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UNITED
STATES SECURITIES AND EXCHANGE COMMISSION






Washington,
D.C. 20549










Form


10-K




























ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934






For
the fiscal year ended


December 31, 2020









or


























TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934






For
the Transition Period from___________________to___________________











Commission
File Number:


001-34589
























ABERDEEN STANDARD PALLADIUM ETF TRUST







(Exact
name of registrant as specified in its charter)






















New York












26-4733157








(State
or other jurisdiction of incorporation or






organization)









(I.R.S.
Employer Identification No.)





















c/o
Aberdeen Standard Investments ETFs Sponsor LLC














712 Fifth Avenue


,


49

th

Floor










New York


,


NY








(Address
of principal executive offices)












10019








(Zip
Code)













(


844


)


383-7289








(Registrant’s
telephone number, including area code)









Securities
registered pursuant to Section 12(b) of the Act:
























Title
of each class








Trading
Symbol(s)








Name
of each


exchange on which registered






Aberdeen
Standard Physical Palladium Shares ETF










PALL










NYSE Arca










Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐


No











Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐


No











Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes


☒   No ☐








Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit such files).


Yes


☒   No ☐








Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated
filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange
Act.






























Large
Accelerated Filer












Accelerated Filer









Non-Accelerated
Filer










Smaller
Reporting Company




















Emerging
Growth Company














If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐








Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes    ☒


No










Aggregate
market value of the registrant’s shares outstanding based upon the closing price of a share on June 30, 2020 as reported
by the NYSE Arca, Inc. on that date: $


269,615,240


.








As
of February 24, 2021, Aberdeen Standard Palladium ETF Trust had


1,650,000


Aberdeen Standard Physical Palladium Shares ETF
outstanding.









DOCUMENTS
INCORPORATED BY REFERENCE:

None































FORWARD
LOOKING STATEMENTS











This
Annual Report on Form 10-K contains various “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. Forward-looking statements usually include the words, “anticipates,”
“believes,” “estimates,” “expects,” “intends,” “plans,” “projects,”
“understands” and other words suggesting uncertainty. We remind readers that forward-looking statements are merely
predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could
cause the actual results, performance, levels of activity, or our achievements, or industry results, to be materially different
from any future results, performance, levels of activity, or our achievements expressed or implied by such forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
The Trust undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of unanticipated events.








Additional
significant uncertainties and other factors affecting forward-looking statements are presented in the Risk Factors section herein.























TABLE
OF CONTENTS






































































































































































































PART I





1





Item 1. Business





1





Trust Objective





1





Overview of the Palladium Industry





2





Operation of the Palladium Markets





3





Secondary Market Trading





6





Valuation
of Palladium and Computation of Net Assets Value





6





Trust Expenses





7





Deposit of Palladium; Issuance of Shares





8





Withdrawal of Palladium; Redemption of Shares





9





Creation and Redemption Transaction Fee





9





The Sponsor





9





The Trustee





10





The Custodian





11





Inspection of Palladium





11





Description of Shares





12





Custody of the Trust’s Palladium





13





United States Federal Income Tax Consequences




13




ERISA and Related Considerations





16





Item 1A. Risk Factors





17





Item 1B. Unresolved Staff Comments





26





Item 2. Properties





26





Item 3. Legal Proceedings





26





Item 4. Mine Safety Disclosures





27











PART II





27






Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities






27





Item 6. Selected Financial Data





29





Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations





29





Item 7A. Quantitative and Qualitative Disclosures about Market Risk





33





Item 8. Financial Statements and Supplementary Data





34





Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures





34





Item 9A. Controls and Procedures





35





Item 9B. Other Information





38











PART III





39





Item 10. Directors, Executive Officers and Corporate Governance





39





Item 11. Executive Compensation





39





Item 12. Security





39





Item 13. Certain Relationships and Related Transactions, and Director Independence





40





Item 14. Principal Accounting Fees and Services





41











PART IV





42





Item 15. Exhibits, Financial Statement Schedule





42





Item 16. Form 10K Summary





44


























PART I








Item 1. Business





The purpose of the Aberdeen Standard Palladium ETF
Trust (the “Trust”) is to own palladium transferred to the Trust in exchange for shares issued by the Trust
(“Shares”). Each Share represents a fractional undivided beneficial interest in and ownership of the Trust. The
assets of the Trust consist solely of palladium bullion. The Trust was formed on December 30, 2009 when an initial deposit
of palladium was made in exchange for the issuance of two Baskets (a “Basket” consists of 50,000 Shares).





The sponsor of the Trust is Aberdeen Standard Investments ETFs
Sponsor LLC (the “Sponsor”). The trustee of the Trust is The Bank of New York Mellon (the “Trustee”) and
the custodian is JPMorgan Chase Bank N.A., London Branch (the “Custodian”).





The Trust’s Shares at redeemable value increased from
$300,485,250 at December 31, 2019 to $356,238,300 at December 31, 2020, the Trust’s fiscal year end. Outstanding Shares in
the Trust decreased from 1,675,000 Shares at December 31, 2019 to 1,625,000 Shares at December 31, 2020.





The Trust is not managed like a corporation or an active investment
vehicle. The Trust has no directors, officers or employees. It does not engage in any activities designed to obtain a profit from
or to improve the losses caused by changes in the price of palladium. The palladium held by the Trust will only be delivered
to pay the remuneration due to the Sponsor (the “Sponsor’s Fee”), distributed to Authorized Participants (defined
below) in connection with the redemption of Baskets or sold (1) on an as-needed basis to pay Trust expenses not assumed by the
Sponsor, (2) in the event the Trust terminates and liquidates its assets, or (3) as otherwise required by law or regulation.





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.aberdeenstandardetfs.us 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”). Additional information regarding the Trust may also
be found on the SEC’s EDGAR database at www.sec.gov.








Trust Objective





The investment objective of the Trust is for the Shares to reflect
the performance of the price of palladium bullion, less the expenses of the Trust’s operations. 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.








1











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:







Is Easily Accessible

. The Shares trade on
the NYSE Arca and provide institutional and retail investors with indirect access to the palladium bullion market. The Shares
are bought and sold on the NYSE Arca like any other exchange-listed securities. The close of the NYSE Arca trading session
is 4:00 p.m. New York time.







Is Relatively Cost Effective

. The Sponsor
expects that, for many investors, costs associated with buying and selling the Shares in the secondary market and the payment of
the Trust’s ongoing expenses will be lower than the costs associated with buying and selling palladium bullion and storing
and insuring palladium bullion in a traditional allocated palladium account.







Has Minimal Credit Risk

. The Shares
represent an interest in physical bullion owned by the Trust (other than an amount held in unallocated form which is not
sufficient to make up a whole plate or ingot or which is held temporarily to effect a creation or redemption of Shares).
Physical Bullion 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 bullion 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 bullion 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






Introduction





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 found primarily in South Africa and Russia. South Africa
is the world’s leading platinum producer and one of the largest palladium producers. Russia is the largest producer of palladium
and most production is concentrated in the Norilsk region. 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 84%
of platinum supply and 79% of palladium supply in 2019.






World Palladium Supply and Demand 2010-2019





The following table sets forth a summary of the world palladium
supply and demand from 2010 to 2019 and is based on information reported by Johnson Matthey, PGM Market Report – May 2020.






































































































































































































































































































































































































































































































































































































































































































































































































































































(thousands of ounces)


2010


2011


2012


2013


2014


2015


2016


2017


2018


2019


Supply






















South Africa



2,640



2,560



2,359



2,465



2,125



2,684



2,570



2,554



2,543



2,648


Russia



3,720



3,480



2,887



2,628



2,589



2,434



2,773



2,407



2,976



2,802


Others



995



1,320



1,239



1,305



1,389



1,337



1,417



1,410



1,458



1,444


Total Supply



7,355



7,360



6,485



6,398



6,103



6,455



6,760



6,371



6,977



6,894


































Demand by Application
































Autocatalyst



5,580



6,155



6,673



7,061



7,512



7,622



7,941



8,391



8,721



9,677


Chemical



370



440



524



440



358



451



414



529



565



511


Dental



595



540



510



457



468



468



430



398



364



323


Electrical



1,410



1,375



1,190



1,070



1,014



903



871



840



807



728


Investment



1,095



-565



467



-8



943



-659



-646



-386



-574



-57


Jewelry



595



505



442



354



272



222



191



173



157



140


Other



90



110



104



109



111



134



151



134



182



180


Total Gross Demand



9,735



8,560



9,910



9,483



10,678



9,141



9,352



10,079



10,222



11,502


































Recycling
































Autocatalyst



-1,310



-1,695



-1,675



-1,905



-2,158



-1,897



-2,001



-2,404



-2,633



-2,932


Other



-540



-690



-637



-620



-563



-521



-502



-503



-491



-484


Total Recycling



-1,850



-2,385



-2,312



-2,525



-2,721



-2,418



-2,503



-2,907



-3,124



-3,416


































Total Net Demand



7,885



6,175



7,598



6,958



7,957



6,723



6,849



7,172



7,098



8,086


































Movements in stocks



-530



1,185



-1,113



-560



-1,854



-268



-89



-801



-121



-1,192












Source: World Platinum Investment Council, Johnson Matthey
PGM Market Report - May 2020








2











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 43% of supply over the past 10 years.  South Africa has, on average, supplied approximately 37%
of production over the past 10 years. In 2019, Russia provided 41% of mine supplies, while South Africa produced 38%. North America
contributes approximately 14% of mine supply in 2019. Autocatalysts continue to be the largest component of palladium demand, representing
more than 84% of total demand in 2019, down slightly from 85% of total demand in 2018. Retail investors returned nearly 57,000
ounces of palladium to the market in 2019, as high prices stimulated profit taking in virtually all palladium ETF products. Jewelry
demand for palladium contributed 1.0% of total demand in 2019, down from 1.5% in 2018. Other industrial demand (chemical, dental
and electrical) has fallen from 24% of total demand in 2010 to 14% of total demand in 2019.






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, 2010 to December 31, 2020 and is based on information provided by Bloomberg:





CHART





Rising palladium prices tempered in 2011, but concerns over
supply shortages due to labor problems at mines in South Africa and dwindling Russian stocks provided some price support into mid-2012.
Palladium rose to a 13 year high of $907 per ounce in September 2014, a 27% increase from the start of the year. The rally was
driven by supply side concerns following the longest labor strike in South African mining history and escalating tensions between
Russia and Ukraine. The strong rally in 2014 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. The deficit in the palladium market
looks set to widen dramatically, with stricter emissions legislation forecast to trigger a steep change in demand from Chinese
automakers.








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
electronic LME PM fix process (as described below) administered by the London Metal Exchange (“LME”). 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 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 (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, the standard size of palladium 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.








3














The Zurich and London Palladium Bullion Market





Although the market for physical palladium is distributed globally,
most palladium is stored and most OTC market trades are cleared through Zurich. As of September 1, 2009, London also serves as
a center for the clearing of OTC trades in palladium. 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 Zurich basis, meaning
the precious metal is physically held in vaults in Zurich or is transferred into accounts established in Zurich. As of September
1, 2009, palladium began trading on a loco London basis as well, meaning that the precious metal is physically held in vaults in
London or is transferred into accounts established in London. The basis for settlement and delivery of a loco Zurich spot trade
is payment (generally in U.S. Dollars) two business days after the trade date against delivery. 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 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 systems (“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 LME AM Fix) and 2:00 p.m. London time (the LME PM Fix). 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 LME PM Fix.
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
Benchmarks.





Daily during London trading hours the LME AM Fix and the LME
PM Fix each provide reference palladium prices for that day’s trading. Many long-term contracts will be priced on the basis
of either the LME AM Fix or the LME PM Fix, 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 LME PM Fix.








4













Formal participation in the LME PM Fix is limited to participating
LPPM members. Five LPPM members are currently participating in establishing the LME PM Fix (Goldman Sachs International, HSBC Bank
USA NA, ICBC Standard Bank plc, Johnson Matthey plc and BASF Metals Ltd.). Any other market participant wishing to participate
in the trading on the LME PM Fix 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.





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 LME PM Fix 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 will support the integrity of the LME PM Fix.





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 LME PM Fix, 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 has determined that the
LME PM Fix will fairly represent the commercial value of palladium bullion held by the Trust and, the “Benchmark Price”
(as defined in the Trust Agreement) of the Trust’s palladium bullion as of any day is the LME PM Fix for such day.





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
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.








5












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 UK-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 US Commodity Futures Trading Commission
(“CFTC”) regulates trading in commodity contracts, such as futures, options and swaps. In addition, under the
Commodity Exchange Act of 1936 (“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 palladium bullion, less the expenses of the Trust, 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.








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 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 LME PM Fix or, if no LME PM Fix is made on such day, the next most recent LME PM Fix
determined prior to the Evaluation Time will be used, unless the Sponsor determines that such price is inappropriate as a basis
for evaluation. In the event the Sponsor determines that the LME PM Fix 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 LME PM Fix 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 LME PM Fix.





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 adjusted net asset value (“ANAV”)
of the Trust. The ANAV of the Trust is used to compute the Sponsor’s Fee.








6













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).





The Trustee’s estimation of accrued but unpaid fees, expenses
and liabilities are 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.










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.





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’s Fee is paid by delivery of palladium
to an account maintained by the Custodian for the Sponsor on an unallocated basis. 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 LME PM Fix.





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, 2020
was $2,012,865 (December 31, 2019: $1,392,218; December 31, 2018: $1,073,755).





Cash held by the Trustee pending payment of the Trust’s
expenses will not bear any interest.








7
















Deposit of Palladium; Issuance of Shares





The Trust creates and redeems Shares from time to time, but
only in one or more Baskets. Prior to April 1, 2019, the number of Shares that constituted a Basket was 50,000 Shares. Effective
April 1, 2019, the Basket size was decreased to 25,000 Shares.  Only registered broker-dealers, or other securities market
participants not required to register as broker-dealers such as banks or other financial institutions, who (1) are participants
in the DTC and (2) have entered into written agreements with the Sponsor and the Trustee (each an “Authorized Participant”)
can deposit palladium and receive Baskets of Shares in exchange.  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 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.





