WisdomTree Metal Securities Limited
Registered No: 95996
Annual Report and Audited Financial Statements for the
Year ended 31 December 2024
WisdomTree Metal Securities Limited
Contents
Management and Administration
1
Directors' Report 2 - 7
Statement of Directors' Responsibilities 8
Independent Auditor's Report 9 - 15
Statement of Profit or Loss and Other Comprehensive Income 16
Statement of Financial Position 17
Statement of Cash Flows 18
Statement of Changes in Equity 19
Notes to the Financial Statements 20 - 33
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WisdomTree Metal Securities Limited
Management and Administration
Directors Manager
Vinod Rajput (Appointed on 09 August 2024)
(As from 14 June 2024)
Olivia Vuillemin (Appointed on 26 June 2024)
Apex Financial Services (Alternative Funds) Limited.
Peter Ziemba IFC 5
Bryan Governey St Helier
David Middleton (Appointed on 26 June 2024 and Resigned on 09 August 2024)
Jersey, JE1 1ST
Christopher Foulds (Resigned on 26 June 2024 )
Steven Ross (Resigned on 26 June 2024)
(Up to 14 June 2024)
Wisdom Tree Management Jersey Limited
Registered Office
Ordinance House
(As from 14 June 2024) 31 Pier Road
IFC 5 St Helier
St Helier Jersey, JE4 8PW
Jersey, JE1 1ST
Auditor
(Up to 14 June 2024) Ernst & Young LLP
Ordnance House Royal Chambers
31 Pier Road St Julian's Avenue
St Helier St Peter Port
Jersey, JE4 8PW Guernsey
GY1 4AF
Administrator
(As from 14 June 2024)
Registrar
Apex Financial Services (Alternative Funds) Limited. Computershare Investor Services (Jersey) Limited
IFC 5 13 Castle Street
St Helier St Helier
Jersey, JE1 1ST Jersey, JE1 1ES
(Up to 14 June 2024)
Custodian
R&H Fund Services (Jersey) Limited HSBC Bank plc
Ordnance House 8 Canada Square
PO Box 83 London, E14 5HQ
31 Pier Road United Kingdom
St Helier
Jersey, JE4 8PW
Swiss Gold Custodian
JP Morgan Chase Bank, NA
Company Secretary
London Branch
(As from 14 June 2024) 25 Bank Street
Apex Financial Services (Alternative Funds) Limited. Canary Wharf
IFC 5 London, E14 5PJ
St Helier United Kingdom
Jersey, JE1 1ST
Trustee
(Up to 14 June 2024) The Law Debenture Trust Corporation plc
R&H Fund Services (Jersey) Limited 8th Floor
Ordnance House 100 Bishopsgate
31 Pier Road London, EC2N 4AG
St Helier United Kingdom
Jersey, JE4 8PW
Jersey Legal Advisers
Mourant Ozannes
22 Grenville Street
St Helier
Jersey, JE4 8PX
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WisdomTree Metal Securities Limited
Directors’ Report
Directors
The names and particulars of the directors of the Company during and since the end of the financial year are:
Vinod Rajput (Appointed on 09 August 2024)
Olivia Vuillemin (Appointed on 26 June 2024)
Peter Ziemba
Bryan Governey
David Middleton (Appointed on 26 June 2024 and Resigned on 09 August 2024)
Chritopher Foulds (Resigned on 26 June 2024)
Steven Ross (Resigned on 26 June 2024)
Directors’ Interests
Principal Activities
•
•
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A holder of a Metal Security is entitled to require the redemption of that Metal Security and receive an amount of Metal Bullion equal to the Metal Entitlement
on the date of redemption (and subject to applicable redemption fees):
in the case of an authorised participant or any holder of WisdomTree Physical Swiss Gold Securities and WisdomTree Core Physical Gold Securities – at
any time; or
in the case of any other holder – only in circumstances where there are no authorised participants (or otherwise as determined by the Company), and where
the holder has an unallocated bullion account and the holder is not an Undertaking for Collective Investment in Transferable Securities (“UCITS”).
The Company earns a management fee by reducing the Metal Entitlement of each class of Metal Security on a daily basis by an agreed amount (the
“Management Fee”) as set out below:
The Company has entered into a service agreement with WisdomTree Management Jersey Limited (“ManJer” or the “Manager”), whereby ManJer is responsible
for supplying or procuring the supply of all management and administration services required by the Company (including marketing), as well as the payment of
costs relating to the listing and issue of Metal Securities. In return for these services, the Company has an obligation to remunerate ManJer with an amount equal
to the aggregate of the Management Fee and the creation and redemption fees (the “ManJer Fee”). The Metal Bullion in respect of the Management Fee is
transferred in the form of bullion on a monthly basis (in arrears) following agreement from the Trustee from the Company’s custodian accounts directly to
ManJer. In addition, creation and redemption fees are transferred directly to ManJer and there are no cash flows through the Company.
The directors of WisdomTree Metal Securities Limited (“MSL” or the “Company”) submit herewith the annual report and financial statements of the Company
for the year ended 31 December 2024.
No director has an interest in the Shares of the Company as at the date of this report.
The Company’s principal activity is the issue and listing of metal securities (“Metal Securities”). Metal Securities allow investors to gain exposure to the
precious metals market without needing to take physical delivery of platinum, palladium, silver and gold bullion (“Metal Bullion”). It also allows investors to
buy and sell that interest through the trading of a security on the London Stock Exchange and any other exchange to which that security may be admitted to
trading from time to time.
A Metal Security is an undated secured limited recourse debt obligation of the Company, constituted by a trust instrument. Under the terms of this trust
instrument the Metal Securities are secured on an amount of Metal Bullion equivalent to the entitlement of each Metal Security (referred to as the “Metal
Entitlement”), which is calculated in accordance with an agreed formula published in the Prospectus. This Metal Bullion is held in custody by designated
custodians or their sub-custodians and is the subject of fixed and floating charges in favour of the Trustee. Metal Bullion, once deposited, may only be removed
after approval from the Trustee.
WisdomTree Metal Securities Limited
Directors’ Report (Continued)
Review of Operations
Euronext
Paris
P P P P
-
P
-
P P P P
-
P
-
P P P P
-
P P
P P P P
-
P
-
P P P P
-
P
-
P P P P
- -
P
P P P
-
P
- -
P P P
- - - -
Troy Ounces USD Troy Ounces USD
Platinum 613,527.92 560,764,520 391,464.12 393,812,905
Palladium 126,150.39 114,670,704 116,227.77 130,058,859
Gold 3,546,280.54 9,258,806,546 3,681,715.55 7,593,170,110
Silver 49,435,312.61 1,428,927,711 52,882,982.15 1,258,086,129
11,363,169,481 9,375,128,003
The most recent Prospectus was issued on 11 November 2024. As at 31 December 2024, the Company had the following classes of Metal Securities in issue and
admitted to trading on the following exchanges:
London
Stock
Exchange
NYSE-
Euronext
Amsterdam
Borsa
Italian
Xetra
Tokyo Stock
Exchange
Bolsa Mexicana de
Valores
IFRS 13 requires the Company to identify the principal market for the Metal Securities and to utilise the available price within that principal market. The
directors consider the stock exchanges where the Metal Securities are listed to be the principal market and as a result the fair value of the Metal Securities is the
on- exchange price as quoted on the stock exchange demonstrating active trading with the highest trading volume on each day that the price is obtained.
As a result of the difference in valuation between Metal Bullion and Metal Securities there is a mis-match between the values recognised, and the results of the
Company reflect a gain or loss on the difference between the value of the Metal Bullion (through the application of the price published by the LBMA against the
Metal Entitlement, referred to within these financial statements as the “Contractual Value”) and the price of Metal Securities.
The Company recognises its assets (Metal Bullion) and financial liabilities (Metal Securities) at fair value in the Statement of Financial Position. The gain or loss
on Metal Securities and Metal Bullion is recognised through profit or loss in line with the Company’s accounting policy. This is presented in more detail in notes
7 and 8 to these financial statements.
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WisdomTree Core
Physical Gold
WisdomTree Core
Physical Silver
The Company holds Metal Bullion to support the Metal Securities as determined by the Metal Entitlement. Metal Bullion is marked to fair value using the latest
price published by the London Bullion Market Association (“LBMA”). The Company has entered into contractual obligations to issue and redeem Metal
Securities in exchange for Metal Bullion as determined by the Metal Entitlement of each class of Metal Security on each trading day. The Metal Bullion in
respect of each creation and redemption is recorded using the price published by the LBMA on the transaction date. The fair value of assets under management
as at 31 December amounted to:
2024
2023
The Company has entered into overdraft agreements with the custodians (one with JP Morgan Chase Bank, NA, and two with HSBC Bank plc). Each agreement
allows for the loan of up to one bullion bar of gold (collectively the “Overdraft Facility”). The gold held under the Overdraft Facility (the “Metal Bullion on
Loan”) is used by the Company to ensure all WisdomTree Physical Swiss Gold Securities, WisdomTree Physical Gold Securities and WisdomTree Core Physical
Gold Securities, respectively, are supported by holdings of gold in allocated form.
WisdomTree
Physical Platinum
WisdomTree
Physical
WisdomTree
Physical Silver
WisdomTree
Physical Gold
WisdomTree
Physical PM
WisdomTree Physical
Swiss Gold
WisdomTree Metal Securities Limited
Directors’ Report (Continued)
Review of Operations (continued)
The Company is entitled to:
•
•
The Management Fee rates for each class of Individual Metal Security are:
% Rate (p.a)
•
WisdomTree Physical Platinum
0.49
•
WisdomTree Physical Palladium
0.49
•
WisdomTree Physical Gold
0.39
•
WisdomTree Physical Swiss Gold
0.15
•
WisdomTree Core Physical Gold
0.12
•
WisdomTree Physical Silver
0.49
•
WisdomTree Core Physical Silver
0.19
During the year, the Company generated income from creation and redemption fees and Management Fees as follows:
2024 2023
USD USD
Creation and Redemption Fees 58,252 50,034
Management Fees 35,857,601 32,165,884
Total Fee Income
35,915,853 32,215,918
Non-GAAP Performance Measures
Future Developments
A Management Fee which is calculated by reducing the Metal Entitlement of each class of Metal Security on a daily basis by an agreed amount (as set out
below); and
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Creation and redemption fees on the issue and redemption of the Metal Securities.
The Management Fee for WisdomTree Physical Precious Metals Basket Security is the total of the Metal Entitlements of the Individual Metal Securities of which
it is made up: Platinum – 0.1; Palladium – 0.2; Silver – 1.2; and Gold – 0.4 (therefore the Management Fee rate being applied is in respect of those Individual
Metal Securities).
The change in Metal Entitlement of each class of Metal Security reduces the value of the Metal Securities. This reduction equates to the Management Fee
amount in Metal Bullion, that is recognised for that day per each Metal Security in issue on that day. The Management Fees are accrued and recognised on a
daily basis until invoiced and settled by transfer of the Metal Bullion. The amount recognised as income is calculated by applying the average LBMA Price to the
total Management Fee accrued on a monthly basis.
Under the terms of the service agreement with ManJer, the Company accrued expenses equal to the Management Fee and creation and redemption fees, which,
after taking into account other operating income and expenses, resulted in a result before fair value movements for the year of USD Nil (2023: USD Nil).
