of various magnitudes since 2012, this year saw a turn in
the overwhelming narrative driving weak prices. Several mining companies reduced mining operations into the prior year end and
U.S. government support for EV subsidies waned. Nearly 80% of palladium demand comes from the automotive sector for pollution
control of internal combustion engine vehicles and hybrids. The cessation of the $7.500 EV tax credit in September accelerated
automakers’ decisions to offer more fossil fuel and hybrid vehicles which use palladium for pollution control. Further, weaker
than anticipated South African supply and recycling, along with revised market forecasts for 2025 and 2026, contributed to a sharp
increase in the spot price of palladium that reached $1,297 per ounce on July 18, 2025, an increase of 42.7% from the end of 2024.
The spot price of palladium pulled back into a tighter range between July and the end of September before pricing became increasingly
sensitive to financial flows, with futures positioning amplifying the movement in spot price driven by U.S. tariff uncertainty,
South African disruptions, tighter leasing markets and strong Chinese imports. The spot price would reach as high as $1,837 per
ounce, before ending the year at $1,567 per ounce on December 31, 2025 (+72.4%).

Operation
of the Palladium Bullion Market

The
global trade in palladium consists of Over-the-Counter (“OTC”) transactions in spot, forwards, and options and other
derivatives, together with exchange-traded futures and options.

Global
Over-The-Counter Market

The
OTC market trades on a 24-hour per day continuous basis and accounts for most global palladium trading. Market makers, as well
as others in the OTC market, trade with each other and with their clients on a principal-to-principal basis. All risks and issues
of credit are between the parties directly involved in the transaction. Market makers include the market-making members of the
London Platinum and Palladium Market (“LPPM”), the trade association that acts as the coordinator for activities conducted
on behalf of its members and other participants in the LPPM. Five member participants of the LPPM are currently participating
in the London Metal Exchange’s (“LME”) administration of the LBMA Palladium prices. In January 2026, the LBMA announced that it intends to appoint
ICE Benchmark Administration (“IBA”) to replace the LME as the third-party administrator of the LBMA Palladium prices in mid-2026.
The OTC market provides a relatively flexible market in terms of quotes, price, size, destinations for delivery and other factors.
Bullion dealers customize transactions to meet clients’ requirements. The OTC market has no formal structure and no open-outcry
meeting place.

The
main centers of the OTC market for palladium are London, New York, Hong Kong and Zurich. Mining companies, manufacturers of jewelry
and industrial products, together with investors and speculators, tend to transact their business through one of these market
centers. Centers such as Dubai and several cities in the Far East also transact substantial OTC market business, typically involving
jewelry and small plates or ingots of palladium (1 kilogram or less) and will hedge their exposure by selling into one of these
main OTC centers. Precious metals dealers have offices around the world and most of the world’s major bullion dealers are
either members or associate members of the London Bullion Market Association (“LBMA”) and/or the LPPM. In the OTC
market for palladium, the standard size of trades between market makers is 1,000 ounces.

Liquidity
in the OTC market can vary from time to time during the course of the 24-hour trading day. Fluctuations in liquidity are reflected
in adjustments to dealing spreads—the differential between a dealer’s “buy” and “sell” prices.
The period of greatest liquidity in the palladium market generally occurs at the time of day when trading in the European time
zones overlaps with trading in the United States, which is when OTC market trading in London, New York, Zurich and other centers
coincides with futures and options trading on the Commodity Exchange, Inc. (“COMEX”), a designated contract market
within the CME Group. This period lasts for approximately four hours each New York business day morning.

5

The
Zurich and London Palladium Bullion Markets

Although
the market for physical palladium is distributed globally, most palladium is stored and most OTC market trades are cleared through
London and Zurich. In addition to coordinating market activities, the LPPM acts as the principal point of contact between the
market and its regulators. A primary function of the LPPM is its involvement in the promotion of refining standards by maintenance
of the “London/Zurich Good Delivery Lists,” which are the lists of LPPM accredited refiners of palladium. The LPPM
also coordinates market clearing and vaulting, promotes good trading practices and develops standard documentation.

Palladium
is traded generally on a “loco London” or “loco Zurich” basis, meaning the precious metal is physically
held in vaults in London or Zurich or is transferred into accounts established in London or Zurich. Delivery of the palladium
can either be by physical delivery or through the clearing systems to an unallocated account.

The
unit of trade in London and Zurich is the troy ounce, whose conversion between grams is: 1,000 grams equals 32.1507465 troy ounces,
and one troy ounce equals 31.1034768 grams. A good delivery palladium plate or ingot on the LPPM approved list is acceptable for
delivery in settlement of a transaction on the OTC market (a “Good Delivery Plate or Ingot”). A Good Delivery Plate
or Ingot must contain between 32 and 192.904 troy ounces of palladium with a minimum fineness (or purity) of 999.5 parts per 1,000
(99.95%), be of good appearance, and be easy to handle and stack. The palladium content of a palladium plate or ingot is calculated
by multiplying the gross weight by the fineness of the plate or ingot. A Good Delivery Plate or Ingot must also bear the stamp
of one of the refiners who are on the LPPM approved list. Unless otherwise specified, the palladium spot price always refers to
that of “Good Delivery Standards” set by the LPPM. Business is generally conducted over the phone and through electronic
dealing systems.