All palladium bullion deposited with the Custodian or for the
Custodian by the Zurich Sub-Custodian

1

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 Plate or Ingot.





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, Zurich or another jurisdiction occurs on “business days”
when (1) banks in the United Kingdom, Zurich or such other jurisdiction and (2) the London or Zurich palladium markets are regularly
open for business. If such banks or the London or Zurich 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.





On any business day, an Authorized Participant may place an
order with the Trustee to purchase one or more Baskets. 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. A purchase order so received is effective on the date it is received in satisfactory
form by the Trustee. By placing a purchase order, an Authorized Participant agrees to deposit palladium with the Trust, as described
below. 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 (as explained under “Creation and Redemption Transaction Fee”
below).





An Authorized Participant who places a purchase order is
responsible for crediting its Authorized Participant Unallocated Account, either loco London or loco Zurich, with the
required palladium deposit amount by the second business day in London or Zurich following the purchase order date. Upon
receipt of the palladium deposit amount, the Custodian, after receiving appropriate instructions from the Authorized
Participant and the Trustee, will transfer on the second business day following the purchase order date the palladium deposit
amount from the Authorized Participant Unallocated Account to the unallocated palladium account of the Trust established with
the Custodian under the Unallocated Account Agreement between the Trustee and the Custodian (the “Trust Unallocated
Account”) and the Trustee will direct the Depository Trust Company (the “DTC”) to credit the number of
Baskets ordered to the Authorized Participant’s DTC account. Acting on standing instructions given by the Trustee, the
Custodian will transfer the palladium deposit amount from the Trust Unallocated Account to the allocated palladium account of
the Trust established with the Custodian under the Allocated Account Agreement between the Trustee and the Custodian (the
“Trust Allocated Account”), by transferring specific palladium plates or ignots from its inventory or the
inventory of the Zurich Sub-Custodian to the Trust Allocated Account. The Trust’s Unallocated Account Agreement and
Allocated Account Agreement are referred to collectively as the “Custody Agreements.”

































1

The
Zurich Sub-Custodian is any firm selected by the Custodian to hold the Trust’s palladium in the Trust Allocated Account
(defined below) in the firm’s Zurich vault premises on a segregated basis and whose appointment has been approved by
the Sponsor. The Custodian will use reasonable care in selecting any Zurich Sub-Custodian. As of the date of this annual
report, the Zurich Sub-Custodian that the Custodian uses is UBS AG.








8














Withdrawal of Palladium; Redemption of Shares





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. 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
owner of beneficial interests in the Shares (a “Shareholder”) to redeem any Shares in an amount less than a Basket,
or to redeem Baskets other than through an Authorized Participant.





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 not later than the second business day
following the effective date of the redemption order. 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
(as explained under “Creation and Redemption Transaction Fee” below).





The redemption distribution from the Trust consists of a credit
to the redeeming Authorized Participant’s Authorized Participant Unallocated Account, either loco London or loco Zurich,
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
are subject to the deduction of any applicable tax or other governmental charges which may be due.





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. Additionally, if a loco
swap or physical transfer is necessary to effect a loco London or loco Zurich redemption, the settlement of loco London or loco
Zurich redemption deliveries may be delayed more than two, but not more than five, business days.










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. 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 Sponsor is a Delaware limited liability company and a wholly-owned
subsidiary of Aberdeen Standard Investments Inc. (“ASII”). Aberdeen Standard Investments is a brand of the investment
businesses of Standard Life Investments plc, its affiliates and subsidiaries. In the United States, Aberdeen Standard Investments
is the marketing name for the following affiliated, registered investment advisers: ASII, Aberdeen Asset Managers Ltd., Aberdeen
Standard Investments Australia Ltd., Aberdeen Standard Investments (Asia) Ltd., Aberdeen Capital Management, LLC, Aberdeen Standard
Investments ETFs Advisors LLC and Standard Life Investments (Corporate Funds) Ltd.








9











The Sponsor’s office is located at c/o Aberdeen Standard
Investments ETFs Sponsor LLC, 712 Fifth Avenue, 49th Floor, New York, NY 10019. Under the Delaware Limited Liability Company Act
and the governing documents of the Sponsor, the sole member of the Sponsor, ASII, 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, the 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 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 Zurich 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 2 Hanson Place, Brooklyn, New York 11217. 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. As of December
31, 2020, the Trustee was in compliance with these conditions.






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.
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, the Zurich Sub-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.








10















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





JPMorgan Chase Bank, N.A. (“JPMorgan”) serves as
the Custodian of the Trust’s palladium. JPMorgan is a national banking association organized under the laws of the United
States of America. JPMorgan is subject to supervision by the Federal Reserve Bank of New York and the Federal Deposit Insurance
Corporation.





JPMorgan’s London office is regulated by the FCA and is
located at 25 Bank Street, Canary Wharf, London, E14 5JP, United Kingdom. JPMorgan is a subsidiary of JPMorgan Chase & Co.  While
the United Kingdom operations of the Custodian are regulated by the FCA, the custodial services provided by the Custodian and any
sub-custodian, including the Zurich Sub-Custodian under the Custody Agreements, are presently not a regulated activity subject
to the supervision and rules of the FCA. The Zurich Sub-Custodian that the Custodian currently uses is UBS AG, which is located
at 45 Bahnhoffstrasse, 8021 Zurich, Switzerland.






The Custodian’s Role





The Custodian is responsible for safekeeping of the Trust’s
palladium deposited with it by Authorized Participants in connection with the creation of Baskets. The Custodian is also responsible
for selecting the Zurich Sub-Custodian and its other direct sub-custodians, if any. 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 will maintain 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 Zurich Sub-Custodian holds at its Zurich, Switzerland
vault premises that portion of the Trust’s allocated palladium to be held in Zurich on behalf of the Custodian. 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
Sponsor’s auditors and inspectors may, only up to twice a year, visit the premises of the Custodian and the Zurich Sub-Custodian
for the purpose of examining the Trust’s palladium and certain related records maintained by the Custodian. Under the
Allocated Account Agreement, the Custodian agreed to procure similar inspection rights from the Zurich Sub-Custodian. Any
such inspection rights with respect to the Zurich Sub-Custodian are expected to be granted in accordance with the normal course
of dealing between the Custodian and the Zurich Sub-Custodian. Visits by auditors and inspectors to the Zurich Sub-Custodian’s facilities will be
arranged through the Custodian. Other than with respect to the Zurich Sub-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.








11













The Sponsor has exercised its right to visit the Custodian and
the Zurich Sub-Custodian, in order to examine the palladium and the records maintained by them. Inspections were conducted
by Inspectorate International Limited, a leading commodity inspection and testing company retained by the Sponsor, as of August
14, 2020 and December 31, 2020. Due to unprecedented social lock-down policies implemented in the UK and Switzerland to help prevent the spread of COVID-19, neither the
Sponsor, nor Inspectorate, were able to perform a physical inspection of the Trust's palladium at December 31, 2020. In lieu of a physical
inspection, the Sponsor performed alternative procedures to verify the palladium held by the Trust at December 31, 2020. These procedures
included confirmation of the palladium bar list and total ounces of palladium held by the Custodian at December 31, 2020, and an independent
recalculation of ounces of palladium for each creation or redemption transaction from August 14, 2020, the date of the last physical inspection,
through December 31, 2020. The Sponsor and Inspectorate also virtually inspected a selection of palladium bars held by the Custodian on
behalf of the Trust, verifying the weight of the bars and that the serial numbers of the bars selected matched the records of the Trust.








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 and only upon the order of an Authorized Participant.
Effective April 1, 2019, the number of Shares that constitute a Basket for the purposes of creations and redemptions is 25,000
Shares. Prior to April 1, 2019, a Basket consisted of 50,000 Shares. 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.










12














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 the Zurich Sub-Custodian selected by the Custodian
in its Zurich 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.





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, and requires the Zurich Sub-Custodian to also segregate the physical palladium of the Trust from the
other palladium held by it for other customers of the Custodian and the Zurich Sub-Custodian’s other customers. The Custodian
requires the Zurich Sub-Custodian to identify in its books and records the Trust as having the rights to the physical palladium
credited to its Trust Allocated Account.





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 will or will require the Zurich Sub-Custodian to allocate 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.





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 “Deposit of Palladium; Issuance of Shares” and
“Withdrawal of Palladium; 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, including
substantial changes to the Code made in the Tax Cuts and Jobs Act (P.L. 115-97).








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For purposes of this discussion, a “US Shareholder”
is a Shareholder that is:





• An individual who is treated as a citizen or resident
of the United States for US federal income tax purposes;





• 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.





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.






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.






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 by 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.








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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 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. Under the Tax Cuts and Jobs Act (P.L. 115-97), 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.






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 recent 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.








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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.








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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).








Item 1A. Risk Factors





Shareholders should consider carefully the risks described below
before making an investment decision. Shareholders should also refer to the other information included in this report, including
the Trust’s financial statements and the related notes.






RISKS RELATED TO PALLADIUM










The price of palladium may be affected by the sale
of ETVs tracking the palladium markets.





To the extent existing exchange traded vehicles (“ETVs”)
tracking the palladium markets represent a significant proportion of demand for physical palladium bullion, large redemptions
of the securities of these ETVs could negatively affect physical palladium bullion prices and the price and NAV of the
Shares.






Crises may motivate large-scale sales of palladium which
could decrease the price of palladium and adversely affect an investment in the Shares.





The possibility of large-scale distress sales of palladium in
times of crisis may have a short-term negative impact on the price of palladium and adversely affect an investment in the Shares.
For example, the 2008 financial credit crisis resulted in significantly depressed prices of palladium largely due to forced sales
and deleveraging from institutional investors such as hedge funds and pension funds as expectations of economic growth slumped.
Crises in the future may impair palladium’s price performance which would, in turn, adversely affect an investment in the
Shares.






Several factors may have the effect of causing a decline
in the prices of palladium and a corresponding decline in the price of Shares. Among them:






































































A significant increase in palladium hedging activity by palladium producers. Should there be
an increase in the level of hedge activity of palladium producing companies, it could cause a decline in world palladium
prices, adversely affecting the price of the Shares.







A significant change in the attitude of speculators, investors and central banks towards palladium. Should the
speculative community take a negative view towards palladium or central banking authorities determine to sell national
palladium reserves, either event could cause a decline in world palladium prices, negatively impacting the price of the
Shares.







A widening of interest rate differentials between the cost of money and the cost of palladium could negatively
affect the price of palladium which, in turn, could negatively affect the price of the Shares.







A combination of rising money interest rates and a continuation of the current low cost of borrowing palladium
could improve the economics of selling palladium forward. This could result in an increase in hedging by palladium mining
companies and short selling by speculative interests, which would negatively affect the price of palladium. Under such
circumstances, the price of the Shares would be similarly affected.







Autocatalysts, automobile components that use palladium, accounted for approximately 84% of the net global
demand in palladium in 2019. While the automotive sector in China and the US is showing signs of recovery, the European market
is currently experiencing declining demand and, in certain cases, solvency concerns. Reduced automotive industry sales in
Europe may result in a decline in autocatalyst demand.







A decline in the global automotive industry may impact the price of palladium and affect the price of the
Shares.









A 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.





Autocatalysts, automobile components for emissions control that
use palladium, accounted for approximately 84% of the global demand in palladium in 2019. Reduced automotive industry sales or
a shift from gasoline-powered to electric vehicles may result in a decline in autocatalyst demand. A contraction in the global
automotive industry or more widespread acceptance of electric vehicles may impact the price of palladium and the price of Shares.






The 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.





The Shares are designed to mirror as closely as possible the
performance of the price of palladium bullion, and the value of the Shares relates directly to the value of the palladium held
by the Trust, less the Trust’s liabilities (including estimated accrued but unpaid expenses). The price of palladium has
fluctuated widely over the past several years. Several factors may affect the price of palladium, including:




























Global palladium supply, which is influenced by such factors as production and cost levels in
major palladium-producing countries such as Russia and South Africa. Recycling, autocatalyst demand,
industrial demand, jewelry demand and investment demand are also important drivers of palladium supply and demand. Sales of
existing stockpiles of palladium have been a key source of supply in the past decade and could potentially soon be exhausted,
placing a higher burden on new mine supply;







Currency exchange rates;









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Interest rates;







Investment and trading activities of hedge funds and commodity funds; and







Global or regional political, economic or financial events and situations.






In addition, investors should be aware that there is no assurance
that palladium will maintain its long-term value in terms of purchasing power in the future. In the event that the price of palladium
declines, the Sponsor expects the value of an investment in the Shares to decline proportionately.






RISKS RELATED TO THE SHARES










The sale of the Trust’s palladium to pay expenses
not assumed by the Sponsor at a time of low palladium prices could adversely affect the value of the Shares.





The Trustee sells palladium held by the Trust to pay Trust
expenses not assumed by the Sponsor on an as-needed basis irrespective of then-current palladium prices. The Trust is not
actively managed and no attempt will be made to buy or sell palladium to protect against or to take advantage of fluctuations
in the price of palladium. Consequently, the Trust’s palladium may be sold at a time when the palladium price
is low, resulting in a negative effect on the value of the Shares.






The value of the Shares will be adversely affected if the
Trust is required to indemnify the Sponsor or the Trustee under the Trust Agreement.





Under the Trust Agreement, each of the Sponsor and the Trustee
has a right to be indemnified from the Trust for any liability or expense it incurs without gross negligence, bad faith, willful
misconduct, willful malfeasance or reckless disregard on its part. That means the Sponsor or the Trustee may require the assets
of the Trust to be sold in order to cover losses or liability suffered by it. Any sale of that kind would reduce the NAV of the
Trust and the value of the Shares.






The 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.





The Shares may trade at, above or below the NAV per Share. The
NAV per Share fluctuates with changes in the market value of the Trust’s assets. The trading price of the Shares fluctuates
in accordance with changes in the NAV per Share as well as market supply and demand. 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 and the major
palladium markets. While the Shares trade on the NYSE Arca until 4:00 p.m. New York time, liquidity in the market for palladium
is reduced after the close of the major world palladium markets, including London, Zurich and the COMEX. As a result, during this
time, trading spreads, and the resulting premium or discount on the Shares, may widen.






