Table of Contents
| Performance Overview | December 31, 2021 (Unaudited) |
Investment Objective
The Sprott Gold Miners ETF (the "Gold Fund", NYSE Arca: SGDM) seeks investment results that correspond (before fees and expenses) to the performance of its underlying index, the Solactive Gold Miners Custom Factors Total Return Index (ticker symbol: SOLGMCFT, the "Underlying Gold Index").
Performance Overview
For the twelve months ended December 31, 2021, the Sprott Gold Miners ETF generated a total return of -9.33%. These results are in line with the performance of senior gold mining equities, as measured by the Underlying Gold Index (SOLGMCFT), which declined 9.19% for the year. By comparison, the S&P 500 Total Return Index, a broad equity index measuring the largest publicly traded companies in the U.S., rose by 28.71% over the period.
For the year 2021, the price of gold bullion fell 3.64%, which negatively impacted gold miners. Gold bullion sold off sharply in the beginning of the year, falling more than 10% in the first three months due to a significantly steepened U.S. Treasury yield curve and the Federal Reserve ("Fed") signaling a reduction in quantitative easing and the possibility of earlier than expected interest rate hikes. In April, the inflation rate showed surprising signs of climbing, coming in at 4.2% year-over-year. Initially considered by the Fed as "transitory", inflation stayed consistently high for the remainder of 2021. By year end, the gold price recovered much of what was lost in the first quarter. Although the gold price declined overall in 2021, the average gold price was $1,800 in 2021, $30 higher than the average of $1,770 posted in 2020.
In large part, gold mining equities traded directionally and with greater magnitude to the gold price throughout the year. Gold miners benefit from a higher gold price because of their inherent operating leverage. A strengthening gold price helps increase profit margins and free cash flow for gold miners. Gold mining stocks remain inexpensive relative to gold bullion. Valuations are very low on most standard metrics and further multiple compression may be limited versus the market. Gold mining companies have benefitted from strong margins, cash flows, healthy balance sheets, better dividends and share buybacks. Merger and acquisition (M&A) activity should continue in 2022, as corporate profits build and limited opportunities keep markets tense. We see the potential for much stronger gold prices going forward, given the amount of global liquidity injected into markets over the past two years.
While investor interest in gold was impeded by strong equity returns in 2021, we believe that different characteristics will be at play in 2022. Gold's bullish supply and demand setup will likely continue to support prices, as mine supply and production will continue to decline. Also, gold miners may be shielded relative to the rest of the market as higher real interest rates should take a toll on sectors with higher valuations. With gold hovering around $1,800 an ounce at year end and mining costs remaining stable, the outlook for gold company earnings and cash flow remains positive.
In 2021, the largest positive contributors to the Fund's performance were Newmont Corporation, Pretium Resources Inc. and Franco-Nevada Corporation. The largest performance detractors were Hecla Mining Company, K92 Mining Inc. and Barrick Gold Corporation.
| Performance^ (as of December 31, 2021) | |||
| 1 Year | 5 Year | Since Inception^^ | |
| Sprott Gold Miners ETF - Net Asset Value ("NAV") | -9.33% | 8.40% | 1.82% |
| Sprott Gold Miners ETF - Market Price* | -9.32% | 8.37% | 1.84% |
| Solactive Gold Miners Custom Factors Total Return Index** | -9.19% | 9.26% | 2.61% |
| S&P 500® Total Return Index | 28.71% | 18.47% | 14.71% |
Total expense ratio before any fee waivers or expense reimbursements (per the Gold Fund's current prospectus dated February 26, 2021) 0.52%
Performance data quoted represents past performance. Past performance does not guarantee future results. Total return figures assume reinvestment of dividends and capital gains distributions, if any, and include the effect of the Gold Fund’s recurring expenses. The table does not reflect the deduction of taxes that a shareholder would pay on Gold Fund distributions or the redemption of Gold Fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data please visit www.sprottetfs.com or call 888.622.1813.
1 | December 31, 2021
Sprott Gold Miners ETF
| Performance Overview | December 31, 2021 (Unaudited) |
NAV is an exchange-traded fund’s per-share value. The per-share dollar amount of the Gold Fund is derived by dividing the total value of all the securities in its portfolio, less any liabilities, by the number of Gold Fund shares outstanding. Market Price is the price at which a share can currently be traded in the stock market. Information detailing the number of days the Market Price of the Gold Fund was greater than the Gold Fund’s NAV and the number of days it was less than the Gold Fund’s NAV can be obtained at www.sprottetfs.com.
| ^ | The Sprott Gold Miners ETF was reorganized on or about July 19, 2019 ("Reorganization Date") from Sprott Gold Miners ETF ("Gold Predecessor Fund"), then a series of ALPS ETF Trust, into a series of Sprott Funds Trust. The Gold Fund is a continuation of the Gold Predecessor Fund and, therefore, the performance information presents the performance of the Gold Predecessor Fund prior to the Reorganization Date. Returns less than one year are not annualized. |
| ^^ | The Gold Predecessor Fund’s Commencement date was July 15, 2014. |
| * | Market Price means the official closing price of a security or the last reported sale price. In the event there were no sales during the day or closing prices are not available, the price that is the midpoint of the bid-ask spread as of that time will be used. It does not represent the returns an investor would receive if shares were traded at other times. |
| ** | From the Gold Fund's inception to July 19, 2019, the Gold Fund's objective was to track the Sprott Zacks Gold Miners Total Return Index ("predecessor index") and since that date the Gold Fund has been seeking to track the Solactive Gold Miners Custom Factors Total Return Index. The index performance presented reflects the performance of the predecessor index through July 19, 2019 and thereafter reflects the performance of the Solactive Gold Miners Custom Factors Total Return Index. |
Sprott Zacks Gold Miners Total Return Index is comprised of approximately 25 stocks selected, based on investment and other criteria, from a universe of gold and silver mining companies whose stock is listed on a major U.S. exchange. The stocks are selected using a proprietary, quantitative rules-based methodology developed by Zacks Index Services.
Solactive Gold Miners Custom Factors Total Return Index was created by Solactive AG to provide a means of generally tracking the performance of gold companies whose common stocks or American Depository Receipts (“ADRs”) are traded on the Toronto Stock Exchange, the New York Stock Exchange and NASDAQ. As of December 31, 2021, the Underlying Gold Index consisted of 34 securities.
S&P 500® Total Return Index is the Standard & Poor’s composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices.
The indexes are reported on a total return basis, which assumes reinvestment of any dividends and distributions realized during a given time period. The indexes are not actively managed and do not reflect any deductions for fees, expenses or taxes. One cannot invest directly in an index. Index performance does not reflect fund performance.
The Gold Fund is concentrated in the gold and silver mining industry. As a result, the Gold Fund will be sensitive to changes in, and its performance will depend to a greater extent on, the overall condition of the gold and silver mining industry. Also, gold and silver mining companies are highly dependent on the price of gold and silver bullion. These prices may fluctuate substantially over short periods of time so the Gold Fund’s share price may be more volatile than other types of investments.
Funds that emphasize investments in small-cap and mid-cap companies will generally experience greater price volatility.
Funds investing in foreign and emerging markets will also generally experience greater price volatility.
The Gold Fund’s shares are not individually redeemable. Investors buy and sell shares of the Gold Fund on a secondary market. Only market makers or “authorized participants” may trade directly with the Gold Fund, typically in blocks of 50,000 shares.
The Sprott Gold Miners ETF is not suitable for all investors. Investments in the Gold Fund are subject to investment risks, including possible loss of the principal amount invested.
ALPS Distributors, Inc., a FINRA member, is the distributor for the Sprott Gold Miners ETF.
ALPS Distributors, Inc. is not affiliated with Sprott, Solactive AG nor Zacks Index Services, a division of Zacks Investment Management.