Since
December 1, 2014, the LME has been administering the operation of electronic palladium bullion price fixing system (“LMEbullion”)
that replicate electronically the manual London palladium fix processes previously employed by the London Platinum and Palladium
Fixing Company Ltd (“LPPFCL”) as well as providing electronic market clearing processes for palladium bullion transactions
at the fixed prices established by the LME pricing mechanism. The LME’s electronic price fixing processes, like the previous
London palladium fix processes, establishes and publishes fixed prices for troy ounces of palladium twice each London trading
day during fixing sessions beginning at 9:45 a.m. London time (the “LBMA Palladium Price AM”) and 2:00 p.m. London time
(the “LBMA Palladium Price PM”). In addition to utilizing the same London palladium fix standards and methods, the LME
also supervises the palladium electronic price fixing processes through its market operations, compliance, internal audit and
third-party complaint handling capabilities in order to support the integrity of the “LBMA Palladium Price PM”. The
LME, in administering LMEbullion, uses a pricing methodology that meets the administrative and regulatory needs of palladium market
participants, including the International Organization of Securities Commission’s (IOSCO) Principles for Financial Benchmark,
(the “IOSCO Principles”). In January 2026, the LBMA announced that it intends to appoint ICE Benchmark Administration (“IBA”) to replace the LME as the third-party
administrator of the LBMA Platinum and Palladium prices in mid-2026.

Daily
during London trading hours the LBMA Palladium Price AM and the LBMA Palladium Price PM each provide reference palladium prices
for that day’s trading. Many long-term contracts will be priced on the basis of either the LBMA Palladium Price AM or the
LBMA Palladium Price PM, and market participants will usually refer to one or the other of these prices when looking for a basis
for valuations. The Trust values its palladium on the basis of the LBMA Palladium Price PM. If there is no LME PM Price on any
day, the Trust will value its palladium on the basis of LBMA Palladium Price AM announced on that day. If neither price is available
for that day, the Trust will value its palladium based on the most recently announced LBMA Palladium Price PM price or LBMA Palladium
Price AM price.

Formal
participation in the LBMA Palladium Price PM is limited to participating LPPM members. Six LPPM members are currently participating
in establishing the LBMA Palladium Price PM (Goldman Sachs International, HSBC Bank USA NA, ICBC Standard Bank plc, Johnson Matthey
plc, StoneX Financial Ltd and BASF Metals Ltd.). Any other market participant wishing to participate in the trading on the LBMA
Palladium Price PM is required to do so through one of the participating LPPM members.

Orders
are placed either with one of the participating LPPM member participants or with another precious metals dealer who will then
be in contact with a participating LPPM member during the fixing. The fix begins with the chair reflecting the market price and
other data, prevailing at the opening of the fix. This is relayed by the LPPM member participants to their dealing rooms which
have direct communication with all interested parties. Any market member may enter the fixing process at any time, or adjust or
withdraw his order. The palladium price is adjusted up or down until all the buy and sell orders are electronically matched, at
which time the price is declared fixed. All fixing orders are transacted on the basis of this fixed price, which is instantly
relayed to the market through various media.

6

The
LBMA and the LME have asserted that the LME’s electronic price fixing processes are similar to the non-electronic processes
previously used to establish the applicable London palladium fix where the London palladium fix process adjusted the palladium
price up or down until all the buy and sell orders entered by the participating LPPM members are matched, at which time the price
was declared fixed. Nevertheless, the LBMA Palladium Price PM has several advantages over the previous London palladium fix. The
LME’s electronic price fixing processes are intended to be transparent. The LME asserts that its electronic price fixing
processes are fully auditable by third parties since an audit trail exists from the beginning of each fixing session. The LME
also asserts that the market operation, compliance, internal audit and third-party complaint handling capabilities of the LME
supports the integrity of the LBMA Palladium Price PM.

Since
December 1, 2014, the Sponsor determined that the London palladium fix, which has been revised based on the new LME method and
is now known as the LBMA Palladium Price PM, is an appropriate basis for valuing palladium bullion received upon purchase of the
Trust’s Shares, delivered upon redemption of the Trust’s Shares and for determining the value of the Trust’s
palladium bullion each trading day. The Sponsor also determined that the LBMA Palladium Price PM fairly represents the commercial
value of Palladium bullion held by the Trust and the “Benchmark Price” (as defined inTrust Agreement) as of any day
is such day’s LBMA Palladium Price PM or such day’s LBMA Palladium Price AM if such day’s LBMA Palladium Price
PM is not available.

As
of December 1, 2014, the LPPFCL transferred ownership of the historic and future intellectual property of the twice daily “fix”
for platinum and palladium bullion to a subsidiary company of the LBMA.

Futures
Exchanges

The
most significant palladium futures exchanges are the COMEX, a designated contract market within the CME Group, and the Tokyo Commodity
Exchange (“TOCOM”). The COMEX is the largest exchange in the world for trading precious metals futures and options
and launched palladium futures in 1968, followed with options in 2010. The TOCOM has been trading palladium since 1992. Trading
on these exchanges is based on fixed delivery dates and transaction sizes for the futures and options contracts traded. Trading
costs are negotiable. As a matter of practice, only a small percentage of the futures market turnover ever comes to physical delivery
of the palladium represented by the contracts traded. Both exchanges permit trading on margin. Margin trading can add to the speculative
risk involved given the potential for margin calls if the price moves against the contract holder. The COMEX trades palladium
futures almost continuously (with one short break in the evening) through its CME Globex electronic trading system and clears
through its central clearing system. On June 6, 2003, the TOCOM adopted a similar clearing system. In each case, the exchange
acts as a counterparty for each member for clearing purposes.

Market
Regulation

The
global palladium markets are overseen and regulated by both governmental and self-regulatory organizations. In addition, certain
trade associations have established rules and protocols for market practices and participants. In the United Kingdom, responsibility
for the regulation of the financial market participants, including the major participating members of the LPPM falls under the
authority of the Financial Conduct Authority (“FCA”) as provided by the Financial Services and Markets Act 2000 (“FSM
Act”). Under this act, all U.K.-based banks, together with other investment firms, are subject to a range of requirements,
including fitness and properness, capital adequacy, liquidity, and systems and controls.

The
FCA is responsible for regulating investment products, including derivatives, and those who deal in investment products. Regulation
of spot, commercial forwards, and deposits of palladium not covered by the FSM Act is provided for by The London Code of Conduct
for Non-Investment Products, which was established by market participants in conjunction with the Bank of England.

