Process Manipulation
A history of undermining independent judgment and steering key decisions
Compromised the integrity of the advisory contract renewal process
One of the most important duties of a fund board under the Investment Company Act of 1940 is the annual review of the advisory contract. This review is often referred to as the “15(c)” process.
A proper 15(c) process requires independent directors to evaluate the adviser, the Fund’s performance, fees, services, risks, profitability, and related matters. The process typically includes a formal request for information, a detailed response from the adviser, follow-up questions, and a meeting between the adviser and the Board. Only disinterested directors vote on renewal of the advisory agreement, which makes director independence essential.
The Board's advisory review process raises serious questions about whether Merk’s performance, risk controls, and investment process were evaluated with the rigor and objectivity shareholders deserved.
The full 15(c) record is not public. I have therefore not published Merk’s response letter or follow-up correspondence.
Publicly available performance and risk data show that ASA has substantially outperformed its benchmark and peers during Merk’s tenure. Merk also provided the Board with a detailed explanation of the investment process and risk controls.
Against that record, the Board’s follow-up questioning included the following: “Have the companies that Merk has invested in for the Fund catapulted because of hype and illiquidity...?”
In my view, that question is revealing. It was asked after Merk had provided a robust risk analysis and after years of exceptional performance. Rather than reflecting an open-ended review of the adviser’s record, the question suggested a predisposition to treat ASA’s performance as suspect.
That concern is heightened by the composition of the Board. No current ASA director has a background in precious metals investing. Three of the five directors have served for less than a year. One director is a Saba partner. Another has facilitated Saba’s efforts in the past.
Trustee counsel took the lead on the advisory contract review process. That matters because current trustee counsel has worked with Saba-backed directors in other funds on special projects, including facilitating the takeover of another closed-end fund. Against that background, counsel’s role in guiding ASA’s 15(c) process is part of why the process raises serious questions.
This example is only one part of a broader record. Based on that record — including the substance of the follow-up questions, the role of trustee counsel, and the composition of the Board — the advisory review process raises serious questions about whether Merk’s record was evaluated objectively or whether the review was shaped toward a predetermined result.
Advisory agreements typically renew annually and can generally be terminated with notice. Yet in April, ASA issued a press release announcing that the Board had extended Merk’s agreement by only 90 days without noting the unusual nature of such short-term extension or otherwise disclosing the implications or any plans for the Fund's future. That temporary extension created uncertainty around a process that should have protected shareholders through independent judgment, not rushed or incomplete review.
Ignored constructive proposals that would benefit all shareholders
As discussed in my institutional presentation addressing Saba's campaign and governance issues at ASA a year ago, the hand-picked Saba directors declined to seriously consider constructive proposals that could have been attractive for all shareholders, including Saba.
Since Saba’s January Schedule 13D filing, Merk proposed a path to address the widening discount while preserving shareholder choice and ASA’s precious-metals strategy. The proposal noted public board support for ASA’s current strategy, a path for shareholders seeking liquidity near NAV, and an investor outreach effort intended to rebuild shareholder trust and attract new investors.
Related concern: Substantial Shareholder Costs
These concerns remain important. Many shareholders have already filed complaints with the SEC. If you have information relevant to Saba’s conduct, shareholder rights, director independence, or the ASA Board process, you may still submit information to the SEC.
If you invested in ASA for precious metals mining exposure, register your potential interest in a future Merk-managed mining strategy: saveasa.com/register. (*)
Register your potential interest in a future Merk-managed mining strategy, so you don't miss out: saveasa.com/register
* The online registration is to indicate potential interest only. More information about a potential Merk-managed mining strategy will be provided at a later date. The past performance of ASA does not guarantee the future results of another Merk-managed strategy.
As of this writing, ASA’s Board has not announced how it will proceed. On June 30, 2026, Merk concluded its management of ASA after the Saba-controlled Board terminated Merk’s advisory agreement. Certain Fund directors, including a Saba partner, have assumed responsibility for ASA’s management.
Axel Merk owns over 300,000 shares of ASA Gold and Precious Metals Limited. He serves as President and Chief Investment Officer of Merk Investments LLC, which served as the Fund’s investment adviser until June 30, 2026. He also resigned as Chief Operating Officer of ASA in June 2026.
Nothing on this website constitutes an offer to sell, or a solicitation of an offer to buy, any securities. The information presented on this website reflects the views and opinions of Axel Merk and is provided solely for educational and informational purposes. It does not constitute investment, legal, financial, or tax advice. You should consult your own advisors for guidance specific to your circumstances.
The plans of Saba and the Board are based on publicly disclosed information only and are therefore accordingly qualified in their entirety and subject to change.
This site and its content have not been approved by ASA Gold & Precious Metals Ltd. (“ASA” or the “Fund”). concentrates its investments in the gold and precious minerals sector, which may be more volatile than other industries and influenced by changes in commodity prices driven by international economic and political developments. ASA is a non-diversified fund, which may result in higher risk through reduced portfolio diversification. It may also invest in smaller-sized and foreign companies, which may be more volatile, less liquid, and subject to additional risks, including currency fluctuations. Shares of closed-end funds like ASA frequently trade at a discount to net asset value.
This website may include forward-looking statements that reflect the current expectations, estimates, beliefs, assumptions, and projections of Axel Merk. These statements are inherently subject to risks and uncertainties, many of which are beyond the control of the author. Actual outcomes may differ materially from those discussed. Forward-looking statements can often be identified by words such as “believe,” “expect,” “intend,” “may,” “will,” “should,” or similar expressions including the negatives thereof, other variations or comparable terms. These statements speak only as of the date made, and there is no obligation to update or revise them in light of future developments.
Certain links may direct users to third-party websites or filings with the U.S. Securities and Exchange Commission (“SEC”). These materials are provided solely for convenience and informational purposes and are not incorporated by reference into any proxy materials. No responsibility is taken for the accuracy or content of third-party sources, and no obligation exists to provide updated information if it subsequently becomes incorrect in the future.
