Sprott Energy Fund
Investment Team

Eric Nuttall
Portfolio Manager
Eric Nuttall
Portfolio Manager
Eric Nuttall is a Portfolio Manager with Sprott Asset Management LP. He joined the firm in February 2003 as a research associate and was subsequently promoted to the position of research analyst in 2005, associate portfolio manager in 2008, and then to portfolio manager in January 2010.
Eric is lead portfolio manager of the Sprott Energy Fund, and also co-manages the Sprott 2010 Flow-Through Limited Partnership and the Sprott 2011 Flow-Through Limited Partnership with Allan Jacobs.
In addition to his responsibilities for those two funds, Eric supports the rest of the Sprott portfolio management team with identifying top performing oil and gas investment opportunities. Further, Eric contributes towards internal macro energy forecasts, and his insight into emerging unconventional plays has been covered in several financial publications such as The Wall Street Journal Asia and Barron's.
Eric graduated with high honors from Carleton University with an Honors Bachelor of International Business.

Eric Sprott
Chief Executive Officer; Chief Investment Officer; Senior Portfolio Manager
Eric Sprott
Chief Executive Officer; Chief Investment Officer; Senior Portfolio Manager
Eric Sprott has accumulated 35 years of experience in the investment industry. After earning his designation as a chartered accountant, Eric entered the investment industry as a research analyst at Merrill Lynch. In 1981, he founded Sprott Securities (now called Cormark Securities Inc.), which today is one of Canada's largest independently owned securities firms. After establishing Sprott Asset Management Inc. in December 2001 as a separate entity, Eric divested his entire ownership of Sprott Securities to its employees.
Eric's investment abilities are well represented in his track record in managing the Sprott Hedge Fund L.P., Sprott Hedge Fund L.P. II, Sprott Bull/Bear RSP Fund, Sprott Offshore Funds, Sprott Canadian Equity Fund, Sprott Energy Fund and Sprott Managed Accounts. In December 2004, the Sprott Hedge Fund L.P. was awarded the Opportunistic Strategy Hedge Fund Award at the Canadian Investment Awards. In addition, the Sprott Offshore Fund Ltd. won the 2006 MarHedge Annual Performance Award under the Canada-Based Manager category. Furthermore, in October 2006, Eric was the recipient of the 2006 Ernst & Young Entrepreneur of the Year Award (Financial Services) and the 2006 Ernst & Young Entrepreneur of the Year for Ontario. In December 2007, Eric was named Fund Manager of the Year by Investment Executive, a widely circulated publication for Canadian financial advisors. In October 2008, the Sprott Offshore Fund Ltd. won the award for the Best Long/Short Hedge Fund globally by HFM Week, a leading publication for the global hedge fund industry.
Eric's predictions on the state of the North American financial markets have been captured throughout the last several years in an investment strategy article that he authors titled "Markets At A Glance".
Fund Details
| Fund Status | Open |
| Distributions | Income and Capital Gains Distributed Annually (if any) Distributions are reinvested automatically |
| Fund Code |
SPR 006 (A) |
| Inception Date | 4/15/2004 |
| Nature of Securities | Mutual Fund Trust Units |
| Type of Fund | Energy Sector Fund |
| Valuations | Daily |
| Redemptions | Daily |
| Minimum Initial Investment | $1,000 CDN |
| Minimum Subsequent Investment | $100 CDN |
| Minimum Investment Term | 180 days (3% penalty) |
| Management Fee | 2.5% annual - (A) |
| Performance Fee | 10% of excess over S&P/TSX Capped Energy Total Return Index |
| Eligible for Registered Plans | Yes |
| Investor Risk Tolerance | High |

Q4 Market Commentary
It is an understatement in describing 2011 as "challenging." The Sprott Energy Fund Series A (the "Fund") gained 21.2% during the fourth quarter which outpaced its benchmark the S&P TSX Capped Energy Total Return Index which rose by 12.0% during the same period. Despite this dramatic outperformance during the quarter, the Fund gave up 11.0% during 2012, outperforming its underlying Index by 3.8% after-fees.
Despite the year being the first time in history when the world oil price averaged over US$100 a barrel, oil stocks languished, falling by over 30% in some cases. The capital markets fell prey to fear surrounding European banking challenges, the potential for a slowdown in Chinese growth and a plethora of other real and perceived issues. And yet, amidst all of these fears, the price of oil, an irrefutable gauge for global economic vitality, set an all-time record.
For the first time in several years, the Fund has a substantial weighting towards service stocks. Trican Well Service, Calfrac Well Service, and Precision Drilling made up an approximate 22% weighting at the end of the fourth quarter. Service stocks are trading at historically low levels - in some cases a full 300 basis point discount on a EV/EBITDA basis relative to their 5 year historical mid point averages. We believe that a strong oil price, continued drilling in liquid rich natural gas reservoirs, and impending drilling in the Montney to prove reserves for West Coast LNG and the emergence of the Duvernay will create continued tightness in services, especially for frackers. We believe that as investors become more accepting that E&P spending will likely be up between 5% to 10% during 2012 and that tightness will extend into 2013, service stocks will experience a multiple expansion. Service stocks look very attractive to us.
We have been bearish on natural gas for well over a year now, and rightfully so. Technology has unlocked vast amounts of lower cost gas, and despite the waning number of rigs drilling for natural gas, production month-over-month continues to set all-time highs. As a result natural gas fell over 30% in 2011.
The actual fundamentals for the oil and gas space in Canada remain very good. Stock performance in 2011 was poor due to fears surrounding Europe and a general increase in risk aversion which in our opinion has had nothing to do with company operations or oil fundamentals. We are very happy with the quality and make up of the Fund, and are optimistic for a much better year in 2012.