This information should be read in conjunction with the financial statements and notes to the financial statements included with this report. The discussion and analysis that follows may contain statements that relate to future events or future performance. In some cases, such forward-looking statements can be identified by terminology such as "may," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or the negative of these terms or other comparable terminology. Neither the Sponsor, nor any other person assumes responsibility for the accuracy or completeness of forward-looking statements. Neither the Trust nor the Sponsor is under a duty to update any of the forward-looking statements to conform such statements to actual results or to a change in the Sponsor's expectations or predictions.

Introduction.

The ETFS White Metals Basket Trust (the "Trust") is a trust formed under the laws of the State of New York. The Trust does not have any officers, directors, or employees, and is administered by The Bank of New York Mellon (the "Trustee") acting as trustee pursuant to the Depositary Trust Agreement (the "Trust Agreement") between the Trustee and ETF Securities USA LLC, the sponsor of the Trust (the "Sponsor"). The Trust issues shares ("Shares") representing fractional undivided beneficial interests in its net assets. The assets of the Trust consist of silver, platinum and palladium bullion ("Bullion") held by a custodian as an agent of the Trust and responsible only to the Trustee.

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

The Trust issues and redeems Shares only in exchange for Bullion, only in aggregations of 50,000 or integral multiples thereof (each, a "Basket"), and only in transactions with registered broker-dealers that have previously entered into an agreement with the Trust governing the terms and conditions of such issuance (such dealers, the "Authorized Participants"). A list of current Authorized Participants is available from the Sponsor or the Trustee.

Shares of the Trust trade on the NYSE Arca under the symbol "WITE."

Investing in the Shares does not insulate the investor from certain risks, including price volatility. The following table illustrates the movement in the price of the Shares and NAV of the Shares against the price per ounce of silver, platinum and palladium in the proportions held by the Trust (the "Proportionate Price") since inception.

NAV per Share vs. Proportionate Price from Inception to December 31, 2012

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

Critical Accounting Policy

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

Valuation of Bullion

Bullion is valued, for financial statement purposes, at the lower of cost or market. The cost of Bullion is determined according to the average cost method and the market value is based on the London Fix for each metal held by the Trust used to determine the NAV of the Trust. Realized gains and losses on transfers of Bullion to pay the Sponsor's Fee, or Bullion distributed for the redemption of Shares, are calculated on a trade date basis using average cost.

Once the value of Bullion has been determined, the NAV is computed by the Trustee by deducting all accrued fees and other liabilities of the Trust, including the remuneration due to the Sponsor (the "Sponsor's Fee"), from the fair value of the Bullion and all other assets held by the Trust.

The table below summarizes the unrealized gains or losses on the Trust's Bullion holdings as of December 31, 2012 and 2011:

                                               December 31, 2012      December 31, 2011
(Amounts in 000's of US$)
Investment in Bullion - average cost           $          34,887      $          46,709
Realized loss on investment in Bullion                         -                 (6,932)
Investment in Bullion - lower of cost or
market value                                              34,887                 39,777
Unrealized gain on investment in Bullion                   2,737                      -
Investment in Bullion - market value           $          37,624      $          39,777

Inspection of Bullion

Under the Custody Agreements, the Sponsor has exercised its right to visit the Custodian, in order to examine the Bullion and the records maintained by the Custodian. The inspection held as of December 31, 2012 by Inspectorate, a leading commodity inspection and testing company, confirmed that the Custodian's records of Bullion held in the vault were accurate.

Liquidity

The Trust is not aware of any trends, demands, conditions, events or uncertainties that are reasonably likely to result in material changes to its liquidity needs. In exchange for the Sponsor's Fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust. As a result, the only expense of the Trust during the period covered by this report was the Sponsor's Fee. The Trust's only source of liquidity is its transfers and sales of Bullion.

The Trustee will, at the direction of the Sponsor or in its own discretion, sell the Trust's Bullion (only in the specified proportion of silver, platinum and palladium held by the Trust) as necessary to pay the Trust's expenses not otherwise assumed by the Sponsor. The Trustee will not sell Bullion to pay the Sponsor's Fee but will pay the Sponsor's Fee through in-kind transfers of Bullion to the Sponsor. At December 31, 2012 and 2011, the Trust did not have any cash balances.