The
TOCOM has authority to perform financial and operational surveillance on its members’ trading activities, scrutinize positions
held by members and large-scale customers, and monitor the price movements of futures markets by comparing them with cash and
other derivative markets’ prices. To act as a Futures Commission Merchant Broker on the TOCOM, a broker must obtain a license
from Japan’s Ministry of Economy, Trade and Industry (“METI”), the regulatory authority that oversees the operations
of the TOCOM.

The
CFTC regulates trading in commodity contracts, such as futures, options and swaps. In addition, under the CEA, the CFTC has jurisdiction
to prosecute manipulation and fraud in any commodity (including precious metals) traded in interstate commerce as spot as well
as deliverable forwards. The CFTC is the exclusive regulator of U.S. commodity exchanges and clearing houses.

Secondary
Market Trading

While
the Trust’s investment objective is for the Shares to reflect the performance of the price of physical palladium, less
the Trust’s expenses, 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 (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, COMEX and the London and Zurich palladium markets. While the Shares trade on the NYSE
Arca until 4:00 PM New York time, liquidity in the global palladium market 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.

7

Valuation
of Palladium and Computation of Net Asset Value

On
each day that the NYSE Arca is open for regular trading, as promptly as practicable after 4:00 p.m., New York time, on such day
(the “Evaluation Time”), the Trustee evaluates the palladium held by the Trust and determines both the adjusted net
asset value (“ANAV”) and the NAV of the Trust. For the purposes of making these calculations, a business day means
any day other than a day when NYSE Arca is closed for regular trading.

At
the Evaluation Time, the Trustee values the Trust’s palladium on the basis of that day’s LBMA Palladium Price PM or,
if no LBMA Palladium Price PM Fix is made on such day, or has not been announced by the Evaluation Time, the LBMA Palladium Price
AM announced on that day will be used. If neither price is available for that day, the Trust will value its palladium based on
the most recently announced LBMA Palladium Price PM or LBMA Palladium Price AM, unless the Sponsor determines that such price
is inappropriate as a basis for evaluation. In the event the Sponsor determines that the applicable LBMA Palladium Price PM or
such other publicly available price as the Sponsor may deem fairly represents the commercial value of the Trust’s palladium
is not an appropriate basis for evaluation of the Trust’s palladium, it shall identify an alternative basis for such evaluation
to be employed by the Trustee. Neither the Trustee nor the Sponsor shall be liable to any person for the determination that the
LBMA Palladium Price PM or such other publicly available price is not appropriate as a basis for evaluation of the Trust’s
palladium or for any determination as to the alternative basis for such evaluation provided that such determination is made in
good faith. See “Operation of the Palladium Market—The Zurich and London Palladium Bullion Markets” for
a description of the LBMA Palladium Price PM.

Once
the value of the palladium has been determined, the Trustee subtracts all estimated accrued but unpaid fees (other than the fees
accruing for such day on which the valuation takes place which are computed by reference to the value of the Trust or its assets),
expenses and other liabilities of the Trust from the total value of the palladium and any other assets of the Trust. The resulting
figure is 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 which are computed by reference to the value of the Trust or its
assets are calculated using the ANAV calculated for such day. The Trustee subtracts from the ANAV the amount of accrued fees so
computed for such day and the resulting figure is the NAV of the Trust. The Trustee also determines the NAV per Share by dividing
the NAV of the Trust by the number of the Shares outstanding as of the close of trading on the NYSE Arca (which includes the net
number of any Shares created or redeemed on such evaluation day).

Any
estimate of the accrued but unpaid fees, expenses and liabilities of the Trust for purposes of computing the NAV of the Trust
and ANAV made by the Trustee in good faith shall be conclusive upon all persons interested in the Trust and no revision or correction
in any computation made under the Trust Agreement will be required by reason of any difference in amounts estimated from those
actually paid.

The
Sponsor and the Shareholders may rely on any evaluation furnished by the Trustee, and the Sponsor has no responsibility for the
evaluation’s accuracy. The determinations the Trustee makes will be made in good faith upon the basis of, and the Trustee
will not be liable for any errors contained in, information reasonably available to it. The Trustee will not be liable to the
Sponsor, The Depository Trust Company (“DTC”), Authorized Participants, the Shareholders or any other person for errors
in judgment. However, the preceding liability exclusion will not protect the Trustee against any liability resulting from bad
faith or gross negligence in the performance of its duties.

On
May 23, 2024, the Sponsor entered into an Amendment (the “Trust Amendment”) to the Depositary Trust Agreement (the
“Trust Agreement”) with the Trustee. The Trust Amendment reflects the following changes, effective as of June 18,
2024, as approved and directed by the Sponsor on behalf of the Trust: (1) the amendment of the definition of “Benchmark
Price” to mean, “as of any day, (i) such day’s LBMA Palladium Price PM or such day’s LBMA Palladium Price
AM if such day’s LBMA Palladium Price PM is not available; or (ii) such other publicly available price which is reasonably
available to the Trustee at no cost to the Trustee and which the Sponsor may determine fairly represents the commercial value
of palladium held by the Trust and instructs the Trustee to use as the Benchmark Price”; (2) the deletion and replacement
of the defined term for “London PM Fix” with the defined term “LBMA Palladium Price PM”, which means “the
price of a troy ounce of palladium as determined by the LME, the third party administrator of the London palladium price selected
by the LBMA, or any successor administrator of the London palladium price, at or about 2:00 p.m. London, England time”;
and (3) the addition of the new definition for “LBMA Palladium Price AM” which means “the price of a troy ounce
of palladium as determined by the LME, the third party administrator of the London palladium price selected by the LBMA, or any
successor administrator of the London palladium price, at or about 9:45 a.m. London, England time.

