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FXSG > SEC Filings for FXSG > Form 10-Q on 9-Jun-2014All Recent SEC Filings

Show all filings for CURRENCYSHARES SINGAPORE DOLLAR TRUST

Form 10-Q for CURRENCYSHARES SINGAPORE DOLLAR TRUST


9-Jun-2014

Quarterly Report


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Regarding Forward-Looking Information

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipate," "expect," "intend," "plan," "believe," "seek," "outlook" and "estimate" and other similar words. Forward-looking statements are based upon our current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance. Various factors may cause our actual results to differ materially from those expressed in our forward-looking statements. These factors include fluctuations in the price of the Singapore Dollar, as the value of the Shares relates directly to the value of the Singapore Dollars held by the Trust and price fluctuations could materially adversely affect an investment in the Shares. Readers are urged to review the "Risk Factors" section contained in the Trust's most recent annual report on Form 10-K for a description of other risks and uncertainties that may affect an investment in the Shares.

Neither Guggenheim Specialized Products, LLC d/b/a Guggenheim Investments (the "Sponsor") nor any other person assumes responsibility for the accuracy or completeness of forward-looking statements contained in this report. The forward-looking statements are made as of the date of this report, and will not be revised or updated to reflect actual results or changes in the Sponsor's expectations or predictions.

Trust Overview

The CurrencyShares® Singapore Dollar Trust (the "Trust") is a grantor trust that was formed on August 7, 2008. The Trust issues shares (the "Shares") in blocks of 50,000 (a "Basket") in exchange for deposits of Singapore Dollars and distributes Singapore Dollars in connection with the redemption of Baskets.

The Trust is a passive investment vehicle. The Trust does not have any officers, directors or employees. The investment objective of the Trust is for the Shares to reflect the price of the Singapore Dollar plus accrued interest, if any, less the expenses of the Trust's operations. The Trust does not engage in any activities designed to obtain profit from, or ameliorate losses caused by, changes in the price of the Singapore Dollar.

Definition of Net Asset Value

The Trustee calculates, and the Sponsor publishes, the Trust's Net Asset Value ("NAV") each business day. To calculate the NAV, the Trustee adds to the amount of Singapore Dollars in the Trust at the end of the preceding day accrued but unpaid interest, if any, Singapore Dollars receivable under pending purchase orders and the value of other Trust assets, and subtracts the accrued but unpaid Sponsor's fee, Singapore Dollars payable under pending redemption orders and other Trust expenses and liabilities, if any. The NAV is expressed in U.S. Dollars ("USD") based on the "Closing Spot Rate," which is the Singapore Dollar/USD exchange rate as determined by The WM Company, as of 4:00 PM (London time/London fixing) on each day that NYSE Arca is open for regular trading. If, on a particular evaluation day, the Closing Spot Rate has not been determined and announced by 6:00 PM (London time), then the most recent Closing Spot Rate is used to determine the NAV of the Trust unless the Trustee, in consultation with the Sponsor, determines that such price is inappropriate to use as the basis for the valuation.

The Trustee also determines the NAV per Share, which equals the NAV of the Trust, divided by the number of outstanding Shares. The NAV of the Trust and the NAV per Share are published by the Sponsor on each day that NYSE Arca is open for regular trading and are posted on the Trust's website, www.currencyshares.com.


Table of Contents

Movements in the Price of Singapore Dollar

The investment objective of the Trust is for the Shares to reflect the price in USD of the Singapore Dollar plus accrued interest, less the expenses of the Trust's operations. The Shares are intended to provide institutional and retail investors with a simple, cost-effective means of gaining investment benefits similar to those of holding Singapore Dollars. Each outstanding Share represents a proportional interest in the Singapore Dollars held by the Trust. The following chart illustrates recent movements in the price of Singapore Dollars in USD and is based on the Closing Spot Rate.

[[Image Removed: LOGO]]


Table of Contents

NAV per Share; Valuation of the Singapore Dollar

The following chart illustrates the movement in the price of the Shares based on
(1) NAV per Share, (2) the "bid" and "ask" midpoint offered on NYSE Arca and
(3) the Closing Spot Rate expressed as a multiple of 100 Singapore Dollars.