As the difference in the valuation of Metal Bullion (held to support the Metal Securities) and Metal Securities would be reversed on a subsequent redemption of
the Metal Securities and transfer of the corresponding Metal Bullion (as described further in note 8), the Company presents an adjusted Statement of Profit or
Loss and Total Comprehensive Income and an adjusted Statement of Changes in Equity in note 16 of the financial statements.
The Board are not aware of any other developments that might have a significant effect on the operations of the Company in subsequent financial periods not
already disclosed in this report or the attached financial statements.
WisdomTree Metal Securities Limited
Directors’ Report (Continued)
Going Concern
Dividends
Corporate Social Responsibility
Directors’ Remuneration
Employees
There were no dividends declared or paid in the year (2023: USD nil). It is the Company’s policy that dividends will only be declared when the directors are of
the opinion that there are sufficient distributable reserves.
Sustainability and corporate responsibility are embedded throughout the business of WisdomTree, Inc and its subsidiaries (the “WisdomTree group”) as this
benefits shareholders and employees of the WisdomTree group, investors in WisdomTree’s products as well as wider society.
Environmental, Social and Governance (“ESG”) investing is guided at the WisdomTree group level by an ESG Steering Committee, which includes senior
leaders from across the WisdomTree group, and which further includes several sub-committees focused on particular ESG considerations, such as improving
data and transparency into the ESG attributes of WisdomTree’s products. Particular ESG considerations relevant to the Company’s products are overseen by the
Board, leveraging the work undertaken by the ESG Steering Committee. More information on WisdomTree’s corporate social responsibility strategy can be
found on the WisdomTree website (https://www.wisdomtree.eu/en-gb/wisdomtree-corporate-responsibility).
The Board acknowledges that climate change and its impact on the global economy is of increasing interest and focus for stakeholders and that, where relevant,
stakeholders will seek information from companies regarding how climate change is expected to impact the operations of the business and how climate change
risk has been considered in the context of reported results.
In acknowledging the above, the Board has considered the Company’s exposure to climate change and determined that due to the nature of the Company and its
operations there are no directly observed impacts of climate change on the business. As a result, the Board concluded that there is no basis on which to provide
extended information of analysis relating to climate change, including as part of the basis of accounting or individual accounting policies adopted by the
Company.
In the above determination, the Board has concluded specifically that climate change, including physical and transition risks, does not have a material impact on
the recognition and separate measurement considerations of the assets and liabilities in these financial statements as at 31 December 2024.
The directors continue to monitor and assess the impact of geopolitical conflicts on the assets under management of the Company and will take any potential
actions or as required under the terms of the prospectus, as facts and cicumstances are subject to change and may be specific to investments and jurisdictions.
The nature of the Company’s business dictates that the outstanding Metal Securities may be redeemed at any time by Authorised Participants and in certain
circumstances by individual holders and also, in certain circumstances, may be compulsorily redeemed by the Company. As the redemption of Metal Securities
will always coincide with the transfer of an equal amount (contractual value) of Metal Bullion, liquidity risk is mitigated such that there is no material residual
risk. All other expenses of the Company are met by ManJer. The directors closely monitor the financial position and performance of ManJer, its assets under
management, and therefore its related revenue streams, in respect of fulfilling the obligations under the services agreement. The net reported position on balance
sheet, including in instances where a deficit is reported, is not considered to impact the going concern position of the Company as this position results solely due
to the unrealised gains or losses on Metal Bullion and Metal Securities due to the accounting measurement basis applied in accordance with IFRS. As Metal
Bullion are held to support Metal Securities, any deficit or surplus reported on unrealised positions would be reversed on a subsequent redemption of the Metal
Securities and the related transfer of Metal Bullion. A reported deficit is not considered indicative of any issues relating to solvency of the Company and the
directors are satisfied that any obligations arising in respect of the Metal Securities can be managed in accordance with the terms of the applicable Prospectus.
The directors consider the operations of the Company to be ongoing, with a reasonable expectation that the Company has adequate resources to continue in
operational existence until 30 April 2026, and accordingly these financial statements have been prepared on the going concern basis.
This conclusion is based on the fact that assets are reported at fair value under IFRS, and as set out in note 13 are categorised as level 2 due to the use of
observable, verifiable inputs, including use of third party information sources within the agreed pricing formulae (set out in the Prospectus). The liabilities are
valued utilising listed market prices at the period end. These observable inputs and market prices will reflect wider market sentiment, which inherently includes
market perspectives relating to the impact of climate change.
The Board recognises that government and societal responses to climate change risks are still developing and the future impact cannot be predicted. Future
valuations of assets and liabilities may therefore differ as the market responds to these changing impacts or assesses the impact of current requirements
No director has a service contract with the Company. The directors of the Company who are employees within the WisdomTree, Inc. group do not receive
separate remuneration in their capacity as directors of the Company. The directors of the Company who are employees of Apex Financial Services (Securities)
Limited (“Apex” or the “Administrator”) and previously R&H Fund Services (Jersey) Limited do not receive separate remuneration in their capacity as directors
of the Company, however Apex receives a fee from ManJer which includes services in respect of the Company, including for the provision of directors who are
employees of Apex.
The Company does not have any employees. It is the Company’s policy to use the services of specialist subcontractors or consultants as far as possible.
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WisdomTree Metal Securities Limited
Directors’ Report (Continued)
Auditor
Principal Risks and Uncertainties
The fair value the Metal Securities as at 31 December amounted to:
Number USD Number USD
WisdomTree Physical Platinum Securities
6,609,967 550,742,450 4,148,152 384,139,616
WisdomTree Physical Palladium Securities
1,211,603 101,126,687 1,059,778 109,506,861
WisdomTree Physical Gold Securities
19,845,283 4,833,715,580 22,968,445 4,435,432,050
WisdomTree Physical Swiss Gold Securities
12,786,889
3,197,458,779
12,636,689 2,504,338,344
WisdomTree Core Physical Gold Securities 4,408,830 1,144,186,616 2,807,530 576,374,011
WisdomTree Physical Silver Securities
51,312,109 1,358,128,901 56,189,736 1,227,543,988
WisdomTree Physical Precious Metals Securities
822,029 127,467,105 1,008,929 134,362,572
WisdomTree Physical Core Silver Securities
1,489,876 43,620,709
11,356,446,827 9,371,697,442
Movement
2024 2023 %
Platinum 914.000 1,006.000 -9.15%
Palladium 909.000 1,119.000 -18.77%
Gold
2,610.850 2,062.400 26.59%
Silver
28.905 23.790 21.50%
2024 Review
Further information on the contractual value of the Metal Securities on a daily basis can be found on the WisdomTree website (https://www.wisdomtree.eu/en-
gb/products).
Movements in the value of the underlying Metal Bullion, and thus the value of the Metal Securities, may vary widely which could have an impact on the demand
for the Metal Securities issued by the Company. The movement in the prices of the Metal Bullion are:
LBMA Price USD
On 30 October 2024, gold reached, what was at the time, an all-time high of $2,777.80/oz (a 35% year-to-date gain). The metal had seemed to defy bond and
dollar headwinds. However, shortly after gold fell. The main trigger appeared to be the US presidential election which saw President Trump return for a second
term. Markets interpreted the news as growth positive, diminishing the need for gold as a financial/economic hedge. From that peak to the end of 2024, gold
prices fell 6% (leaving gold up 27% for the year). However, in March 2025, gold has surpassed the October 2024 peak by a considerable margin, to $3,083/oz
(28 March 2025, up 17% year to date). Gold has gained on the back of a trade war that has broken out after President Trump raised tariffs on several countries
(and been met with retaliatory measures). His withdrawal of military support for Europe has also led gold prices rising as the defensive asset has gained allure.
Also, all the U.S. Dollar appreciation since the election has been wiped out, removing one of the headwinds on the metal.
For most of the year silver was outpacing gold, but a setback in the last few weeks of December 2024, saw the metal pull in second at 22% for the year. Silver
recorded another year of a supply deficit, with industrial demand hitting new highs, fuelled by photovoltaics. The ongoing electrification trend is likely to keep
silver demand strong.
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The Independent Auditor is Ernst & Young LLP. A resolution to re-appoint Ernst & Young LLP will be proposed at the next Board meeting of the director on
behalf of the sole shareholder.
The Metal Securities provide investors with exposure to precious metals. Each Metal Security is a debt instrument whose redemption price is linked to the value
of the relevant underlying Metal Bullion. Each class of Metal Security is issued under limited recourse arrangements whereby the holders have recourse only to
the relevant Metal Bullion held to support the Metal Securities and not to the Metal Bullion of any other class of Metal Security or the Company.
Any movements in the value of the Metal Bullion are wholly attributable to the holders of the Metal Securities, therefore the Company has no residual exposure
to movements in the value of the Metal Bullion. From a commercial perspective the Company does not retain any net gains or losses or net risk exposures, as
(with the exception of the impact of management fees) the gains or losses on the liability represented by the Metal Securities are matched economically by
corresponding losses or gains attributable to the Metal Bullion (see detail on page 3 regarding the accounting mis-match).
Furthermore, the Company has an obligation to remunerate ManJer with the ManJer Fee, which results in the Company recognising a result before fair value
movements of nil for each period. As a result, the principal risks and uncertainties to which the Company is exposed has not materially changed during the year
ended 31 December 2024.
There is an inherent risk from the point of view of investors as the values of Metal Bullion, and thus the value of the Metal Securities, may vary widely due to,
amongst other things, changing supply and demand for Metal Bullion, government and monetary policy or intervention, interest rate levels and global or regional
political, economic or financial events. The market price of Metal Securities is (and will remain) a function of supply and demand amongst investors wishing to
buy and sell Metal Securities and the bid or offer spread that the market makers are willing to quote.
2024
2023
WisdomTree Metal Securities Limited
Directors’ Report (Continued)
2024 Review (continued)
Future Outlook
Silver, which has not yet caught up with gold, could close ground and the support of strong industrial demand could take it further.
Corporate Governance
Internal Control
Audit Committee
Vinod Rajput
Director
Jersey
28 April 2025
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The constitution of the Board is disclosed on page 1. The Board meets regularly as required by the operations of the Company, but at least quarterly to review the
overall business of the Company and to consider matters specifically reserved for its review.
During the year the Company did not have any employees or subsidiaries, and there is no intention that this will change. The Company, being a special purpose
company established for the purpose of issuing Metal Securities, has not undertaken any business, save for issuing and redeeming Metal Securities, entering into
the required documents and performing the obligations and exercising its rights in relation thereto, since its incorporation. The Company does not intend to
undertake any business other than issuing and redeeming Metal Securities and performing the obligations and exercising its rights in relation thereto.
The Company is dependent upon ManJer to provide management and administration services to it. ManJer is licensed under the Financial Services (Jersey) Law
1998 to conduct classes U and Z of Fund Services Business. ManJer outsources the administration services in respect of the Company to the Administrator.
Documented contractual arrangements are in place with the Administrator which define the areas where the authority is delegated to them. The performance of
the Manager and Administrator are reviewed on an ongoing basis by the Board through their review of periodic reports.