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,
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.

8

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, from time to time, may temporarily waive all or a portion of the Sponsor’s Fee at its discretion for a stated
period of time.

Presently,
the Sponsor does not intend to waive any of its fee.

Furthermore,
the Sponsor may, in its sole discretion, agree to rebate all or a portion of the Sponsor’s Fee attributable to Shares held
by institutional investors subject to minimum shareholding and lock up requirements as determined by the Sponsor to foster stability
in the Trust’s asset levels. Any such rebate will be subject to negotiation and written agreement between the Sponsor and
the investor on a case by case basis. The Sponsor is under no obligation to provide any rebates of the Sponsor’s Fee. Neither
the Trust nor the Trustee will be a party to any Sponsor’s Fee rebate arrangements negotiated by the Sponsor. Any Sponsor’s
Fee rebate shall be paid from the funds of the Sponsor and not from the assets of the Trust.

The
Sponsor’s Fee is paid by delivery of palladium to an account maintained by the Custodian for the Sponsor on an unallocated
basis, monthly on the first business day of the month in respect of fees payable for the prior month. The delivery is of that
number of ounces of palladium which equals the daily accrual of the Sponsor’s Fee for such prior month calculated at the
LBMA Palladium Price PM.

The
Trustee will, when directed by the Sponsor, and, in the absence of such direction, may, in its discretion, sell palladium 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 palladium 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 palladium. Accordingly, the amount
of palladium to be sold will vary from time to time depending on the level of the Trust’s expenses and the market price
of palladium. The Custodian is authorized to purchase from the Trust, at the request of the Trustee, palladium needed to cover
Trust expenses not assumed by the Sponsor at the price used by the Trustee to determine the value of the palladium held by the
Trust on the date of the sale.

The
Sponsor’s Fee for the year ended December 31, 2025 was $3,203,228 (December 31, 2024: $1,737,833; December 31, 2023: $1,464,063).

Cash
held by the Trustee pending payment of the Trust’s expenses will not bear any interest. Each delivery or sale of palladium
by the Trust to pay the Sponsor’s Fee or other Trust expenses will be a taxable event to Shareholders.

Creation
and Redemption of Shares

The
Trust creates and redeems Shares from time to time, but only in one or more Baskets (a Basket equals a block of 12,500 Shares). The
number of Shares in a block that constitutes a Basket for the purposes of creation and redemptions in the Trust was reduced from
50,000 to 25,000 effective April 1, 2019, and reduced from 25,000 to 12,500 effective June 18, 2024. 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 physical palladium
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 are the only persons that may place orders to create and redeem Baskets. Authorized Participants must be (1) registered
broker-dealers or other securities market participants, such as banks and other financial institutions, which are not required
to register as broker-dealers to engage in securities transactions, and (2) participants in DTC. To become an Authorized Participant,
a person must enter into an Authorized Participant Agreement with the Sponsor and the Trustee. The Authorized Participant Agreement
provides the procedures for the creation and redemption of Baskets and for the delivery of the palladium and any cash required
for such creations and redemptions. The Authorized Participant Agreement and the related procedures attached thereto may be amended
by the Trustee and the Sponsor, without the consent of any Shareholder or Authorized Participant. Authorized Participants pay
a transaction fee of $500 to the Trustee for each order they place to create or redeem one or more Baskets. Authorized Participants
who make deposits with the Trust in exchange for Baskets receive no fees, commissions or other form of compensation or inducement
of any kind from either the Sponsor or the Trust for serving as an Authorized Participant, and no such person has any obligation
or responsibility to the Sponsor or the Trust to effect any sale or resale of Shares.

Authorized
Participants are cautioned that some of their activities will result in their being deemed participants in a distribution in a
manner which would render them statutory underwriters and subject them to the prospectus-delivery and liability provisions of
the Securities Act.

9

Prior
to initiating any creation or redemption order, an Authorized Participant must have entered into an agreement with the
Custodian or a palladium clearing bank to establish an Authorized Participant Unallocated Account in London
(“Authorized Participant Unallocated Bullion Account Agreement”). Authorized Participant Unallocated Accounts may
only be used for transactions with the Trust. Palladium held in Authorized Participant Unallocated Accounts is typically not
segregated from the Custodian’s or other palladium clearing bank’s assets, as a consequence of which an
Authorized Participant will have no proprietary interest in any specific plates or ingots of palladium held by the Custodian
or the clearing bank. Credits to its Authorized Participant Unallocated Account are therefore at risk of the
Custodian’s or other palladium clearing bank’s insolvency. No fees will be charged by the Custodian for the use
of the Authorized Participant Unallocated Account as long as the Authorized Participant Unallocated Account is used solely
for palladium transfers to and from the Trust Unallocated Account and the Custodian (or one of its affiliates) receives
compensation for maintaining the Trust Allocated Account. Authorized Participants should be aware that the Custodian’s
liability threshold under the Authorized Participant Unallocated Bullion Account Agreement is generally gross negligence, not
negligence, which is the Custodian’s liability threshold under the Trust’s Custody Agreements.

As
the terms of the Authorized Participant Unallocated Bullion Account Agreement differ in certain respects from the terms of the
Trust Unallocated Account Agreement, potential Authorized Participants should review the terms of the Authorized Participant Unallocated
Bullion Account Agreement carefully. A copy of the Authorized Participant Agreement may be obtained by potential Authorized Participants
from the Trustee.

Certain
Authorized Participants are expected to have the facility to participate directly in the physical palladium market and the palladium
futures markets. In some cases, an Authorized Participant may from time to time acquire palladium from or sell palladium to its
affiliated palladium trading desk, which may profit in these instances. Each Authorized Participant must be registered as a broker-dealer
under the Securities Exchange Act of 1934 (“Exchange Act”) and regulated by FINRA or be exempt from being or otherwise
not be required to be so regulated or registered, and be qualified to act as a broker or dealer in the states or other jurisdictions
where the nature of its business so requires. Certain Authorized Participants are regulated under federal and state banking laws
and regulations.