2 | December 31, 2021
Sprott Gold Miners ETF
| Performance Overview | December 31, 2021 (Unaudited) |
| Top 10 Holdings^ (as of December 31, 2021) | Country Allocation^ (as of December 31, 2021) | |||
| Newmont Corporation | 13.08% | Canada | 72.42% | |
| Franco-Nevada Corporation | 11.18% | United States | 18.82% | |
| Barrick Gold Corporation | 8.31% | South Africa | 4.39% | |
| Kirkland Lake Gold, Ltd. | 6.23% | United Kingdom | 4.06% | |
| Royal Gold, Inc. | 4.97% | Australia | 0.32% | |
| Endeavour Mining PLC | 4.06% | Total | 100.00% | |
| Yamana Gold, Inc. | 3.95% | |||
| B2Gold Corp. | 3.84% | |||
| SSR Mining, Inc. | 3.70% | |||
| Pretium Resources, Inc. | 3.62% | |||
| Total % of Top 10 Holdings | 62.94% | |||
| ^ | % of Total Investments (excluding investments purchased with collateral from securities loaned). |
Future holdings are subject to change.
Growth of $10,000 (as of December 31, 2021)
Comparison of Change in Value of $10,000 Investment in the Gold Fund, and the Performance of the Underlying Gold Index, and S&P 500
The chart above compares historical performance of a hypothetical investment of $10,000 in the Gold Fund since inception with the performance of the Underlying Gold Index and S&P 500. Results include the reinvestment of all dividends and capital gains distributions, if any. Past performance does not guarantee future results. The graph does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Gold Fund shares.
| * | From the Gold Fund's inception to July 19, 2019, the Gold Fund's objective was to track the Sprott Zacks Gold Miners Total Return Index ("predecessor index") and since that date the Gold Fund has been seeking to track the Solactive Gold Miners Custom Factors Total Return Index. The index performance presented reflects the performance of the predecessor index through July 19, 2019 and thereafter reflects the performance of the Solactive Gold Miners Custom Factors Total Return Index. |
3 | December 31, 2021
| Performance Overview | December 31, 2021 (Unaudited) |
Investment Objective
The Sprott Junior Gold Miners ETF (the "Junior Fund", NYSE Arca: SGDJ) seeks investment results that correspond (before fees and expenses) to the performance of its underlying index, the Solactive Junior Gold Miners Custom Factors Total Return Index (ticker symbol: SOLJGMFT, the "Junior Underlying Index").
Performance Overview
For the twelve-months ended December 31, 2021, the Sprott Junior Gold Miners ETF generated a total return of -15.56%. These results are in line with the performance of junior gold mining equities, as measured by the Junior Underlying Index (SOLJGMFT), which declined 15.95% for the year. By comparison, the S&P 500 Total Return Index, a broad equity index measuring the largest publicly traded companies in the U.S., rose by 28.71% over the period.
For the year 2021, the price of gold bullion fell 3.64%, which negatively impacted gold miners. Gold bullion sold off sharply in the beginning of the year, falling more than 10% in the first three months due to a significantly steepened U.S. Treasury yield curve and the Federal Reserve ("Fed") signaling a reduction in quantitative easing and the possibility of earlier than expected interest rate hikes. In April, the inflation rate showed surprising signs of climbing, coming in at 4.2% year-over-year. Initially considered by the Fed as "transitory", inflation stayed consistently high for the remainder of 2021. By yearend, the gold price recovered much of what was lost in the first quarter. Although the gold price declined overall in 2021, the average gold price was $1,800 in 2021, $30 higher than the average of $1,770 posted in 2020.
In large part, junior gold mining equities traded directionally and with greater magnitude to the gold price throughout the year. Gold miners benefit from a higher gold price because of their inherent operating leverage. A strengthening gold price helps increase profit margins and free cash flow for gold miners. Gold mining stocks remain inexpensive relative to gold bullion. Valuations are very low on most standard metrics and further multiple compression may be limited versus the market. Gold mining companies have benefitted from strong margins, cash flows, healthy balance sheets, better dividends and share buybacks. Merger and acquisition (M&A) activity should continue in 2022, as corporate profits build and limited opportunities keep markets tense. We see the potential for much stronger gold prices going forward, given the amount of global liquidity injected into markets over the past two years.
While investor interest in gold was impeded by strong equity returns in 2021, we believe that different characteristics will be at play in 2022. Gold's bullish supply and demand setup will likely continue to support prices, as mine supply and production will continue to decline. Also, gold miners may be shielded relative to the rest of the market as higher real interest rates should take a toll on sectors with higher valuations. With gold hovering around $1,800 an ounce at yearend and mining costs remaining stable, the outlook for gold company earnings and cash flow remains positive.
In 2021, the largest positive contributors to the Fund's performance were Great Bear Resources Ltd., Victoria Gold Corp. and Argonaut Gold Inc. The largest detractors were Greatland Gold plc, Resolute Mining Limited and Bellevue Gold Limited.
| Performance^ (as of December 31, 2021) | |||
| 1 Year | 5 Year | Since Inception^^ | |
| Sprott Junior Gold Miners ETF - Net Asset Value ("NAV") | -15.56% | 6.16% | 9.23% |
| Sprott Junior Gold Miners ETF - Market Price* | -15.18% | 6.22% | 9.32% |
| Solactive Junior Gold Miners Custom Factors Total Return Index** | -15.95% | 7.11% | 10.27% |
| S&P 500® Total Return Index | 28.71% | 18.47% | 15.20% |
Total expense ratio before any fee waivers or expense reimbursements (per the Junior Fund's current prospectus dated February 26, 2021) 0.76%
Performance data quoted represents past performance. Past performance does not guarantee future results. Total return figures assume reinvestment of dividends and capital gains distributions, if any, and include the effect of the Junior Fund’s recurring expenses. The table does not reflect the deduction of taxes that a shareholder would pay on Junior Fund distributions or the redemption of Junior Fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data please visit www.sprottetfs.com or call 888.622.1813.
4 | December 31, 2021
Sprott Junior Gold Miners ETF
| Performance Overview | December 31, 2021 (Unaudited) |
NAV is an exchange-traded fund’s per-share value. The per-share dollar amount of the Junior Fund is derived by dividing the total value of all the securities in its portfolio, less any liabilities, by the number of Junior Fund shares outstanding. Market Price is the price at which a share can currently be traded in the stock market. Information detailing the number of days the Market Price of the Junior Fund was greater than the Junior Fund’s NAV and the number of days it was less than the Junior Fund’s NAV can be obtained at www.sprottetfs.com.
| ^ | The Sprott Junior Gold Miners ETF was reorganized on or about July 19, 2019 ("Reorganization Date") from Sprott Junior Gold Miners ETF ("Junior Predecessor Fund"), then a series of ALPS ETF Trust, into a series of Sprott Funds Trust. The Junior Fund is a continuation of the |
Junior Predecessor Fund and, therefore, the performance information presents the performance of the Junior Predecessor Fund prior to the Reorganization Date. Returns less than one year are not annualized.
| ^^ | The Junior Predecessor Fund’s Commencement date was March 31, 2015. |
| * | Market Price means the official closing price of a security or the last reported sale price. In the event there were no sales during the day or closing prices are not available, the price that is the midpoint of the bid-ask spread as of that time will be used. It does not represent the returns an investor would receive if shares were traded at other times. |
| ** | From the Junior Fund's inception to July 19, 2019, the Junior Fund's objective was to track the Sprott Zacks Junior Gold Miners Total Return Index ("predecessor index") and since that date the Junior Fund has been seeking to track the Solactive Junior Gold Miners Custom Factors Total Return Index. The index performance presented reflects the performance of the predecessor index through July 19, 2019 and thereafter reflects the performance of the Solactive Junior Gold Miners Custom Factors Total Return Index. |
Sprott Zacks Junior Gold Miners Total Return Index is comprised of between 30 to 40 stocks selected, based on investment and other criteria, from a universe of gold and silver mining companies whose stocks are listed on a major U.S. or Canadian exchange. The stocks are selected using a proprietary, quantitative rules-based methodology developed by Zacks Index Services.