ManJer provides management and other services to both the Company and other companies issuing commodity and index tracking securities.
The Board, having reviewed the effectiveness of the internal control systems of the Manager and the Administrator, does not consider that there is a need for the
Company to establish its own internal audit function.
The Board has not established a separate audit committee; instead the Board meets to consider the financial reporting by the Company, the internal controls, and
relations with the external auditors. In addition, the Board reviews the independence and objectivity of the auditor
Platinum and palladium prices fell 8% and 15% respectively over the year. Both of these precious metals, whose main source of demand is the internal
combustion (ICE) engine auto sector have come under pressure as a transition from ICE to electric vehicles (EVs) remains intact. That price decline occurred
despite both metals being in a supply deficit in the year.
We believe that geopolitical risks remain high, with various ceasefires and peace talks remaining very fragile. The erosion of military and strategic bonds
between U.S. and Europe is a source of concern that could continue to support gold prices.
The long-term headwinds of a vehicle transition are unlikely to be helpful to either platinum or palladium. However, as of the end of March 2025, both metals
are trading up year-to-date.
Additional information on other financial and operational risks and uncertainties faced by the Company, including further details surrounding the value of Metal
Securities and the Metal Bullion are disclosed in note 13 of these financial statements.
There is no standard code of corporate governance in Jersey. The operations, as previously described in the directors’ report, are such that the directors have
determined that the Company is not required to apply, and has elected not to voluntarily apply, the UK Corporate Governance Code.
As the Board is small, there is no nomination committee and appointments of new directors are considered by the Board as a whole. The Board does not consider
it appropriate that directors should be appointed for a specific term. Furthermore, the structure of the Board is such that it is considered unnecessary to identify a
senior non-executive director.
WisdomTree Metal Securities Limited
Statement of Directors’ Responsibilities
•
•
•
•
•
•
•
By order of the Board
Vinod Rajput
Director
Jersey
28 April 2025
The directors are responsible for preparing the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in
accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”) and applicable law.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of
the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
With regard to Directive 2004/109/EC, amended by Directive 2013/50/EU (collectively the Transparency Directive), the Central Bank (Investment Market
Conduct) Rules of the Central Bank of Ireland and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, the directors confirm
that to the best of their knowledge that:
the financial statements for the year ended 31 December 2024 give a true and fair view of the assets, liabilities, financial position and profit or loss of the
Company as required by law and in accordance with IFRS as issued by the IASB; and
the Directors’ Report gives a fair view of the development and performance of the Company’s business, including financial position and the important
events that have occurred during the year, and their impact on these financial statements, together with a description of the principal risks and uncertainties
they face.
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make judgements and estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do
so.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies
(Jersey) Law 1991. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the
assets of the Company and to prevent and detect fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in
Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF WISDOMTREE METAL SECURITIES LIMITED
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Opinion
We have audited the financial statements of WisdomTree Metal Securities Limited (the “company”) for
the year ended 31 December 2024 which comprise the Statement of Profit or Loss and Other
Comprehensive Income, the Statement of Financial Position, the Statement of Cash Flows, the
Statement of Changes in Equity and the related notes 1 to 16, including material accounting policy
information. The financial reporting framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards as issued by the International Accounting
Standards Board (“IFRS”).
In our opinion, the financial statements:
► give a true and fair view of the state of the company’s affairs as at 31 December 2024 and of its
profit for the year then ended;
► have been properly prepared in accordance with IFRS;
► have been properly prepared in accordance with the requirements of the Companies (Jersey) Law
1991.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of the
company in accordance with the ethical requirements that are relevant to our audit of the financial
statements, including the UK FRC’s Ethical Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the
directors’ assessment of the company’s ability to continue to adopt the going concern basis of
accounting included:
► We obtained an understanding of management’s rationale for using the going concern basis of
accounting and confirmed our understanding of management’s Going Concern assessment process
including the process they adopted to capture all key factors in their assessment;
► We obtained management’s board approved going concern assessment covering the period of
assessment from the date of signing to 30 April 2026. Management’s assessment has focussed on
a combination of;
► Assessing the ongoing viability of the company through continued involvement of its Custodian
and Authorised Participants;
► Assessing the ongoing ability of WisdomTree Management Jersey Limited (“ManJer”) to
continue to meet its obligations as manager and pay all expenses of the company. This
includes consideration of the assets under management of all managed issuer entities (“Issuer
Platform”) which includes this company. In assessing this ability management considered the
fixed and variable operating costs that could be supported under varying levels of total assets
under management for the Issuer Platform.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF WISDOMTREE METAL SECURITIES LIMITED (continued)
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► Using our understanding of the business, we evaluated whether the considerations and method
adopted by management in assessing going concern was appropriate.
► We performed reverse stress testing on the forecasts to understand how severe the downside
scenarios would have to be, and the reduction in platform assets under management, to result in
the platform generating insufficient management fees to cover operating costs. We observed
significant headroom in management fee income, at current Assets Under Management (“AUM”)
levels, in excess of fixed and AUM based costs which supports management’s assumption that the
Issuer Platform is able to absorb heightened levels of volatility in AUM.
► We considered whether management’s disclosures, in the Annual Report and financial statements,
sufficiently and appropriately discloses information required in respect of the going concern
assumption applied through consideration of relevant disclosure standards.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the company’s ability
to continue as a going concern for a period to 30 April 2026.
Our responsibilities and the responsibilities of the directors with respect to going concern are described
in the relevant sections of this report. However, because not all future events or conditions can be
predicted, this statement is not a guarantee as to the company’s ability to continue as a going concern.
Overview of our audit approach
Key audit
matters
► Valuation of Financial Liabilities at fair value through profit and loss – Metal
Securities
Materiality ► Overall materiality of US$113.6m which represents 1% of total assets.
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality
determine our audit scope for the company. This enables us to form an opinion on the financial
statements. We take into account size, risk profile, the organisation of the company and effectiveness of
controls, changes in the business environment and the potential impact of climate change when
assessing the level of work to be performed. All audit work was performed directly by the audit
engagement team.
Changes from the prior year
There were no scoping changes compared to the prior year.
Climate change
There has been increasing interest from stakeholders as to how climate change will impact companies.
The company has determined that there are no directly observed impacts of climate change on the
business due to the nature of the company and its operations. This is explained on page 5 in the
corporate social responsibility section, which form part of the “Other information,” rather than the
audited financial statements. Our procedures on these disclosures therefore consisted solely of
considering whether they are materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit or otherwise appear to be materially misstated.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF WISDOMTREE METAL SECURITIES LIMITED (continued)
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Our audit effort in considering climate change was focused on evaluating management’s assessment of
the impact of climate risk, physical and transition, the adequacy of the company’s disclosures in the
financial statements as set out in note 2 and conclusion that there was no further impact of climate
change to be taken into account as the material assets and liabilities are valued based on market
pricing as required by IFRS.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current period and include the most significant assessed
risks of material misstatement (whether or not due to fraud) that we identified. These matters included
those which had the greatest effect on the overall audit strategy, the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters were addressed in the context of our
audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a
separate opinion on these matters.
Risk Our response to the risk
Key observations
communicated to the Board
Valuation of Financial
Liabilities at fair value through
profit or loss – Metal
Securities
USD 11,356,446,827
(2023: USD 9,371,697,442)
Refer to the Accounting policies
(page 22); and Note 8 of the
Financial Statements (pages 25-
26)
Risk that values of securities in
issue are misstated or that
valuations are incorrectly
captured.
The Metal Securities in issue
comprise a range of financial
instrument that provide holders
of issued securities with
exposure to movements in
prices of metals without needing
to take physical delivery.
The Metal Securities are carried
at fair value as a Financial
Liability.
The risk comprises the risk of
errors in both the valuation
methodology applied and, in the
source, and timing of valuation
inputs utilised.
Our response to the risk
comprised:
We walked through the
company’s systems, controls
and process implemented in
respect of the valuation of Metal
Securities.
We assessed the design of the
company’s systems and controls
implemented in respect of Metal
Securities valuation.
In executing our strategy, we
adopted a fully substantive
approach.
We assessed the
appropriateness of the valuation
methodology applied,
comprising the use of traded
security prices to value the
Metal Securities, against
relevant IFRS requirements.
We independently obtained
security prices using external
pricing sources at the balance
sheet date.
There were no matters identified
during our audit work on
valuation of Metal Securities that
we brought to the attention of
the Board of Directors of the
company.
Based on our testing we are
satisfied that the valuation of
Metal Securities is not materially
misstated.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF WISDOMTREE METAL SECURITIES LIMITED (continued)
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Risk Our response to the risk Key observations
communicated to the Board
The balance of Metal Securities
represents in excess of 99% of
the company’s total liabilities as
at 31 December 2024 (2023:
99%) and therefore any error in
valuation approach could be
significant.
The risk has remained
consistent with that observed in
the prior year.
We recalculated the value of
Metal Securities held at
31 December 2024, by
multiplying the security price by
the confirmed security balance
in issue. This represented 100%
of the total value of Metal
Securities in issue.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of
identified misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably
be expected to influence the economic decisions of the users of the financial statements. Materiality
provides a basis for determining the nature and extent of our audit procedures.
We determined materiality for the company to be US$113.6 million (2023: US$93.8 million), which is 1%
(2023: 1%) of Total Assets. We believe that Total Assets provides us with an appropriate basis for audit
materiality as Total Assets reflects the relevant exposure of holders of issued securities to the
underlying asset base.
There has been no change in the basis of materiality used compared to the prior year.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce
to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the company’s overall control
environment, our judgement was that performance materiality was 50% (2023: 50%) of our planning
materiality, namely US$56.8m (2023: US$46.9m). We have set performance materiality in both
periods at this percentage in response to the value of errors identified and corrected in the financial
statement close process.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Board that we would report to them all uncorrected audit differences in excess of
US$5.68m (2023: US$4.69m), which is set at 5% of materiality, as well as differences below that
threshold that, in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality
discussed above and in light of other relevant qualitative considerations in forming our opinion.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF WISDOMTREE METAL SECURITIES LIMITED (continued)
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Other information
The other information comprises the information included in the annual report set out on pages 1 to
8, other than the financial statements and our auditor’s report thereon. The directors are responsible for
the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in the
course of the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of the other information, we are required
to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies
(Jersey) Law 1991 requires us to report to you if, in our opinion:
► proper accounting records have not been kept by the company, or proper returns adequate for our
audit have not been received from branches not visited by us; or
► the financial statements are not in agreement with the company’s accounting records and returns;
or
► we have not received all the information and explanations we require for our audit
Responsibilities of directors
As explained more fully in the Statement of Directors’ Responsibilities set out on page 8, the directors
are responsible for the preparation of the financial statements and for being satisfied that they give a
true and fair view, and for such internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the company or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF WISDOMTREE METAL SECURITIES LIMITED (continued)
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Explanation as to what extent the audit was considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The
risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those
charged with governance of the company and management.