A possible “short squeeze” due to a sudden increase
in demand of Shares that largely exceeds supply may lead to price volatility in the Shares.





Investors may purchase Shares to hedge existing palladium exposure
or to speculate on the price of palladium. Speculation on the price of palladium may involve long and short exposures. To the extent
aggregate short exposure exceeds the number of Shares available for purchase (for example, in the event that large redemption requests
by Authorized Participants dramatically affect Share liquidity), investors with short exposure may have to pay a premium to repurchase
Shares for delivery to Share lenders. Those repurchases may in turn, dramatically increase the price of the Shares until additional
Shares are created through the creation process. This is often referred to as a “short squeeze.” A short squeeze could
lead to volatile price movements in Shares that are not directly correlated to the price of palladium.






Purchasing 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.





Purchasing activity associated with acquiring the palladium
required for deposit into the Trust in connection with the creation of Baskets may increase the market price of palladium, which
will result in higher prices for the Shares. Increases in the market price of palladium may also occur as a result of the purchasing
activity of other market participants. Other market participants may attempt to benefit from an increase in the market price of
palladium that may result from increased purchasing activity of palladium connected with the issuance of Baskets. Consequently,
the market price of palladium may decline immediately after Baskets are created. If the price of palladium declines, the trading
price of the Shares will also decline.





Selling activity associated with sales of palladium withdrawn
from the Trust in connection with the redemption of Baskets may decrease the market price of palladium, which will result in lower
prices for the Shares. Decreases in the market price of palladium may also occur as a result of the selling activity of other market
participants. If the price of palladium declines, the trading price of the Shares will also decline.





The Sponsor is unable to ascertain whether the palladium price
movements since the commencement of the Trust’s initial public offering on January 8, 2010 were attributable to the Trust’s
Basket creation and redemption process or independent metal market forces or both. Nevertheless, the Trust and the Sponsor cannot
assure Shareholders that future Basket creations or redemptions will have no effect on the palladium metal prices and, consequently,
Share trading prices.








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Since 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.





The Trust Agreement places no limit on the amount of palladium
the Trust may hold. Moreover, the Trust may issue an unlimited number of Shares, subject to registration requirements, and thereby
acquire an unlimited amount of palladium. The global market for palladium is characterized by supply and demand constraints that
are generally not present in the markets for other precious metals such as gold and silver. From 2015 to 2019, world palladium
mine supply averaged 6.7 million ounces, while world gross demand averaged 10.1 million ounces. If the amount of palladium acquired
by the Trust is large enough in relation to global palladium supply and demand, further in-kind creations and redemptions of Shares
could have an impact on the supply and demand of palladium unrelated to other factors affecting the global market for palladium.
Such an impact could affect the price for palladium that would directly affect the price at which Shares are traded on the Exchange
or the price of future Baskets created or redeemed by the Trust. The Trust and the Sponsor cannot provide Shareholders any
assurance that increased metal holdings by the Trust in the future will have no such long-term metal price impact thereby affecting
Share trading prices.






The Shares and their value could decrease if unanticipated
operational or trading problems arise.





There may be unanticipated problems or issues with respect to
the mechanics of the Trust’s operations and the trading of the Shares that could have a material adverse effect on an investment
in the Shares. In addition, although the Trust is not actively “managed” by traditional methods, to the extent that
unanticipated operational or trading problems or issues arise, the Sponsor’s past experience and qualifications may not be
suitable for solving these problems or issues.






Discrepancies, disruptions or unreliability of the LME PM
Fix could impact the value of the Trust’s palladium and the market price of the Shares.





The Trustee values the Trust’s palladium pursuant to the
LME PM Fix. In the event that the LME PM Fix proves to be an inaccurate benchmark, or the LME PM Fix varies materially from the
prices determined by other mechanisms for valuing palladium, the value of the Trust’s palladium and the market price of the
Shares could be adversely impacted. Any future developments in the LME PM Fix, to the extent it has a material impact on the LME
PM Fix, could adversely impact the value of the Trust’s palladium and the market price of the Shares. It is possible that
electronic failures or other unanticipated events may occur that could result in delays in the announcement of, or the inability
of the benchmark to produce, the LME PM Fix on any given date. Furthermore, any actual or perceived disruptions that result in
the perception that the LME PM Fix is vulnerable to actual or attempted manipulation could adversely affect the behavior of market
participants, which may have an effect on the price of palladium. If the LME PM Fix is unreliable for any reason, the price of
palladium and the market price for the Shares may decline or be subject to greater volatility.






If 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.





If the processes of creation and redemption of Shares (which
depend on timely transfers of palladium to and by the Custodian) encounter any unanticipated difficulties, potential market participants
who would otherwise be willing to purchase or redeem Baskets to take advantage of any arbitrage opportunity arising from discrepancies
between the price of the Shares and the price of the underlying palladium may not take the risk that, as a result of those difficulties,
they may not be able to realize the profit they expect. If this is the case, the liquidity of Shares may decline and the price
of the Shares may fluctuate independently of the price of palladium and may fall. Additionally, redemptions could be suspended
for any period during which (1) the NYSE Arca is closed (other than customary weekend or holiday closings) or trading on the NYSE
Arca is suspended or restricted, or (2) an emergency exists as a result of which delivery, disposal or evaluation of the gold is
not reasonably practicable.










19












The liquidity of the Shares may be affected by the withdrawal
from participation of one or more Authorized Participants.





In the event that one or more Authorized Participants having
substantial interests in Shares or otherwise responsible for a significant portion of the Shares’ daily trading volume on
the Exchange withdraw from participation, the liquidity of the Shares will likely decrease which could adversely affect the market
price of the Shares and result in Shareholders incurring a loss on their investment.






Shareholders 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 Commodity Exchange Act (“CEA”).





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. Consequently, Shareholders do not have the
regulatory protections provided to investors in investment companies. The Trust does not and will not hold or trade in commodity
futures contracts, “commodity interests” or any other instruments regulated by the CEA, as administered by the CFTC
and the National Futures Association (“NFA”). Furthermore, 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 by the
CFTC as a commodity pool operator or a commodity trading advisor in connection with the Trust or the Shares. Consequently, Shareholders
do not have the regulatory protections provided to investors in CEA-regulated instruments or commodity pools operated by registered
commodity pool operators or advised by commodity trading advisors.






The Trust may be required to terminate and liquidate at a
time that is disadvantageous to Shareholders.





If the Trust is required to terminate and liquidate, such termination
and liquidation could occur at a time which is disadvantageous to Shareholders, such as when palladium prices are lower than
the palladium prices at the time when Shareholders purchased their Shares. In such a case, when the Trust’s palladium
is sold as part of the Trust’s liquidation, the resulting proceeds distributed to Shareholders will be less than if palladium
prices were higher at the time of sale.






The lack of an active trading market for the Shares may result
in losses on investment at the time of disposition of the Shares.





Although Shares are listed for trading on the NYSE Arca, it
cannot be assumed that an active trading market for the Shares will develop or be maintained. If an investor needs to sell Shares
at a time when no active market for Shares exists, such lack of an active market will most likely adversely affect the price the
investor receives for the Shares (assuming the investor is able to sell them).






Shareholders do not have the rights enjoyed by investors
in certain other vehicles.





As interests in an investment trust, the Shares have none of
the statutory rights normally associated with the ownership of shares of a corporation (including, for example, the right to bring
“oppression” or “derivative” actions). In addition, the Shares have limited voting and distribution rights
(for example, Shareholders do not have the right to elect directors or approve amendments to the Trust Agreement and do not receive
dividends).






An investment in the Shares may be adversely affected by
competition from other methods of investing in palladium.





The Trust competes with other financial vehicles, including
traditional debt and equity securities issued by companies in the palladium industry and other securities backed by or linked
to palladium, direct investments in palladium and investment vehicles similar to the Trust. Market and financial conditions,
and other conditions beyond the Sponsor’s control, may make it more attractive to invest in other financial vehicles or to
invest in palladium directly, which could limit the market for the Shares and reduce the liquidity of the Shares.










20












The amount of palladium represented by each Share will
decrease over the life of the Trust due to the recurring deliveries of palladium necessary to pay the Sponsor’s Fee
in-kind and potential sales of palladium to pay in cash the Trust expenses not assumed by the Sponsor. Without increases in
the price of palladium sufficient to compensate for that decrease, the price of the Shares will also decline proportionately
over the life of the Trust.





The amount of palladium represented by each Share
decreases each day by the Sponsor’s Fee. In addition, although the Sponsor has agreed to assume all organizational and
certain 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), in exceptional cases certain Trust expenses may need to
be paid by the Trust. Because the Trust does not have any income, it must either make payments in-kind by deliveries
of palladium (as is the case with the Sponsor’s Fee) or it must sell palladium to obtain cash (as in the case
of any exceptional expenses).  The result of these sales of palladium and recurring deliveries of palladium to
pay the Sponsor’s Fee in-kind is a decrease in the amount of palladium represented by each Share. New deposits of
palladium, received in exchange for new Shares issued by the Trust, will not reverse this trend.





A decrease in the amount of palladium represented by each
Share results in a decrease in each Share’s price even if the price of palladium bullion does not change. To retain
the Share’s original price, the price of palladium must increase. Without that increase, the lesser amount of palladium
represented by the Share will have a correspondingly lower price. If this increase does not occur, or is not sufficient to counter
the lesser amount of palladium represented by each Share, Shareholders will sustain losses on their investment in Shares.





An increase in Trust expenses not assumed by the Sponsor, or
the existence of unexpected liabilities affecting the Trust, will require the Trustee to sell larger amounts of palladium, and
will result in a more rapid decrease of the amount of palladium represented by each Share and a corresponding decrease
in its value.






RISKS RELATED TO THE CUSTODY OF PALLADIUM






The Trust’s palladium may be subject to loss,
damage, theft or restriction on access.





There is a risk that part or all of the Trust’s palladium
could be lost, damaged or stolen. Access to the Trust’s palladium could also be restricted by natural events (such as
an earthquake) or human actions (such as a terrorist attack). Any of these events may adversely affect the operations of the Trust
and, consequently, an investment in the Shares.






The Trust’s lack of insurance protection and the Shareholders’
limited rights of legal recourse against the Trust, the Trustee, the Sponsor, the Custodian, the Zurich Sub-Custodian and any other
sub-custodian exposes the Trust and its Shareholders to the risk of loss of the Trust’s palladium for which no person
is liable.





The Trust does not insure its palladium. The Custodian maintains
insurance with regard to its business on such terms and conditions as it considers appropriate in connection with its custodial
obligations and is responsible for all costs, fees and expenses arising from the insurance policy or policies. The Trust is not
a beneficiary of any such insurance and does not have the ability to dictate the existence, nature or amount of coverage. Therefore,
Shareholders cannot be assured that the Custodian maintains adequate insurance or any insurance with respect to the palladium
held by the Custodian on behalf of the Trust. In addition, the Custodian and the Trustee do not require the Zurich Sub-Custodian
or any other direct or indirect sub-custodians to be insured or bonded with respect to their custodial activities or in respect
of the palladium held by them on behalf of the Trust. Further, Shareholders’ recourse against the Trust, the Trustee
and the Sponsor under New York law, the Custodian, the Zurich Sub-Custodian and any other sub-custodian under English law, and
any other sub-custodian under the law governing their custody operations is limited. Consequently, a loss may be suffered with
respect to the Trust’s palladium which is not covered by insurance and for which no person is liable in damages.






The 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.





The liability of the Custodian is limited under the Custody
Agreements. Under the Custody agreements between the Trustee and the Custodian which establish the Trust’s unallocated palladium
account (“Unallocated Account”) and the Trust’s allocated palladium account (“Allocated Account”),
the Custodian is only liable for losses that are the direct result of its own negligence, fraud or willful default in the performance of its duties. Any such liability
is further limited to the market value of the palladium lost or damaged at the time such negligence, fraud or willful default
is discovered by the Custodian provided the Custodian notifies the Trust and the Trustee promptly after the discovery of the loss
or damage. Under each Authorized Participant Unallocated Bullion Account Agreement (between the Custodian and an Authorized
Participant establishing an Authorized Participant Unallocated Account), the Custodian is not contractually or otherwise liable
for any losses suffered by any Authorized Participant or Shareholder that are not the direct result of its own gross negligence,
fraud or willful default in the performance of its duties under such agreement, and in no event will its liability exceed the market
value of the balance in the Authorized Participant Unallocated Account at the time such gross negligence, fraud or willful default
is discovered by the Custodian. For any Authorized Participant Unallocated Bullion Account Agreement between an Authorized Participant
and another palladium clearing bank, the liability of the palladium clearing bank to the Authorized Participant may be greater
or lesser than the Custodian’s liability to the Authorized Participant described in the preceding sentence, depending on
the terms of the agreement. In addition, the Custodian will not be liable for any delay in performance or any non-performance of
any of its obligations under the Allocated Account Agreement, the Unallocated Account Agreement or the Authorized Participant Unallocated Bullion
Account Agreement by reason of any cause beyond its reasonable control, including acts of God, war or terrorism. As a result, the
recourse of the Trustee or a Shareholder, under English law, is limited. Furthermore, under English common law, the Custodian, the
Zurich Sub-Custodian, or any other sub-custodian will not be liable for any delay in the performance or any non-performance of
its custodial obligations by reason of any cause beyond its reasonable control.








21














The obligations of the Custodian, the Zurich Sub-Custodian
and any other sub-custodians are governed by English law, which may frustrate the Trust in attempting to seek legal redress against
the Custodian, the Zurich Sub-Custodian or any other sub-custodian concerning its palladium.





The obligations of the Custodian under the Custody Agreements
are, and the Authorized Participant Unallocated Bullion Account Agreements may be, governed by English law. The Custodian
has entered into arrangements with the Zurich Sub-Custodian and may enter into arrangements with any other sub-custodians
for the custody or temporary holding of the Trust’s palladium, which arrangements may also be governed by English law. The
Trust is a New York common law trust. Any United States, New York or other court situated in the United States may have difficulty
interpreting English law (which, insofar as it relates to custody arrangements, is largely derived from court rulings rather than
statute), LPPM rules or the customs and practices in the London custody market. It may be difficult or impossible for the
Trust to sue the Zurich Sub-Custodian or any other sub-custodian in a United States, New York or other court situated in the
United States. In addition, it may be difficult, time consuming and/or expensive for the Trust to enforce in a foreign court a
judgment rendered by a United States, New York or other court situated in the United States.






