This information should be read in conjunction with the unaudited condensed
financial statements and notes to the unaudited condensed 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 with respect to the Trust's
financial conditions, 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.
The Trust is a common law trust, formed under the laws of the state of
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, only in aggregations of 100,000 or integral multiples thereof. A list of current Authorized Participants is available from the Sponsor or the Trustee.
Shares of the Trust trade on the
Valuation of Silver and Computation of Net Asset Value
As of the London Fix on each day that the NYSE Arca is open for regular trading or as soon as practicable after
At the Evaluation Time, the Trustee values the Trust's silver on the basis of that day's London Fix, or, if no London Fix is made on such day or has not been announced by the Evaluation Time, the next most recent London Fix determined prior to the Evaluation Time is used, unless the Sponsor determines that such price is inappropriate as a basis for valuation. In the case this determination is made, the Sponsor will identify an alternative basis for such evaluation to be used by the Trustee.
Once the value of the silver held by the Trust has been determined, the Trustee subtracts all estimated accrued but unpaid fees and other liabilities of the Trust from the total value of the silver and all other assets of the Trust. The resulting figure is the ANAV of the Trust. The ANAV is used to compute the Sponsor's Fee.
The Trustee then subtracts from the ANAV the amount of accrued Sponsor's Fees computed for such day to determine the net asset value ("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.
ETFS SILVER TRUST
The Quarter Ended
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
NAV per Share increased 2.34% from
The NAV per Share of
There was no change in net assets arising from the change in accounting principle (Refer to Note 2.1 of the unaudited condensed financial statements) as of
Prior to the adoption of investment company accounting, the Trust recorded its investment in silver at the lower of cost or market value. Under the previous presentation and accounting policies, net gain from operations for the quarter ended
The decrease in realized gain on silver distributed for the redemption of Shares occurred because there were no redemption of Shares in the quarter ended
ETFS SILVER 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
Off-Balance Sheet Arrangements
The Trust has no off-balance sheet arrangements.
Critical Accounting Policies
The unaudited condensed financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in