Sprott Gold & Precious Minerals Class

Investment Team


  • Charles Oliver
    Senior Portfolio Manager

Fund Details

Fund Status Open
Issue Price $10.00 per Unit
Distributions Ordinary Dividends Paid in December; Capital Gains Dividends Paid in February; Distributions are Reinvested Automatically.
Fund Code

SPR302 - FE (A)               
SPR315 - LL (A)                        
SPR303 - F

Inception Date 10/17/2011
Nature of Securities Shares of a Class of a Mutual Fund Corporation
Type of Fund Gold and Precious Minerals
Valuations Daily
Redemptions Daily
Minimum Initial Investment $1,000 CAD
Minimum Subsequent Investment $25 CAD
Minimum Investment Term 90 days (2% penalty)
Management Fee 2.5% annual - (A) 1.5% annual - (F)
Performance Fee Based on underlying fund. Underlying fund's performance fee is 10% of excess over S&P/TSX Global Gold Index.
Eligible for Registered Plans Yes
Investor Risk Tolerance High
Service Fee

FE - 1%                                         
LL - 1% (payable after the first year)          
F - No trailer fee paid

Fund Objective

The Fund aims to achieve long-term capital growth. It seeks a similar return to its underlying fund, Sprott Gold and Precious Minerals Fund, by investing substantially all of its assets in securities of that fund. The underlying fund invests primarily in gold, gold certificates, precious metals and minerals, the certificates relating to such metals and minerals and/or in equity securities of companies that are directly or indirectly involved in the exploration, mining, production or distribution of gold and precious metals and minerals.

Unit Price (NAV - Series A)

Fund Performance as at March 31, 2014

MTD* YTD* 1 YR 3 YR 5 YR 10 YR Inception
-0.6 22.0 -27.4 - - - -31.0
*MTD & YTD as at most recent NAV
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Sprott Corporate Class Brochure
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Sprott Corporate Class Fund Fact 


Q4 Market Commentary

The Sprott Gold & Precious Minerals Class Series A fell by 12.5% during the fourth quarter, slightly outperforming its benchmark, the S&P/TSX Global Gold Total Return Index, which declined by 13.0% during the quarter.

The Fed’s announcement of QE3 in September had positive implications for the gold market, and yet precious metals and precious metal stocks declined during the following quarter. This is different from past announcements of quantitative easing, which have led to rallies in the precious metals markets. It is a bit of a conundrum that has frustrated many sophisticated investors caught off guard by this aberration.

At the end of the year, the Fed announced an additional $45 billion per month of long bond purchases, which is on top of the existing $40 billion per month program. At the new rate of $85 billion per month, the Fed will effectively print $1 trillion dollars in 2013. With the monetary base currently near 2.7 trillion this represents nearly a 40% increase for this coming year. We see this as inherently inflationary and for this reason alone, we anticipate future outsized returns from precious metals stocks.

In past cycles after coming out of a weak period it has usually been the mid and smaller cap names that have outperformed. As such, during the quarter we trimmed some of our large caps positions and re-deployed into the mid and smaller cap names.

In our opinion, gold equities, which represented 63% of the portfolio at year-end, are cheap. As a result, in the fourth quarter, we saw a number of stocks held within the underlying Fund including: Orko Silver bought by First Majestic (70% announced premium), Prodigy Gold bought by Argonaut Gold (54% announced premium) and Queenston Mining bought by Osisko Mining (36% announced premium). With the juniors running tight on cash, and valuations very attractive we expect that M&A activity to remain high in 2013.

Silver equities accounted for 23% of the underlying Fund at year-end we also saw some decent M&A activity in these names during the quarter, including Mirasol Resources which sold one of their properties for $60 million (1/2 cash and half shares). Mirasol now has a very low enterprise value and lots of cash. The backdrop for silver continues to be supportive, as global investment demand remains strong and improving data from China bodes well for strong industrial demand.

The Fund’s small-cap bias worked against it this year, as the market preferred higher yielding large cap names. While this hurt our relative returns, we remain very optimistic that once gold and silver bullion establish a consistent upward trend, smaller cap producers and explorers will outperform.

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.