► We obtained an understanding of the legal and regulatory frameworks that are applicable to the
company and determined that the most significant are those that relate to the reporting framework,
comprising IFRS and the Companies (Jersey) Law 1991. In addition, we concluded that there are
certain significant laws and regulations that may have an effect on the presentation and disclosure
of the financial statements being the applicable Listing Rules of the Central Bank of Ireland
(Investment Market Conduct) and UK Listing Authority Rules;
► We understood how WisdomTree Metal Securities Limited is complying with those frameworks by
making enquiries of the directors and key management of the administrative service provider. We
corroborated our enquiries through our review of minutes of Board meetings, papers provided to the
board and correspondence received from regulatory bodies and noted no contradictory evidence;
► We assessed the susceptibility of the company’s financial statements to material misstatement,
including how fraud might occur by understanding the investment objectives of the Company and
discussing with management to understand where reporting was considered susceptible to fraud.
Where this risk was considered to be higher, we performed audit procedures in response to the
identified fraud risk. These procedures included testing of transactions to supporting
documentation, testing of specific accounting journal entries, and focused testing, including that
referred to in the key audit matters section above. These procedures were designed to provide
reasonable assurance that the financial statements were free from fraud or error;
► Based on this understanding we designed our audit procedures to identify non-compliance with
such laws and regulations. Our procedures involved reading board minutes to identify any non-
compliance with laws and regulations, a review of any associated reporting submitted to the board
on compliance with laws and regulations and enquiries of members of management of the
appointed administrative service provider;
► As the Company operates in the asset management industry the Audit Partner assessed the
experience of the engagement team and concluded that the team had the appropriate competence
and capabilities.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Other matters we are required to address
► Following the recommendation from those charged with governance, we were appointed by the
company on 3 December 2019 to audit the financial statements for the year ending 31 December
2019 and subsequent financial periods.
The period of total uninterrupted engagement including previous renewals and reappointments is
6 years, covering the years ending 31 December 2019 to 31 December 2024.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF WISDOMTREE METAL SECURITIES LIMITED (continued)
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► The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the company
and we remain independent of the company in conducting the audit. The audit opinion is
consistent with the additional report to those charged with governance.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Article 113A of the
Companies (Jersey) Law 1991. Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Ove Toennes Svejstrup
for and on behalf of Ernst & Young LLP
Guernsey, Channel Islands
Date: 28 April 2025
WisdomTree Metal Securities Limited
Statement of Profit or Loss and Other Comprehensive Income
2024 2023
Notes USD USD
Income 3 35,915,853 32,215,918
Expenses 3 (35,915,853) (32,215,918)
Result Before Fair Value Movements
3
- -
Change in Fair Value of Metal Bullion 7 2,269,690,333 899,735,000
Change in Fair Value of Metal Securities 8 (2,266,398,237) (864,297,012)
Profit for the Year
1,
2
3,292,096 35,437,988
The directors consider the Company’s activities as continuing.
Year ended 31 December
1 A non-statutory and non-GAAP Statement of Profit or Loss and Total Comprehensive Income reflecting adjustments representing the movement in the difference between
the value of Metal Bullion and the price of Metal Securities is set out in note 16.
2 There are no items of Other Comprehensive Income, therefore the Profit / (Loss) for the Year also represented the Total Comprehensive Income for the Year.
The notes on pages 20 to 33 form part of these financial statements
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WisdomTree Metal Securities Limited
Statement of Financial Position
2024 2023
Notes USD USD
Assets
Metal Bullion 7 11,363,169,481 9,375,128,003
Metal Bullion on Loan 9 1,569,651 654,987
Metal Bullion Held in Respect of Assets Awaiting Settlement 7 1,558,425 4,906,174
Amounts Receivable on Securities Awaiting Settlement
7 9,055,431 637,034
Metal Bullion Held in Respect of Fees 5 3,020,864 2,628,710
Trade and Other Receivables 6 15,223 15,916
Total Assets 11,378,389,075 9,383,970,824
Liabilities
Metal Securities 8 11,356,446,827 9,371,697,442
Overdraft Facility 9 1,569,651 654,987
Metal Bullion Payable in Respect of Assets Awaiting Settlement
8 1,558,425 4,906,174
Amounts Payable on Securities Awaiting Settlement 8 9,055,431 637,034
Trade and Other Payables 10 3,036,083 2,644,625
Total Liabilities 11,371,666,417 9,380,540,262
Equity
Share Capital 11 4 4
Revaluation Reserve 6,722,654 3,430,558
Total Equity 6,722,658 3,430,562
Total Equity and Liabilities 11,378,389,075 9,383,970,824
The assets and liabilities in the above Statement of Financial Position are presented in order of liquidity from most to least liquid.
Vinod Rajput
Director
As at 31 December
The financial statements on pages 16 to 33 were approved and authorised for issue by the board of directors and signed on its behalf on 28 April 2025.
The notes on pages 20 to 33 form part of these financial statements
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WisdomTree Metal Securities Limited
Statement of Cash Flows
2024 2023
USD USD
Profit for the Year
3,292,096
35,437,988
Non-cash Reconciling Items
Change in Fair Value of Metal Bullion
(2,269,690,333) (899,735,000)
Change in Fair Value of Metal Securities
2,266,398,237 864,297,012
-
-
Cash Generated from Operating Activities
- -
Net Movement in Cash and Cash Equivalents
-
-
Cash and Cash Equivalents at the Beginning of the Year
-
-
Net Movement in Cash and Cash Equivalents
- -
Cash and Cash Equivalents at the End of the Year
- -
Metal Securities are issued through a direct transfer of Metal Bullion from the Authorised Participants to the custodian or redeemed by the direct transfer of
Metal Bullion by the custodian to the Authorised Participants. Transactions related to the Metal Bullion on Loan and the Overdraft Facilities are included within
this direct transfer process with the custodian. As such the Company is not a party to any cash transactions. The creations and redemptions of Metal Securities
and additions and disposals of Metal Bullion, which are non- cash transactions for the Company, are disclosed in notes 7 and 8 respectively in the reconciliation
of opening to closing Metal Securities and Metal Bullion.
The Company has entered into a service agreement with WisdomTree Management Jersey Limited (“ManJer” or the “Manager”), whereby ManJer is responsible
for supplying or procuring the supply of all management and administration services required by the Company (including marketing), as well as the payment of
costs relating to the listing and issue of Metal Securities. In return for these services, the Company has an obligation to remunerate ManJer with an amount equal
to the aggregate of the Management Fee and the creation and redemption fees (the “ManJer Fee”). The Metal Bullion in respect of the ManJer Fee is transferred
by the Trustee from the Company’s custodian accounts to ManJer’s custodian accounts. In addition, amounts in respect of the creation and redemption fees are
transferred directly from the Authorised Participants to ManJer and there are no cash flows through the Company. These fees are disclosed in note 3.
The notes on pages 20 to 33 form part of these financial statements
Year ended
31 December
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WisdomTree Metal Securities Limited
Statement of Changes in Equity
Stated Retained Revaluation Total
Capital Earnings Reserve Equity
Notes USD USD USD USD
Opening Balance at 1 January 2023
4 - (32,007,430) (32,007,426)
- 35,437,988 - 35,437,988
Transfer to Revaluation Reserve 16 - (35,437,988) 35,437,988
-
Balance at 31 December 2023
4 - 3,430,558 3,430,562
Opening Balance at 1 January 2024
4 - 3,430,558 3,430,562
- 3,292,096 - 3,292,096
Transfer to Revaluation Reserve 16 - (3,292,096) 3,292,096 -
Balance at 31 December 2024
4
- 6,722,654 6,722,658
Result and Total Comprehensive Income
for the Year
3 A non-statutory and non-GAAP Statement of Changes in Equity reflecting adjustments representing the difference between the value of Metal Bullion and the price of Metal Securities is set out in note 16.
The notes on pages 20 to 33 form part of these financial statements
Result and Total Comprehensive Expense
for the Year
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WisdomTree Metal Securities Limited
Notes to the Financial Statements
1. General Information
(1)
(2)
2. Accounting Policies
Basis of Preparation
WisdomTree Metal Securities Limited (the “Company”) is a company incorporated and domiciled in Jersey. The address of the registered office is IFC 5,St
Helier, Jersey, JE1 1ST.
The material accounting policies of the Company are described below.
The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting
Standards Board (“IASB”), and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB. The financial statements
have been prepared under the historical cost covention, except for Metal Bullion and financial liabilities held at fair vale through profit or loss.
The board of directors (the “Board”) has considered the Company's exposure to climate change and determined that due to the nature of the Company and its
operations there are no directly observed impacts of climate change on the business. As a result, the Board concluded that there is no basis on which to provide
extended information of analysis relating to climate change, including as part of the basis of accounting or individual accounting policies adopted by the
Company.
The board of directors (the “Board”) has concluded specifically that climate change, including physical and transition risks, does not have a material impact on
the recognition and separate measurement considerations of the assets and liabilities in these financial statements as at 31 December 2024. This conclusion is
based on the fact that assets are reported at fair value under IFRS, and as set out in note 13 are categorised as level 2 due to the use of observable, verifiable
inputs, including use of third party information sources within the agreed pricing formulae (set out in the Prospectus). The liabilities are valued utilising listed
market prices at the period end. These observable inputs and market prices will reflect wider market sentiment, which inherently includes market perspectives
relating to the impact of climate change.
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The Company’s principal activity is the issue and listing of metal securities (“Metal Securities”). Metal Securities allow investors to gain exposure to the
precious metals market without needing to take physical delivery of platinum, palladium, silver and gold bullion (“Metal Bullion”). It also allows investors to
buy and sell that interest through the trading of a security on the London Stock Exchange and any other exchange to which that security may be admitted to
trading from time to time. Each class of Metal Security is issued under limited recourse arrangements whereby the holders have recourse only to the relevant
platinum, palladium, silver and gold bullion (“Metal Bullion”) held to support the Metal Securities and not to the Metal Bullion of any other class of Metal
Security or to the Company. The Metal Securities are secured on an amount of Metal Bullion equivalent to the entitlement to that Metal Bullion in respect of
each Metal Security (referred to as the “Metal Entitlement”), which is calculated in accordance with an agreed formula published in the Prospectus. The
Company holds Metal Bullion to support the Metal Securities as determined by the Metal Entitlement. The Company does not make gains from trading in the
underlying Metal Bullion. As a result, (and with the exception of the impact of Management Fees), from a commercial perspective gains and losses in respect of
Metal Bullion will always be offset by a corresponding loss or gain on the Metal Securities and therefore commercially the Company does not retain any net
gains or losses or net risk exposures. However, the difference in valuation between Metal Bullion and Metal Securities creates a mis-match between the values
reported within these financial statements. This difference in valuation would be reversed on a subsequent redemption of the Metal Securities and transfer of the
corresponding Metal Bullion. Further details are disclosed within the Accounting Policies and in note 16, with additional information regarding the risks of the
Company disclosed in note 13. Furthermore, the Company presents an adjusted Statement of Profit or Loss and Total Comprehensive Income and an adjusted
Statement of Changes in Equity in note 16 of the financial statements to reflect the economic results of the Company through the reversal of the difference in
valuation between Metal Bullion and Metal Securities given the gain or loss would be reversed on a subsequent redemption of the Metal Securities and transfer
of the corresponding Metal Bullion, and therefore will not be realised.