Each
Authorized Participant has its own set of rules and procedures, internal controls and information barriers as it determines is
appropriate in light of its own regulatory regime.

Authorized
Participants may act for their own accounts or as agents for broker-dealers, custodians and other securities market participants
that wish to create or redeem Baskets. An order for one or more Baskets may be placed by an Authorized Participant on behalf of
multiple clients. As of the date of this report, Goldman Sachs & Co., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC,
Merrill Lynch Professional Clearing Corp., Mizuho Securities USA LLC, Morgan Stanley & Co. Inc., Scotia Capital (USA) LLC,
UBS Securities LLC and Virtu Americas, LLC have each signed an Authorized Participant Agreement with the Trust and, upon the effectiveness
of such agreement, may create and redeem Baskets as described above. Persons interested in purchasing Baskets should contact the
Sponsor or the Trustee to obtain the contact information for the Authorized Participants. Shareholders who are not Authorized
Participants will only be able to redeem their Shares through an Authorized Participant.

All
palladium is delivered to the Trust and distributed by the Trust in unallocated form through credits and debits between Authorized Participant
Unallocated Accounts and the Trust Unallocated Account. Palladium transferred from an Authorized Participant Unallocated Account to the
Trust in unallocated form will first be credited to the Trust Unallocated Account. Thereafter, the Custodian will allocate, specific
plates or ingots of palladium, in each case representing the amount of palladium credited to the Trust Unallocated Account (to the extent
such amount is representable by palladium plates or ingots) to the Trust Allocated Account. The movement of palladium is reversed for
the distribution of palladium to an Authorized Participant in connection with the redemption of Baskets.

All
physical palladium represented by a credit to any Authorized Participant Unallocated Account and to the Trust Unallocated Account
and all physical palladium held in the Trust Allocated Account with the Custodian or for the Custodian by the Zurich Sub-Custodian
must be of at least a minimum fineness (or purity) of 999.5 parts per 1,000 (99.95%) and otherwise conform to the rules, regulations
practices and customs of the LPPM, including the specifications for a Good Delivery Palladium Plate or Ingot.

Under
the Authorized Participant Agreement, the Sponsor has agreed to indemnify the Authorized Participants against certain liabilities,
including liabilities under the Securities Act.

The
following description of the procedures for the creation and redemption of Baskets is only a summary and an investor should refer
to the relevant provisions of the Trust Agreement and the form of Authorized Participant Agreement for more detail.

Creation
Procedures

On
any business day, an Authorized Participant may place an order with the Trustee to create one or more Baskets. 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 palladium in the United Kingdom, or another jurisdiction will
occur on “business days” when (1) banks in the United Kingdom, or other jurisdiction and (2) the London palladium
markets are regularly open for business. If such banks or the London palladium 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. Redemption settlements including palladium deliveries loco London may be delayed longer than two, but
no more than five, business days following the redemption order date. Settlement of orders requiring receipt or delivery, or confirmation
of receipt or delivery, of Shares will occur, after confirmation of the applicable palladium delivery, on “business days”
when the NYSE Arca is open for regular trading. In the event of a level 3 market-wide circuit breaker resulting in a trading halt
for the remainder of the trading day, the time of the market-wide trading halt is considered the close of regular trading and
no creation orders for the current trade date will be accepted after that time (the “cutoff”). Orders placed after
the cutoff will be deemed to be rejected and will not be processed. Orders should be placed in proper form on the following business
day. 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.

10

By
placing a purchase order, an Authorized Participant agrees to deposit palladium with the Trust. Prior to the delivery of Baskets
for a purchase order, the Authorized Participant must also have wired to the Trustee the non-refundable transaction fee due for
the purchase order.

Determination
of required deposits

The
amount of the required palladium deposit is determined by dividing the number of ounces of palladium held by the Trust by the
number of Baskets outstanding, as adjusted for the amount of palladium constituting estimated accrued but unpaid fees and expenses
of the Trust.

Fractions
of a fine ounce of palladium smaller than 0.001 of a fine ounce which are included in the palladium deposit amount are disregarded
in the foregoing calculation. All questions as to the composition of a Creation Basket Deposit will be finally determined by the
Trustee. The Trustee’s determination of the Creation Basket Deposit shall be final and binding on all persons interested
in the Trust.

Delivery
of required deposits

An
Authorized Participant who places a purchase order is responsible for crediting its Authorized Participant Unallocated Account
with the required palladium deposit amount by the prescribed settlement date in London. Upon receipt of the palladium deposit
amount, the Custodian, after receiving appropriate instructions from the Authorized Participant and the Trustee, will transfer
on the prescribed settlement date the palladium deposit amount from the Authorized Participant Unallocated Account to the Trust
Unallocated Account and the Trustee will direct DTC to credit the number of Baskets ordered to the Authorized Participant’s
DTC account. The expense and risk of delivery, ownership and safekeeping of palladium until such palladium has been received by
the Trust shall be borne solely by the Authorized Participant. The Trustee may accept delivery of palladium by such other means
as the Sponsor, from time to time, my determine with the Trustee to be acceptable for the Trust, provided that the same is disclosed
in a prospectus relating to the Trust filed with the SEC pursuant to Rule 424 under the Securities Act. If palladium is to be
delivered other than as described above, the Sponsor is authorized to establish such procedures and to appoint such custodians
and establish such custody accounts in addition to those described in this report, as the Sponsor determines to be desirable.

