The Trusts' precious metals are fully allocated which provides the Trusts with direct beneficial ownership. Unlike other bullion funds, the Trusts do not have an unallocated account that is used to facilitate transfers of bullion between financial institutions that act as authorized participants. Without exception, all of the bullion owned by the Trusts is held in the Trusts' allocated accounts in physical form.
In contrast, unallocated gold does not correspond to specific bars and does not provide direct beneficial ownership or title. Counter party risk is a key consideration when investing in unallocated gold as there may not be a sufficient amount of gold backing all of the ownership claims and in the event of bankruptcy, you will likely become an unsecured creditor.
The primary reason to invest in precious metals is to manage a number of potential risks – financial, geopolitical, currency devaluation, inflation, etc. As we witnessed in the 2008 financial crises, even the world’s largest financial institutions are not immune from insolvency and government bail outs. For these reasons, the Trusts store their precious metals in custody with the Royal Canadian Mint, a Federal Crown Corporation of the Government of Canada. There is no levered financial institution between the unitholders and the Trusts' physical bullion and no risk of financial loss in the event of a bankruptcy or nationalization of the financial institution.
Just like stocks, you can buy and sell the Trusts throughout the trading day on both the New York Stock Exchange and Toronto Stock Exchange. All of the Trusts trade in U.S. dollars.
|Trust Name||NYSE ARCA Ticker||TSX Ticker|
|Sprott Physical Gold and Silver Trust||CEF||CEF|
|Sprott Physical Gold Trust||PHYS||PHYS.U|
|Sprott Physical Silver Trust||PSLV||PSLV.U|
|Sprott Physical Platinum and Palladium Trust||SPPP||SPPP.U|
Subject to minimum redemption amounts, unitholders have the ability to redeem their units for physical bullion on a monthly basis. The Royal Canadian Mint can deliver the bars almost anywhere in the world via an Armored Transportation Service Carrier. Physical redemptions will never dilute remaining unitholders. All physical redemptions are equal to 100% of the NAV per Unit of the redeemed units, less redemption and delivery expenses, including the handling of the notice of redemption and the applicable bullion storage in-and-out fees.1
For U.S. non-corporate investors who hold units for more than one year and make a timely Qualified Election Form (QEF) election, gains realized on the sale of the Trust’s units are currently taxed at the long-term capital gains rate of 15% (20% for higher income taxpayers), versus the maximum of 28% applied against most precious metals ETFs and physical gold coins.2 See our Tax Guide for more information | PDF VERSION
You can sell your units in the Trusts between 9:30 am and 4:00 pm EST on any open trading day for the New York Stock Exchange or Toronto Stock Exchange. Just like with stocks, proceeds from selling your Trust units are deposited to your brokerage account three business days after the trade date.
Sprott Physical Bullion Trusts
Sprott Asset Management LP is the investment manager to the Sprott Physical Bullion Trusts (the “Trusts”). Important information about the Trusts, including the investment objectives and strategies, purchase options, applicable management fees, and expenses, is contained in the prospectus. Please read the document carefully before investing (available here). Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. This communication does not constitute an offer to sell or solicitation to purchase securities of the Trusts.
The risks associated with investing in a Trust depend on the securities and assets in which the Trust invests, based upon the Trust’s particular objectives. There is no assurance that any Trust will achieve its investment objective, and its net asset value, yield and investment return will fluctuate from time to time with market conditions. There is no guarantee that the full amount of your original investment in a Trust will be returned to you. The Trusts are not insured by the Canada Deposit Insurance Corporation or any other government deposit insurer. Please read a Trust’s prospectus before investing. The information contained herein does not constitute an offer or solicitation to anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Funds may be lawfully sold in their jurisdiction. The information provided is general in nature and is provided with the understanding that it may not be relied upon as, nor considered to be, the rendering or tax, legal, accounting or professional advice. Readers should consult with their own accountants and/or lawyers for advice on the specific circumstances before taking any action.
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