ABERDEEN STANDARD SILVER ETF TRUST Management’s Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q) – marketscreener.com

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

 Introduction 

The Trust is a common law trust, formed under the laws of the state of New York
on July 20, 2009. The Trust is not managed like a corporation or an active
investment vehicle. It does not have any officers, directors, or employees and
is administered by the Trustee pursuant to the Trust Agreement. The Trust is not
registered as an investment company under the Investment Company Act of 1940 and
is not required to register under such act. It does not hold or trade in
commodity futures contracts, nor is it a commodity pool, or subject to
regulation as a commodity pool operator or a commodity trading adviser in
connection with issuing Shares.

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

The Trust issues and redeems Shares only with Authorized Participants in
exchange for silver and only in one or more Baskets (a Basket equals a Block of
50,000 Shares). A list of current Authorized Participants is available from the
Sponsor or the Trustee.

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

Valuation of Silver 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 silver held by the Trust and determine both the ANAV
and the NAV of the Trust.

At the Evaluation Time, the Trustee values the Trust’s silver on the basis of
that day’s LBMA Silver Price (the daily price of an ounce of silver as set at
approximately 12:00 noon London, England time by LBMA-authorized bullion banks
or market makers in an electronic, over-the-counter auction conducted by the ICE
Benchmark Administration
(“IBA”) and disseminated by major market vendors, or,
if no LBMA Silver Price is made on such day or has not been announced by the
Evaluation Time, the next most recent LBMA Silver Price determined prior to the
Evaluation Time is used, unless the Sponsor determines that such price is
inappropriate as a basis for evaluation. In the event the Sponsor determines
that the LBMA Silver Price or such other publicly available price as the Sponsor
may deem fairly represents the commercial value of the Trust’s silver is not an
appropriate basis for evaluation of the Trust’s silver, it shall identify an
alternative basis for such evaluation to be employed by the Trustee.

Once the value of the silver has been determined, the Trustee subtracts all
estimated accrued but unpaid fees. The resulting figure is the adjusted net
asset value (the “ANAV”) of the Trust. The ANAV of the Trust is used to compute
the Sponsor’s Fee.

 12 ABERDEEN STANDARD SILVER ETF TRUST 

The Trustee then subtracts from ANAV the amount of the accrued Sponsor’s Fee
computed for such day to determine the NAV of the Trust. The Trustee also
determines the NAV per Share by dividing the NAV of the Trust by the number of
Shares outstanding as of the close of trading on the NYSE Arca.

The Quarter Ended September 30, 2020

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

The Trust’s NAV increased from $507,681,170 at June 30, 2020 to $769,658,234 at
September 30, 2020, a 51.60% increase for the quarter. The increase in the
Trust’s NAV resulted primarily from an increase in the price per ounce of
silver, which rose 32.94% from $17.85 at June 30, 2020 to $23.73 at September
30, 2020
and an increase in outstanding Shares, which rose from 29,400,000
Shares at June 30, 2020 to 33,550,000 Shares at September 30, 2020, as a result
of 4,650,000 Shares (93 Baskets) being created and 500,000 Shares (10 Baskets)
being redeemed.

The NAV per Share increased 32.83% from $17.27 at June 30, 2020 to $22.94 at
September 30, 2020. The Trust’s NAV per Share rose slightly less than the price
per ounce of silver on a percentage basis due to the Sponsor’s Fee, which was
$555,114 for the quarter, or 0.30% of the Trust’s ANAV on an annualized basis.

The NAV per Share of $27.94 at September 1, 2020 was the highest during the
quarter, compared with a low of $17.35 at July 2, 2020.

The increase in net assets from operations for the quarter ended September 30,
2020
was $162,818,720, resulting from a realized gain of $84,387 on the transfer
of silver to pay expenses, a realized gain of $3,028,557 on silver distributed
for the redemption of Shares, and a change in unrealized gain on investment in
silver of $160,260,890, offset by the Sponsor’s Fee, net of waiver, of $555,114.
Other than the Sponsor’s Fee, the Trust had no expenses during the quarter ended
September 30, 2020.

The Nine Months Ended September 30, 2020

The Trust’s NAV increased from $407,463,630 at December 31, 2019 to $769,658,234
at September 30, 2020, a 88.89% increase for the period. The increase in the
Trust’s NAV resulted primarily from an increase in outstanding Shares, which
rose from 23,300,000 Shares at December 31, 2019 to 33,550,000 Shares at
September 30, 2020, as a result of 10,900,000 Shares (218 Baskets) being created
and 650,000 Shares (13 Baskets) being redeemed, as well as an increase in the
price per ounce of silver, which rose 31.47% from $18.05 at December 31, 2019 to
$23.73 at September 30, 2020.

The NAV per Share increased 31.16% from $17.49 at December 31, 2019 to $22.94 at
September 30, 2020. The Trust’s NAV per Share rose slightly less than the price
per ounce of silver on a percentage basis due to the Sponsor’s Fee, net of
waiver, which was $1,172,012 for the period, or 0.30% of the Trust’s ANAV on an
annualized basis.

The NAV per Share of $27.94 at September 1, 2020 was the highest during the
period, compared with a low of $11.63 at March 19, 2020.

The increase in net assets from operations for the period ended September 30,
2020
was $171,975,468, resulting from a realized gain of $38,496 on the transfer
of silver to pay expenses, a realized gain of $2,793,078 on silver distributed
for the redemption of Shares, and a change in unrealized gain on investment in
silver of $170,315,906, offset by the Sponsor’s Fee, net of waiver, of
$1,172,012. Other than the Sponsor’s Fee, the Trust had no expenses during the
period ended September 30, 2020.

 13 ABERDEEN STANDARD SILVER ETF TRUST 

Liquidity & Capital Resources

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

The Trustee will, at the direction of the Sponsor or in its own discretion, sell
the Trust’s silver as necessary to pay the Trust’s expenses not otherwise
assumed by the Sponsor. The Trustee will not sell silver to pay the Sponsor’s
Fee but will pay the Sponsor’s Fee through in-kind transfers of silver to the
Sponsor. At September 30, 2020, the Trust did not have any cash balances.

Off-Balance Sheet Arrangements

The Trust has no off-balance sheet arrangements.

Critical Accounting Policies

The financial statements and accompanying notes are prepared in accordance with
U.S. GAAP. The preparation of these financial statements relies on estimates and
assumptions, such as the Valuation of Silver and Computation of Net Asset Value
discussed above, that impact the Trust’s financial position and results of
operations. These estimates and assumptions affect the Trust’s application of
accounting policies.

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