Solactive Junior Gold Miners Custom Factors Total Return Index was created by Solactive AG to provide a means of generally tracking the performance of “junior” gold companies whose common stock or American Depository Receipts (“ADRs”) or Global Depository Receipts (“GDRs”) are traded on a regulated stock exchange in the form of shares tradeable for foreign investors without any restrictions. Junior companies include early stage mining companies that are in the exploration stage only or that hold properties that might not ultimately produce gold. Most of these companies are in the development and exploration phase and are on the lookout for land with a higher chance for uncovering large mineral deposits. As of December 31, 2021, the Junior Underlying Index consisted of 39 securities.
S&P 500® Total Return Index is the Standard & Poor’s composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices.
The indexes are reported on a total return basis, which assumes reinvestment of any dividends and distributions realized during a given time period. The indexes are not actively managed and do not reflect any deductions for fees, expenses or taxes. One cannot invest directly in an index. Index performance does not reflect fund performance.
The Junior Fund is concentrated in the gold and silver mining industry. As a result, the Junior Fund will be sensitive to changes in, and its performance will depend to a greater extent on, the overall condition of the gold and silver mining industry. Also, gold and silver mining companies are highly dependent on the price of gold and silver bullion. These prices may fluctuate substantially over short periods of time so the Junior Fund’s share price may be more volatile than other types of investments.
Funds that emphasize investments in small-cap and mid-cap companies will generally experience greater price volatility. Micro-cap stocks involve substantially greater risks of loss and price fluctuations because their earnings and revenues tend to be less predictable. These companies may be newly formed or in the early stages of development, with limited product lines, markets or financial resources and may lack management depth.
Funds investing in foreign and emerging markets will also generally experience greater price volatility.
The Junior Fund’s shares are not individually redeemable. Investors buy and sell shares of the Junior Fund on a secondary market. Only market makers or “authorized participants” may trade directly with the Junior Fund, typically in blocks of 50,000 shares.
The Sprott Junior Gold Miners ETF is not suitable for all investors. Investments in the Junior Fund are subject to investment risks, including possible loss of the principal amount invested.
ALPS Distributors, Inc., a FINRA member, is the distributor for the Sprott Junior Gold Miners ETF.
ALPS Distributors, Inc. is not affiliated with Sprott, Solactive AG nor Zacks Index Services, a division of Zacks Investment Management.
5 | December 31, 2021
Sprott Junior Gold Miners ETF
| Performance Overview | December 31, 2021 (Unaudited) |
| Top 10 Holdings^ (as of December 31, 2021) | Country Allocation^ (as of December 31, 2021) | |||
| Aurelia Metals Limited | 5.04% | Australia | 40.82% | |
| Greatland Gold plc | 4.93% | Canada | 37.67% | |
| Skeena Resources Limited | 4.81% | United Kingdom | 9.27% | |
| Westgold Resources Limited | 4.57% | Jersey | 3.54% | |
| Resolute Mining Limited | 4.40% | Russia | 3.06% | |
| Great Bear Resources Limited | 4.40% | United States | 2.70% | |
| Pan African Resources plc | 4.34% | Turkey | 1.62% | |
| Eldorado Gold Corporation | 4.14% | Peru | 1.21% | |
| Perseus Mining Limited | 3.66% | Chile | 0.11% | |
| Centamin plc | 3.54% | Total | 100.00% | |
| Total % of Top 10 Holdings | 43.83% | |||
| ^ | % of Total Investments (excluding investments purchased with collateral from securities loaned). |
Future holdings are subject to change.
Growth of $10,000 (as of December 31, 2021)
Comparison of Change in Value of $10,000 Investment in the Junior Fund, and the Performance of the Junior Underlying Index, and S&P 500
The chart above compares historical performance of a hypothetical investment of $10,000 in the Junior Fund since inception with the performance of the Junior Underlying Index and the S&P 500. Results include the reinvestment of all dividends and capital gains distributions, if any. Past performance does not guarantee future results. The graph does not reflect the deduction of taxes that a shareholder would pay on Junior Fund distributions or the redemption of Junior Fund shares.
| * | From the Junior Fund's inception to July 19, 2019, the Fund's objective was to track the Sprott Zacks Junior Gold Miners Total Return Index ("predecessor index") and since that date the Junior Fund has been seeking to track the Solactive Junior Gold Miners Custom Factors Total Return Index. The index performance presented reflects the performance of the predecessor index through July 19, 2019 and thereafter reflects the performance of the Solactive Junior Gold Miners Custom Factors Total Return Index. |
6 | December 31, 2021
| Disclosure of Fund Expenses | December 31, 2021 (Unaudited) |
Shareholder Expense Example: As a shareholder of a Fund, you incur two types of costs: (1) transaction costs which may include brokerage charges, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds. It is based on an investment of $1,000 invested at the beginning of the six month period and held through December 31, 2021.
Actual Return: The first line of the table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.
Hypothetical 5% Return: The second line of the table provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare ongoing costs of investing in each Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
The expenses shown in the table are meant to highlight ongoing Fund costs only and do not reflect any transaction costs, such as brokerage charges. Therefore, the second line is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if transaction costs were included, your costs would have been higher.
