10-K: Franklin Solana ETF Faces Solana Price Drop

Franklin Solana ETF reports a 41.21% NAV decline due to Solana's price drop, with 112,336 SOL held as of March 31, 2026.

Summary

• The Franklin Solana ETF (SOEZ) experienced a significant decline in its Net Asset Value (NAV) per Share, falling by 41.21% from $24.51 to $14.41 between December 3, 2025, and March 31, 2026.
• This decrease in NAV is directly attributed to a 42.37% drop in the price of Solana during the same period.
• The Fund holds 112,336.0666 Solana tokens, valued at $9,365,458 as of March 31, 2026, with an original cost of $12,191,899.
• The Fund generated $98,962 in investment income from staking rewards, which partially offset the net realized and change in unrealized loss of $2,954,111 on its Solana holdings.
• The Sponsor waived its entire fee for the first $5.0 billion of the Fund's assets until May 31, 2026, resulting in no Sponsor fees being paid for the reporting period.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the significant drop in NAV, directly linked to Solana's price decline and the associated unrealized losses.

Positives

• The Fund generated $98,962 in investment income from staking rewards.
• The Sponsor waived its entire fee for the first $5.0 billion of the Fund's assets until May 31, 2026, meaning no Sponsor fees were paid during the reporting period.

Negatives

• The Fund's NAV per Share decreased by 41.21% from $24.51 to $14.41 between December 3, 2025, and March 31, 2026.
• The decrease in NAV is directly linked to a 42.37% decline in the price of Solana during the same period.
• The Fund incurred a net realized and change in unrealized loss of $2,954,111 on its investment in Solana.
• The Fund's investment in Solana had an original cost of $12,191,899 but was valued at $9,365,458 as of March 31, 2026, representing a significant unrealized depreciation.

Risks

• The trading prices of Solana have experienced extreme volatility and may continue to do so, which could materially affect the value of the Shares.
• The Fund's value is directly tied to the price of Solana, and any decline in Solana's price will adversely impact the Fund's NAV.
• Staking activities carry risks, including potential slashing penalties and temporary inaccessibility of staked Solana, which could lead to liquidity risks.
• The Fund's reliance on service providers like Coinbase Custody and Coinbase Inc. introduces operational and cybersecurity risks.
• Regulatory uncertainty surrounding digital assets, including Solana, could lead to adverse legislative or regulatory developments that harm the value of Solana or the Shares.
• The Sponsor has limited experience in operating crypto-asset investment vehicles, which could pose risks to the effective management and operation of the Fund.
• The Fund's concentration in a single asset (Solana) means that losses from Solana's price decline will not be offset by gains from other assets.
• The Sponsor may amend the Declaration of Trust, including increasing the Sponsor's Fee, without Shareholder consent.

Future Outlook

The Fund's performance is directly tied to the price of Solana. Given the historical volatility of Solana, future outlook is subject to significant market fluctuations. The Sponsor does not actively manage the Solana holdings, meaning the Fund will not attempt to capitalize on market highs or lows.

Management Comments

• The Fund seeks to reflect generally the performance of the price of Solana and rewards from staking as much of the Funds Solana as is practicable.
• The Shares have been designed to remove the obstacles represented by the complexities and operational burdens involved in a direct investment in Solana.
• The Sponsor has waived the entire Sponsor's Fee on the first $5.0 billion of the Funds assets for a period commencing on the day the Shares are initially listed on the Exchange to May 31, 2026.

Industry Context

StockSavvy.ai notes that the Franklin Solana ETF operates in the rapidly evolving digital asset ETF market. The significant NAV decline reflects the broader market volatility experienced by cryptocurrencies like Solana. The Fund's passive strategy and reliance on staking rewards are common among digital asset ETFs, but also expose it to the inherent risks of the underlying asset and staking mechanisms.

Comparison to Industry Standards

• The Franklin Solana ETF's expense ratio of 0.19% (before any potential waivers) is competitive with other digital asset ETFs.
• The Fund's NAV decline of 41.21% mirrors the volatility seen in other crypto-related investment products during the reporting period.
• The use of Coinbase as custodian and prime broker is a common industry practice for digital asset ETFs, leveraging established infrastructure for security and operations.

Legal Proceedings

• As of June 29, 2026, the Trust and the Fund are not subject to any material legal proceedings, nor, to our knowledge, are any material legal proceedings threatened against the Trust or Fund.

Related Party Transactions

• Franklin Resources Inc., an affiliate of the Sponsor, purchased 4,000 Shares as Initial Seed Shares and later purchased two creation units comprising 100,000 Shares in exchange for 17,000 Solana.
• Franklin Distributors, LLC serves as the Marketing Agent for the Fund and is an affiliate of the Sponsor.
• As of March 31, 2026, 100,000 of the outstanding shares of the Fund were held by a related party.

Stakeholder Impact

• Shareholders have experienced a significant decrease in the value of their investment due to the decline in Solana's price.
• The Fund's reliance on service providers like Coinbase could impact operations if these providers face issues.
• The Sponsor's fee waiver benefits shareholders by reducing immediate expenses, but the underlying volatility of Solana remains the primary driver of investment performance.

Next Steps

• The Sponsor intends to convert Staking Rewards to cash and distribute such amounts to shareholders on a monthly basis.
• The Sponsor may, at its sole discretion, waive all or a portion of the Sponsor's Fee for stated periods of time in the future.

Key Dates

Recommendation

The Fund's performance is entirely dependent on the price of Solana. While the NAV has declined significantly, the underlying asset's volatility makes a definitive recommendation difficult. Given the passive strategy and the current market conditions for Solana, a 'hold' recommendation is appropriate, advising investors to monitor Solana's price movements closely.

Keywords

Franklin Solana ETF, SOEZ, Solana, Cryptocurrency ETF, Digital Assets, ETF, SEC Filing, 10-K, Franklin Holdings, Coinbase, Staking Rewards