Although the relationship between the Custodian and the Zurich
Sub-Custodian concerning the Trust’s allocated palladium is expressly governed by English law, a court hearing any legal
dispute concerning their arrangement may disregard that choice of law and apply Swiss law, in which case the ability of the Trust
to seek legal redress against the Zurich Sub-Custodian may be frustrated.





The obligations of the Zurich Sub-Custodian under its arrangement
with the Custodian with respect to the Trust’s allocated palladium is expressly governed by English law. Nevertheless,
a court in the United States, England or Switzerland may determine that English law should not apply and, instead, apply Swiss
law to that arrangement. Not only might it be difficult or impossible for a United States or English court to apply Swiss law to
the Zurich Sub-Custodian’s arrangement, but application of Swiss law may, among other things, alter the relative rights and obligations
of the Custodian and the Zurich Sub-Custodian to the extent that a loss to the Trust’s palladium may not have adequate
or any legal redress. Further, the ability of the Trust to seek legal redress against the Zurich Sub-Custodian may be frustrated
by application of Swiss law.






The Trust may not have adequate sources of recovery if its palladium
is lost, damaged, stolen or destroyed.





If the Trust’s palladium is lost, damaged, stolen
or destroyed under circumstances rendering a party liable to the Trust, the responsible party may not have the financial resources
sufficient to satisfy the Trust’s claim. For example, as to a particular event of loss, the only source of recovery for the
Trust might be limited to the Custodian, the Zurich Sub-Custodian or any other sub-custodian or, to the extent identifiable, other responsible third parties (e.g.,
a thief or terrorist), any of which may not have the financial resources (including liability insurance coverage) to satisfy a
valid claim of the Trust.








22














Shareholders and Authorized Participants lack the right under
the Custody Agreements to assert claims directly against the Custodian, the Zurich Sub-Custodian, and any other sub-custodian.





Neither the Shareholders nor any Authorized Participant have
a right under the Custody Agreements to assert a claim of the Trust against the Custodian, the Zurich Sub-Custodian or any other
sub-custodian. Claims under the Custody Agreements may only be asserted by the Trustee on behalf of the Trust.






The Custodian is reliant on the Zurich Sub-Custodian for
the safekeeping of all or a substantial portion of the Trust’s palladium. Furthermore, the Custodian has limited obligations
to oversee or monitor the Zurich Sub-Custodian. As a result, failure by any Zurich Sub-Custodian to exercise due care in the safekeeping
of the Trust’s palladium could result in a loss to the Trust.





Palladium generally trades on a loco London or loco Zurich basis
whereby the physical palladium is held in vaults located in London or Zurich or is transferred into accounts established in London
or Zurich. The Custodian does not have a vault in Zurich and is reliant on the Zurich Sub-Custodian for the safekeeping of all
or a substantial portion of the Trust’s allocated palladium. Other than obligations to (1) use reasonable care in appointing
the Zurich Sub-Custodian, (2) require any Zurich Sub-Custodian to segregate the palladium held by it for the Trust from any other
palladium held by it for the Custodian and any other customers of the Custodian by making appropriate entries in its books and
records and (3) ensure that the Zurich Sub-Custodian provides confirmation to the Trustee that it has undertaken to segregate the
palladium held by it for the Trust, the Custodian is not liable for the acts or omissions of the Zurich Sub-Custodian. Other than
as described above, the Custodian does not undertake to monitor the performance by the Zurich Sub-Custodian of its custody functions.
The Trustee’s obligation to monitor the performance of the Custodian is limited to receiving and reviewing the reports of
the Custodian. The Trustee does not monitor the performance of the Zurich Sub-Custodian or any other sub-custodian. In addition,
the ability of the Trustee and the Sponsor to monitor the performance of the Custodian may be limited because under the Custody
Agreements, the Trustee and the Sponsor have only limited rights to visit the premises of the Custodian or the Zurich Sub-Custodian
for the purpose of examining the Trust’s palladium and certain related records maintained by the Custodian or Zurich Sub-Custodian.





As a result of the above, any failure by any Zurich Sub-Custodian
to exercise due care in the safekeeping of the Trust’s palladium may not be detectable or controllable by the Custodian or
the Trustee and could result in a loss to the Trust.






The Custodian relies on its Zurich Sub-Custodian to hold
the palladium allocated to the Trust Allocated Account and used to settle redemptions. As a result, settlement of palladium in
connection with redemptions loco London may require more than two business days.





The Custodian is reliant on its Zurich Sub-Custodian to hold
the palladium allocated to the Trust Allocated Account in order to effect redemption of Shares. As a result, in the case for redemption
orders electing palladium deliveries to be received loco London, it may take longer than two business days for palladium to be
credited to the Authorized Participant Unallocated Account, which may result in a delay of settlement of the redemption order that
is settled loco London.






Because the Trustee does not, and the Custodian has limited
obligations to, oversee and 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.





Under the Allocated Account Agreement, the Custodian may appoint
from time to time one or more sub-custodians to hold the Trust’s palladium on a temporary basis pending delivery to the Custodian.
The sub-custodians which the Custodian currently uses are The Bank of Nova Scotia – ScotiaMocatta, Brinks Global Services
Inc., HSBC Bank plc, ICBC Standard Bank plc, Malca-Amit SA Zurich, and UBS Zurich. The Custodian has selected the Zurich Sub-Custodian,
and the Zurich Sub-Custodian maintains custody of all of the Trust’s allocated palladium to be held in Zurich for the Custodian.
The Custodian is required under the Allocated Account Agreement to use reasonable care in appointing the Zurich Sub-Custodian
and any other sub-custodians, making the Custodian liable only for negligence or bad faith in the selection of such sub-custodians,
and has an obligation to use commercially reasonable efforts to obtain delivery of the Trust’s palladium from any sub-custodians
appointed by the Custodian. Otherwise, the Custodian is not liable for the acts or omissions of its sub-custodians. These sub-custodians
may in turn appoint further sub-custodians, but the Custodian is not responsible for the appointment of these further sub-custodians.
The Custodian does not undertake to monitor the performance by sub-custodians of their custody functions or their selection of
further sub-custodians. The Trustee does not monitor the performance of the Custodian other than to review the reports provided
by the Custodian pursuant to the Custody Agreements and does not undertake to monitor the performance of any sub-custodian. Furthermore,
except for the Zurich Sub-Custodian, the Trustee may 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 will be obligated
to cooperate in any review the Trustee may wish to conduct of the facilities, procedures, records or creditworthiness of such sub-custodian.
In addition, the ability of the Trustee to monitor the performance of the Custodian and the Zurich Sub-Custodian may be limited
because under the Allocated Account Agreement and the Unallocated Account Agreement the Trustee has only limited rights to visit
the premises of the Custodian and the Zurich Sub-Custodian for the purpose of examining the Trust’s palladium and certain
related records maintained by the Custodian and the Zurich Sub-Custodian.








23












The 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.





Except for the Custodian’s arrangement with the Zurich
Sub-Custodian, there are expected to be no written contractual arrangements between sub-custodians that hold the Trust’s
palladium and the Trustee or the Custodian because traditionally such arrangements are based on the LPPM’s rules and on the
customs and practices of the London bullion market. In the event of a legal dispute with respect to or arising from such arrangements,
it may be difficult to define such customs and practices. The LPPM’s rules may be subject to change outside the control of
the Trust. Under English law, neither the Trustee nor the Custodian would have a supportable breach of contract claim against a
sub-custodian for losses relating to the safekeeping of palladium. If the Trust’s palladium is lost or damaged while in the
custody of a sub-custodian, the Trust may not be able to recover damages from the Custodian or the sub-custodian. Whether a sub-custodian
will be liable for the failure of sub-custodians appointed by it to exercise due care in the safekeeping of the Trust’s palladium
will depend on the facts and circumstances of the particular situation. Shareholders cannot be assured that the Trustee will be
able to recover damages from sub-custodians whether appointed by the Custodian or by another sub-custodian for any losses relating
to the safekeeping of palladium by such sub-custodians.






Palladium bullion allocated to the Trust in connection with
the creation of a Basket may not meet the London/Zurich Good Delivery Standards and, if a Basket is issued against such palladium,
the Trust may suffer a loss.





Neither the Trustee nor the Custodian independently confirms
the fineness of the palladium allocated to the Trust in connection with the creation of a Basket. The palladium bullion allocated
to the Trust by the Custodian may be different from the reported fineness or weight required by the LPPM’s standards for
palladium plates or ingots delivered in settlement of a palladium trade (London/Zurich Good Delivery Standards), the standards
required by the Trust. If the Trustee nevertheless issues a Basket against such palladium, and if the Custodian fails to satisfy
its obligation to credit the Trust the amount of any deficiency, the Trust may suffer a loss

.






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.
If the Custodian becomes insolvent, its assets may not be adequate to satisfy a claim by the Trust or any Authorized Participant.
In addition, in the event of the Custodian’s insolvency, there may be a delay and costs incurred in identifying the bullion
held in the Trust’s allocated palladium account.





Palladium which is part of a deposit for a purchase order or
part of a redemption distribution is held for a time in the Trust Unallocated Account and, previously or subsequently in, the Authorized
Participant Unallocated Account of the purchasing or redeeming Authorized Participant. During those times, the Trust and the Authorized
Participant, as the case may be, have no proprietary rights to any specific plates or ingots of palladium held by the Custodian
and are each an unsecured creditor of the Custodian with respect to the amount of palladium held in such unallocated accounts.
In addition, if the Custodian fails to allocate the Trust’s palladium in a timely manner, in the proper amounts or otherwise in accordance
with the terms of the Unallocated Account Agreement, or if a sub-custodian fails to so segregate palladium held by it on behalf
of the Trust, unallocated palladium will not be segregated from the Custodian’s assets, and the Trust will be an unsecured
creditor of the Custodian with respect to the amount so held in the event of the insolvency of the Custodian. In the event the
Custodian becomes insolvent, the Custodian’s assets might not be adequate to satisfy a claim by the Trust or the Authorized
Participant for the amount of palladium held in their respective unallocated palladium accounts.








24













In the case of the insolvency of the Custodian, a liquidator
may seek to freeze access to the palladium held in all of the accounts held by the Custodian, including the Trust Allocated
Account. Although the Trust would be able to claim ownership of properly allocated palladium, the Trust could incur expenses in
connection with asserting such claims, and the assertion of such a claim by the liquidator could delay creations and redemptions
of Baskets.






In issuing Baskets, the Trustee relies on certain information
received from the Custodian which is subject to confirmation after the Trustee has relied on the information. If such information
turns out to be incorrect, Baskets may be issued in exchange for an amount of palladium which is more or less than the amount
of palladium which is required to be deposited with the Trust.





The Custodian’s definitive records are prepared after
the close of its business day. However, when issuing Baskets, the Trustee relies on information reporting the amount of palladium
credited to the Trust’s accounts which it receives from the Custodian during the business day and which is subject to correction
during the preparation of the Custodian’s definitive records after the close of business. If the information relied upon
by the Trustee is incorrect, the amount of palladium actually received by the Trust may be more or less than the amount required
to be deposited for the issuance of Baskets.






GENERAL RISKS






The Trust relies on the information and technology systems
of the Trustee, the Custodian, the Marketing Agent and, to a lesser degree, the Sponsor, which could be adversely affected by information
systems interruptions, cybersecurity attacks or other disruptions which could have a material adverse effect on the Trust’s
record keeping and operations.





The Custodian, the Trustee and the Marketing Agent depend upon
information technology infrastructure, including network, hardware and software systems to conduct their business as it relates
to the Trust. A cybersecurity incident, or a failure to protect their computer systems, networks and information against cybersecurity
threats, could result in a loss of information and adversely impact their ability to conduct their business, including their business
on behalf of the Trust. Despite implementation of network and other cybersecurity measures, their security measures may not be
adequate to protect against all cybersecurity threats.








25












Uncertainty regarding the effects of Brexit could adversely
affect the price of the Shares.





The United Kingdom left the European Union (the “EU”)
(“Brexit”) on January 31, 2020, subject to a transitional period which ended December 31, 2020. During the transitional
period, although the United Kingdom was no longer a member state of the EU, it remained subject to EU law and regulations as if
it were still a member state. The United Kingdom and the EU were to negotiate the terms of their future trading relationship during
the transitional period. On December 24, 2020, negotiators representing the United Kingdom and the EU came to a preliminary trade
agreement, which was subsequently ratified by the UK Parliament. The trade agreement must also be ratified by the European Parliament.





The unavoidable uncertainties and events related to Brexit could
increase taxes and costs of business and cause volatility in currency exchange rates and interest rates. Brexit could adversely
affect the performance of contracts in existence at the date of Brexit and European, United Kingdom or worldwide political, regulatory,
economic or market conditions and could contribute to instability in political institutions, regulatory agencies and financial
markets. Brexit could also lead to legal uncertainty and politically divergent national laws and regulations as a new relationship
between the United Kingdom and EU is defined and the United Kingdom determines which EU laws to replace or replicate. Any of these
effects of Brexit, and others that cannot be anticipated, could adversely affect the price of the Shares. In addition, the risk
that Standard Life Aberdeen plc, the parent of the Sponsor and which is headquartered in the United Kingdom, failed to adequately
prepare for the end of Brexit’s transitional period could have significant customer, reputation and capital impacts for Standard
Life Aberdeen plc and its subsidiaries, including those providing services to the Trust; however, Standard Life Aberdeen plc and
its subsidiaries have detailed contingency planning in place to seek to manage the consequences of Brexit to the Trust and to avoid
any disruption on the Trust and to the services they provide. Given the fluidity and complexity of the situation, we cannot provide
assurance that the Trust will not be adversely impacted despite these preparations.






The Trust as well as the Sponsor and its service providers
are vulnerable to the effects of public health crises, including the ongoing novel coronavirus pandemic.