Review of Financial Results

Financial Highlights





                                      December 31, 2012      December 31, 2011      December 31, 2010*
(Amounts in 000's of US$)
Total gain / (loss) on Bullion        $             581      $          (4,904)     $                -
Net gain / (loss) from operations     $             342      $          (5,259)     $              (15)
Net cash provided by operating
activities                            $               -      $               -      $                -

* Period from November 29, 2010

The year ended December 31, 2012

The net asset value ("NAV") of the Trust is obtained by subtracting the Trust's expenses and liabilities on any day from the value of the Bullion owned by the Trust on that day; the NAV per Share is obtained by dividing the NAV of the Trust on a given day by the number of Shares outstanding on that day.

The Trust's NAV decreased from $39,757,253 at December 31, 2011 to $37,605,438 at December 31, 2012, a 5.41% decrease for the year. The decrease in the Trust's NAV resulted primarily from a decrease in outstanding Shares, which fell from 850,000 Shares at December 31, 2011 to 750,000 Shares at December 31, 2012, a result of 0 Shares (0 Baskets) being created and 100,000 Shares (2 Baskets) being redeemed during the year.

The prices per ounce of silver, platinum and palladium in the proportions held by the Trust (the "Proportionate Price"), increased 7.85% in the year.

NAV per Share increased 7.21% from $46.77 at December 31, 2011 to $50.14 at December 31, 2012. The Trust's NAV per Share rose slightly less than the Proportionate Price on a percentage basis due to Sponsor's Fee, which were $239,748 for the year, or 0.60% of the Trust's assets on an annualized basis.

The NAV per Share of $59.82 at February 29, 2012 was the highest during the year, compared with a low of $44.92 at July 12, 2012.

Net gain from operations for the year ended December 31, 2012 was $341,815, resulting from a net gain of $20,279 on the transfer of Bullion to pay expenses and a net gain of $561,284 on Bullion distributed for the redemption of Shares, offset by Sponsor's Fee of $239,748. Other than the Sponsor's Fee, the Trust had no expenses during the year ended December 31, 2012.

The year ended December 31, 2011

The Trust's NAV increased from $37,969,441 at December 31, 2010 to $39,757,253 at December 31, 2011, a 4.71% increase for the year. The increase in the Trust's NAV resulted primarily from an increase in outstanding Shares, which rose from 700,000 Shares at December 31, 2010 to 850,000 Shares at December 31, 2011, a result of 750,000 Shares (15 Baskets) being created and 600,000 Shares (12 Baskets) being redeemed during the year.

The Proportionate Price decreased 13.25% in the year.

NAV per Share decreased 13.77% from $54.24 at December 31, 2010 to $46.77 at December 31, 2011. The Trust's NAV per Share fell slightly more than the Proportionate Price on a percentage basis due to Sponsor's Fee, which were $354,354 for the year, or 0.60% of the Trust's assets on an annualized basis.

The NAV per Share of $73.09 at April 28, 2011 was the highest during the year, compared with a low of $44.45 at December 29, 2011.

Net loss from operations for the year ended December 31, 2011 was $5,258,745, resulting from a net gain of $33,004 on the transfer of Bullion to pay expenses and a net gain of $1,994,809 on Bullion distributed for the redemption of Shares, offset by a realized loss on Bullion of $6,932,204 and Sponsor's Fee of $354,354. Other than the Sponsor's Fee, the Trust had no expenses during the year ended December 31, 2011.

Period ended December 31, 2010

The Trust was formed as a legal entity on November 29, 2010 with an initial deposit of Bullion. NAV at November 29, 2010 was $4,854,000.

The Trust's Shares commenced trading on the NYSE Arca under the symbol WITE on December 3, 2010. The Trust began accruing expenses and calculating NAV from this date.

The Trust's NAV grew from $4,854,000 at November 29, 2010 to $37,969,441 at December 31, 2010, a 682.23% increase for the period. The increase in the Trust's NAV relates to increases in the Proportionate Price, and an increase in outstanding Shares, which rose from 100,000 Shares at November 29, 2010 to 700,000 Shares at December 31, 2010, a consequence of 600,000 Shares (12 Baskets) being created and no Shares being redeemed during the period.

NAV per Share increased 4.35% from $51.98 at December 3, 2010 to $54.24 at December 31, 2010. The Trust's NAV per share rose slightly less than the Proportionate Price on a percentage basis due to the Sponsor's Fee, which was $14,675 for the period, or 0.60% of the Trust's assets on an annualized basis.

The NAV per Share of $54.60 on December 30, 2010 was the highest during the period compared with a low of $51.28 on December 9, 2010.

Net loss for the period ended December 31, 2010 was $14,675, which comprises the Sponsor's Fee. Other than the Sponsor's Fee, the Trust had no expenses during the period ended December 31, 2010.