| Beginning Account | Ending Account | Expenses Paid | |||
| Value | Value | Expense | During Period | ||
| 7/1/21 | 12/31/21 | Ratio(a) | 7/1/21 - 12/31/21(b) | ||
| Sprott Gold Miners ETF | $1,000.00 | $976.80 | 0.50% | ||
| Actual | $2.49 | ||||
| Hypothetical (5% return before expenses) | $1,000.00 | $1,022.68 | 0.50% | $2.55 | |
| Sprott Junior Gold Miners ETF | $1,000.00 | $951.50 | 0.50% | ||
| Actual | $2.46 | ||||
| Hypothetical (5% return before expenses) | $1,000.00 | $1,022.68 | 0.50% | $2.55 |
| (a) | Annualized, based on the applicable Fund's most recent fiscal half year expenses. |
| (b) | Expenses are equal to the applicable Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (184), divided by 365. |
7 | December 31, 2021
| Schedule of Investments | December 31, 2021 |
| Security Description | Shares | Value | ||||||
| COMMON STOCKS (99.87%) | ||||||||
| Gold Mining (99.53%) | ||||||||
| Agnico Eagle Mines, Ltd. | 67,788 | $ | 3,600,676 | |||||
| Alamos Gold, Inc., Class A(a) | 1,069,927 | 8,229,882 | ||||||
| AngloGold Ashanti, Ltd., Sponsored ADR | 44,810 | 940,114 | ||||||
| B2Gold Corp. | 2,264,232 | 8,914,088 | ||||||
| Barrick Gold Corp. | 1,013,921 | 19,277,284 | ||||||
| Centerra Gold, Inc. | 1,000,038 | 7,708,107 | ||||||
| Coeur Mining, Inc.(b) | 139,681 | 703,992 | ||||||
| Dundee Precious Metals, Inc. | 1,026,383 | 6,345,164 | ||||||
| Eldorado Gold Corp.(b) | 791,216 | 7,418,334 | ||||||
| Endeavour Mining PLC(a) | 429,098 | 9,406,607 | ||||||
| Equinox Gold Corp.(a)(b) | 112,419 | 760,747 | ||||||
| Franco-Nevada Corp. | 187,539 | 25,936,260 | ||||||
| Gold Fields, Ltd., Sponsored ADR | 85,541 | 940,096 | ||||||
| Harmony Gold Mining Co., Ltd., Sponsored ADR(a) | 2,017,422 | 8,291,604 | ||||||
| IAMGOLD Corp.(b) | 281,890 | 878,016 | ||||||
| K92 Mining, Inc.(b) | 1,132,762 | 6,438,641 | ||||||
| Kinross Gold Corp. | 136,887 | 794,301 | ||||||
| Kirkland Lake Gold, Ltd. | 344,469 | 14,435,592 | ||||||
| New Gold, Inc.(b) | 406,446 | 607,283 | ||||||
| Newmont Corp. | 489,064 | 30,331,749 | ||||||
| Novagold Resources, Inc.(b) | 119,106 | 816,356 | ||||||
| OceanaGold Corp.(a)(b) | 429,088 | 746,270 | ||||||
| Osisko Gold Royalties, Ltd. | 69,862 | 854,946 | ||||||
| Osisko Mining, Inc.(b) | 209,980 | 632,455 | ||||||
| Pretium Resources, Inc.(b) | 595,622 | 8,390,833 | ||||||
| Royal Gold, Inc. | 109,634 | 11,534,593 | ||||||
| Sandstorm Gold, Ltd.(a) | 1,086,622 | 6,743,336 | ||||||
| Seabridge Gold, Inc.(b) | 45,387 | 749,902 | ||||||
| SSR Mining, Inc.(a) | 484,227 | 8,570,965 | ||||||
| Torex Gold Resources, Inc.(b) | 580,660 | 6,036,348 | ||||||
| Wesdome Gold Mines, Ltd.(b) | 712,304 | 6,481,378 | ||||||
| Wheaton Precious Metals Corp. | 190,176 | 8,160,602 | ||||||
| Yamana Gold, Inc. | 2,176,409 | 9,153,323 | ||||||
| Total Gold Mining | 230,829,844 | |||||||
| Silver Mining (0.34%) | ||||||||
| Hecla Mining Co. | 150,556 | 785,902 | ||||||
| TOTAL COMMON STOCKS | ||||||||
| (Cost $205,759,747) | 231,615,746 | |||||||
| 7 Day Yield | Shares | Value | ||||||||||
| SHORT TERM INVESTMENTS (3.95%) | ||||||||||||
| Money Market Fund (0.12%) | ||||||||||||
| State Street Institutional | ||||||||||||
| Treasury Plus Money | ||||||||||||
| Market Fund | ||||||||||||
| (Cost $276,166) | 0.01 | % | 276,166 | $ | 276,166 | |||||||
| Investments Purchased with Collateral | ||||||||||||
| from Securities Loaned (3.83%) | ||||||||||||
| State Street Navigator | ||||||||||||
| Securities Lending | ||||||||||||
| Government Money Market | ||||||||||||
| Portfolio, 0.03% | ||||||||||||
| (Cost $8,878,749) | 8,878,749 | 8,878,749 | ||||||||||
| TOTAL SHORT TERM INVESTMENTS | ||||||||||||
| (Cost $9,154,915) | 9,154,915 | |||||||||||
| TOTAL INVESTMENTS (103.82%) | ||||||||||||
| (Cost $214,914,662) | $ | 240,770,661 | ||||||||||
| LIABILITIES IN EXCESS OF OTHER ASSETS (-3.82%) | (8,856,702 | ) | ||||||||||
| NET ASSETS - 100.00% | $ | 231,913,959 | ||||||||||
| (a) | The security, or a portion of the security position is currently on loan. As of December 31, 2021 the total market value of securities on loan was $10,243,042. The loaned securities were secured with cash collateral of $8,878,749 and non-cash collateral with the value of $1,980,235. The non-cash collateral received consists of common stocks and is held for the benefit of the Fund at the Fund's custodian. The Fund cannot repledge or resell this collateral. Collateral is calculated based on prior day’s prices. |
| (b) | Non-income producing security. |
See Notes to Financial Statements.
8 | December 31, 2021
| Schedule of Investments | December 31, 2021 |
| Security Description | Shares | Value | ||||||
| COMMON STOCKS (100.07%) | ||||||||
| Basic Materials (0.11%) | ||||||||
| Aclara Resources, Inc.(a)(b) | 118,356 | $ | 134,734 | |||||
| Diversified Metals & Mining (5.04%) | ||||||||
| Aurelia Metals, Ltd.(b) | 20,987,153 | 6,260,355 | ||||||
| Gold Mining (94.92%) | ||||||||
| Argonaut Gold, Inc.(a)(b) | 611,086 | 1,159,418 | ||||||
| Bellevue Gold, Ltd.(a)(b) | 2,722,621 | 1,673,807 | ||||||
| Capricorn Metals, Ltd.(b) | 929,535 | 2,299,356 | ||||||
| Centamin PLC | 3,662,872 | 4,403,577 | ||||||
| Coeur Mining, Inc.(b) | 429,351 | 2,163,929 | ||||||
| De Grey Mining, Ltd.(a)(b) | 4,912,757 | 4,342,733 | ||||||
| Dundee Precious Metals, Inc. | 648,384 | 4,008,350 | ||||||
| Eldorado Gold Corp.(b) | 548,921 | 5,146,609 | ||||||
| Gold Road Resources, Ltd.(a) | 3,467,539 | 3,960,797 | ||||||
| Great Bear Resources, Ltd.(b) | 239,941 | 5,470,492 | ||||||
| Greatland Gold PLC(a)(b) | 28,283,007 | 6,125,178 | ||||||
| Hochschild Mining PLC | 852,068 | 1,500,461 | ||||||
| K92 Mining, Inc.(b) | 728,316 | 4,139,762 | ||||||
| Koza Altin Isletmeleri AS(b) | 230,029 | 2,011,819 | ||||||
| McEwen Mining, Inc.(a)(b) | 1,684,267 | 1,493,103 | ||||||
| New Gold, Inc.(a)(b) | 1,125,126 | 1,681,085 | ||||||
| OceanaGold Corp.(a)(b) | 889,042 | 1,546,221 | ||||||
| Orla Mining, Ltd.(b) | 445,671 | 1,701,720 | ||||||
| Osisko Mining, Inc.(a)(b) | 725,966 | 2,186,593 | ||||||
| Pan African Resources PLC(a) | 23,865,536 | 5,394,619 | ||||||
| Perseus Mining, Ltd.(b) | 3,859,048 | 4,548,380 | ||||||
| Petropavlovsk PLC(a)(b) | 14,680,201 | 3,805,169 | ||||||
| Ramelius Resources, Ltd. | 3,246,021 | 3,707,768 | ||||||
| Red 5, Ltd.(a)(b) | 9,266,180 | 1,955,061 | ||||||
| Regis Resources, Ltd. | 1,239,793 | 1,758,917 | ||||||
| Resolute Mining, Ltd.(b) | 19,285,433 | 5,472,120 | ||||||
| Sabina Gold & Silver Corp.(b) | 1,474,613 | 1,690,335 | ||||||
| Seabridge Gold, Inc.(a)(b) | 248,422 | 4,096,479 | ||||||
| Silver Lake Resources, Ltd.(a)(b) | 1,400,719 | 1,808,885 | ||||||
| Skeena Resources, Ltd.(b) | 574,562 | 5,982,040 | ||||||
| SolGold PLC(b) | 5,582,507 | 2,191,293 | ||||||
| St Barbara, Ltd. | 1,665,886 | 1,775,597 | ||||||
| Torex Gold Resources, Inc.(a)(b) | 334,602 | 3,478,411 | ||||||
| Victoria Gold Corp.(b) | 136,632 | 1,539,196 | ||||||
| Wesdome Gold Mines, Ltd.(a)(b) | 460,452 | 4,189,733 | ||||||
| West African Resources, Ltd.(b) | 1,802,302 | 1,730,865 | ||||||
| Westgold Resources, Ltd. | 3,829,755 | 5,684,113 | ||||||
| Total Gold Mining | 117,823,991 | |||||||
| TOTAL COMMON STOCKS | ||||||||
| (Cost $132,441,013) | 124,219,080 | |||||||
| 7 Day Yield | Shares | Value | ||||||||||
| SHORT TERM INVESTMENTS (9.56%) | ||||||||||||
| Money Market Fund (0.03%) | ||||||||||||
| State Street Institutional | ||||||||||||
| Treasury Plus Money | ||||||||||||
| Market Fund | ||||||||||||
| (Cost $36,939) | 0.01 | % | 36,939 | $ | 36,939 | |||||||
| Investments Purchased with Collateral | ||||||||||||
| from Securities Loaned (9.53%) | ||||||||||||
| State Street Navigator | ||||||||||||
| Securities Lending | ||||||||||||
| Government Money Market | ||||||||||||
| Portfolio, 0.03% | ||||||||||||
| (Cost $11,834,253) | 11,834,253 | 11,834,253 | ||||||||||
| TOTAL SHORT TERM INVESTMENTS | ||||||||||||
| (Cost $11,871,192) | 11,871,192 | |||||||||||
| TOTAL INVESTMENTS (109.63%) | ||||||||||||
| (Cost $144,312,205) | $ | 136,090,272 | ||||||||||
| LIABILITIES IN EXCESS OF OTHER ASSETS (-9.63%) | (11,962,786 | ) | ||||||||||
| NET ASSETS - 100.00% | $ | 124,127,486 | ||||||||||
| (a) | The security, or a portion of the security position is currently on loan. As of December 31, 2021 the total market value of securities on loan was $17,819,568. The loaned securities were secured with cash collateral of $11,834,253 and non-cash collateral with the value of $7,036,219. The non-cash collateral received consists of common stocks and is held for the benefit of the Fund at the Fund's custodian. The Fund cannot repledge or resell this collateral. Collateral is calculated based on prior day’s prices. |
| (b) | Non-income producing security. |
See Notes to Financial Statements.