Acting
on standing instructions given by the Trustee, the Custodian will transfer the palladium deposit amount from the Trust Unallocated
Account to the Trust Allocated Account by transferring palladium plates and ingots from its inventory to the Trust Allocated Account.
The Custodian uses commercially reasonable efforts to complete the transfer of palladium to the Trust Allocated Account prior
to the time by which the Trustee is to credit the Basket to the Authorized Participant’s DTC account; if, however, such
transfers have not been completed by such time, the number of Baskets ordered will be delivered against receipt of the palladium
deposit amount in the Trust Unallocated Account, and all Shareholders will be exposed to the risks of unallocated palladium to
the extent of that palladium deposit amount until the Custodian completes the allocation process. See “Risk Factors—Palladium
held in the Trust’s unallocated palladium account and any Authorized Participant’s unallocated palladium account is
not segregated from the Custodian’s assets…”

Because
palladium is only allocated in multiples of whole plates or ingots, the amount of palladium allocated from the Trust Unallocated
Account to the Trust Allocated Account may be less than the total fine ounces of palladium credited to the Trust Unallocated Account.
Any balance will be held in the Trust Unallocated Account. The Custodian uses commercially reasonable efforts to minimize the
amount of palladium held in the Trust Unallocated Account; no more than 192.904 troy ounces of palladium (maximum weight to make
one Good Delivery Palladium Plate or Ingot) is expected to be held in the Trust Unallocated Account at the close of each business
day.

Rejection
of purchase orders

The
Trustee may reject a purchase order or a Creation Basket Deposit if such order or Creation Basket Deposit is not presented in
proper form as described in the Authorized Participant Agreement or if the fulfillment of the order, in the opinion of counsel,
might be unlawful. None of the Trustee, the Sponsor or the Custodian will be liable for the rejection of any purchase order or
Creation Basket Deposit.

Redemption
Procedures

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. In the event of a level
3 market-wide circuit breaker resulting in a trading halt for the remainder of the trading day, the time of the market wide trading
halt is considered the close of regular trading and no redemption orders for the current trade date will be accepted after that
time (the “cutoff”). Orders placed after the cutoff will be deemed to be rejected and will not be processed. Orders
should be placed in proper form on the following business day. 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 Shareholder to redeem any Shares in an amount less than a Basket, or to redeem Baskets other than through an Authorized
Participant.

11

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 by the prescribed settlement date. 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.

Determination
of redemption distribution

The
redemption distribution from the Trust consists of a credit to the redeeming Authorized Participant’s Authorized Participant
Unallocated Account representing the amount of the palladium held by the Trust evidenced by the Shares being redeemed. Fractions
of a fine ounce of palladium included in the redemption distribution smaller than 0.001 of a fine ounce are disregarded.

Redemption
distributions will be subject to the deduction of any applicable tax or other governmental charges which may be due.

Delivery
of redemption distribution

The
redemption distribution due from the Trust will be delivered to the Authorized Participant on the prescribed settlement date following
a loco London redemption order date if, by 10:00 a.m. New York time on the settlement date, the Trustee’s DTC account has
been credited with the Baskets to be redeemed. If a loco swap or physical transfer is necessary to effect a loco London redemption,
the redemption distribution due from the Trust will be delivered to the Authorized Participant on or before the prescribed settlement
date if, by 10:00 a.m. New York time on the prescribed settlement date, the Trustee’s DTC account has been credited with
the Baskets to be redeemed. In the event that, by 10:00 a.m. New York time on the prescribed settlement date, the Trustee’s
DTC account has not been credited with the total number of Shares corresponding to the total number of Baskets to be redeemed
pursuant to such redemption order, the Trustee shall send to the Authorized Participant and the Custodian via fax or electronic
mail message notice of such fact and the Authorized Participant shall have one business day following receipt of such notice to
correct such failure. If such failure is not cured within such one business day period, the Trustee (in consultation with the
Sponsor) will cancel such redemption order and will send via fax or electronic mail message notice of such cancellation to the
Authorized Participant and the Custodian, and the Authorized Participant will be solely responsible for all costs incurred by
the Trust, the Trustee or the Custodian related to the cancelled order. The Trustee is also authorized to deliver the redemption
distribution notwithstanding that the Baskets to be redeemed are not credited to the Trustee’s DTC account by 10:00 a.m.
New York time on the prescribed settlement date if the Authorized Participant has collateralized its obligation to deliver the
Baskets through DTC’s book entry system on such terms as the Sponsor and the Trustee may from time to time agree upon.

The
Custodian transfers the redemption palladium amount from the Trust Allocated Account to the Trust Unallocated Account and, thereafter,
to the redeeming Authorized Participant’s Authorized Participant Unallocated Account. The Authorized Participant and the
Trust are each at risk in respect of palladium credited to their respective unallocated accounts in the event of the Custodian’s
insolvency. See “Risk Factors—Palladium held in the Trust’s unallocated palladium account and any Authorized
Participant’s unallocated palladium account is not segregated from the Custodian’s assets…”

As
with the allocation of palladium to the Trust Allocated Account which occurs upon a purchase order, if in transferring palladium
from the Trust Allocated Account to the Trust Unallocated Account in connection with a redemption order there is an excess amount
of palladium transferred to the Trust Unallocated Account, the excess over the palladium redemption amount will be held in the
Trust Unallocated Account. The Custodian uses commercially reasonable efforts to minimize the amount of palladium held in the
Trust Unallocated Account; no more than 192.904 ounces of palladium (maximum weight to make one Good Delivery Palladium Plate
or Ingot) is expected to be held in the Trust Unallocated Account at the close of each business day.

Suspension
or rejection of redemption orders

The
Trustee may, in its discretion, and will when directed by the Sponsor, suspend the right of redemption, or postpone the redemption
settlement date, (1) for any period during which the NYSE Arca is closed other than customary weekend or holiday closings, or
trading on the NYSE Arca is suspended or restricted or (2) for any period during which an emergency exists as a result of which
delivery, disposal or evaluation of palladium is not reasonably practicable. None of the Sponsor, the Trustee or the Custodian
are liable to any person or in any way for any loss or damages that may result from any such suspension or postponement.