The respiratory illness COVID-19 caused by a novel coronavirus
has resulted in a global pandemic and major disruption to economies and markets around the world, including the United States.
Financial markets have experienced extreme volatility and trading in many instruments has been disrupted. Liquidity
for many instruments has been greatly reduced for periods of time. Some interest rates are very low and in some cases yields are
negative. Some sectors of the economy and individual issuers have experienced particularly large losses. These circumstances may
continue for an extended period of time, and may continue to affect adversely the value and liquidity of a fund’s investments.
The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers,
including the Trust and its service providers, are not known. The information technology and other operational systems upon which
the Trust’s service providers rely could be impaired and the ability of employees of the Trust’s service providers
to perform essential tasks on behalf of the Trust could be disrupted. Governments and central banks, including the Federal Reserve
in the U.S., have taken extraordinary and unprecedented actions to support local and global economies and the financial markets.
The impact of these measures, and whether they will be effective to mitigate the economic and market disruption, will not be known
for some time.








Item 1B. Unresolved Staff Comments





None.








Item 2. Properties





Not applicable.








Item 3. Legal Proceedings





None








26

















Item
4. Mine Safety Disclosure









Not
applicable.











PART
II












Item
5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities









The
Trust’s Shares have been listed on the NYSE Arca under the symbol PALL since its initial public offering on January 8, 2010.








The
following tables set out the range of high and low closing prices for the Shares as reported for NYSE Arca transactions for each
of the quarters during the years ended December 31, 2020 and 2019:












































































Fiscal Year Ended December 31, 2020: Quarter Ended











High



Low



March 31, 2020




$

272.69



$

148.21



June 30, 2020




$

209.20



$

168.99



September 30, 2020




$

224.00



$

178.49



December 31, 2020




$

233.30



$

206.99












































































Fiscal Year Ended December 31, 2019: Quarter Ended











High



Low



March 31, 2019




$

152.13



$

120.03



June 30, 2019




$

146.34



$

123.04



September 30, 2019




$

159.25



$

132.51



December 31, 2019




$

185.79



$

156.59








The
number of outstanding Share of the Trust as of February 24, 2021

was 1,650,000.










Monthly
Share Price









The
following table sets forth, for each of the most recent six months, the high and low closing prices of the Shares, as reported
for NYSE Arca transactions.


























































































Month



High



Low



August 2020




$

211.86



$

196.81



September 2020




$

224.00



$

206.68



October 2020




$

230.46



$

206.99



November 2020




$

233.30



$

207.83



December 2020




$

225.52



$

212.30



January 2021




$

232.82



$

208.37










27















Issuer
Purchase of Equity Securities









The
Trust issues and redeems Shares only with Authorized Participants in exchange for palladium, only in aggregations of 25,000 Shares,
referred to as a Basket. A list of current Authorized Participants is available from the Sponsor or the Trustee and is included
in Item 7 of this report. Although the Trust does not purchase Shares directly from its Shareholders, in connection with the redemption
of Baskets, the Trust redeemed as follows during the years ended December 31, 2020 and 2019:














































































































































































Month



Total number of


Shares redeemed



Average ounces of


palladium per Share



January 2020





75,000




0.094



February 2020














March 2020





450,000




0.094



April 2020





25,000




0.094



May 2020





25,000




0.094



June 2020





25,000




0.094



July 2020














August 2020














September 2020





75,000




0.094



October 2020





50,000




0.094



November 2020





25,000




0.094



December 2020





50,000




0.094



Total





800,000




0.094










28


















































































































































































Month



Total number of


Shares redeemed



Average ounces of


palladium per Share


January 2019











February 2019





50,000




0.095



March 2019





100,000




0.095



April 2019





75,000




0.095



May 2019





200,000




0.095



June 2019





25,000




0.095



July 2019





50,000




0.094



August 2019














September 2019





25,000




0.094



October 2019














November 2019





75,000




0.094



December 2019





25,000




0.094



Total





625,000




0.095











Item
6. Selected Financial Data









The
following selected financial data for the reporting periods should be read in conjunction with the Trust’s financial statements
and related notes and

Management’s Discussion and Analysis of Financial Condition and Results of Operations

.





























































































































































































Year Ended


December 31, 2020



Year Ended


December 31, 2019



Year Ended


December 31, 2018



Year Ended


December 31, 2017



Year Ended


December 31, 2016


(Amounts in 000’s of US$, except for Share and per Share data)





















Total assets


$

356,424



$

300,638



$

185,555



$

241,679



$

178,342


Total gain/(loss) on palladium


$

62,621



$

90,140



$

17,340



$

91,808



$

41,126


Change in net assets from operations


$

60,608



$

88,748



$

16,266



$

90,530



$

40,026


Weighted average number of Shares



1,615,779




1,590,959




1,826,301




2,559,726




3,114,344


Net increase / (decrease) in net assets per Share


$

37.51



$

55.78



$

8.91



$

35.37



$

12.85


Net cash provided by operating activities


$





$





$





$





$













Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations












This
information should be read in conjunction with the financial statements and notes to the financial statements included with this
report. The discussion and analysis that follows may contain statements that relate to future events or future performance. In
some cases, such forward-looking statements can be identified by terminology such as “may,” “should,”
“expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,”
“potential” or the negative of these terms or other comparable terminology. We remind readers that forward-looking
statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown
risks that could cause the actual results, performance, levels of activity, or our achievements, or industry results, to be materially
different from any future results, performance, levels of activity, or our achievements expressed or implied by such forward-looking
statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the
date hereof. The Trust undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect
events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.













29

















Introduction.











The
Aberdeen Standard Palladium ETF Trust (the “Trust”) is a trust formed under the laws of the State of New York. The
Trust does not have any officers, directors, or employees, and is administered by The Bank of New York Mellon (the “Trustee”)
acting as trustee pursuant to the Depositary Trust Agreement (the “Trust Agreement”) between the Trustee and Aberdeen
Standard Investments ETFs Sponsor LLC, the sponsor of the Trust (the “Sponsor”). The Trust issues shares (“Shares”)
representing fractional undivided beneficial interests in its net assets. The assets of the Trust consist of palladium bullion
held by a custodian as an agent of the Trust and responsible only to the Trustee.








The
Trust is a passive investment vehicle and the objective of the Trust is for the value of each Share to approximately reflect,
at any given time, the price of the palladium bullion owned by the Trust, less the Trust’s liabilities (anticipated to be
principally for accrued operating expenses), divided by the number of outstanding Shares. The Trust does not engage in any activities
designed to obtain a profit from, or ameliorate losses caused by, changes in the price of palladium.








The
Trust issues and redeems Shares only in exchange for palladium, only in aggregations of 25,000 Shares effective April 1, 2019
(prior to April 1, 2019, the number of Shares that constituted a Basket was 50,000 Shares) or integral multiples thereof (each,
a “Basket”), and only in transactions with registered broker-dealers (or other securities market participants not
required to register as broker-dealers, such as a bank or other financial institution) that (1) are participants in DTC and (2)
have previously entered into an agreement with the Trust governing the terms and conditions of such issuance (such dealers, the
“Authorized Participants”).








As
of the date of this annual report the Authorized Participants that have signed an Authorized Participant Agreement with the Trust
are Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, HSBC Securities (USA) Inc.,
J.P. Morgan Securities Inc., Merrill Lynch Professional Clearing Corp., Mizuho Securities USA LLC, Morgan Stanley & Co. Inc.,
Scotia Capital (USA) Inc., UBS Securities LLC and Virtu Financial BD, LLC.








Shares
of the Trust trade on the NYSE Arca under the symbol “PALL.”








Investing
in the Shares does not insulate the investor from certain risks, including price volatility. The following table illustrates the
movement in the NAV of the Shares against the corresponding palladium price (per 1/10 of an oz. of palladium) since inception:











NAV
per Share vs. Palladium Price from December 30, 2010 (the Date of Inception) to December 31, 2020




















The
divergence of the NAV per Share from the palladium price over time reflects the cumulative effect of the Trust expenses that arise
if an investment had been held since inception.










Critical
Accounting Policy










The
financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United
States of America. The preparation of these financial statements relies on estimates and assumption that impact the Trust’s
financial position and results of operations. These estimates and assumptions affect the Trust’s application of accounting
policies. Below we describe the valuation of palladium bullion, a critical accounting policy that we believe is important to understanding the
results of operations and financial position. In addition, please refer to Note 2 to the Financial Statements for further discussion
of our accounting policies.










30















Valuation
of Palladium









Palladium
is held by JPMorgan Chase Bank, N.A. (the “Custodian”) on behalf of the Trust, at its London, England vaulting premises.
Palladium may also be held by UBS AG, or any other firm selected by the Custodian to hold the Trust’s palladium in the Trust’s
allocated account in the firm’s Zurich vault premises and whose appointment has been approved by the Sponsor, at its Zurich,
Switzerland vaulting premises. Palladium is recorded at fair value. The cost of palladium is determined according to the average
cost method and the fair value is based on the LME PM Fix (the afternoon session of LME’s twice daily electronic price fixing
process). Realized gains and losses on transfers of palladium, or palladium distributed for the redemption of Shares, are calculated
on a trade date basis as the difference between the fair value and cost of palladium transferred

.


















































































December 31, 2020


December 31, 2019


December 31, 2018

(Amounts in 000’s of US$)













Investment in palladium - cost


$

224,166



$

170,040



$

112,344


Unrealized gain on investment in palladium



132,258




130,598




73,211


Investment in palladium - fair
value


$

356,424



$

300,638



$

185,555









Inspection
of Palladium









Under
the Custody Agreements, the Trustee, the Sponsor and the Sponsor’s auditors and inspectors may, only up to twice a year,
visit the premises of the Custodian and the Zurich Sub-Custodian for the purpose of examining the Trust’s palladium
and certain related records maintained by the Custodian. Visits by auditors and inspectors to the Zurich Sub-Custodian’s
facilities will be arranged through the Custodian. Other than with respect to the Zurich Sub-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 and the Zurich Sub-Custodian, in order to examine the palladium and
the records maintained by them. Inspections were conducted by Inspectorate International Limited, a leading commodity inspection
and testing company retained by the Sponsor, as of August 14, 2020. Due to unprecedented social lock-down policies implemented in the UK and Switzerland to help prevent the spread of COVID-19, neither the
Sponsor, nor Inspectorate, were able to perform a physical inspection of the Trust's palladium at December 31, 2020. In lieu of a physical
inspection, the Sponsor performed alternative procedures to verify the palladium held by the Trust at December 31, 2020. These procedures
included confirmation of the palladium bar list and total ounces of palladium held by the Custodian at December 31, 2020, and an independent
recalculation of ounces of palladium for each creation or redemption transaction from August 14, 2020, the date of the last physical inspection,
through December 31, 2020. The Sponsor and Inspectorate also virtually inspected a selection of palladium bars held by the Custodian on
behalf of the Trust, verifying the weight of the bars and that the serial numbers of the bars selected matched the records of the Trust.










Liquidity










The
Trust is not aware of any trends, demands, conditions, 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 expense of the Trust during the period covered by this report was the Sponsor’s
Fee. The Trust’s only source of liquidity is its transfers and sales of palladium.








The
Trustee will, at the direction of the Sponsor or in its own discretion, sell the Trust’s palladium as necessary to
pay the Trust’s expenses not otherwise assumed by the Sponsor. The Trustee will not sell palladium to pay the Sponsor’s
Fee but will pay the Sponsor’s Fee through in-kind transfers of palladium to the Sponsor. At December 31, 2020
and 2019, the Trust did not have any cash balances.










31















Review
of Financial Results












Financial
Highlights
















































































Year Ended


December 31, 2020


Year Ended


December 31, 2019


Year Ended


December 31, 2018

(Amounts in 000’s of US$)













Total gain/(loss) on palladium


$

62,621



$

90,140



$

17,340


Net change in assets from operations


$

60,608



$

88,748



$

16,266


Net cash provided by operating activities


$





$





$











The
year ended December 31, 2020









The
net asset value (“NAV”) of the Trust is obtained by subtracting the Trust’s expenses and liabilities on any
day from the value of the palladium owned 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 $300,485,250 at December 31, 2019 to $356,238,300 at December 31, 2020, an 18.55% increase for
the year. The increase in the Trust’s NAV resulted primarily from an increase in the price per ounce of palladium, which
rose 22.94% from $1,905.00 at December 31, 2019 to $2,342.00 at December 31, 2020.








There
was a decrease in outstanding Shares, which fell from 1,675,000 Shares at December 31, 2019 to 1,625,000 Shares at December
31, 2020, a result of 750,000 Shares (30 Baskets) being created and 800,000 Shares (32 Baskets) being redeemed during the
year.








The
NAV per Share increased 22.20% from $179.39 at December 31, 2019 to $219.22 at December 31, 2020. The Trust’s NAV per Share
rose slightly less than the price per ounce of palladium on a percentage basis due to the Sponsor’s Fee, which was $2,012,865
for the year, or 0.60% of the Trust’s ANAV.










32














The
NAV per Share of $261.67 at February 19, 2020 was the highest during the year, compared with a low of $146.44 at March 16, 2020.








The
increase in net assets from operations for the year ended December 31, 2020 was $60,607,957, resulting from a realized gain of
$772,814 on the transfer of palladium to pay expenses, a realized gain of $60,188,024 on palladium distributed for the redemption
of Shares, a change in unrealized gain on investment in palladium of $1,659,984, offset by the Sponsor’s Fee of $2,012,865.
Other than the Sponsor’s Fee, the Trust had no expenses during the year ended December 31, 2020.









The
year ended December 31, 2019









The
Trust’s NAV increased from $185,465,009 at December 31, 2018 to $300,485,250 at December 31, 2019, a 62.02% increase for
the year. The increase in the Trust’s NAV resulted primarily from an increase in outstanding Shares, which rose from 1,550,000
Shares at December 31, 2018 to 1,675,000 Shares at December 31, 2019, a result of 750,000 Shares (30 Baskets) being created and
625,000 Shares (25 Baskets) being redeemed during the year.








There
was an increase in the price per ounce of palladium, which rose 50.83% from $1,263.00 at December 31, 2018 to $1,905.00 at December
31, 2019.