9 | December 31, 2021
Sprott ETFs
| Statements of Assets and Liabilities | December 31, 2021 |
| Sprott Gold | Sprott Junior | |||||||
| Miners ETF | Gold Miners ETF | |||||||
| ASSETS: | ||||||||
| Investments, at value | $ | 240,770,661 | $ | 136,090,272 | ||||
| Receivable for investments sold | 92,733 | – | ||||||
| Dividends and reclaim receivable | 141,982 | 21,000 | ||||||
| Other assets and prepaid expenses | 3,793 | 2,059 | ||||||
| Total Assets | 241,009,169 | 136,113,331 | ||||||
| LIABILITIES: | ||||||||
| Payable for investments purchased | 165 | – | ||||||
| Payable to adviser | 83,594 | 26,546 | ||||||
| Payable for collateral upon return of securities loaned | 8,878,749 | 11,834,253 | ||||||
| Administration fees payable | 16,144 | 17,379 | ||||||
| Professional fees payable | 34,904 | 26,397 | ||||||
| Transfer agent fees payable | 8,250 | 8,250 | ||||||
| Accrued expenses and other liabilities | 73,404 | 73,020 | ||||||
| Total Liabilities | 9,095,210 | 11,985,845 | ||||||
| NET ASSETS | $ | 231,913,959 | $ | 124,127,486 | ||||
| NET ASSETS CONSIST OF: | ||||||||
| Paid-in capital | $ | 286,066,357 | $ | 160,226,997 | ||||
| Total distributable earnings | (54,152,398 | ) | (36,099,511 | ) | ||||
| NET ASSETS | $ | 231,913,959 | $ | 124,127,486 | ||||
| INVESTMENTS, AT COST | $ | 214,914,662 | $ | 144,312,205 | ||||
| PRICING OF SHARES | ||||||||
| Net Assets | $ | 231,913,959 | $ | 124,127,486 | ||||
| Shares of beneficial interest outstanding (Unlimited number of shares authorized, par value $0.01 per share) | 8,500,000 | 3,050,000 | ||||||
| Net Asset Value, offering and redemption price per share | $ | 27.28 | $ | 40.70 | ||||
See Notes to Financial Statements.
10 | December 31, 2021
| Statements of Operations | For the Year Ended December 31, 2021 |
| Sprott Gold | Sprott Junior | |||||||
| Miners ETF | Gold Miners ETF | |||||||
| INVESTMENT INCOME: | ||||||||
| Dividends(a) | $ | 4,041,685 | $ | 1,793,166 | ||||
| Securities lending income | 11,308 | 46,143 | ||||||
| Total Investment Income | 4,052,993 | 1,839,309 | ||||||
| EXPENSES: | ||||||||
| Investment adviser fees (See Note 3) | 843,866 | 440,068 | ||||||
| Administration fees | 161,765 | 161,918 | ||||||
| Trustee fees | 11,101 | 5,287 | ||||||
| Compliance fees | 10,413 | 5,543 | ||||||
| Legal fees | 23,271 | 15,740 | ||||||
| Audit fees | 19,945 | 19,945 | ||||||
| Transfer agent fees | 8,228 | 8,228 | ||||||
| Other fees and expenses | 106,223 | 106,239 | ||||||
| Total Expenses before waiver/reimbursement | 1,184,812 | 762,968 | ||||||
| Less fee waiver/reimbursement by investment adviser (See Note 3) | (4,105 | ) | (134,456 | ) | ||||
| Expense recoupment of previously waived fees (See Note 3) | 24,568 | – | ||||||
| Net Expense | 1,205,275 | 628,512 | ||||||
| NET INVESTMENT INCOME | 2,847,718 | 1,210,797 | ||||||
| REALIZED AND UNREALIZED GAIN/(LOSS) | ||||||||
| Net realized gain/(loss) on investments | (4,530,479 | ) | 10,037,176 | |||||
| Net realized loss on foreign currency transactions | (18,216 | ) | (53,997 | ) | ||||
| Net realized gain/(loss) | (4,548,695 | ) | 9,983,179 | |||||
| Net change in unrealized depreciation on investments | (22,044,016 | ) | (32,195,259 | ) | ||||
| Net change in unrealized appreciation on translation of assets and liabilities denominated in foreign currencies | 1,582 | 91 | ||||||
| Net change in unrealized appreciation/(depreciation) | (22,042,434 | ) | (32,195,168 | ) | ||||
| NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS | (26,591,129 | ) | (22,211,989 | ) | ||||
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (23,743,411 | ) | $ | (21,001,192 | ) | ||
| (a) | Net of foreign tax withholding in the amounts of $388,985 and $65,710, respectively. |
See Notes to Financial Statements.