The
Trustee will reject a redemption order if the order is not in proper form as described in the Authorized Participant Agreement
or if the fulfillment of the order, in the opinion of its counsel, might be unlawful.

12

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. From time to
time, the Trustee, with the consent of the Sponsor, may waive all or a portion of the applicable transaction fee. 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
Trust’s Sponsor is abrdn ETFs Sponsor LLC (known as Aberdeen Standard Investments ETFs Sponsor LLC prior to March 1, 2022
and ETF Securities USA LLC prior to October 1, 2018), a Delaware limited liability company formed on June 17, 2009.

The
Sponsor’s office is located at c/o abrdn ETFs Sponsor LLC, 1900 Market Street, Suite 200, Philadelphia, PA 19103. Prior
to April 27, 2018, the Sponsor was wholly-owned by ETF Securities Limited, a Jersey, Channel Islands based company. Effective
April 27, 2018, ETF Securities Limited sold its membership interest in the Sponsor to abrdn Inc. (known as Aberdeen Standard Investments
Inc. prior to January 1, 2022), a Delaware corporation. As a result of the sale, abrdn Inc. became the sole member of the Sponsor.
abrdn Inc. is a wholly-owned indirect subsidiary of Aberdeen Group plc. (“Aberdeen”). Aberdeen has retained “abrdn” as an operational abbreviation across its subsidiary legal entities (including
the Sponsor, fund names and descriptors). Under the Delaware Limited Liability Company Act and the governing documents of the Sponsor,
the sole member of the Sponsor, abrdn Inc., 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, and is responsible for the ongoing 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
generally the organizational expenses of the Trust and 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 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 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 240 Greenwich Street, New York, NY 10286. BNYM is subject to supervision by
the New York State Financial Services 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 have capital, surplus and
undivided profits of at least $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 palladium as needed to pay
the Sponsor’s Fee in palladium (palladium transfers are expected to occur approximately monthly in the ordinary course),
(2) valuing the Trust’s palladium 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 palladium 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 palladium. 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.

13

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 or any other sub-custodian 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.

The
Trustee’s monthly fees and out-of-pocket expenses are paid by the Sponsor.

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

The
Custodian

Effective
May 23, 2024, the Trustee, at the direction of the Sponsor, entered into an Allocated Account Agreement and Unallocated Account Agreement
with ICBC providing for the custody of the Trust’s palladium. Effective August 8, 2024, JPMorgan Chase Bank N.A. no longer serves
as a custodian of the Trust’s palladium.

ICBC
is a public limited company incorporated under the laws of England and Wales, serves as a Custodian of the Trust’s palladium.
ICBC’s office is located at 20 Gresham Street, London, EC2V 7JE, United Kingdom.

The
Custodian’s Role

The
Custodian is responsible for the safekeeping of the Trust’s palladium deposited with it by Authorized Participants in connection
with the creation of Baskets. The Custodian facilitates the transfer of palladium in and out of the Trust through the unallocated
palladium accounts it will maintain for each Authorized Participant and the unallocated and allocated palladium accounts it maintains
for the Trust. The Custodian holds at its London, England vault premises that portion of the Trust’s allocated palladium
to be held in London. The Custodian is responsible for allocating specific plates or ingots of physical palladium to the Trust’s
allocated palladium account. The Custodian provides the Trustee with regular reports detailing the palladium transfers in and
out of the Trust’s unallocated and allocated palladium accounts and identifying the palladium plates or ingots held in the
Trust’s allocated palladium 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 palladium or Shares for
their own account, as agent for their customers and for accounts over which they exercise investment discretion. The Custodian
and its affiliates are subject to the same transaction fee as other Authorized Participants.

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 for the purpose of examining the Trust’s palladium and certain related records
maintained by the 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 in order to examine the palladium and the records maintained by the
Custodian. Inspections were conducted by Bureau Veritas Commodities UK Ltd, a leading commodity inspection and testing
company retained by the Sponsor, as of August 4, 2025 and January 5, 2026. The results can be found on
www.abrdn.com/usa/etf.

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.

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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 12,500 Shares) and only upon the order of an Authorized Participant. The number of Shares in a block that constitutes a Basket for the purposes of creation and redemptions in the Trust was reduced from 50,000
to 25,000 effective April 1, 2019, and reduced from 25,000 to 12,500 effective June 18, 2024. 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 Shareholders 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.

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 Palladium

Custody
of the physical palladium deposited with and held by the Trust is provided by the Custodian at its London, England vaults and
by other sub-custodians on a temporary basis. The Custodian is a market maker, clearer and approved weigher under the rules of
the LPPM.

15

The
Custodian is the custodian of the physical palladium credited to the Trust Allocated Account in accordance with the Custody Agreements.
The Custodian segregates the physical palladium credited to the Trust’s Allocated Account from any other precious metal
it holds or holds for others by entering appropriate entries in its books and records. Under the Custody Agreements, the Trustee,
the Sponsor and the Trust’s auditors and inspectors may inspect the vaults of the Custodian. See “Inspection of Palladium”.

The
Custodian, as instructed by the Trustee on behalf of the Trust, is authorized to accept, on behalf of the Trust, deposits of palladium
in unallocated form. Acting on standing instructions specified in the Custody Agreements, the Custodian allocates palladium deposited
in unallocated form with the Trust by selecting plates or ingots of palladium for deposit to the Trust Allocated Account. All
physical palladium allocated to the Trust must conform to the rules, regulations, practices and customs of the LPPM, and the Custodian
must replace any non-conforming palladium with conforming palladium as soon as practical upon a determination by the Custodian
any palladium is non-conforming.