The
NAV per Share increased 49.92% from $119.66 at December 31, 2018 to $179.39 at December 31, 2019. The Trust’s NAV per Share
rose slightly less than the price per ounce of palladium on a percentage basis due to the Sponsor’s Fee, which was $1,392,218
for the year, or 0.60% of the Trust’s ANAV.








The
NAV per Share of $185.66 at December 13, 2019 was the highest during the year, compared with a low of $120.03 at January 2, 2019.








The
increase in net assets from operations for the year ended December 31, 2019 was $88,747,092, resulting from a realized gain of
$519,521 on the transfer of palladium to pay expenses, a realized gain of $32,232,847 on palladium distributed for the redemption
of Shares, a change in unrealized gain on investment in palladium of $57,386,942, offset by the Sponsor’s Fee of $1,392,218.
Other than the Sponsor’s Fee, the Trust had no expenses during the year ended December 31, 2019.









The
year ended December 31, 2018









The
Trust’s NAV decreased from $241,554,950 at December 31, 2017 to $185,465,009 at December 31, 2018, a 23.22% decrease for
the year. The decrease in the Trust’s NAV resulted primarily from a decrease in outstanding Shares, which fell from 2,400,000
Shares at December 31, 2017 to 1,550,000 Shares at December 31, 2018, a result of 400,000 Shares (16 Baskets) being created and
1,250,000 Shares (50 Baskets) being redeemed during the year.

Effective April 1, 2019, the number of shares in a block that
constitutes a basket decreased from 50,000 Shares to 25,000 Shares (the “Basket Size Change”). The information presented
attributable to periods prior to the Basket Size Change has been adjusted to reflect the effect of the Basket Size Change.









There
was an increase in the price per ounce of palladium, which rose 19.60% from $1,056.00 at December 31, 2017 to $1,263.00 at December
31, 2018.








The
NAV per Share increased 18.89% from $100.65 at December 31, 2017 to $119.66 at December 31, 2018. The Trust’s NAV per Share
rose slightly less than the price per ounce of palladium on a percentage basis due to the Sponsor’s Fee, which was $1,073,755
for the year, or 0.60% of the Trust’s ANAV.








The
NAV per Share of $120.43 at December 20, 2018 was the highest during the year, compared with a low of $80.62 at August 15, 2018.








The
increase in net assets from operations for the year ended December 31, 2018 was $16,266,087, resulting from a realized gain of
$339,658 on the transfer of palladium to pay expenses, a realized gain of $30,150,488 on palladium distributed for the redemption
of Shares, offset by a change in unrealized loss on investment in palladium of $13,150,304 and the Sponsor’s Fee of $1,073,755.
Other than the Sponsor’s Fee, the Trust had no expenses during the year ended December 31, 2018.









Off-Balance
Sheet Arrangements









The
Trust is not a party to any off-balance sheet arrangements.











Item
7A. Quantitative and Qualitative Disclosures about Market Risk









The
Trust Agreement does not authorize the Trustee to borrow for payment of the Trust’s ordinary expenses. The Trust does not
engage in transactions in foreign currencies which could expose the Trust or holders of Shares to any foreign currency related
market risk. The Trust invests in no derivative financial instruments and has no foreign operations or long-term debt instruments.










33

















Item
8. Financial Statements and Supplementary Data

(Unaudited)











Quarterly
Income Statements










Year
Ended December 31, 2020




















































































































































































































































































































































































































































Three months ended


Year ended

(Amounts in 000’s of US$, except for Share and per Share data)


March 31


June 30


September 30


December 31


December 31

EXPENSES











Sponsor’s Fee


$

548



$

376



$

530



$

559



$

2,013


Total expenses



548




376




530




559




2,013























Net investment loss



(548

)



(376

)



(530

)



(559

)



(2,013

)






















REALIZED AND UNREALIZED GAINS / (LOSSES)





















Realized gain on palladium transferred to pay expenses



258




160




145




210




773


Realized gain / (loss) on palladium distributed for the redemption of Shares



39,238




4,647




5,940




10,363




60,188


Change in unrealized gain on investment in palladium



8,711




(57,866

)



60,054




(9,239

)



1,660


Total
gain / (loss) on investment in palladium



48,207




(53,059

)



66,139




1,334




62,621























Change in net assets from operations


$

47,659



$

(53,435

)


$

65,609



$

775



$

60,608























Net increase in net assets per Share


$

28.84



$

(37.93

)


$

38.35



$

0.46



$

37.51























Weighted average number of Shares



1,652,473




1,408,791




1,710,870




1,689,130




1,615,779




























































































































































































































































































































































































































Year Ended December 31, 2019



Three months ended


Year ended

(Amounts in 000’s of US$, except for Share and per Share data)


March 31


June 30


September 30


December 31


December 31

EXPENSES











Sponsor’s Fee


$

329



$

329



$

312



$

422



$

1,392


Total Expenses



329




329




312




422




1,392























Net investment loss



(329

)



(329

)



(312

)



(422

)



(1,392

)






















REALIZED AND UNREALIZED GAINS / (LOSSES)





















Realized gain on palladium transferred to pay expenses



118




127




120




155




520


Realized gain on palladium distributed for the redemption of Shares



5,408




15,187




4,696




6,942




32,233


Change in unrealized gain on investment in palladium



11,210




1,844




15,673




28,660




57,387


Total gain on investment in palladium



16,736




17,158




20,489




35,757




90,140























Change in net assets from operations


$

16,407



$

16,829



$

20,177



$

35,335



$

88,748























Net increase in net assets per Share


$

9.68



$

10.62



$

14.14



$

21.29



$

55.78























Weighted average number of shares



1,695,000




1,584,341




1,427,174




1,659,511




1,590,959









Note:
Quarterly balances may not add to totals due to independent rounding.









The
financial statements required by Regulation S-X, together with the report of the Trust’s independent registered public accounting
firm appear on pages F-1 to F-13 of this filing.











Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures









None.










34

















Item
9A. Controls and Procedures










Conclusion
Regarding the Effectiveness of Disclosure Controls and Procedures









The
Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its
Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange
Commission’s rules and forms, and that such information is accumulated and communicated to the Chief Executive Officer and
Chief Financial Officer of the Sponsor, and to the audit committee, as appropriate, to allow timely decisions regarding required
disclosure.








Under
the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer of the Sponsor, the
Sponsor conducted an evaluation of the Trust’s disclosure controls and procedures, as defined under Exchange Act Rules 13a-15(e)
and 15d-15(e). Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer of the Sponsor concluded
that, as of December 31, 2020, the Trust’s disclosure controls and procedures were effective.








There
have been no changes in the Trust’s or Sponsor’s internal control over financial reporting that occurred during the
Trust’s fiscal year ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect,
the Trust’s or Sponsor’s internal control over financial reporting.









Management’s
Report on Internal Control over Financial Reporting









The
Sponsor’s management is responsible for establishing and maintaining adequate internal control over financial reporting,
as defined under Exchange Act Rules 13a-15(f) and 15d-15(f). The Trust’s internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with accounting principles generally accepted in the United States. Internal control
over financial reporting includes those policies and procedures that:















(1)



pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the Trust’s assets;















(2)



provide
reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles,
and that the Trust’s receipts and expenditures are being made only in accordance
with appropriate authorizations; and















(3)



provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the Trust’s assets that could have a material effect on
the financial statements.








Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become ineffective because of changes
in conditions, or that the degree of compliance with the policies or procedures may deteriorate.








The
Chief Executive Officer and Chief Financial Officer of the Sponsor assessed the effectiveness of the Trust’s internal control
over financial reporting as of December 31, 2020. In making this assessment, they used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) in

Internal Control—Integrated Framework (2013)

. Their
assessment included an evaluation of the design of the Trust’s internal control over financial reporting and testing of
the operational effectiveness of its internal control over financial reporting. Based on their assessment and those criteria,
the Chief Executive Officer and Chief Financial Officer of the Sponsor concluded that the Trust maintained effective internal
control over financial reporting as of December 31, 2020.










35














KPMG
LLP, the independent registered public accounting firm that audited and reported on the financial statements included in this
Form 10-K, as stated in their report which is included herein, issued an attestation report on the effectiveness of the Trust’s
internal control over financial reporting as of December 31, 2020.










36















Report
of Independent Registered Public Accounting Firm
















To the Sponsor, Trustee and Shareholders


Aberdeen Standard Palladium ETF Trust:



Opinion on Internal Control Over Financial Reporting



We have audited Aberdeen Standard Palladium ETF Trust’s
(the Trust) internal control over financial reporting as of December 31, 2020, based on criteria established in

Internal
Control – Integrated Framework (2013)

issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the Trust maintained, in all material respects, effective internal control over financial reporting as of December 31,
2020, based on criteria established in

Internal Control – Integrated Framework (2013)

issued by the Committee of Sponsoring
Organizations of the Treadway Commission.



We also have audited, in accordance with the standards of
the Public Company Accounting Oversight Board (United States) (PCAOB), the statements of assets and liabilities of the Trust,
including the schedules of investments, as of December 31, 2020 and 2019, the related statements of operations and changes
in net assets for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively,
the financial statements) and the financial highlights for each of the years in the three-year period ended December 31,
2020, and our report dated February 26, 2021 expressed an unqualified opinion on those financial statements and financial
highlights.



Basis for Opinion



The Sponsor’s management is responsible for maintaining
effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility
is to express an opinion on the Trust’s internal control over financial reporting based on our audit. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.



We conducted our audit in accordance with the standards of
the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal
control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists,
and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.



Definition and Limitations of Internal Control Over
Financial Reporting



A company’s internal control over financial reporting
is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements and financial highlights for external purposes in accordance with generally accepted accounting principles. A company’s
internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements and financial highlights
in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only
in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements and financial highlights.



Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.



/s/ KPMG LLP



New York, New York


February 26, 2021






37

















Item
9B. Other Information









Not
applicable










38



















PART
III














Item
10. Directors, Executive Officers and Corporate Governance









The
Trust has no directors or executive officers.  The biographies of the President and Chief Executive Officer of the Sponsor
and the Chief Financial Officer and Treasurer of the Sponsor are set out below:










Christopher
Demetriou – President and Chief Executive Officer










Mr.
Demetriou is Chief Executive Officer – Americas for ASII. Mr. Demetriou is a member of the Group Executive Committee as
well as several other committees within the organization. Mr. Demetriou is based in Philadelphia and is responsible for Aberdeen
Standard Investments’ operations across North and South America. Mr. Demetriou previously held the position of Deputy Chief
Executive Officer – Americas for ASII from December 2016 to April 2018, Chief Financial Officer – Americas from January
2016 to December 2016, and Head of Finance – Americas from June 2014 to January 2016. Mr. Demetriou joined ASII in June
2014, as a result of Aberdeen’s acquisition of SVG, a FTSE 250 private equity investor based in London. While at SVG, from
June 2010 to June 2014, Mr. Demetriou was Group Financial Controller and Deputy Head of Strategy. Prior to joining SVG, Mr. Demetriou
worked at Ernst and Young, specializing in Asset and Wealth Management audits and transactions. Mr. Demetriou is a Chartered Accountant
and has a BA in Politics from the University of York in England.










Andrea
Melia – Chief Financial Officer and Treasurer










Ms.
Melia is Vice President and Head of Fund Operations, Traditional Assets – Americas for ASII. Ms. Melia has managed the fund
administration team since joining ASII in September 2009. Prior to joining ASII, Ms. Melia was Director of fund administration
and accounting oversight for Princeton Administrators LLC, a division of BlackRock Inc. and had worked with Princeton Administrators
since 1992. Ms. Melia holds a BS in Accounting from University of Scranton and a MBA from Rider University.








As
described under Item 1 above, ASII is the parent of the Sponsor.











Item
11. Executive Compensation









The
Trust has no directors or executive officers. The only ordinary expense paid by the Trust is the Sponsor’s Fee.











Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters










Security
Ownership of Certain Beneficial Owners









There
are no persons known by the Trust to own directly or indirectly beneficially more than 5% of the outstanding Shares of the Trust.









Security
Ownership of Management









Not
applicable.












39

















Change
in Control









Neither
the Sponsor nor the Trustee knows of any arrangements which may subsequently result in a change in control of the Trust.











Item
13. Certain Relationships and Related Transactions, and Director Independence









The
Trust has no directors or executive officers.










40

















Item
14. Principal Accounting Fees and Services









Fees
for services performed by KPMG LLP for the years ended December 31, 2020 and 2019























































December
31, 2020






December
31, 2019


Audit fees – KPMG


$

77,825



$

72,900


Audit related fees – KPMG



10,000









$

87,825



$

72,900








Audit
Fees are fees paid by the Sponsor to KPMG LLP for professional services for the audit of the Trust’s financial statements
included in the Form 10-K and review of financial statements included in the Form 10-Qs, and for services that are normally provided
by the accountants in connection with regulatory filings or engagements. Audit Related Fees are paid by the Sponsor to KPMG LLP
for assurance and related services that are reasonably related to the performance of the audit or review of the Trust’s
financial statements. These services include the accountant providing a consent letter related to the Trust's registration statement filing.









Pre-Approval
Policies and Procedures









As
referenced in Item 10 above, the Trust has no board of directors, and as a result, has no pre-approval policies or procedures
with respect to fees paid to KPMG LLP. Such determinations are made by the Sponsor.










41















PART
IV








Item
15. Exhibits, Financial Statement Schedules










1.
Financial Statements









See
Index to Financial Statements on Page F-1 for a list of the financial statements being filed herein.









2.
Financial Statement Schedules









Schedules
have been omitted since they are either not required, not applicable, or the information has otherwise been included.



































































































































































Exhibit
No.