11 | December 31, 2021
Statements of Changes in Net Assets
| For the Period | ||||||||||||
| For the | December 1, 2020 | For the | ||||||||||
| Year Ended | to | Year Ended | ||||||||||
| December 31, | December 31, | November 30, | ||||||||||
| 2021 | 2020(a) | 2020 | ||||||||||
| OPERATIONS: | ||||||||||||
| Net investment income | $ | 2,847,718 | $ | 281,732 | $ | 550,209 | ||||||
| Net realized gain/(loss) | (4,548,695 | ) | (268,116 | ) | 7,606,434 | |||||||
| Net change in unrealized appreciation/(depreciation) | (22,042,434 | ) | 8,632,614 | 34,395,136 | ||||||||
| Net increase/(decrease) in net assets resulting from operations | (23,743,411 | ) | 8,646,230 | 42,551,779 | ||||||||
| DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||
| From distributable earnings | (3,066,167 | ) | (788,715 | ) | (485,870 | ) | ||||||
| Total distributions | (3,066,167 | ) | (788,715 | ) | (485,870 | ) | ||||||
| CAPITAL SHARE TRANSACTIONS: | ||||||||||||
| Proceeds from sale of shares | 8,448,105 | – | 59,618,187 | |||||||||
| Cost of shares redeemed | (8,958,387 | ) | – | (27,954,368 | ) | |||||||
| Net increase/(decrease) from capital share transactions | (510,282 | ) | – | 31,663,819 | ||||||||
| Net increase/(decrease) in net assets | (27,319,860 | ) | 7,857,515 | 73,729,728 | ||||||||
| NET ASSETS: | ||||||||||||
| Beginning of year | 259,233,819 | 251,376,304 | 177,646,576 | |||||||||
| End of year | $ | 231,913,959 | $ | 259,233,819 | $ | 251,376,304 | ||||||
| OTHER INFORMATION: | ||||||||||||
| CAPITAL SHARE TRANSACTIONS: | ||||||||||||
| Beginning shares | 8,500,000 | 8,500,000 | 7,600,000 | |||||||||
| Shares sold | 300,000 | – | 1,850,000 | |||||||||
| Shares redeemed | (300,000 | ) | – | (950,000 | ) | |||||||
| Shares outstanding, end of period | 8,500,000 | 8,500,000 | 8,500,000 | |||||||||
| (a) | With the approval of the Board effective December 31, 2020, the Fund's fiscal year end was changed from November 30 to December 31. |
See Notes to Financial Statements.
12 | December 31, 2021
Statements of Changes in Net Assets
| For the Period | ||||||||||||
| For the | December 1, 2020 | For the | ||||||||||
| Year Ended | to | Year Ended | ||||||||||
| December 31, | December 31, | November 30, | ||||||||||
| 2021 | 2020(a) | 2020 | ||||||||||
| OPERATIONS: | ||||||||||||
| Net investment income/(loss) | $ | 1,210,797 | $ | (6,469 | ) | $ | (75,873 | ) | ||||
| Net realized gain/(loss) | 9,983,179 | (473,003 | ) | 10,107,197 | ||||||||
| Net change in unrealized appreciation/(depreciation) | (32,195,168 | ) | 12,296,683 | 18,355,659 | ||||||||
| Net increase/(decrease) in net assets resulting from operations | (21,001,192 | ) | 11,817,211 | 28,386,983 | ||||||||
| DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||
| From distributable earnings | (2,712,420 | ) | (2,324,976 | ) | (395,316 | ) | ||||||
| Total distributions | (2,712,420 | ) | (2,324,976 | ) | (395,316 | ) | ||||||
| CAPITAL SHARE TRANSACTIONS: | ||||||||||||
| Proceeds from sale of shares | 80,190,762 | 7,383,291 | 56,503,070 | |||||||||
| Cost of shares redeemed | (55,608,011 | ) | – | (31,105,911 | ) | |||||||
| Net increase from capital share transactions | 24,582,751 | 7,383,291 | 25,397,159 | |||||||||
| Net increase in net assets | 869,139 | 16,875,526 | 53,388,826 | |||||||||
| NET ASSETS: | ||||||||||||
| Beginning of year | 123,258,347 | 106,382,821 | 52,993,995 | |||||||||
| End of year | $ | 124,127,486 | $ | 123,258,347 | $ | 106,382,821 | ||||||
| OTHER INFORMATION: | ||||||||||||
| CAPITAL SHARE TRANSACTIONS: | ||||||||||||
| Beginning shares | 2,500,000 | 2,350,000 | 1,750,000 | |||||||||
| Shares sold | 1,700,000 | 150,000 | 1,450,000 | |||||||||
| Shares redeemed | (1,150,000 | ) | – | (850,000 | ) | |||||||
| Shares outstanding, end of period | 3,050,000 | 2,500,000 | 2,350,000 | |||||||||
(a) With the approval of the Board effective December 31, 2020, the Fund's fiscal year end was changed from November 30 to December 31.
See Notes to Financial Statements.
13 | December 31, 2021
| Financial Highlights | For a Share Outstanding Throughout the Periods Presented |
| For the Year Ended December 31, 2021 |
For
the Period December 1, 2020 to December 31, 2020(a) |
For the Year Ended November 30, 2020 |
For the Year Ended November 30, 2019 |
For the Year Ended November 30, 2018(b) |
For
the Year Ended November 30, 2017(b) |
|||||||||||||||||||
| NET ASSET VALUE, BEGINNING OF PERIOD | $ | 30.50 | $ | 29.57 | $ | 23.37 | $ | 15.26 | $ | 19.82 | $ | 19.15 | ||||||||||||
| INCOME/(LOSS) FROM INVESTMENT OPERATIONS: | ||||||||||||||||||||||||
| Net investment income (c) | 0.33 | 0.03 | 0.07 | 0.02 | 0.07 | 0.04 | ||||||||||||||||||
| Net realized and unrealized gain/(loss) | (3.19 | ) | 0.99 | 6.19 | 8.18 | (4.51 | ) | 0.63 | ||||||||||||||||
| Total from investment operations | (2.86 | ) | 1.02 | 6.26 | 8.20 | (4.44 | ) | 0.67 | ||||||||||||||||
| DISTRIBUTIONS: | ||||||||||||||||||||||||
| From net investment income | (0.36 | ) | (0.09 | ) | (0.06 | ) | (0.09 | ) | (0.12 | ) | (0.00 | )(d) | ||||||||||||
| Total distributions | (0.36 | ) | (0.09 | ) | (0.06 | ) | (0.09 | ) | (0.12 | ) | (0.00 | )(d) | ||||||||||||
| Net increase/(decrease) in net asset value | (3.22 | ) | 0.93 | 6.20 | 8.11 | (4.56 | ) | 0.67 | ||||||||||||||||
| NET ASSET VALUE, END OF PERIOD | $ | 27.28 | $ | 30.50 | $ | 29.57 | $ | 23.37 | $ | 15.26 | $ | 19.82 | ||||||||||||
| TOTAL RETURN(e) | (9.33 | )% | 3.46 | % | 26.85 | % | 53.91 | % | (22.56 | )% | 3.52 | % | ||||||||||||
| RATIOS/SUPPLEMENTAL DATA: | ||||||||||||||||||||||||
| Net assets, end of period (000s) | $ | 231,914 | $ | 259,234 | $ | 251,376 | $ | 177,647 | $ | 123,576 | $ | 164,545 | ||||||||||||
| Ratio of expenses including reimbursement/waiver recoupment to average net assets(f) | 0.50 | % | 0.50 | %(g) | 0.50 | % | 0.54 | % | N/A | N/A | ||||||||||||||
| Ratio of expenses excluding reimbursement/waiver recoupment to average net assets | 0.49 | % | 0.58 | %(g) | 0.52 | % | 0.57 | % | 0.57 | % | 0.57 | % | ||||||||||||
| Ratio of net investment income to average net assets | 1.18 | % | 1.28 | %(g) | 0.24 | % | 0.09 | % | 0.39 | % | 0.21 | % | ||||||||||||
| Portfolio turnover rate(h) | 66 | % | 0 | % | 95 | % | 112 | % | 82 | % | 101 | % | ||||||||||||
| (a) | With the approval of the Board effective December 31, 2020, the Fund's fiscal year end was changed from November 30 to December 31. |
| (b) | These financials have been audited by the Predecessor Fund's independent registered public accounting firm. |
| (c) | Based on average shares outstanding during the period. |
| (d) | Less than $0.005 per share. |
| (e) | Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period and redemption at the net asset value on the last day of the period and assuming all distributions are reinvested at reinvestment prices. Total return calculated for a period of less than one year is not annualized. |
| (f) | Prior to July 19, 2019, the prior adviser paid certain Fund expenses via a unitary fee arrangement; no fees or expenses were waived. |
| (g) | Annualized. |
| (h) | Portfolio does not include securities received or delivered from processing creations or redemptions in-kind. |
See Notes to Financial Statements.
