Xtrackers ETC plc Expands Precious Metals Portfolio with 3,000 EUR-Hedged Silver ETC Securities Issued

Xtrackers ETC plc Corporate and Regulatory Overview

Incorporated in Ireland on 21 May 2018 (registration number 627079), Xtrackers ETC plc is a public limited company with its registered office at Fourth Floor, 3 George's Dock, IFSC, Dublin 1, Ireland. Its legal entity identifier is 549300FXP9JMVJDIO346. The company has an authorised share capital of 1,000,000 with 25,000 fully issued ordinary shares held by Wilmington Trust SP Services (Dublin) Limited in trust for charitable purposes.

Established as a special purpose vehicle for issuing asset-backed securities linked to precious metals and commodities, the company is managed by directors Eileen Starrs and Claudio Borza, with KPMG Ireland serving as statutory auditors. Financial statements for periods ending 30 September 2024 and 30 September 2025 report total assets of USD 6,749,076,488 and USD 9,444,414,693 respectively, demonstrating significant growth. The firm operates under the UK Financial Conduct Authority's supervision, which approved the Base Prospectus on 12 February 2026 under Regulation (EU) 2017/1129 as retained EU law.

Silver ETC Securities Backed by Allocated Physical Metal

The 3,000 newly issued securities constitute Tranche 120 of Series 4 within the Secured Xtrackers ETC Precious Metal Linked Securities Programme. Each ETC unit corresponds to 1.208146119 fine troy ounces of physical silver as of the subscription trade date, 24 July 2026. This silver is held on an allocated basis by JPMorgan Chase Bank, N.A. (London Branch), acting as Secured Account Custodian, ensuring specific physical silver is segregated exclusively for the Issuer. Operationally, minor amounts may be held unallocated, creating contractual claims backed by the custodian's credit rating.

Security is reinforced via dual security deeds governed by Irish and English law, establishing security interests over the Issuer's rights and metal holdings. J.P. Morgan SE functions as Series Counterparty, Account Bank, and manages the Series Cash Account, while JPMorgan Chase Bank, N.A. serves as Metal Agent responsible for metal sales and redemptions. All counterparties maintain minimum S&P credit ratings of BBB-/A-3 for long- and short-term obligations, ensuring operational integrity and investor protection.

Currency Hedging and Fee Structure for EUR Investors

Denominated in EUR, the securities incorporate FX hedging to shield EUR-based investors from USD silver price volatility. Hedging references Thomson Reuters/WM Reuters for spot and forward rates, with fixing times at 15:00 and 10:00 London time respectively. A bid-offer spread adjustment of 15 basis points applies at issuance, capped at 18 basis points, alongside metal reference price spreads of +0.0025 USD on both bid and offer sides, ensuring transparent pricing.

The fee structure includes a base fee of 0.38% per annum and an FX hedging fee of 0.35% per annum as at issuance, totaling 0.73% annually. Both fees have maximum caps of 1.00% per annum. Fees are accrued daily through proportional reductions in metal entitlements per security and are realized via periodic metal sales, with proceeds credited to the Series Cash Account and paid to the Programme Administrator to cover programme and issuer expenses.

Maturity and Redemption Terms

These securities mature on 15 May 2080, offering a 54-year investment duration. The final redemption valuation date is 29 March 2080, followed by a 45-calendar-day disposal period commencing four non-disrupted business days later. Final redemption amounts will be the greater of the final metal redemption plus specified interest or 10% of the original issue price plus specified interest, ensuring a minimum principal protection of EUR 2.077 per security based on the EUR 20.77 issue price.

Early redemption triggers include the security value falling to or below 20% of the original issue price for two consecutive valuation days, agent resignation without successor appointment within 60 calendar days, or material legal or regulatory changes impacting the Issuer. Early redemptions follow the same 45-day disposal period, with the early redemption date set eight business days post-disposal. The announcement cautions that redemption amounts may not equal or exceed invested amounts, and investors may receive zero payment due to the limited recourse nature of the securities.