Exchange traded products are not typically actively managed, are significantly lower in cost when compared to actively managed mutual funds and are easily
accessible to investors. No active trading or management of Metal Bullion is required of the Company because the Company only receives or delivers Metal
Bullion on the issue and redemption of Metal Securities, and only holds Metal Bullion as determined by the Metal Entitlement of each class of Metals Security to
support the Metal Securities.
The Company is entitled to:
a management fee which is calculated by reducing the Metal Entitlement of each class of Metal Security on a daily basis by an agreed amount (the
“Management Fee”); and
creation and redemption fees on the issue and redemption of the Metal Securities.
The Company has entered into a service agreement with WisdomTree Management Jersey Limited (“ManJer” or the “Manager”), whereby ManJer is responsible
for supplying or procuring the supply of all management and administration services required by the Company (including marketing), as well as the payment of
costs relating to the listing and issuance of Metal Securities. In return for these services, the Company has an obligation to remunerate ManJer with an amount
equal to the Management Fee and the creation and redemption fees earned (the “ManJer Fee”). As a result, the Company recognises a result before fair value
movements of nil for each period.
WisdomTree Metal Securities Limited
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
Going Concern
Material Accounting Estimates and Judgements
Significant Judgements
1.
2.
Significant Estimates
Accounting Standards
(a) Standards, amendments and interpretations considered by the Company:
•
•
The directors continue to monitor and assess the impact of geopolitical conflicts on the assets under management of the Company and will take any potential
actions needed or as required under the terms of the prospectus, as facts and circumstances are subject to change and may be specific to investments and
jurisdictions.
The nature of the Company’s business dictates that the outstanding Metal Securities may be redeemed at any time by Authorised Participants and in certain
circumstances by individual holders and also, in certain circumstances, may be compulsorily redeemed by the Company. As the redemption of Metal Securities
will always coincide with the transfer of an equal amount (contractual value) of Metal Bullion, liquidity risk is mitigated such that there is no material residual
risk. All other expenses of the Company are met by ManJer. The directors closely monitor the financial position and performance of ManJer, its assets under
management, and therefore its related revenue streams, in respect of fulfilling the obligations under the services agreement. The net reported position on balance
sheet, including in instances where a deficit is reported, is not considered to impact the going concern position of the Company as this position results solely due
to the unrealised gains or losses on Metal Bullion and Metal Securities due to the accounting measurement basis applied in accordance with IFRS.
As Metal Bullion are held to support Metal Securities, any deficit or surplus reported on unrealised positions would be reversed on a subsequent redemption of
the Metal Securities and the related cancellation of Metal Bullion. A reported deficit is not considered indicative of any issues relating to solvency of the
Company and the directors are satisfied that any obligations arising in respect of the Metal Securities can be managed in accordance with the terms of the
applicable Prospectus. The directors consider the operations of the Company to be ongoing, with a reasonable expectation that the Company has adequate
resources to continue in operational existence until 30 April 2026, and accordingly these financial statements have been prepared on the going concern basis.
The presentation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Company’s accounting policies.
The key accounting judgements required to prepare these financial statements are:
In respect of the presentation of non-statutory and non-GAAP adjustments to the Statement of Profit or Loss and Other Comprehensive Income and the
Statement of Changes in Equity, as disclosed in note 16.
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The determination of the appropriate accounting policy to be applied to Metal Bullion. Under IFRS there is no standard treatment for the classification of
physical metals (as they do not meet the definition of a financial asset, cash, inventory or property, plant or equipment) therefore the election of how to treat
physical metals is left to some interpretation for companies which hold these assets. The Metal Bullion is held to provide the security holders with the
exposure to changes in the fair value of Metal Bullion and therefore the Directors consider that carrying the Metal Bullion at fair value through profit or loss,
consistent with the treatment that would be applicable to a financial instrument, reflects the objectives and the purpose of holding the asset.
The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates are continually evaluated and based on
historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The directors do not
consider that any significant estimates have been applied in the preparation of these financial statements.
The following are standards and amendments effective for accounting periods beginning on or after 1 January 2024 but which did not have any effect on the
financial statements of the Company.
Amendments to IAS 1 - Classification of Liabilities as current or non-current
Amendments to IFRS 16 - Lease liability in a sale and leaseback transaction
There were no other new standards, amendments and interpretations adopted in the current year that resulted in a significant effect on these financial
statements.
WisdomTree Metal Securities Limited
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
Accounting Standards (continued)
(b) New and revised IFRSs in issue but not yet effective:
•
•
•
•
•
•
Metal Securities
i) Issue and Redemption
ii) Classification at fair value through Profit or Loss
iii) Pricing
Metal Bullion
Metal Bullion and Metal Securities Awaiting Settlement
Amendments to IFRS 7 and IFRS 9 - Classification and Measurement of Financial Instruments (effective for annual periods beginning on or after 1
January 2026)
IFRS 16 - Lease Liability in a Sale and Leaseback (effective for annual periods beginning on or after 1 January 2025)
Amendments to IAS 21 - The Effects of Changes in Foreign Exchange Rates (effective for annual periods beginning on or after 1 January 2025)
The directors do not expect the adoption of the above standards, amendments and interpretations that are in issue but not yet effective will have a material
impact on the financial statements of the Company in future periods.
Each time a Metal Security is issued or redeemed by the Company a corresponding amount of Metal Bullion is transferred into or from the relevant secured
account held by the custodian. Upon initial recognition, the fair value is recorded using the fixing price published by the London Bullion Market Association
(“LBMA”) applied to the underlying Metal Bullion transferred. Financial liabilities are recognised and de-recognised on the transaction (trade) date.
Metal Securities comprise a financial instrument whose redemption price is linked to the value of the underlying Metal Bullion. Metal Securities are
classified as liabilities at fair value through profit or loss under IFRS 9 due to an embedded derivative. This also significantly reduces a measurement or
recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.
The Company has not applied the following new and revised IFRSs that have been issued but are not yet effective:
IFRS 18 - Presentation and Disclosure in Financial Statements (effective for annual periods beginning on or after 1 January 2027)
IAS 7 and IFRS 7 - Supplier Finance Arrangements (effective for annual periods beginning on or after 1 January 2025)
IFRS 19 - Subsidiaries Without Public Accountability Disclosures (effective for annual periods beginning on or after 1 January 2027)
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IFRS 13 requires the Company to identify the principal market and to utilise the available price within that principal market. The directors consider that the
stock exchanges where the Metal Securities are listed to be the principal market and as a result the fair value of the Metal Securities is the on-exchange price
as quoted on the stock exchange demonstrating active trading with the highest trading volume on each day that the price is obtained. The Metal Securities
are priced using the latest traded mid-market price on (or before) the Statement of Financial Position date.
A difference arises between the value of Metal Bullion (held to support the Metal Securities) and Metal Securities (at market value) presented in the Statement of
Financial Position. This difference is reversed on a subsequent redemption of the Metal Securities and transfer of the corresponding Metal Bullion.
The Company holds Metal Bullion equal to the redemption amount due to holders of Metal Securities solely for the purposes of meeting its obligations under the
Metal Securities.
As described above (under the heading Critical Accounting Estimates and Judgements), under IFRS there is no standard treatment for the classification of
physical metals. The Metal Bullion is held to provide the security holders with the exposure to changes in the fair value of Metal Bullion and therefore the
Directors consider that carrying the Metal Bullion at fair value through profit or loss, consistent with the treatment that would be applicable to a financial
instrument, reflects the objectives and the purpose of holding the asset.
Metal Bullion is priced on a daily basis based on the amount of Metal Bullion held using the latest fixing price published by the LBMA, and is considered to be
the fair value of the Metal Bullion. Also on a daily basis an amount is transferred to Metal Bullion Held in Respect of the Management Fees. This valuation of
the Metal Bullion is equivalent to the LBMA fixing price being applied to the total Metal Entitlement of each class of Metal Security, and is referred to as the
‘Contractual Value’.
The issue and redemption of Metal Securities, and the transfer in and out of Metal Bullion, is accounted for on the transaction date. The transaction will not settle
until two days after the transaction date. Where transactions are awaiting settlement at the year end, the value of the Metal Bullion and the Metal Securities due
to be settled is separately disclosed within the relevant assets and liabilities on the Statement of Financial Position. Metal Bullion and Metal Securities Awaiting
Settlement are recorded at fair value using the latest prices published by the LBMA. Changes in fair value are recognised through profit or loss. The fair value of
these receivables and payables is considered equivalent to their carrying value.
WisdomTree Metal Securities Limited
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
Overdraft Facility
Metal Bullion on Loan
Reserves
Other Financial Assets and Liabilities
Income
i) Management Fees
% Rate (P.a)
•
WisdomTree Physical Platinum
0.49
•
WisdomTree Physical Palladium
0.49
•
WisdomTree Physical Gold
0.39
•
WisdomTree Physical Swiss Gold
0.15
•
WisdomTree Core Physical Gold
0.12
•
WisdomTree Physical Silver
0.49
•
WisdomTree Core Physical Silver
0.19
The gold held under the Overdraft Facility (the “Metal Bullion on Loan”) is used by the Company to ensure all WisdomTree Physical Swiss Gold Securities,
WisdomTree Physical Gold Securities and WisdomTree Core Physical Gold Securities, respectively, are supported by holdings of gold in allocated form. The
Metal Bullion on Loan is recorded at fair value using the latest price published by the LBMA. Changes in fair value are recognised through profit or loss.
A revaluation reserve and a retained earnings reserve are maintained within equity. All profit or loss is taken to the retained earnings reserve at the end of the
accounting period to which it relates and the gain or loss relating to the mis-match of accounting values is transferred to the non-distributable revaluation reserve
as the balance relates to unrealised gains and losses on Gold Bullion (held to support the Gold Securities) and Gold Securities, which will be reversed on a
subsequent redemption of the Gold Securities and the related transfer of Gold Bullion and will therefore not be realised.
Other financial assets and liabilities are non-derivative financial assets and liabilities including trade and other receivables and trade and other payables
(primarily Creation and Redemption Fees) with a fixed payment amount and are not quoted in an active market. After initial measurement the other financial
assets and liabilities are subsequently measured at amortised cost using the effective interest method less any allowance for expected credit losses (in respect of
financial assets only). The effective interest method is a method of calculating the amortised cost of an instrument and of allocating interest over the relevant
period. The effective interest rate is the rate that exactly discounts estimated future cash flows (including all fees paid or received that form an integral part of
the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the instrument, or, where appropriate, a shorter period,
to the net carrying amount on initial recognition. Impairment losses, including reversals of impairment losses and impairment gains, are recorded through profit
or loss.
The Company derives its income over time (in respect of Management Fees), and at a point in time (in respect of creation and redemption fees) as follows:
Management Fees are calculated by applying a fixed percentage to reduce the Metal Entitlement of each class of Metal Security on a daily basis in
accordance with the terms of the securities issued, as follows:
The Management Fee for WisdomTree Physical Precious Metals Basket Security is the total of the Metal Entitlements of the Individual Metal Securities of which
it is made up: Platinum – 0.1; Palladium – 0.2; Silver – 1.2; and Gold – 0.4 (therefore the Management Fee rate being applied is in respect of those Individual
Metal Securities).
