Canary HBAR ETF Annual Report - How They Did This Year

I’ve put together a simple guide to help you understand how the Canary HBAR ETF performed. Think of this as a plain-English breakdown—no confusing Wall Street jargon, just the facts you need to decide if this fits your investment goals.

1. What does this company do and how did they perform this year?

The Canary HBAR ETF (ticker: HBR) is a simple investment tool. Its only job is to track the price of HBAR, the native cryptocurrency of the Hedera Network. It doesn't try to beat the market; it simply holds HBAR so you can track its price through your regular brokerage account.

The Trust launched on October 27, 2025. By the end of 2025, the Trust held 3,460,000 shares and raised over $88 million. As of December 31, 2025, the Trust held approximately 115.3 million HBAR tokens, which back the shares issued to investors.

2. Financial performance

Because this is a "pass-through" fund, it doesn't earn a profit. Its value depends entirely on the HBAR it holds.

Costs to run the fund: The sponsor, Canary Capital, charges an annual fee of 0.75% of the fund’s total value, calculated daily and collected monthly. This fee covers day-to-day costs like legal work, audits, and marketing. If the fund faces "extraordinary" costs—like legal defense—the Trust must pay them, which could involve selling some HBAR and reducing the amount of HBAR held per share.

3. Major wins and challenges

The biggest win was the successful launch and listing on the Nasdaq, providing easy access for investors to trade HBAR. Security is a top priority: the fund uses professional custodians to keep HBAR in "cold storage," meaning digital keys are kept offline to prevent hacking. The custodian keeps a 100% reserve, ensuring every HBAR is physically held and never lent out. The sponsor also uses strict cybersecurity measures, including regular training and multi-signature authorization, to protect the fund’s assets.

4. How they value your money

To ensure the price is fair, the fund uses a "Pricing Benchmark." Every day at 4:00 p.m. ET, they check the exchange with the highest HBAR trading volume to value the assets. They also provide an "Indicative Trust Value" every 15 seconds so you can see if the ETF price is drifting away from the actual value of the HBAR. If the ETF price moves more than 2% away from the fund's value, professional traders step in to close that gap.

Note for tax-conscious investors: The IRS treats the Trust as a "grantor trust." You are essentially treated as if you own the HBAR directly. For U.S. investors, selling shares is usually treated as a sale of a capital asset, subject to capital gains tax rates.

5. Key risks to consider

• Price Volatility: HBAR prices swing wildly. A 10-20% change in a single week is possible, which directly impacts your investment.
• Trading Deviations: Shares may trade for more or less than the actual value of the HBAR held. If market sentiment turns negative, you might receive less than the underlying value when you sell.
• Regulatory Changes: If regulators label HBAR a "security," the Trust must register under the Investment Company Act of 1940. This would increase costs and could force the fund to close.
• Tax Uncertainty: IRS rules for digital assets are still evolving. If the Trust were reclassified as a corporation, it would pay corporate income taxes, which would lower your returns.
• Governance Concentration: The Hedera Network is governed by a council of up to 39 organizations. They could make decisions that don't align with your interests, potentially impacting the token's value.

Final Thought for Investors: This ETF is designed for those who want exposure to HBAR without the technical hurdles of managing a digital wallet. Before investing, consider whether you are comfortable with the inherent volatility of crypto assets and the specific regulatory risks associated with this type of fund. If you are looking for a long-term hold, ensure this fits within your overall risk tolerance.