Description



4.1(a)




Depositary
Trust Agreement, incorporated by reference to Exhibit 4.1 filed with Registration Statement No. 333-158380 on December 31,
2009










4.1(b)




Amendment
to the Depositary Trust Agreement effective September 20, 2018, incorporated by reference to Exhibit 4.1 filed with the Trust’s
Current Report on  Form 8-K on October 5, 2018










4.2




Form
of Authorized Participant Agreement, effective as of September 5, 2017, incorporated by reference to Exhibit 4.2 filed with
the Trust’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017










4.3




Global
Certificate, incorporated by reference to Exhibit 4.3 filed with Registration Statement No. 333-158380 on December 31, 2009










10.1(a)




Allocated
Account Agreement, incorporated by reference to Exhibit 10.1 filed with Registration Statement No. 333-158380 on December
31, 2009










10.1(b)




Amendment
to the Allocated Account Agreement effective October 1, 2018, incorporated by reference to Exhibit 10.1 filed with the Trust’s
Current Report on Form 8-K on October 5, 2018










10.1(c)




Second
amendment to the Allocated Account Agreement effective May 7, 2020, incorporated by reference to Exhibit 10.1(c) filed with
Registration Statement No. 333-238125 on May 8, 2020










10.2(a)




Unallocated
Account Agreement, incorporated by reference to Exhibit 10.2 filed with Registration Statement No. 333-158380 on December
31, 2009










10.2(b)




Amendment
to the Unallocated Account Agreement, incorporated by reference to Exhibit 10.2 filed with the Trust’s Current Report
on Form 8-K on October 5, 2018










10.2(c)




Second
amendment to the Unallocated Account Agreement effective May 7, 2020, incorporated by reference to Exhibit 10.2(c) filed with
Registration Statement No. 333-238125 on May 8, 2020










10.3




Depository
Agreement, incorporated by reference to Exhibit 10.3 filed with Registration Statement No. 333-158380 on December 31, 2009










10.4(a)




Marketing
Agent Agreement, incorporated by reference to Exhibit 10.4 filed with Registration Statement No. 333-158380 on December 31,
2009










10.4(b)




Novation
of and Amendment No. 1 to the Marketing Agent Agreement effective as of October 1, 2018










23.1




Consent of KPMG LLP, Independent Registered Public Accounting Firm










31.1




Chief Executive Officer’s Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002










31.2




Chief Financial Officer’s Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002










32.1




Chief Executive Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002










32.2




Chief Financial Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002









42











































































101



The following financial
statements from the Trust’s Annual Report on Form 10-K for the year ended December 31, 2020, formatted in Inline XBRL:
(i) Statements of Assets and Liabilities, (ii) Statements of Operations, (iii) Statements of Changes in Net Assets, and (iv)
Notes to the Financial Statements.









101.SCH



Inline XBRL Taxonomy
Extension Schema Document









101.CAL



Inline XBRL Taxonomy
Extension Calculation Document









101.DEF



Inline XBRL Taxonomy
Extension Definitions Document









101.LAB



Inline XBRL Taxonomy
Extension Labels Document









101.PRE



Inline XBRL Taxonomy
Extension Presentation Document









104



The cover page from
the Trust’s Annual Report on Form 10-K for the year ended December 31, 2020, formatted in Inline XBRL (included as Exhibit
101).










43

















Item
16. Form 10-K Summary









Not
applicable.










44















ABERDEEN
STANDARD PALLADIUM ETF TRUST




FINANCIAL STATEMENTS AS OF DECEMBER 31, 2020




INDEX










































































Page











Report of Independent Registered Public Accounting Firm




F-2










Statements of Assets and Liabilities at December 31, 2020 and 2019




F-3












Schedules of Investments at December 31, 2020 and 2019




F-4












Statements of Operations for the years ended December 31, 2020, 2019 and 2018




F-5










Statements of Changes in Net Assets for the years ended December 31, 2020, 2019 and 2018




F-6










Financial Highlights for the years ended December 31, 2020, 2019 and 2018




F-7










Notes to the Financial Statements




F-8









F-

1





















Report
of Independent Registered Public Accounting Firm












To the Sponsor, Trustee and Shareholders


Aberdeen Standard Palladium ETF Trust:



Opinion on the Financial Statements



We have audited the accompanying statements of assets and
liabilities of Aberdeen Standard Palladium ETF Trust (the Trust), including the schedules of investments, as of December 31,
2020 and 2019, the related statements of operations and changes in net assets for each of the years in the three-year period ended
December 31, 2020, and the related notes (collectively, the financial statements) and the financial highlights for each
of the years in the three-year period ended December 31, 2020. In our opinion, the financial statements and financial highlights
present fairly, in all material respects, the financial position of the Trust as of December 31, 2020 and 2019, and the results
of its operations and the changes in its net assets, for each of the years in the three-year period ended December 31, 2020,
and the financial highlights for each of the years in the three-year period ended December 31, 2020, in conformity with U.S. generally
accepted accounting principles.



We also have audited, in accordance with the standards of
the Public Company Accounting Oversight Board (United States) (PCAOB), the Trust’s internal control over financial reporting
as of December 31, 2020, based on criteria established in

Internal Control – Integrated Framework (2013)

issued
by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated Februrary 26, 2021 expressed
an unqualified opinion on the effectiveness of the Trust’s internal control over financial reporting.



Basis for Opinion



These financial statements and financial highlights are the
responsibility of the Sponsor’s management. Our responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent
with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.



We conducted our audits in accordance with the standards of
the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing
procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of
the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.



Critical Audit Matter



The critical audit matter communicated below is a matter arising
from the current period audit of the financial statements and financial highlights that was communicated or required to be communicated
to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and
the financial highlights and (2) involved our especially challenging, subjective, or complex judgment. The communication of
a critical audit matter does not alter in any way our opinion on the financial statements and the financial highlights, taken as
a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter
or on the accounts or disclosures to which it relates.



Evaluation of the Evidence Pertaining to the
Existence of the Palladium Holdings



As presented on the December 31, 2020 schedule of investments,
the fair value of the Trust’s investment in palladium was $356.42 million, representing 100% of the Trust’s total assets,
and 152,187.5 ounces of palladium holdings. The investment in palladium was held by a third-party custodian or sub-custodian (collectively,
the custodian).



We identified the evaluation of the evidence pertaining
to the existence of the palladium holdings as a critical audit matter. Given the nature and volume of the palladium holdings, subjective
auditor judgment was required to evaluate the extent and nature of evidence obtained to assess the existence of palladium held
by the custodian.



The following are the primary procedures we performed
to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls
over the Trust’s palladium holdings process, including controls over (1) the comparison of the Trust’s records of palladium
held to the custodian’s records, (2) the approval of palladium deposits and withdrawals by the trustee of the Trust and (3)
the roll forward of palladium holdings from the date of the Trust’s most recent physical inspection through December 31,
2020. We obtained a schedule directly from the custodian of the Trust’s palladium holdings held by the custodian as of December
31, 2020. We compared the total ounces on such schedule to the Trust’s record of palladium holdings. We also tested the Trust’s
roll forward of palladium holdings from August 14, 2020 (the date of the Trust’s most recent physical inspection performed
at the custodian’s locations by a third party engaged by the Trust’s sponsor (the inspector)) through December 31,
2020 by (1) agreeing the Trust’s records of palladium holdings as of the last inspection date to the inspector’s and/or
custodian’s records, (2) agreeing palladium holdings transactions to order confirmations and trade tickets, and (3) comparing
the Trust’s expected holdings to the schedule obtained directly from the custodian of the Trust’s palladium holdings
at December 31, 2020.



We have served as the Trust’s auditor since 2015.



/s/ KPMG LLP



New York, New York


February 26, 2021





F-

2

















ABERDEEN
STANDARD PALLADIUM ETF TRUST









Statements
of Assets and Liabilities




At
December 31, 2020 and 2019











































































































































December
31, 2020



December
31, 2019



(Amounts in 000’s of US$, except for Share and per Share data)









ASSETS









Investment in palladium (cost: December 31, 2020: $


224,166


; December 31, 2019: $


170,040


)


$


356,424




$


300,638



Total assets




356,424






300,638












LIABILITIES









Fees payable to Sponsor




186






153



Total liabilities




186






153














NET ASSETS

(1)





$


356,238




$


300,485














(1)




Authorized
share capital is




unlimited




with




no




par value per Share. Shares issued and outstanding at December 31, 2020 were




1,625,000




and at December 31, 2019 were




1,675,000




. Net asset values per Share at December 31, 2020 and December 31, 2019 were $


219.22


and $


179.39


, respectively.











See
Notes to the Financial Statements











F-

3

















ABERDEEN
STANDARD PALLADIUM ETF TRUST











Schedules
of Investments




At
December 31, 2020 and 2019









































































































December 31, 2020

Description


oz


Cost


Fair Value


% of Net Assets



Investment in palladium


(in 000’s of US$, except for oz and percentage data)



Palladium




152,187.5




$


224,166




$


356,424






100.05


%

Total investment in palladium




152,187.5




$


224,166




$


356,424






100.05


%

Less liabilities











(

186


)



(

0.05


)%

Net Assets










$


356,238






100.00


%








































































































December 31, 2019

Description


oz


Cost


Fair Value


% of Net Assets



Investment in palladium


(in 000’s of US$, except for oz and percentage data)



Palladium




157,815.0




$


170,040




$


300,638






100.05


%

Total investment in palladium




157,815.0




$


170,040




$


300,638






100.05


%

Less liabilities











(

153


)



(

0.05


)%

Net Assets










$


300,485






100.00


%









See
Notes to the Financial Statements











F-

4

















ABERDEEN
STANDARD PALLADIUM ETF TRUST









Statements
of Operations




For
the years ended December 31, 2020, 2019, and 2018

































































































































































































































































































Year Ended


December 31, 2020


Year Ended


December 31, 2019


Year Ended


December 31, 2018

(Amounts in 000’s of US$, except for Share and per Share data)













EXPENSES













Sponsor’s Fee


$


2,013




$


1,392




$


1,074



Total expenses




2,013






1,392






1,074
















Net investment loss



(

2,013


)



(

1,392


)



(

1,074


)














REALIZED AND UNREALIZED GAINS / (LOSSES)













Realized gain on palladium transferred to pay expenses




773






520






340



Realized gain on palladium distributed for the redemption of Shares




60,188






32,233






30,150



Change in unrealized gain / (loss) on investment in palladium




1,660






57,387





(

13,150


)

Total gain on investment in palladium




62,621






90,140






17,340
















Change in net assets from operations


$


60,608




$


88,748




$


16,266
















Net increase in net assets per Share


$


37.51




$


55.78




$


8.91
















Weighted average number of Shares




1,615,779






1,590,959






1,826,301











See
Notes to the Financial Statements











F-

5

















ABERDEEN
STANDARD PALLADIUM ETF TRUST











Statements
of Changes in Net Assets




For
the years ended December 31, 2020, 2019 and 2018



































































































Year Ended December 31, 2020

(Amounts in 000’s of US$, except for Share data)


Shares


Amount

Opening balance at January 1, 2020




1,675,000




$


300,485



Net investment loss







(

2,013


)

Realized gain on investment in palladium








60,961



Change in unrealized gain on investment in palladium








1,660



Creations




750,000






150,950



Redemptions



(

800,000


)



(

155,805


)

Closing balance at December 31, 2020




1,625,000




$


356,238








































































































Year Ended December 31, 2019

(Amounts in 000’s of US$, except for Share data)


Shares


Amount

Opening balance at January 1, 2019




1,550,000




$


185,465



Net investment loss







(

1,392


)

Realized gain on investment in palladium








32,753



Change in unrealized gain on investment in palladium








57,387



Creations




750,000






112,464



Redemptions



(

625,000


)



(

86,192


)

Closing balance at December 31, 2019




1,675,000




$


300,485








































































































Year Ended December 31, 2018

(Amounts in 000’s of US$, except for Share data)


Shares


Amount

Opening balance at January 1, 2018




2,400,000




$


241,555



Net investment loss







(

1,074


)

Realized gain on investment in palladium








30,490



Change in unrealized (loss) on investment in palladium







(

13,150


)

Creations




400,000






42,111



Redemptions



(

1,250,000


)



(

114,467


)

Closing balance at December 31, 2018




1,550,000




$


185,465











See
Notes to the Financial Statements











F-

6

















ABERDEEN
STANDARD PALLADIUM ETF TRUST











Financial
Highlights




For
the years ended December 31, 2020, 2019 and 2018



































































































































































































































































Year
Ended


December 31, 2020


Year
Ended


December 31, 2019


Year
Ended


December 31, 2018

Per Share Performance (for a Share outstanding throughout the entire period)













Net asset value per Share at beginning of period


$


179.39




$


119.66




$


100.65



Income from investment operations:













Net investment loss



(

1.25


)



(

0.88


)



(

0.59


)

Total realized and unrealized gains or losses on investment in palladium




41.08






60.61






19.60



Change in net assets from operations




39.83






59.73






19.01
















Net asset value per Share at end of period


$


219.22




$


179.39




$


119.66
















Weighted average number of Shares




1,615,779






1,590,959






1,826,301
















Expense ratio




0.60


%




0.60


%




0.60


%














Net investment loss ratio



(

0.60


)%



(

0.60


)%



(

0.60


)%














Total return, net asset value




22.20


%




49.92


%




18.89


%









See
Notes to the Financial Statements











F-

7

















ABERDEEN
STANDARD PALLADIUM ETF TRUST











Notes
to the Financial Statements












1.


Organization











The Aberdeen
Standard Palladium ETF Trust (the “Trust”) is a common law trust formed on December 30, 2009 (the “Date
of Inception”) under New York law pursuant to a depositary trust agreement (the “Trust Agreement”) executed
by Aberdeen Standard Investments ETFs Sponsor LLC (the “Sponsor”) and The Bank of New York Mellon as Trustee (the
“Trustee”). The Trust holds palladium bullion and issues Aberdeen Standard Physical Palladium Shares ETF
(“Shares”) in minimum blocks of Shares (also referred to as “Baskets”) in exchange for deposits of palladium
and distributes palladium in connection with the redemption of Baskets. Prior to April 1, 2019, the number of Shares that
constituted a Basket was


50,000


Shares. Effective April 1, 2019, the Basket size was reduced to


25,000


Shares. Shares represent
units of fractional undivided beneficial interest in and ownership of the Trust which are issued by the Trust. The Sponsor is
a Delaware limited liability company and a wholly-owned subsidiary of Aberdeen Standard Investments Inc. (“ASII”).
ASII is a wholly-owned indirect subsidiary of Standard Life Aberdeen plc. The Trust is governed by the Trust Agreement.