Metal Bullion Held in Respect of Management Fees and ManJer Fee Payable in Metal Bullion
Management Fee income is accrued by reducing the Metal Entitlement of each class of Metal Security on a daily basis by an agreed amount. These fees are
recognised in Metal Bullion, recorded at fair value through profit or loss in accordance with the accounting judgement set out above in respect of Metal Bullion.
The amount recognised at the Statement of Financial Position date is revalued using the latest price published by the LBMA.
Management Fees payable are also accrued based on the income accrued in accordance with the agreement with ManJer. The fees payable in Metal Bullion are
classified as financial liabilities measured at fair value value through profit or loss under IFRS 9 due to an embedded derivative. This also significantly reduces a
measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them, on
different bases. The payable at the Statement of Financial Position date is revalued using the latest price published by the LBMA.
The Company has entered into three agreements with the custodians which each allow for the loan of up to one bullion bar of gold (collectively the “Overdraft
Facility”). The Overdraft Facility is denominated in ounces of Metal Bullion, repayable in ounces of Metal Bullion equivalent to the Metal Bullion on Loan. The
Overdraft Facility is recorded at the fair value of the ounces of Metal Bullion using the latest price published by the LBMA and changes in fair value are
recognised through profit or loss.
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WisdomTree Metal Securities Limited
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
Income (continued)
i) Management Fees (continued)
ii) Creation and Redemption Fees
Foreign Currency
Segmental Reporting
3. Result Before Fair Value Movements
2024 2023
USD USD
Creation and Redemption Fees 58,252 50,034
Management Fees 35,857,601 32,165,884
Total Income 35,915,853 32,215,918
ManJer Fees (35,915,853) (32,215,918)
Total Operating Expenses (35,915,853) (32,215,918)
Result Before Fair Value Movements
- -
4. Taxation
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Whilst the Company has a number of different classes of Metal Securities in issue, the financial information reviewed by the CODM is aggregated and not
segregated by those different classes of Metal Securities and therefore the CODM concluded that these components do not meet the criteria of operating
segments. Furthermore the marketing of the Metal Securities is undertaken on a centralised basis and the terms of the Metal Securities of any class rank pari
passu in all respects irrespective of stock exchange listing.
As a result, the CODM determined that the Company is operating a single segment or product group, precious metals, and one geographical segment which is
Europe. Therefore the Company discloses its results on an equivalent aggregated form and does not provide and further segmental information. In addition, the
Company has no single major customer from which greater than 10% of income is generated. All information relevant to the understanding of the Company’s
activities is included in these financial statements.
Result Before Fair Value Movements for the year comprised:
Year ended 31 December
Audit Fees for the year of GBP 48,833 will be met by ManJer (2023: GBP 39,905).
The Company is subject to Jersey Income Tax. During the year the Jersey Income Tax rate applicable to the Company is zero percent (2023: zero percent).
The change in Metal Entitlement reduces the value of the Metal Securities. This reduction equates to the Management Fee amount in the relevant Metal Bullion,
that is recognised for that day per each Metal Security in issue on that day. The Management Fees are accrued and recognised on a daily basis, until invoiced and
settled by transfer of the relevant Metal Bullion. The amount recognised as income is calculated by applying the average LBMA fixing price to the total
Management Fee accrued on a monthly basis.
Fees for the issue and redemption of Metal Securities are recognised at the fair value of the consideration expected to be received, on the date on which the
transaction becomes legally binding. Accrued creation and redemption fees are invoiced and settled on a quarterly basis.
The financial statements of the Company are presented in the currency in which the majority of the Metal Securities issued by the Company are denominated (its
functional currency). For the purpose of the financial statements, the results and financial position of the Company are expressed in United States Dollars, which
is the functional currency of the Company and the presentation currency of the financial statements. Transactions in foreign currencies are initially recorded at
the spot rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the year-end date are translated at rates ruling at
that date. Creation and redemption fees are translated at the average rate for the month in which they are incurred. The resulting differences are accounted for
through profit or loss.
A segment is a distinguishable component of the Company that is engaged either in providing products or services (business segment), or in providing products
and services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other
segments. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Company that are regularly reviewed by
the Chief Operating Decision Maker (“CODM”) in order to allocate resources to the segments and to assess their performance. The CODM has been determined
as the board of directors.
WisdomTree Metal Securities Limited
Notes to the Financial Statements (continued)
5. Metal Bullion Held in Respect of Management Fees
2024 2023
USD USD
Management Fees
3,020,864 2,628,710
6. Trade and Other Receivables
2024 2023
USD USD
Creation and Redemption Fees 15,219 15,912
Receivable from Related Party 4 4
15,223 15,916
7. Metal Bullion
2024 2023
USD USD
Change in Fair Value of Metal Bullion
2,269,690,333 899,735,000
Metal Bullion Held at Fair Value
11,363,169,481 9,375,128,003
•
•
2024 2023
USD USD
Opening Metal Bullion 9,375,128,003 10,126,638,677
Additions 4,245,694,343 1,144,313,975
Disposals (4,491,485,597) (2,763,393,765)
Metal Bullion Transferred to Metal Bullion Held in Respect of Management Fees (35,857,601) (32,165,884)
Change in Fair Value 2,269,690,333 899,735,000
Closing Metal Bullion 11,363,169,481 9,375,128,003
8. Metal Securities
As at 31 December
Management Fees are recognised in Metal Bullion and are recorded at fair value.
As at 31 December
The fair value of the receivables is equal to the carrying value. The Trade and Other Receivables are due to be recovered within 12 months of the year end.
Whilst the Metal Securities are quoted on the open market, the Company’s ultimate liability relates to its contractual obligations to issue and redeem Metal
Securities in exchange for Metal Bullion as determined by the Metal Entitlement of each class of Metal Security on each trading day. The fair value of each
creation and redemption of Metal Securities is recorded using the price published by the LBMA on the transaction date, and is the “Contractual Value”. The
issue and redemption of Metal Securities is recorded at a value that corresponds to the value of the Metal Bullion transferred in respect of the issue and
redemption. As a result, the Company has no net exposure to gains or losses on the Metal Securities and Metal Bullion.
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As at 31 December
As at 31 December 2024, there were certain amounts of Metal Bullion awaiting the settlement in respect of the creation or redemption of Metal Securities with
transaction dates before the year end and settlement dates in the following year:
The amount of Metal Bullion payable on Metal Securities awaiting settlement is USD 9,055,431 (2023: USD 637,034).
The amount of Metal Bullion Held awaiting settlement is USD 1,558,425 (2023: USD 4,906,174).
All Metal Bullion assets have been valued using the AM fix on 31 December 2024 as published by the LBMA being the last fix prices available for the year.
The below reconciliation of changes in the Metal Bullion includes only non-cash changes.
WisdomTree Metal Securities Limited
Notes to the Financial Statements (continued)
8. Metal Securities (continued)
2024 2023
USD USD
Change in Fair Value of Metal Securities
(2,266,398,237) (864,297,012)
Metal Securities at Fair Value
11,356,446,827 9,371,697,442
2024 2023
USD USD
Change in Contractual Redemption Value for the Year
(2,269,690,333) (899,735,000)
Metal Securities at Contractual Redemption Value
11,363,169,481 9,375,128,003
•
•
2024 2023
USD USD
Opening Metal Securities 9,371,697,442 10,158,646,104
Securities Created 4,245,694,346 1,144,313,975
Securities Redeemed (4,491,485,597) (2,763,393,765)
Management Fee (35,857,601) (32,165,884)
Change in Fair Value 2,266,398,237 864,297,012
Closing Metal Securities at Fair Value 11,356,446,827 9,371,697,442
9. Overdraft Facility
Troy Ounces
USD
Troy Ounces
USD
Gold on Loan from JP Morgan
72.259 188,657 90.982 187,641
Gold on Loan from HSBC
528.944 1,380,994 226.603 467,346
1,569,651 654,987
As at 31 December
The gain or loss on the difference between the value of the Metal Bullion and the fair value of Metal Securities would be reversed on a subsequent redemption of
the Metal Securities and transfer of the corresponding Metal Bullion. Refer to note 16 for the non-statutory and non-GAAP adjustments which reflect the results
of this reversal.
As at 31 December 2024, there were certain Metal Securities awaiting settlement in respect of creations or redemptions with transaction dates before the year
end and settlement dates in the following year:
The amount receivable on Metal Securities awaiting settlement is USD 9,055,431 (2023: USD 637,034).
The amount payable in respect of Metal Securities awaiting settlement is USD 1,558,425 (2023: USD 4,906,174).
The below reconciliation of changes in the Metal Securities, being liabilities arising from financing activities, includes only non-cash changes.
The Company measures the Metal Securities at their fair value in accordance with IFRS 13 rather than at the Contractual Value described above. The fair value
is the price quoted on stock exchanges or other markets where the Metal Securities are listed or traded. The fair values and changes thereof during the year based
on prices available on the open market as recognised in the financial statements are:
As at 31 December
The contractual redemption values and changes thereof during the year based on the contractual settlement values are:
As at 31 December
The Overdraft Facility, pursuant to the overdraft agreements entered into with the custodians (one with JP Morgan Chase Bank, NA (“JP Morgan”), and two with
HSBC Bank plc (“HSBC”)), allows for the loan of up to one bullion bar of gold (per agreement). The gold held under the Overdraft Facility (the “Metal Bullion
on Loan”) is used by the Company to ensure all WisdomTree Physical Swiss Gold Securities, WisdomTree Physical Gold Securities and WisdomTree Core
Physical Gold Securities, respectively, are supported by holdings of gold in allocated form.
The Company had Metal Bullion drawn under the Overdraft Facilities as follows:
As at 31 December 2024
As at 31 December 2023
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WisdomTree Metal Securities Limited
Notes to the Financial Statements (continued)
10. Trade and Other Payables
2024 2023
USD USD
ManJer Fees Payable
3,036,083 2,644,624
11. Stated Capital
2024 2023
USD USD
2 Shares of Nil Par Value, Issued at GBP 1 Each and Fully Paid
4 4
12. Related Party Disclosures
Fees charged by ManJer during the year:
2024 2023
USD USD
ManJer Fees
35,915,853 32,215,918
The following balances were due to ManJer at the year end:
2024 2023
USD USD
ManJer Fees Payable
3,036,083 2,644,625
As at 31 December
As at 31 December
At 31 December 2024, USD 4 is receivable from ManJer (2023: USD 4).
No director has a service contract with the Company. The directors of the Company who are employees within the WisdomTree, Inc group do not receive
separate remuneration in their capacity as directors of the Company. The directors of the Company who are employees of Apex Financial Services (Alternative
Funds) Limited (“Apex” or the “Administrator”) do not receive separate remuneration in their capacity as directors of the Company, however Apex receives a fee
from ManJer which includes services in respect of the Company, including for the provision of directors who are employees of Apex.
On 14th June 2024 R&H Fund Services (Jersey) Limited ("R&H") resigned as Administrator, and Apex Financial Services (Alternative Funds) Limited were
appointed as Administrator. Vinod Rajput, Olivia Vuillemin and Middleton (up to his date of resignation) are employees of Apex. During the year, R&H and
Apex charged ManJer administration fees which include the Company and other entities for which the ManJer is the Manager and R&H and Apex is the
Administrator. Total fee amounting GBP 1,687,046 (31 December 2023: GBP 1,221,529) translated in USD 2,114,712 (31 December 2023: USD 1,560,381) of
which GBP 471,388 (31 December 2023: GBP 291,402) translated in USD 590,885 (31 December 2023: USD 372,237) was outstanding at the year end.
