abrdn Palladium ETF Trust (PALL) risk factors, FY2025 10-K

RISKS RELATED TO PALLADIUM

1. 01The price of palladium may be affected by the sale of ETVs tracking the palladium markets
2. 02Crises may motivate large-scale sales of palladium which could decrease the price of palladium and adversely affect an investment in the Shares
3. 03A decline in the automobile industry or a shift from gasoline-powered to electric vehicles may have the effect of causing a decline in the price of palladium and a corresponding decline in the price of Shares
4. 04The value of the Shares relates directly to the value of the palladium held by the Trust and fluctuations in the price of palladium could materially adversely affect an investment in the Shares
5. 05The value of the Shares relates directly to the value of the palladium held by the Trust and fluctuations in the price of palladium could materially adversely affect an investment in the Shares
6. 06The price of physical palladium, and the value of the Shares, has been highly volatile and could continue to be subject to wide fluctuations in response to various factors. See “Overview of the Palladium Industry – Historical Chart of the Price of Palladium” for discussion of the fluctuation of palladium prices
7. 07A decline in the automobile industry may have the effect of causing a decline in the price of palladium and a corresponding decline in the price of Shares

RISKS RELATED TO THE SHARES

1. 08Since there is no limit on the amount of palladium that the Trust may acquire, the Trust, as it grows, may have an impact on the supply and demand of palladium that ultimately may affect the price of the Shares in a manner unrelated to other factors affecting the global market for palladium
2. 09The Shares and their value could decrease if unanticipated operational or trading problems arise
3. 10Discrepancies, disruptions or unreliability of the LBMA Price PM could impact the value of the Trust’s palladium and the market price of the Shares
4. 11If the process of creation and redemption of Baskets encounters any unanticipated difficulties, the possibility for arbitrage transactions intended to keep the price of the Shares closely linked to the price of palladium may not exist and, as a result, the price of the Shares may fall
5. 12A possible “short squeeze” due to a sudden increase in demand of Shares that largely exceeds supply may lead to price volatility in the Shares
6. 13The liquidity of the Shares may be affected by the withdrawal from participation of one or more Authorized Participants
7. 14Shareholders do not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act of 1940 or the protections afforded by the CEA
8. 15The Trust may be required to terminate and liquidate at a time that is disadvantageous to Shareholders
9. 16The lack of an active trading market for the Shares may result in losses on investment at the time of disposition of the Shares
10. 17Shareholders do not have the rights enjoyed by investors in certain other vehicles
11. 18An investment in the Shares may be adversely affected by competition from other methods of investing in palladium
12. 19The sale of the Trust’s palladium to pay expenses not assumed by the Sponsor, or unexpected liabilities affecting the Trust, at a time of low palladium prices could adversely affect the value of the Shares
13. 20The value of the Shares will be adversely affected if the Trust is required to indemnify the Sponsor or the Trustee under the Trust Agreement
14. 21The Shares may trade at a price which is at, above or below the NAV per Share and any discount or premium in the trading price relative to the NAV per Share may widen as a result of non-concurrent trading hours between the NYSE Arca and London, Zurich and COMEX
15. 22Purchasing activity in the palladium market associated with Basket creations or selling activity following Basket redemptions may affect the price of palladium and Share trading prices. These price changes may adversely affect an investment in the Shares

RISKS RELATED TO THE CUSTODY OF PALLADIUM

1. 23The Trust’s palladium may be subject to loss, damage, theft or restriction on access
2. 24The Trust’s lack of insurance protection and the Shareholders’ limited rights of legal recourse against the Trust, the Trustee, the Sponsor, the Custodian and any sub-custodian exposes the Trust and its Shareholders to the risk of loss of the Trust’s palladium for which no person is liable
3. 25The Custodian’s limited liability under the Custody Agreements and English law may impair the ability of the Trust to recover losses concerning its palladium and any recovery may be limited, even in the event of fraud, to the market value of the palladium at the time the fraud is discovered
4. 26The obligations of the Custodian are governed by English law, which may frustrate the Trust in attempting to seek legal redress against the Custodian or any other sub-custodian concerning its palladium
5. 27The Trust may not have adequate sources of recovery if its palladium is lost, damaged, stolen or destroyed
6. 28Because the Trustee does not, and the Custodian has limited obligations to, oversee or monitor the activities of sub-custodians who may hold the Trust’s palladium, failure by the sub-custodians to exercise due care in the safekeeping of the Trust’s palladium could result in a loss to the Trust
7. 29The obligations of any sub-custodian of the Trust’s palladium are not determined by contractual arrangements but by LPPM rules and London palladium market customs and practices, which may prevent the Trust’s recovery of damages for losses on its palladium custodied with sub-custodians
8. 30Palladium bullion allocated to the Trust in connection with the creation of a Basket may not meet the London Good Delivery Standards and, if a Basket is issued against such palladium, the Trust may suffer a loss

GENERAL RISKS

1. 31War and other geopolitical events in eastern Europe, including but not limited to Russia and Ukraine, may cause volatility in commodity prices including precious metals prices. These events are unpredictable and may lead to extended periods of price volatility
2. 32The Trust may be negatively impacted by the effects of the spread of illnesses or other public health emergencies on the global economy and the markets and service providers relevant to the performance of the Trust
3. 33Potential conflicts of interest may arise among the Sponsor or its affiliates and the Trust