14 | December 31, 2021
| Financial Highlights | For a Share Outstanding Throughout the Periods Presented |
| For the Year Ended December 31, 2021 |
For
the Period December 1, 2020 to December 31, 2020(a) |
For the Year Ended November 30, 2020 |
For the Year Ended November 30, 2019 |
For the Year Ended November 30, 2018(b) |
For
the Year Ended November 30, 2017(b) |
|||||||||||||||||||
| NET ASSET VALUE, BEGINNING OF PERIOD | $ | 49.30 | $ | 45.27 | $ | 30.28 | $ | 21.63 | $ | 31.48 | $ | 33.00 | ||||||||||||
| INCOME/(LOSS) FROM INVESTMENT OPERATIONS: | ||||||||||||||||||||||||
| Net investment income/(loss) (c) | 0.42 | (0.00 | ) | (0.04 | ) | 0.06 | (0.06 | ) | (0.09 | ) | ||||||||||||||
| Net realized and unrealized gain/(loss) | (8.12 | ) | 5.00 | 15.25 | 8.59 | (9.74 | ) | (0.87 | ) | |||||||||||||||
| Total from investment operations | (7.70 | ) | 5.00 | 15.21 | 8.65 | (9.80 | ) | (0.96 | ) | |||||||||||||||
| DISTRIBUTIONS: | ||||||||||||||||||||||||
| From net investment income | (0.90 | ) | (0.97 | ) | (0.22 | ) | – | (0.05 | ) | (0.56 | ) | |||||||||||||
| Total distributions | (0.90 | ) | (0.97 | ) | (0.22 | ) | – | (0.05 | ) | (0.56 | ) | |||||||||||||
| Net increase/(decrease) in net asset value | (8.60 | ) | 4.03 | 14.99 | 8.65 | (9.85 | ) | (1.52 | ) | |||||||||||||||
| NET ASSET VALUE, END OF PERIOD | $ | 40.70 | $ | 49.30 | $ | 45.27 | $ | 30.28 | $ | 21.63 | $ | 31.48 | ||||||||||||
| TOTAL RETURN(d) | (15.56 | )% | 11.11 | % | 50.56 | % | 39.99 | % | (31.19 | )% | (2.99 | )% | ||||||||||||
| RATIOS/SUPPLEMENTAL DATA: | ||||||||||||||||||||||||
| Net assets, end of period (000s) | $ | 124,127 | $ | 123,258 | $ | 106,383 | $ | 52,994 | $ | 36,776 | $ | 149,550 | ||||||||||||
| Ratio of expenses including reimbursement/waiver to average net assets(e) | 0.50 | % | 0.50 | %(f) | 0.50 | % | 0.54 | % | N/A | N/A | ||||||||||||||
| Ratio of expenses excluding reimbursement/waiver to average net assets | 0.61 | % | 0.75 | %(f) | 0.76 | % | 0.71 | % | 0.57 | % | 0.57 | % | ||||||||||||
| Ratio of net investment income/(loss) to average net assets | 0.96 | % | (0.07 | )%(f) | (0.10 | )% | 0.22 | % | (0.22 | )% | (0.26 | )% | ||||||||||||
| Portfolio turnover rate(g) | 66 | % | 0 | % | 157 | % | 127 | % | 37 | % | 74 | % | ||||||||||||
| (a) | With the approval of the Board effective December 31, 2020, the Fund's fiscal year end was changed from November 30 to December 31. |
| (b) | These financials have been audited by the Predecessor Fund's independent registered public accounting firm. |
| (c) | Based on average shares outstanding during the period. |
| (d) | Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period and redemption at the net asset value on the last day of the period and assuming all distributions are reinvested at reinvestment prices. Total return calculated for a period of less than one year is not annualized. |
| (e) | Prior to July 19, 2019, the prior adviser paid certain Fund expenses via a unitary fee arrangement; no fees or expenses were waived. |
| (f) | Annualized. |
| (g) | Portfolio does not include securities received or delivered from processing creations or redemptions in-kind. |
See Notes to Financial Statements.
15 | December 31, 2021
Sprott ETFs
| Notes to Financial Statements | December 31, 2021 |
1. ORGANIZATION
The Sprott Funds Trust (the “Trust”) was organized as a Delaware statutory trust on January 3, 2018. As of December 31, 2021, the Trust consisted of three separate portfolios that each represent a separate series of the Trust. This report pertains to the Sprott Gold Miners ETF and the Sprott Junior Gold Miners ETF (each a “Fund” and collectively, the “Funds”). The Funds are non-diversified, open-end management investment companies under the Investment Company Act of 1940, as amended (the “1940 Act”). The Funds reorganized effective as of the close of business on July 19, 2019, from each Fund's respective Predecessor Fund. Each Predecessor Fund was a separate series of ALPS ETF Trust.
The investment objective of the Sprott Gold Miners ETF is to seek investment results that correspond (before fees and expenses) to the performance of its underlying index, the Solactive Gold Miners Custom Factors Total Return Index (ticker symbol SOLGMCFT, the “Underlying Gold Index”). The investment adviser uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. The Sprott Gold Miners ETF is considered non-diversified and may invest a greater portion of assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a diversified fund.
The investment objective of the Sprott Junior Gold Miners ETF is to seek investment results that correspond (before fees and expenses) to the performance of its underlying index, the Solactive Junior Gold Miners Custom Factors Total Return Index (ticker symbol SOLJGMFT, the “Underlying Junior Gold Index”). The investment adviser uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. The Sprott Junior Gold Miners ETF is considered non-diversified and may invest a greater portion of assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a diversified fund.
The Funds offer and issue Shares at their net asset value (“NAV”) only in aggregations of a specified number of Shares (each, a “Creation Unit”). The Funds offer and issue Shares in exchange for a basket of securities (“Deposit Securities”) together with the deposit of a specified cash payment (“Cash Component”). The Trust reserves the right to permit or require the substitution of a “cash in lieu” amount (“Deposit Cash”) to be added to the Cash Component to replace any Deposit Security. Shares are listed on the NYSE Arca, Inc. (the “Exchange” or “NYSE Arca”) and trade on the Exchange at market prices that may differ from the Shares’ NAV. Shares are also redeemable only in Creation Unit aggregations, primarily for a basket of Deposit Securities together with a Cash Component. A Creation Unit of the Funds generally consists of 50,000 Shares, though this may change from time to time. Creation Units are not expected to consist of fewer than 50,000 Shares. As a practical matter, only institutions or large investors that are Authorized Participants may purchase or redeem Creation Units. Except when aggregated in Creation Units, Shares are not redeemable securities.
Shares may be issued in advance of receipt of Deposit Securities subject to various conditions, including a requirement to maintain on deposit with the Trust cash at least equal to a specified percentage of the value of the missing Deposit Securities, as set forth in the Participant Agreement (as defined below). The Trust may impose a transaction fee for each creation or redemption. In all cases, such fees will be limited in accordance with the requirements of the SEC applicable to management investment companies offering redeemable securities. As in the case of other publicly traded securities, brokers’ commissions on share transactions in the secondary market will be based on negotiated commission rates at customary levels.
Pursuant to the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of the financial statements. The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 and Accounting Standards Update 2013-08.
A. Portfolio Valuation
Each Fund’s NAV is determined daily, as of the close of regular trading on the NYSE, normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading. The NAV is computed by dividing the value of all assets of a Fund (including accrued interest and dividends), less all liabilities (including accrued expenses and dividends declared but unpaid), by the total number of shares outstanding.