Peter Ziemba is an executive officer of WisdomTree, Inc. and Bryan Governey is European General Counsel for the WisdomTree, Inc group.
As at 31 December
Management Fees payable by transfer of Metal Bullion are recorded at fair value. The fair value of the remaining payables is equal to the carrying value. The
ManJer Fee Payable is due to be settled within 12 months of the year end.
As at 31 December
The Company can issue an unlimited capital of nil par value shares in accordance with its Memorandum of Association.
All Shares issued by the Company carry one vote per Share without restriction and carry the right to dividends.
All Shares are held by WisdomTree Holdings Jersey Limited (“HoldCo”).
Entities and individuals which have significant influence over the Company, either through ownership or by virtue of being a director of the Company are
considered to be related parties. In addition, entities with common ownership to the Company and entities with common directors are also considered to be
related parties.
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WisdomTree Metal Securities Limited
Notes to the Financial Statements (continued)
13. Financial Risk Management
(a) Credit Risk
•
•
The Metal Securities are backed by physical Metal Bullion in allocated accounts to the extent possible. A small portion may be held in unallocated form on a
short term basis when Metal Bullion is in the process of being allocated or de-allocated for a creation or redemption, or (in respect of Metal Bullion other than
gold) where it cannot be held in whole bars. Once the level of Metal Bullion in an unallocated account reaches an amount equal to one bar, that bar can be
transferred to an allocated account.
The Company has entered the Overdraft Facility to ensure all WisdomTree Physical Swiss Gold Securities, WisdomTree Physical Gold Securities and
WisdomTree Core Physical Gold Securities, respectively, are supported by holdings of gold in allocated form, and therefore the unallocated gold balances relate
to the Metal Bullion drawn on the Overdraft Facility (see note 9). For Metal Bullion other than gold, the unallocated account will be less than 1 physical bar (of
each type of Metal Bullion) and immaterial in value.
The Metal Bullion held at the custodians to back the Metal Securities is audited twice a year by an independent metal audit firm – Inspectorate International –
who inspect the Metal Bullion held at the custodians to ensure that it matches in all respects the Metal Bullion disclosed as held on the Bar List. The first audit
takes place at the start of each year of the Metal Bullion held at the end of the previous year and then a second audit is carried out at random at a later point in the
year.
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The total carrying amounts of the Metal Bullion, Metal Bullion on loan, amounts receivable awaiting settlement and trade and other receivables best represent
the maximum credit risk exposure at the Statement of Financial Position date. At the reporting date the Company’s amounts of the Metal Bullion, Metal Bullion
on loan, receivable awaiting settlement and trade and other receivables are detailed on the Statement of Financial Position. Credit risk is managed by the
Company by only dealing with Authorised Participants who are believed to be creditworthy. In the event the authorised participants fail to complete their
obligation, no Metal Securities will be created therefore the Company does not have the risk of loss of the amount expected to be received.
Credit risk also includes custodial risk. Metal Bullion is the subject of a fixed charge or legal mortgage in favour of The Law Debenture Trust Corporation p.l.c
(the “Trustee”) pursuant to security deeds entered into by the Trustee and the Company to secure the obligations owed by the Company to the Trustee and the
holders of the relevant Metal Securities (the “Security”). However, there is no exposure to credit risk to the Trustee by virtue of the existence of the Security.
Under the custodian agreements the relevant custodian acknowledges the Security created in favour of the Trustee and agrees that once Metal Bullion is
deposited in the secured metal accounts, it may only be removed after approval from the Trustee.
The custodian is not required to take out insurance and neither is the Trustee. Accordingly, there is a risk that the secured Metal Bullion could be lost, stolen or
damaged and the Company would not be able to satisfy its obligations in respect of the Metal Securities. Currently the Company has two custodians, HSBC and
JP Morgan. At the reporting date the exposure to the custodians was split approximately 88% and 12% (2023: 73.3% and 26.7%) respectively.
Metal Bullion held with the custodians is held either in allocated or unallocated form.
The Company is exposed to a number of risks arising from its activities, including credit risk, settlement risk, liquidity risk and market risk. The Board is
responsible for the overall risk management approach and for approving the risk management strategies and principles.
The Board meets frequently to consider the risk exposures of the Company and to determine appropriate management policies. The risk management policies
employed by the Company to manage these are discussed below. The Metal Securities are subject to normal market fluctuations and other risks inherent in
investing in securities and other financial instruments. There can be no assurance that any appreciation in the value of securities will occur, and the capital value
of an investor’s original investment is not guaranteed. The value of investments may go down as well as up, and an investor may not get back the original amount
invested.
The information provided below is not intended to be a comprehensive summary of all the risks associated with the Metal Securities and investors should refer to
the most recent Prospectus for a detailed summary of the risks inherent in investing in the Metal Securities. Any data provided should not be used or interpreted
as a basis for future forecast or investment performance.
Credit risk primarily refers to the risk that Authorised Participants or the custodian will default on its contractual obligations resulting in financial loss. Each
class of Metal Security is issued under limited recourse arrangements whereby the holders have recourse only to the relevant Metal Bullion (held to support the
Metal Securities) and not to the Metal Bullion of any other class of Metal Security or to the Company, therefore limiting the credit risk of the Company in
connection with the issue of the Metal Securities.
Allocated:
An
allocated
account
evidences
that
uniquely
identifiable
bars
of
bullion
have
been
“allocated”
to
the
security holder
and
are
segregated
from
other
metal
held
in
the
custodian’s
vault.
An
allocated
account
is
held
in
the
customer’s
name
(which,
for
the
Metal
Securities,
means
in
the
name
of
the
Trustee
as
legal
mortgagee
pursuant
to
the
Security
and
in
its
capacity
as
trustee
for
the
Security
Holders).
The
customer
has
full
title
to
the
bullion
held
in
the allocated
account.
As
a
result,
allocated
Bullion
does
not
entail
any
credit
risk
exposure
to
the
custodian,
and
the
credit
exposure
to
the
custodians
is therefore limited to the amounts held in unallocated accounts.
Unallocated:
Unlike
bullion
held
in
an
allocated
account,
bullion
in
an
unallocated
account
does
not
entitle
the
customer
to
a
particular
bar
of
bullion
and
the
customer’s
holding
is
not
segregated
from
that
of
other
customers
or
the
custodian.
Instead,
the
books
and
records
of
the
custodian
record
that
the
customer
is
entitled
to
a
specific
amount
of
bullion.
As
the
bullion
is
not
segregated,
the
customer
has
a
credit
risk
exposure
to
the
custodian.
Bullion
in
unallocated
form
is
easier
to
transfer
as
it
simply
requires
an
update
of
the
custodian’s
books
and
records
rather
than
movements
of
physical
bullion
and
for
this reason transfers in connection with creation and redemption of Metal Securities are carried out in unallocated form.
WisdomTree Metal Securities Limited
Notes to the Financial Statements (continued)
13. Financial Risk Management (continued)
(a) Credit Risk (continued)
(b) Settlement Risk
Settlement risk primarily refers to the risk that an Authorised Participant will default on its contractual obligations resulting in financial loss.
(c)
Liquidity Risk
(d) Capital Management
(e)
Market Risk
i) Price Risk
The Board monitors credit risk exposure, including through an assessment of the credit rating of the custodians (HSBC: AA- (2023: AA-) (Fitch, 28 August
2024) and JPMorgan: AA- (2023: AA) (Fitch, 12 June 2024)) , to ensure the Company’s exposure is managed, and has continued to do so more closely with a
focus on any potential impact of, or developments relating to the Ukraine Crisis.
The Company’s principal activity is the issue and listing of Metal Securities. These securities are issued and redeemed as demand requires. The Company holds
a corresponding amount of Metal Bullion which matches the total contractual liability of the Metal Securities issued. ManJer supplies or arranges the supply of
all management and administration services to the Company and pays all management and administration costs of the Company, including Trustee and custodian
fees. In return for these services the Company has an obligation to remunerate ManJer, which under the terms of the service agreement by an amount which is
equal to the aggregate of the Management Fee and creation and redemption fees earned.
As all Metal Securities on issue are supported by an equivalent amount of physical bullion held by the custodian and the running costs of the Company were paid
by ManJer, the directors of the Company consider the capital management and its current capital resources are adequate to maintain the ongoing listing and issue
of Metal Securities.
Market risk is the risk that changes in market prices (such as equity and bullion prices, interest rates and foreign exchange rates) will affect the Company’s
income or the value of its financial instruments held or issued.
As described above, Metal Securities provide investors with exposure to precious metals. Excluding the impact of Management Fees, the value of certain
Metal Securities also dropped in line with the changes in the underlying Metal Bullion values:
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The directors believe that settlement risk would only be caused by the Company’s trading counterparty not delivering Metal Bullion or Metal Securities on the
settlement date. The Metal Securities settle through the CREST system. The directors feel that this risk is mitigated as Metal Securities are not issued until the
required amount of Metal Bullion has been received in the custodian account, and Metal Bullion is not transferred until the relevant Metal Securities have been
delivered in CREST. As a result, each transaction does not settle until both parties have fulfilled their contractual obligations.
Amounts outstanding in respect of positions yet to settle are disclosed in notes 7 and 8
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities as they fall due. The
Company’s payables are all payable on demand and generally settled on a short term basis. Liquidity risk in respect of payables related to expenses is reduced as
Metal Bullion in respect of the Management Fees are secured by the Company on a daily basis, in order for the related ManJer expense accumulated (for the
month, in arrears) to be settled (in Metal Bullion) once invoiced, and amounts in respect of the creation and redemption fees are transferred from the relevant
counterparties directly to ManJer and there are no related cash flows through the Company.
The Metal Securities do not have a contractual maturity date and will only be redeemed at the request of the holder of the security, which may be requested at
any time, with the transaction settling through the transfer of the required Metal Bullion two days after the transaction date, or in the case of a compulsory
redemption by either transferring the required Metal Bullion, or by realising the Metal Bullion for cash and settling the cash proceeds to holders on a short-term
basis. Generally, only holders of Metal Securities who have entered into an authorised participant agreement with the Company or any holder of WisdomTree
Physical Swiss Gold Securities and WisdomTree Core Physical Gold Securities can submit applications and redemptions directly with the Company.
When Metal Securities are redeemed, the Company returns the corresponding amount of Metal Bullion determined by the Metal Entitlement of those Metal
Securities, therefore the redemption of Metal Securities would not impact the liquidity of the Company. Consequently, the Company has not presented any
tabular information in respect of liquidity risk.
The primary objective of the Company’s capital management policy is to ensure that it maintains sufficient resources for operational purposes. The capital being
managed is the Stated Capital as presented in the Statement of Changes in Equity. Retained Earnings and the Revaluation Reserve, as presented in the Statement
of Changes in Equity, are not considered managed capital as these balances relate to unrealised gains and losses on Metal Bullion (held to support the Metal
Securities) and Metal Securities, which are reversed on a subsequent redemption of the Metal Securities and the related transfer of Metal Bullion and will
therefore not be realised. The Company is not subject to any capital requirements imposed by a regulator and there were no changes in the Company’s approach
to capital management during the year.
