Sprott Corporate Class Funds
A More Tax-Efficient Way to Invest
Sprott Corporate Class Inc. is a Mutual Fund Corporation designed to optimize tax-efficiency of non-registered investments, helping enhance after-tax returns.
What Are Sprott Corporate Class Funds?
Sprott Corporate Class Funds are a suite of different mutual funds set up within a corporate structure. Each investment fund is offered as a separate class of shares within the Corporation. Investing in the Corporation allows switching from one class of shares to another without triggering an immediate taxable event.
Tax-Efficient Fund Switching
Switching from one Corporate Class Fund to another Corporate Class Fund, does not trigger an immediate taxable event. Any unrealized capital gains will continue to grow and compound within the Mutual Fund Corporation on a tax-deferred basis. Not until the investment is withdrawn from the Mutual Fund Corporation, will it be considered a disposition for tax purposes. In contrast, each time one Mutual Fund Trust is switched to another, an immediate taxable disposition is triggered.
A Mutual Fund Corporation can share capital losses, allowing some class funds to defer the distribution of taxable capital gains. A Mutual Fund Corporation provides enhanced tax-efficiency because it is treated as a single taxable entity. As a result, the Corporation aggregates all income and expenses, as well as any realized capital gains and losses from its underlying share classes. This provides greater flexibility in reducing the frequency and amount of taxable distributions that have to be paid to investors.
Tax-Efficient Income Investing
Interest income earned from fund’s bond holdings may be offset by the expenses of the aggregate Mutual Fund Corporation. This may allow for more to remain invested to grow and compound over the long-term. For investors seeking tax-efficient cash flow, some Sprott Corporate Class Funds are also available in Series T and Series FT, both provide monthly distributions, targeted at approximately 6% annually. The distributions consist of return of capital (ROC), which is not immediately taxable, but reduces the investment’s adjusted cost base.
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.
Available Share Classes
Sprott Canadian Equity Class
Sprott Diversified Yield Class
Sprott Enhanced Balanced Class
Sprott Enhanced Equity Class
Sprott Gold and Precious Minerals Class
Sprott Gold Bullion Class
Sprott Resource Class
Sprott Short-Term Bond Class
Sprott Silver Equities Class
Sprott Silver Bullion Class
Sprott Tactical Balanced Class