Sprott Canadian Equity Fund

Investment Team


  • Eric Sprott
    Chief Executive Officer; Senior Portfolio Manager

  • Allan Jacobs
    Senior Portfolio Manager, Director of Small Cap Investments

  • Peter Imhof
    Investment Strategist

Fund Details

Fund Status Open
Distributions Income and Capital Gains Distributed Annually (if any) Distributions are reinvested automatically
Fund Code

SPR 001 - (A) 
SPR 111 - (A-LL)
SPR 100 - (F)

Inception Date 9/26/1997
Nature of Securities Mutual Fund Trust Units
Type of Fund Canadian Equity Fund
Valuations Daily
Redemptions Daily
Minimum Initial Investment $1,000 CDN
Minimum Subsequent Investment $100 CDN
Minimum Investment Term 90 days (2% penalty)
Management Fee 2.5% annual - (A) 1.5% annual - (F)
Performance Fee 10% of excess over S&P/TSX Composite Total Return Index
Eligible for Registered Plans Yes
Investor Risk Tolerance High

Fund Objective

The objective of the Fund is to outperform the broad Canadian equity market as measured by the S&P/TSX Composite Total Return Index, over the long term of 5+ years, providing long-term capital appreciation and value by investing primarily in small-to mid-capitalization stocks of Canadian issuers. To assist in achieving this objective, the Fund may focus its assets in specific industry sectors and asset classes based on the analysis of business cycles, industry sectors and market outlook.

Unit Price (NAV - Series A)

Fund Performance as at May 31, 2013

MTD* YTD* 1 YR 3 YR 5 YR 10 YR Inception
-3.2 -31.2 -28.0 -13.8 -14.7 5.7 12.3
*MTD & YTD as at most recent NAV

Top Ten Holdings

  1. Silver Bullion
  2. Cash & Cash Equivalents
  3. First Majestic Silver Corp.
  4. Fortuna Silver Mines Inc.
  5. Silver Lake Resources Limited
  6. Mandalay Resource Company
  7. Aurcana Corp.
  8. Continental Gold Ltd.
  9. Endeavour Mining Corp.
  10. Mag Silver Corp.
Allocation data as at March 28, 2013

Q1 Market Commentary

The Sprott Canadian Equity Fund Series A (the “Fund”) declined 10.4% during the quarter as its precious metals focus weighed on its performance. The S&P/TSX Composite Total Return Index gained 3.3% over the same period.

The majority of the weakness occurred during February, when falling gold and silver bullion prices negatively impacted performance. During that month, market sentiment was positive regarding a global recovery, this optimism was solidified in the wake of the G20 summit. Consequently, investors became less defensive and lightened up their gold and silver bullion positions in anticipation of a US recovery pushing the US dollar higher. This, coupled with the temporary halt in Chinese demand as that country paused for days to celebrate their Lunar New Year, contributed to gold bullion’s 5.0% decline during February while silver bullion declined 9.3% in US dollar terms.

The shares of gold and silver miners experienced a more pronounced downwards movement during the quarter as investors expressed concerns over the sector’s ability to manage capital expenditures and cost overruns. Smaller-cap miners, a sector which the Fund has always focused on, were clearly out of favour during February as the Market Vectors Junior Gold Miners ETF declined 16.2% during the month in US dollar terms.

The first quarter was discouraging, as the Fund’s overall macro view and consequential asset allocation has not changed and our convictions have yet to be rewarded. The massive money printing programs have not resulted in the inflation that we consider to be inevitable, with history as testament. Most recently, our view on inflation has been supported by the actions out of Japan, where that country’s central bank has embarked on an enormous stimulus program which led to frenzied bond purchases. We also believe that all bank depositors should take note of the “bail in” that was forced upon uninsured depositors in Cyprus.

While companies that excel in a low interest rate environment, such as auto manufacturers and home builders, have done well, we maintain that core industrials continue to struggle. Recent statistics indicate that real disposable income is down over the past 5 years and negative earnings releases outnumber positive earnings by 3.5:1.* Within the precious metals sector, cheap has become cheaper and we remain convinced that our portfolio positioning will provide outsized longer-term returns over the broad market.

* Source: Sprott Asset Management LP. 

The indicated rates of return for series A/class A securities of the Funds are based on the historical annual compounded total returns including changes in unit/share value and reinvestment of all distributions or dividends and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. 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 Funds.