Listing and Distribution Information

Application has been submitted for listing on the Frankfurt Stock Exchange with trading admission on the regulated market effective approximately 18 May 2020 (reference date from the original series). The securities bear ISIN DE000A2UDH55, SEDOL BM97NJ5, and German WKN A2UDH5. Delivery is free of payment, and the securities are not intended for Eurosystem eligibility. Clearing occurs through Clearstream Frankfurt with CREST indirect clearing available for UK investors, providing dual settlement infrastructure.

Estimated net proceeds from the 3,000-unit issuance total EUR 185,719, with estimated issue expenses of USD 5,000 and admission expenses of USD 2,000. The Central Bank's certificate of approval has been notified to authorities in Austria, Belgium, Finland, France, Germany, Italy, Luxembourg, the Netherlands, Portugal, Spain, and Sweden, facilitating cross-border distribution within the EU. Although not formally denominated, the securities are treated as having denominations below 100,000 for prospectus purposes.

Investor Exposure Without Physical Silver Delivery

These ETC securities offer investors direct exposure to silver prices without requiring physical possession, storage, or insurance of the metal. The daily value of each ETC is linked to the underlying metal’s market price. Due to daily fee deductions reducing metal entitlements, effective silver exposure declines gradually over time. Redemption proceeds depend on volume-weighted average prices during the disposal period, introducing timing and execution risks.

The Issuer aims to maintain sufficient allocated physical silver to meet obligations, though operational holdings may fluctuate due to fee accruals and interest. Unallocated holdings expose investors to custodial credit risk as unsecured creditors of JPMorgan Chase Bank, N.A. The series counterparty’s BBB- credit rating provides measurable downside protection. This structure appeals to investors seeking regulated European exchange access to commodity exposure without physical bullion ownership.

Counterparty Credit and Security Framework

J.P. Morgan SE and JPMorgan Chase Bank, N.A. serve critical roles in the transaction. J.P. Morgan SE acts as series counterparty and account bank, managing cash flows, while JPMorgan Chase Bank, N.A. (London Branch) functions as Metal Agent and custodian of allocated silver. Both maintain minimum S&P credit ratings of BBB-/A-3.

Security interests are established through dual deeds under Irish and English law, creating fixed security over all Issuer rights and metal holdings. Secured Property is segregated from other series, protecting investors from contagion risks related to other ETC series. Security enforcement occurs upon failure to pay redemption amounts at maturity or early redemption.

Risks and Investor Considerations

Material risks include potential total loss due to the limited recourse structure if final redemption amounts fall below principal protection levels. Silver price volatility exposes investors to significant market risk over the 54-year term. EUR hedging mitigates currency risk but does not eliminate commodity price risk and entails ongoing hedging costs. Custodial and counterparty credit risks remain despite credit rating thresholds. Default of JPMorgan Chase Bank, N.A. on unallocated metal holdings could result in unsecured creditor status and recovery delays.

Execution risk arises during metal disposal periods, where volume-weighted average sale prices may be lower than spot prices at valuation. Early redemption triggered by agent resignation, regulatory changes, or price declines may force sales under adverse conditions, potentially crystallizing losses.

Financial Growth and Asset Expansion

As of 30 September 2025, Xtrackers ETC plc reported total assets of USD 9,444,414,693, a 39.9% increase from USD 6,749,076,488 as of 30 September 2024. Corresponding current liabilities rose from USD 6,749,038,358 to USD 9,444,373,921. Equity remained minimal at USD 40,772, consistent with the special purpose vehicle structure where economic risk is borne by securityholders.

The increase in assets and liabilities reflects robust investor demand for the Issuer's precious metals ETC products. Prior to this tranche, 1,092,413 Series 4 securities had been issued, now totaling 1,095,413 units. This trend indicates continued appetite for silver exposure via regulated ETCs in European markets, though the minimal equity base underscores the pass-through nature of the vehicle.