The
process of withdrawing palladium from the Trust for a redemption of a Basket follows the same general procedure as for depositing
palladium with the Trust for a creation of a Basket, only in reverse. Each transfer of palladium 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
palladium 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 amount of 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 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). The discussion is based on the United States Internal
Revenue Code of 1986 as amended (the “Code”). The discussion below is based on 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 U.S. 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 a citizen or resident of the United States;

● 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.

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.

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) generally is 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.

16

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 by the Trust. Shareholders are also treated as if they directly received their respective pro rata share of the Trust’s
income, if any, and as if they directly incurred their respective pro rata share 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 equal to its cost of acquiring the Shares. In the case of a Shareholder that acquires its Shares
as part of a creation of a Basket, the delivery of palladium to the Trust in exchange for the Shares is not a taxable event to
the Shareholder, and the Shareholder’s tax basis and holding period for the Shares are the same as its tax basis and holding
period for the palladium 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.

When
the Trust sells or transfers palladium, for example to pay expenses, a Shareholder generally will recognize a 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 or transfer and (2) the Shareholder’s tax basis for its pro rata share of the palladium that was sold or transferred.
Such 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 palladium sold by the
Trust generally will be determined by multiplying the Shareholder’s total basis for its Shares immediately prior to the
sale, by a fraction the numerator of which is the amount of palladium sold, and the denominator of which is the total amount of
the palladium held by the Trust immediately prior to the sale. After any such sale, a Shareholder’s tax basis for its pro
rata share of the palladium remaining in the Trust will be equal to its tax basis for its Shares immediately prior to the sale,
less the portion of such basis allocable to its share of the palladium that was sold.

Upon
a Shareholder’s sale of some or all of its Shares, the Shareholder will be treated as having sold a pro rata share of the
palladium held in the Trust at the time of the sale. Accordingly, the Shareholder generally will recognize a 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 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 palladium represented by the Shares redeemed
generally will not be a taxable event to the Shareholder. The Shareholder’s tax basis for the palladium received in the
redemption generally will be the same as the Shareholder’s tax basis for the Shares redeemed. The Shareholder’s holding
period with respect to the palladium received should include the period during which the Shareholder held the Shares redeemed.
A subsequent sale of the palladium received by the Shareholder will be a taxable event.

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.

Under
current law, gains recognized by individuals, estates or trusts from the sale of “collectibles,” including physical
palladium, held for more than one year are taxed at a maximum federal income tax rate of 28%, rather than the 20% rate applicable
to most other long-term capital gains. For these purposes, gains recognized by an individual upon the sale of Shares held for
more than one year, or attributable to the Trust’s sale of any physical palladium which the Shareholder is treated (through
its ownership of Shares) as having held for 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 corporate
taxpayer are generally the same as those at which ordinary income is taxed.

In
addition, high-income individuals and certain trusts and estates are subject to a 3.8% Medicare contribution tax that is imposed
on net investment income and gain. Shareholders should consult their tax advisor regarding this tax.

Brokerage
Fees and Trust Expenses

Any
brokerage or other transaction fees incurred by a Shareholder in purchasing Shares is treated as part of the Shareholder’s
tax basis in the Shares. Similarly, any brokerage fee incurred by a Shareholder in selling Shares reduces the amount realized
by the Shareholder with respect to the sale.

Shareholders
will be required to recognize gain or loss upon a sale of palladium 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. Miscellaneous itemized deductions, including expenses for
the production of income, will not be deductible for either regular federal income tax or alternative minimum tax purposes for
taxable years beginning after December 31, 2017 and before January 1, 2026 and thereafter generally are (i) deductible only to
the extent that the aggregate of a Shareholder’s miscellaneous itemized deductions exceeds 2% of such Shareholder’s
adjusted gross income for federal income tax purposes, (ii) not deductible for the purposes of the alternative minimum tax and
(iii) are subject to the overall limitation on itemized deductions under the Code.

17

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 palladium 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. In administrative guidance, the IRS stated that it will no longer issue rulings
under Code section 851(b) relating to the determination of whether or not an instrument or position is a “security”,
but, instead, intends to defer to guidance from the SEC for such determination.

United
States Information Reporting and Backup Withholding Tax 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 backup withholding tax.

The
amount of any backup withholding tax will be 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 gains (if any) upon the sale of palladium. A Non-US Shareholder generally
is not subject to US federal income tax with respect to gains recognized upon the sale or other disposition of Shares, or upon
the sale of palladium 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 certain 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.

18

It
is anticipated that the Shares will constitute “publicly offered securities” as defined in the Department of Labor “Plan
Asset Regulations,” §2510.3-101 (b)(2) as modified by section 3(42) of ERISA. Accordingly, pursuant to the Plan Asset Regulations,
only Shares purchased by a Plan, and not an interest in the underlying assets held in the Trust, should be treated as assets of the Plan,
for purposes of applying the “fiduciary responsibility” rules of ERISA and the “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) (“Tax Qualified Account”)
is treated as a taxable distribution from the account to the owner of the IRA, or to the participant for whom the Tax Qualified Account
is maintained, of an amount equal to the cost to the account of acquiring the collectible. The term “collectible” is defined
to include, with certain exceptions, “any metal or gem”. The IRS has issued several private letter rulings to the effect
that a purchase by an IRA, or by a participant-directed account under a Code section 401(a) plan, of publicly-traded shares in a trust
holding precious metals will not be treated as resulting in a taxable distribution to the IRA owner or Tax Qualified Account participant
under Code section 408(m). However the private letter rulings provide that, if any of the Shares so purchased are distributed from the
IRA or Tax Qualified Account to the IRA owner or Tax Qualified Account participant, or if any precious metal is received by such IRA
or Tax Qualified Account upon the redemption of any of the Shares purchased by it, the Shares or precious metal 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. Accordingly, potential IRA or Tax Qualified Account investors are urged to consult with their own professional advisors
concerning the treatment of an investment in Shares under Code section 408(m).