WisdomTree Metal Securities Limited
Notes to the Financial Statements (continued)
13. Financial Risk Management (continued)
(e)
Market Risk (continued)
i) Price Risk (continued)
Movement
2024 2023 %
914.000 1,006.000
-9.15%
Palladium
909.000 1,119.000
-18.77%
2,610.850 2,062.400
26.59%
28.905 23.790
21.50%
ii) Interest Rate Risk
The Company does not have significant exposure to interest rate risk as neither the Metal Bullion or the Metal Securities bear any interest.
iii) Currency Risk
(f) Sensitivity Analysis
(g) Fair Value Hierarchy
The levels in the hierarchy are defined as follows:
•
Level 1
•
Level 2
•
Level 3
LBMA Price USD
Platinum
Gold
Silver
The value of the Company’s liability in respect of the Metal Securities fluctuates according to the Metal Bullion prices and the risk of such change in price is
managed by the Company by holding Metal Bullion in the same quantity as its liability. Whilst the Metal Securities are quoted on the open market, the
Company’s ultimate liability relates to its contractual obligations to issue and redeem Metal Securities in exchange for Metal Bullion as determined by the Metal
Entitlement on each trading day. The Company measures the Metal Securities at their fair value in accordance with IFRS 13 rather than at the Contractual Value
(as described in the Prospectus). The gain or loss on the difference between the value of the Metal Bullion and the fair value of Metal Securities would be
reversed on a subsequent redemption of the Metal Securities and transfer of the corresponding Metal Bullion. Refer to note 8 for the further details regarding fair
values. Therefore, the Company bears no residual financial risk from a change in the price of Metal Bullion. Furthermore, the impact of price sensitivity is
considered immaterial to these financial statements.
However, there is an inherent risk from the point of view of investors as the price of Metal Bullion and the value of the Metal Securities may vary widely due to,
amongst other things, changing supply or demand for Metal Bullion, government and monetary policy or intervention and global or regional political, economic
or financial events. The market price of Metal Securities is (and will remain) a function of supply and demand amongst investors wishing to buy and sell Metal
Securities and the bid or offer spread that the market makers are willing to quote. This is highlighted further in note 16, and below under the Fair Value
Hierarchy.
fair values based on valuation techniques using observable inputs other than quoted prices.
fair values based on valauation techniques using inputs that are not based on observable market data.
Categorisation within the hierarchy is determined on the basis of the lowest level input that is significant to the fair value measurement of each relevant asset/
liability.
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Other than as described above, the Company has not initiated any of these further actions during the current year or subsequently to date. Any such action will be
undertaken in accordance with the constitutive documents of the Metal Securities.
The directors do not consider the Company to have a significant exposure to currency risk arising from the current economic uncertainties facing a number
of countries around the world as the gains or losses on the liability represented by the Metal Securities are matched economically by corresponding losses or
gains attributable to the Metal Bullion.
IFRS 7 requires disclosure of a sensitivity analysis for each type of market risk to which the entity is exposed to at the reporting date, showing how profit or loss
and equity would have been affected by a reasonably possible change to the relevant risk variable.
The Company’s rights and liabilities in respect of Metal Securities, relate to its contractual obligations to issue and redeem Metal Securities in exchange for
Metal Bullion as determined by the Metal Entitlement on each trading day. The fair value of each creation and redemption of Metal Securities is recorded using
the price published by the LBMA on the transaction date. However, under IFRS 13, the liability is recorded at fair value (being the on-exchange price) which
results in a mismatch. As described in note 16 this mismatch is reversed on the redemption of Metal Securities.
As a result, the Company’s contractual and economic liability in connection with the issue and redemption of Metal Securities is matched by movements in the
corresponding Metal Bullion. Whilst sensitivity analysis could be performed on this mismatch, the Company does not ultimately have economic exposure to the
on-exchange price, but to the contractual liability of the Metal Securities and consequently, the Company does not have any net exposure to market price risk.
Furthermore the result of the numeric sensitivity is considered not material by the directors and in their opinion, no sensitivity analysis is required to be
disclosed.
fair value based on quoted prices in active markets for identical assets.
WisdomTree Metal Securities Limited
Notes to the Financial Statements (continued)
13. Financial Risk Management (continued)
(g) Fair Value Hierarchy (continued)
The categorisation of the Company’s assets and (liabilities) measured at fair value are as shown below:
2024 2023
USD USD
Level 1
Metal Securities
(11,356,446,827) (9,371,697,442)
Level 2
Overdraft Facility (1,569,651) (654,987)
Metal Bullion On Loan 1,569,651 654,987
Metal Bullion 11,363,169,481 9,375,128,003
11,363,169,481 9,375,128,003
14. Ultimate Controlling Party
15. Events Occurring After the Reporting Period
16. Non-GAAP and Non-Statutory Information
The Company holds Metal Bullion to support the Metal Securities as determined by the Metal Entitlement (which is calculated in accordance with an agreed
formula published in the Prospectus). Metal Bullion is marked to fair value using the latest price published by the LBMA. The Company has contractual
obligations to issue and redeem Metal Securities in exchange for Metal Bullion as determined by the Metal Entitlement of each class of Metal Security on each
trading day. The fair value of each creation and redemption of Metal Securities is recorded using the price published by the LBMA on the transaction date
applied to that Metal Entitlement. Therefore, Metal Bullion is classified as a level 2 asset, as the value is calculated using third party pricing sources supported
by observable, verifiable inputs.
As disclosed in notes 2 and 9, the Company holds Metal Bullion on Loan under the Overdraft Facility, which are recorded at fair value using the latest price
published by the LBMA. Therefore, Metal Bullion on Loan is classified as a level 2 asset, as the value is calculated using third party pricing sources, and the
Overdraft Facilities are classified as a Level 2 liability as the value is calculated using third party pricing sources supported by observable, verifiable inputs.
Fair Value as at 31 December
Each of the Metal Securities, Overdraft Facility, the Metal Bullion on Loan and the Metal Bullion are recognised at fair value upon initial recognition and
revalued to fair value in line with the Company’s accounting policy. There are no assets or liabilities classified in level 3. Transfers between levels would be
recognised if there was a change in circumstances that prevented public information in respect of Level 1 inputs from being available. Any such transfers would
be recognised on the date of the change in circumstances that cause the transfer. There were no transfers or reclassifications between Level 1 and Level 2 for any
of the assets or liabilities during the year.
In accordance with the disclosure requirements of IFRS the directors have determined that no entity meets the definition of immediate parent or ultimate
controlling party. The holder of issued equity shares is HoldCo, a Jersey registered company. WisdomTree, Inc (formerly WisdomTree Investments, Inc) is the
ultimate controlling party of HoldCo.
There have been no significant events that have occurred since the end of the reporting period up to the date of signing the Financial Statements which would
impact on the financial position of the Company disclosed in the Statement of Financial Position as at 31 December 2024, or on the results and cash flows of the
Company for the year ended on that date.
The Company is required to utilise the available on-market price as the Metal Securities are quoted and actively traded on the open market. Therefore, Metal
Securities are classified as Level 1 financial liabilities.
As a result of the mis-match in the accounting valuation of Metal Bullion (held to support the Metal Securities) and Metal Securities (as disclosed in notes 7 and
8) the profits and losses and comprehensive income of the Company presented in the Statement of Profit or Loss and Other Comprehensive Income reflect gains
and losses which represent the movement in the cumulative difference between the value of the Metal Bullion and the price of Metal Securities. The Statement
of Changes in Equity also reflects the fair value movements on both the Metal Bullion (held to support the Metal Securities) and the Metal Securities.
These gains or losses on the difference between the value of the Metal Bullion (held to support the Metal Securities) and the price of Metal Securities would be
reversed on a subsequent redemption of the Metal Securities and transfer of the corresponding Metal Bullion.
Furthermore, each class of Metal Security is issued under limited recourse arrangements whereby the holders have recourse only to the relevant Metal Bullion
(held to support the Metal Securities) and not to the Metal Bullion of any other class of Metal Security or to the Company. As a result, the Company does not
make gains from trading in the underlying Metal Bullion (held to support the Metal Securities) and, from a commercial perspective (with the exception of the
impact of Management Fees) gains and losses in respect of Metal Bullion (held to support the Metal Securities) will always be offset by a corresponding loss or
gain on the Metal Securities and the Company does not retain any net gains or losses.
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WisdomTree Metal Securities Limited
Notes to the Financial Statements (continued)
16. Non-GAAP and Non-Statutory Information (continued)
The mismatched accounting values are as shown below:
2024 2023
USD USD
Change in Fair Value of Metal Bullion 2,269,690,333 899,735,000
Change in Fair Value of Metal Securities (2,266,398,237) (864,297,012)
3,292,096
35,437,988
(a) Non-GAAP and Non-Statutory Statement of Profit or Loss and Other Comprehensive Income
2024 2023
USD USD
Income
35,915,853 32,215,918
Expenses
(35,915,853) (32,215,918)
Result Before Fair Value Movements
-
-
Change in Fair Value of Metal Bullion
2,269,690,333 899,735,000
Change in Fair Value of Metal Securities
(2,266,398,237) (864,297,012)
Profit for the Year
3,292,096 35,437,988
Adjustment from Market Value to Contractual Value (as set out in the Prospectus) of Metal Securities
(3,292,096) (35,437,988)
Adjusted Result
-
-
To reflect the commercial results, the Company has presented below a non-GAAP and non-Statutory Statement of Profit or Loss and Total Comprehensive
Income and Statement of Changes in Equity for the period which reflect an Adjustment from Market Value to Contractual Value (as set out in the Prospectus) of
Metal Securities, together with those gains or losses being transferred to a separate reserve which is deemed non-distributable.
Year ended 31 December
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Year ended
31 December
WisdomTree Metal Securities Limited
Notes to the Financial Statements (continued)
16. Non-GAAP and Non-Statutory Information (continued)
(b) Non-GAAP and Non-Statutory Statement of Changes in Equity
USD USD USD USD USD
Opening Balance at 1 January 2023
4 - (32,007,430) (32,007,426) 4
- 35,437,988 - 35,437,988 35,437,988
Transfer to Revaluation Reserve
- (35,437,988) 35,437,988 - -
- - - - (35,437,988)
Balance at 31 December 2023
4 - 3,430,558 3,430,562 4
Opening Balance at 1 January 2024
4 - 3,430,558 3,430,562 4
- 3,292,096 - 3,292,096 3,292,096
Transfer to Revaluation Reserve
- (3,292,096) 3,292,096 - -
- - - - (3,292,096)
Balance at 31 December 2024
4 - 6,722,654 6,722,658 4
4
This represents the difference between the value of Metal Bullion and the price of Metal Securities.
Result and Total Comprehensive Expense
for the Year
Adjustment from Market Value to
Contractual Value (as set out in the
Prospectus) of Metal Securities
Result and Total Comprehensive Income
for the Year
Adjustment from Market Value to
Contractual Value (as set out in the
Prospectus) of Metal Securities
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Stated
Capital
Retained
Earnings
Revaluation
Reserve
4
Total
Equity
Adjusted
Total Equity