The
investment objective of the Trust is for the Shares to reflect the performance of the price of palladium, less the Trust’s
expenses and liabilities. The Trust is designed to provide an individual owner of beneficial interests in the Shares (a “Shareholder”)
an opportunity to participate in the palladium market through an investment in securities.















2.




Significant Accounting Policies













The
preparation of financial statements in accordance with U.S. GAAP requires those responsible for preparing financial statements
to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the Trust.











2.1.


Basis
of Accounting












The
Sponsor has determined that the Trust falls within the scope of Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“ASC”) 946,

Financial Services—Investment Companies

, and has concluded that for
reporting purposes, the Trust is classified as an Investment Company. The Trust is not registered as an investment company under
the Investment Company Act of 1940 and is not required to register under such act.












2.2.

Valuation
of Palladium











The
Trust follows the provisions of ASC 820,

Fair Value Measurement

(“ASC 820”). ASC 820 provides guidance for
determining fair value and requires increased disclosure regarding the inputs to valuation techniques used to measure fair value.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.








Palladium is
held by JPMorgan Chase Bank, N.A. (the “Custodian”), on behalf of the Trust, at its London, England vaulting premises.
Palladium may also be held by UBS AG, or any other firm selected by the Custodian to hold the Trust’s palladium in the Trust’s
allocated account in the firm’s vault premises on a segregated basis and whose appointment has been approved by the
Sponsor. At December 31, 2020, approximately


77.35

%

of the Trust’s palladium was held by one or more sub-custodians.










F-

8















Palladium
is recorded at fair value. The cost of palladium is determined according to the average cost method and the fair value is based
on the afternoon session of the twice daily fix of an ounce of palladium administered by the London Metal Exchange (“LME”)
(the “LME PM Fix”). Realized gains and losses on transfers of palladium, or palladium distributed for the redemption
of Shares, are calculated on a trade date basis as the difference between the fair value and average cost of palladium
transferred.








The
LME is responsible for the administration of the electronic palladium price fixing system (“LMEbullion”) that
replicates 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. LMEbullion, 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” LME AM Fix”) and 2:00 p.m. London time (the “LME PM Fix”).








Once
the value of palladium has been determined, the net asset value (the “NAV”) is computed by the Trustee by deducting
all accrued fees, expenses and other liabilities of the Trust, including the remuneration due to the Sponsor (the “Sponsor’s
Fee”), from the fair value of the palladium and all other assets held by the Trust.








The
Trust recognizes changes in fair value of the investment in palladium as changes in unrealized gains or losses on investment
in palladium through the Statement of Operations.








The
per Share amount of palladium exchanged for a purchase or redemption is calculated daily by the Trustee, using the LME PM
Fix to calculate the palladium amount in respect of any liabilities for which covering palladium sales have not yet
been made, and represents the per Share amount of palladium held by the Trust, after giving effect to its liabilities, to
cover expenses and liabilities and any losses that may have occurred.









Fair
Value Hierarchy









ASC
820 establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs
are as follows:








– Level
1. Unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access.








– Level
2. Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly
or indirectly. These inputs may include quoted prices for the identical instrument on
an inactive




market,
prices for similar instruments and similar data.








– Level
3. Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing
the Trust’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability,
and that would be based on the best information available.








To
the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination
of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for
instruments categorized in level 3.










F-

9















The
inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes,
the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the
lowest level input that is significant to the fair value measurement in its entirety.








The
investment in palladium is classified as a level 1 asset, as the value of the Trust’s investment
in palladium is calculated using unadjusted quoted prices from primary market sources.









The
categorization of the Trust’s assets is as shown below:












































(Amounts in 000’s of US$)


December
31, 2020


December
31, 2019






Level 1









Investment in palladium


$



356,424





$



300,638












Based on its continuous assessment of the valuation
techniques and inputs used to value the Trust's palladium, the Sponsor determined that the inputs used in determining the
value of the Trust's palladium are more representative of Level 1 inputs, rather than Level 2 inputs. Therefore, all of the
Trust's palladium was transferred from Level 2 to Level 1 at December 31, 2020. The December 31, 2019 information has been
reclassified to level 1 for comparative purposes.
















2.3.

Palladium
Receivable and Payable













Palladium receivable
or payable represents the quantity of palladium covered by contractually binding orders for the creation or redemption of
Shares respectively, where the palladium has not yet been transferred to or from the Trust’s account. Generally, ownership
of palladium is transferred within two business days of the trade date. At December 31, 2020, the Trust had




no




palladium receivable
or payable for the creation or redemption of Shares. At December 31, 2019, the Trust had




no




palladium receivable
or payable for the creation or redemption of Shares.












2.4.

Creations
and Redemptions of Shares











The
Trust expects to create and redeem Shares from time to time, but only in one or more Baskets (a Basket equals a block of


25,000


Shares
effective April 1, 2019. Prior to April 1, 2019, the number of Shares that constituted a Basket was


50,000


Shares). The Trust
issues Shares in Baskets to Authorized Participants on an ongoing basis. Individual investors cannot purchase or redeem Shares
in direct transactions with the Trust. An Authorized Participant is a person who (1) is a registered broker-dealer or other securities
market participant such as a bank or other financial institution which is not required to register as a broker-dealer to engage
in securities transactions; (2) is a participant in The Depository Trust Company; (3) has entered into an Authorized Participant
Agreement with the Trustee and the Sponsor; and (4) has established an Authorized Participant Unallocated Account with the Trust’s
Custodian or other palladium bullion clearing bank. An Authorized Participant Agreement is an agreement entered into by each
Authorized Participant, the Sponsor and the Trustee which provides the procedures for the creation and redemption of Baskets and
for the delivery of the palladium required for such creations and redemptions. An Authorized Participant Unallocated
Account is an unallocated palladium account, either loco London or loco Zurich, established with the Custodian or a palladium
bullion clearing bank by an Authorized Participant.












The
creation and redemption of Baskets is only made in exchange for the delivery to the Trust or the distribution by the Trust of
the amount of 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 may, on any business day, place an order with the Trustee to create or redeem one or more Baskets. The typical settlement
period for Shares is two business days. In the event of a trade date at period end, where a settlement is pending, a respective
account receivable and/or payable will be recorded. When palladium is exchanged in settlement of a redemption, it is considered
a sale of palladium for financial statement purposes.










F-

10















The
amount of palladium represented by the Baskets created or redeemed can only be settled to the nearest 1/1000th of an ounce.
As a result, the value attributed to the creation or redemption of Shares may differ from the value of palladium to
be delivered or distributed by the Trust. In order to ensure that the correct amount of palladium is available at all times
to back the Shares, the Sponsor accepts an adjustment to its management fees in the event of any shortfall or excess on each transaction.
For each transaction, this amount is not more than 1/1000th of an ounce of palladium.








As
the Shares of the Trust are subject to redemption at the option of Authorized Participants, the Trust has classified the outstanding
Shares as Net Assets. Changes in the number of Shares outstanding are presented in the Statement of Changes in Net Assets.












2.5.

Income
Taxes











The
Trust is classified as a “grantor trust” for U.S. federal income tax purposes. As a result, the Trust itself will
not be subject to U.S. federal income tax. Instead, the Trust’s income and expenses will “flow through” to the
Shareholders, and the Trustee will report the Trust’s proceeds, income, deductions, gains, and losses to the Internal Revenue
Service on that basis.








The
Sponsor has evaluated whether or not there are uncertain tax positions that require financial statement recognition and has determined
that




no




reserves for uncertain tax positions are required as of December 31, 2020 and December 31, 2019.












2.6.

Investment
in Palladium












Changes
in ounces of palladium and their respective values for the years ended December 31, 2020 and 2019 are set
out below:












































































































































































































Year
Ended


December 31, 2020


Year
Ended


December 31, 2019

(Amounts in 000’s of US$, except for ounces data)









Ounces of palladium









Opening balance




157,815.0






146,915.9



Creations




70,459.8






70,851.3



Redemptions



(

75,173.5


)



(

59,056.9


)

Transfers of palladium to pay expenses



(

913.8


)



(

895.3


)

Closing balance




152,187.5






157,815.0












Investment in palladium









Opening balance


$


300,638




$


185,555



Creations




150,950






112,464



Redemptions



(

155,805


)



(

86,192


)

Realized gain on palladium distributed for the redemption of Shares




60,188






32,233



Transfers of palladium to pay expenses



(

1,980


)



(

1,329


)

Realized gain on palladium transferred to pay expenses




773






520



Change in unrealized gain on investment in palladium




1,660






57,387



Closing balance


$


356,424




$


300,638

















F-

11


















2.7.

Expenses
/ Realized Gains / Losses











The
primary expense of the Trust is the Sponsor’s Fee, which is paid by the Trust through in-kind transfers of palladium
to the Sponsor.








The
Trust will transfer palladium to the Sponsor to pay the Sponsor’s Fee that accrues daily at an annualized rate equal
to


0.60


% of the adjusted net asset value (“ANAV”) of the Trust, paid monthly in arrears.








The
Sponsor has agreed to assume administrative and marketing expenses incurred by the Trust, including the Trustee’s monthly
fee and out of pocket expenses, the Custodian’s fee and the reimbursement of the Custodian’s expenses, exchange listing
fees, United States Securities and Exchange Commission (the “SEC”) registration fees, printing and mailing costs,
audit fees and up to $


100,000


per annum in legal expenses.








For
the years ended December 31, 2020, 2019 and 2018, the Sponsor’s Fee was $


2,012,865


, $


1,392,218


and $


1,073,755


, respectively.








At December
31, 2020 and at December 31, 2019, the fees payable to the Sponsor were $


185,515


and $


152,293


, respectively.








With
respect to expenses not otherwise assumed by the Sponsor, the Trustee will, at the direction of the Sponsor or in its own discretion,
sell the Trust’s palladium as necessary to pay these expenses. When selling palladium to pay expenses, the Trustee
will endeavor to sell the smallest amounts of palladium needed to pay these expenses in order to minimize the Trust’s
holdings of assets other than palladium. Other than the Sponsor’s Fee, the Trust had




no




expenses during the years
ended December 31, 2020, 2019 and 2018.








Unless
otherwise directed by the Sponsor, when selling palladium the Trustee will endeavor to sell at the price established by the
LME PM Fix. The Trustee will place orders with dealers (which may include the Custodian) through which the Trustee expects to
receive the most favorable price and execution of orders. The Custodian may be the purchaser of such palladium only if the
sale transaction is made at the next LME PM Fix or such other publicly available price that the Sponsor deems fair, in each
case as set following the sale order. A gain or loss is recognized based on the difference between the selling price and the average cost
of the palladium sold. Neither the Trustee nor the Sponsor is liable for depreciation or loss incurred by reason of any sale.








Realized
gains and losses result from the transfer of palladium for Share redemptions and / or to pay expenses and are recognized
on a trade date basis as the difference between the fair value and average cost of palladium transferred.












2.8.

Subsequent
Events











In
accordance with the provisions set forth in FASB ASC 855-10,

Subsequent Events

, the Trust’s management has evaluated
the possibility of subsequent events impacting the Trust’s financial statements through the filing date. During this period,
no material subsequent events requiring adjustment to or disclosure in the financial statements were identified.
















3.

Related
Parties










The
Sponsor and the Trustee are considered to be related parties to the Trust. The Trustee and the Custodian and their affiliates
may from time to time act as Authorized Participants and purchase or sell Shares for their own account, as agent for their customers
and for accounts over which they exercise investment discretion. In addition, the Trustee and the Custodian and their affiliates
may from time to time purchase or sell palladium directly, for their own account, as agent for their customers and for accounts
over which they exercise investment discretion. The Trustee’s and Custodian’s fees are paid by the Sponsor and are
not separate expenses of the Trust.










F-

12
















4.

Concentration
of Risk










The
Trust’s sole business activity is the investment in palladium, and substantially all the Trust’s assets are holdings
of palladium, which creates a concentration of risk associated with fluctuations in the price of palladium. Several factors
could affect the price of palladium, including: (i) global palladium supply and demand, which is influenced by factors such as
production and cost levels in major palladium-producing countries, recycling, autocatalyst demand, industrial demand, jewelry
demand, investment demand, and sales of existing stockpiles of palladium, which have been a key source of supply and are likely
to be exhausted soon, placing a higher burden on new mine supply; (ii) investors’ expectations with respect to the rate
of inflation; (iii) currency exchange rates; (iv) interest rates; (v) investment and trading activities of hedge funds and commodity
funds; and (vi) global or regional political, economic or financial events and situations. In addition, there is no assurance
that palladium will maintain its long-term value in terms of purchasing power in the future. In the event that the price
of palladium declines, the Sponsor expects the value of an investment in the Shares to decline proportionately. Each of these
events could have a material effect on the Trust’s financial position and results of operations.











5.

Indemnification










Under
the Trust’s organizational documents, the Trustee (and its directors, employees and agents) and the Sponsor (and its members,
managers, directors, officers, employees and affiliates) are indemnified by the Trust against any liability, cost or expense it
incurs without gross negligence, bad faith, willful misconduct or willful malfeasance on its part and without reckless disregard
on its part of its obligations and duties under the Trust’s organizational documents. The Trust’s maximum exposure
under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred.










F-

13















ABERDEEN
STANDARD PALLADIUM ETF TRUST












SIGNATURES









Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned in the capacities thereunto duly authorized.


































































ABERDEEN
STANDARD INVESTMENTS ETFs SPONSOR LLC









Date:
February 26, 2021



/s/
Christopher Demetriou






Christopher
Demetriou *






President
and Chief Executive Officer






(Principal
Executive Officer)









Date:
February 26, 2021



/s/
Andrea Melia






Andrea
Melia *






Chief
Financial Officer and Treasurer






(Principal
Financial Officer and Principal Accounting Officer)













*



The
Registrant is a trust and the persons are signing in their capacities as officers of Aberdeen Standard Investments ETFs Sponsor
LLC, the Sponsor of the Registrant.














The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Quarterly report [Sections 13 or 15(d)] - Aug. 5, 2022

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