[[Image Removed: LOGO]]


Table of Contents

Liquidity

The Sponsor is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to the Trust's liquidity needs. The Trust's Depository, the London Branch of JPMorgan Chase Bank, N.A., maintains two deposit accounts for the Trust; a primary deposit account that may earn interest and a secondary deposit account that does not earn interest. Interest on the primary deposit account, if any, accrues daily and is paid monthly. The interest rate in effect as of April 30, 2014 was an annual nominal rate of 0.00%. The following chart provides the daily rate paid by the Depository since the Shares began trading:

[[Image Removed: LOGO]]

In exchange for a fee, the Sponsor bears most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the period covered by this report was the Sponsor's fee. Each month the Depository deposits into the secondary deposit account accrued but unpaid interest, if any, and the Trustee withdraws Singapore Dollars from the secondary deposit account to pay the accrued Sponsor's fee for the previous month plus other Trust expenses, if any. When the interest deposited, if any, exceeds the sum of the Sponsor's fee for the prior month plus other Trust expenses, if any, the Trustee converts the excess into USD at a prevailing market rate and distributes the USD as promptly as practicable to Shareholders on a pro-rata basis (in accordance with the number of Shares that they own). To date, the Trust has not made any distributions.

Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Sponsor's management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period covered by this report.

In addition to the description below, please refer to Note 2 to the financial statements for further discussion of our accounting policies.

The functional currency of the Trust is the Singapore Dollar in accordance with ASC 830, Foreign Currency Translation.


Table of Contents

Results of Operations

Trading in the Shares of the Trust on NYSE Arca commenced on February 13, 2013.

As of October 31, 2013, the number of Singapore Dollars owned by the Trust was 9,974,826, resulting in a redeemable capital share value of $8,039,213. During the six months ended April 30, 2014, no additional Shares were created and no additional Shares were redeemed. In addition, 19,874 Singapore Dollars were withdrawn to pay the portion of sponsor fee that exceeded the interest earned. As of April 30, 2014, the number of Singapore Dollars owned by the Trust was 9,954,952, resulting in a redeemable capital Share value of $7,927,414.

A decrease in the Trust's redeemable capital Share value from $8,039,213 at October 31, 2013 to $7,927,414 at April 30, 2014 was primarily the result of a decrease in the Closing Spot Rate from 0.80622 at October 31, 2013 to 0.79659 at April 30, 2014.

Interest income did not accrue prior to the commencement of the Trust's Shares trading on NYSE Arca on February 13, 2013. No interest income was earned during the three months ended April 30, 2013 and the three months ended April 30, 2014 due to an annual nominal interest rate of 0.00% through those periods, as set forth in the chart above. Interest income increased from $0 for the six months ended April 30, 2013 to $1 for the six months ended April 30, 2014 due to a brief, slight increase in the annual nominal interest rate paid by the Depository.

The Sponsor's fee accrues daily at an annual nominal rate of 0.40% of the Singapore Dollars in the Trust. The Sponsor's fee did not accrue prior to the commencement of the Trust's Shares trading on NYSE Arca on February 13, 2013. Due primarily to a decrease in the weighted-average Singapore Dollars in the Trust, the Sponsor's fee decreased from $9,005 for the three months ended April 30, 2013 to $7,690 for the three months ended April 30, 2014. Due primarily to an increase in the weighted-average Singapore Dollars in the Trust, the Sponsor's fee increased from $9,005 for the six months ended April 30, 2013 to $15,666 for the six months ended April 30, 2014. The only expense of the Trust during the three months and six months ended April 30, 2014 was the Sponsor's fee.

The Trust's net loss for the three months ended April 30, 2014 was $7,690 due to the Sponsor's fee of $7,690 exceeding interest income of $0. The Trust's net loss for the six months ended April 30, 2014 was $15,665 due to the Sponsor's fee of $15,666 exceeding interest income of $1.

Cash dividends were not paid by the Trust during the three months ended April 30, 2013, the three months ended April 30, 2014, the six months ended April 30, 2013 and the six months ended April 30, 2014, as the Trust's interest income did not exceed the Trust's expenses during those periods.

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