16 | December 31, 2021
Sprott ETFs
| Notes to Financial Statements | December 31, 2021 |
Portfolio securities are valued at the most recent sale price or official closing price reported on the exchange (U.S. or foreign) or over-the-counter market on which they trade. Portfolio securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined at the close of the exchange representing the principal market for such securities. Securities for which no sales are reported are valued at the calculated mean between the most recent bid and ask quotations on the relevant market or, if a mean cannot be determined, at the most recent bid quotation. Investments in open-end mutual funds such as money market funds are valued at the closing NAV.
The Funds’ investments are valued at market value or, in the absence of market value with respect to any portfolio securities, at fair value according to procedures adopted by the Trust’s Board of Trustees (the “Board”). When market quotations are not readily available or when events occur that make established valuation methods unreliable, securities of the Funds may be valued in good faith by or under the oversight of the Board. These securities generally include, but are not limited to, restricted securities (securities which may not be publicly sold without registration under the Securities Act of 1933) for which a pricing service is unable to provide a market price; securities whose trading has been formally suspended; a security whose market price is not available from a pre-established primary pricing source or the pricing source is not willing to provide a price; a security with respect to which an event has occurred that is most likely to materially affect the value of the security after the market has closed but before the calculation of the Fund’s NAV or make it difficult or impossible to obtain a reliable market quotation; or a security whose price, as provided by the pricing service, does not reflect the security’s “fair value” due to the security being de-listed from a national exchange or the security’s primary trading market is temporarily closed at a time when, under normal conditions, it would be open. As a general principle, the current “fair value” of a security would be the amount which the owner might reasonably expect to receive from the sale on the applicable exchange or principal market. A variety of factors may be considered in determining the fair value of such securities.
B. Fair Value Measurements
Each Fund discloses the classification of its fair value measurements following a three-tier hierarchy based on the inputs used to measure fair value. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.
Valuation techniques used to value the Funds’ investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the mean of the most recent quoted bid and ask prices on such day and are generally categorized as Level 2 in the hierarchy. Investments in open-end mutual funds are valued at their closing NAV each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Various inputs are used in determining the value of each Fund’s investments as of the end of the reporting period. When inputs used fall into different levels of the fair value hierarchy, the level in the hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments.
These inputs are categorized in the following hierarchy under applicable financial accounting standards:
| Level 1 – | Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that a Fund has the ability to access at the measurement date; |
| Level 2 – | Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and |
| Level 3 – | Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date. |
17 | December 31, 2021
Sprott ETFs
| Notes to Financial Statements | December 31, 2021 |
The following is a summary of the inputs used to value the Funds’ investments at December 31, 2021:
Sprott Gold Miners ETF
| Investments in Securities at Value | Level 1
- Quoted and Unadjusted Prices |
Level 2
- Other Significant Observable Inputs |
Level 3
- Significant Unobservable Inputs |
Total |
||||||||||||
| Common Stocks* | $ | 231,615,746 | $ | – | $ | – | $ | 231,615,746 | ||||||||
| Short Term Investments | 9,154,915 | – | – | 9,154,915 | ||||||||||||
| Total | $ | 240,770,661 | $ | – | $ | – | $ | 240,770,661 | ||||||||
Sprott Junior Gold Miners ETF
| Investments in Securities at Value | Level 1
- Quoted and Unadjusted Prices |
Level 2
- Other Significant Observable Inputs |
Level 3
- Significant Unobservable Inputs |
Total |
||||||||||||
| Common Stocks* | $ | 124,219,080 | $ | – | $ | – | $ | 124,219,080 | ||||||||
| Short Term Investments | 11,871,192 | – | – | 11,871,192 | ||||||||||||
| Total | $ | 136,090,272 | $ | – | $ | – | $ | 136,090,272 | ||||||||
| * | For a detailed sector breakdown, see the accompanying Schedule of Investments. |
The Funds did not have any securities that used significant unobservable inputs (Level 3) in determining fair value and there were no transfers into or out of Level 3 during the year ended December 31, 2021.
C. Gold and Silver Mining Industry Risk
The Funds are sensitive to changes in, and their performance will depend to a greater extent on, the overall condition of the gold and silver mining industry. In times of stable economic growth, traditional equity and debt investments could offer greater appreciation potential and the value of gold, silver and other precious metals may be adversely affected, which could in turn affect the Funds’ returns. The gold and precious metals industry can be significantly affected by competitive pressures, central bank operations, events relating to international political developments, the success of exploration projects, commodity prices, adverse environmental developments and tax and government regulations.
D. Foreign Investment Risk
The Funds investments in non-U.S. issuers may involve unique risks compared to investing in securities of U.S. issuers. Adverse political, economic or social developments could undermine the value of the Funds’ investments or prevent the Funds from realizing the full value of their investments. Emerging market countries may present heightened risks of nationalization of businesses, restrictions on foreign ownership and prohibitions on the repatriation of assets. The economies of emerging market countries also may be based on only a few industries, making them more vulnerable to changes in local or global trade conditions and more sensitive to debt burdens, inflation rates or adverse news and events. Where all or a portion of the Funds’ underlying securities trade in a market that is closed when the market in which the Funds’ shares are listed and trading in that market is open, there may be changes between the last quote from its closed foreign market and the value of such security during the Funds’ domestic trading day. In addition, please note that this in turn could lead to differences between the market price of the Funds’ shares and the underlying value of those shares
E. Foreign Currency Translation
The books and records of the Funds are maintained in U.S. dollars. Investment valuations and other assets and liabilities initially expressed in foreign currencies are converted each business day into U.S. dollars based upon current exchange rates. The portion of realized and unrealized gains or losses on investments due to fluctuations in foreign currency exchange rates is not separately disclosed and is included in realized and unrealized gains or losses on investments in the Statement of Operations, when applicable.
F. Concentration Risk
Each Fund seeks to track its respective Underlying Index, which itself is generally concentrated in the gold and silver mining industry. Underperformance or increased risk in such concentrated areas may result in underperformance or increased risk in a Fund.
G. Market Disruption Risk
The Funds are subject to investment and operational risks associated with financial, economic and other global market developments and disruptions, including the recent spread of an infectious respiratory illness caused by a novel strain of coronavirus (known as COVID-19), which can negatively impact the securities markets and cause a Fund to lose value.
18 | December 31, 2021
Sprott ETFs
| Notes to Financial Statements | December 31, 2021 |
The spread of COVID-19 has caused volatility, severe market dislocations and liquidity constraints in many markets, including markets for the securities the Funds hold, leading to instability in the market place and the jobs market.
The foregoing could lead to a significant economic downturn or recession, increased market volatility, a greater number of market closures, higher default rates and adverse effects on the values and liquidity of the Funds' securities or other assets. Such impacts may adversely affect the performance of the Funds.
H. Securities Transactions and Investment Income
Securities transactions are recorded as of the trade date. Realized gains and losses from securities transactions are recorded on the highest cost basis. Dividend income and capital gains distributions, if any, are recorded on the ex-dividend date. Interest income, if any, is recorded on the accrual basis.
I. Dividends and Distributions to Shareholders
Dividends from net investment income for each Fund, if any, are declared and paid annually or as the Board may determine from time to time. Distributions of net realized capital gains earned by the Funds, if any, are distributed at least annually.
J. Federal Tax and Tax Basis Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. GAAP. Reclassifications are made to the Funds’ capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations.
For the year ended December 31, 2021, the following reclassifications, which had no impact on results of operations or net assets, were recorded to reflect permanent tax differences resulting primarily from in-kind transactions:
| Total Distributable | ||||||||
| Fund | Paid-in Capital | Earnings | ||||||
| Sprott Gold Miners ETF | $ | 2,792,220 | $ | (2,792,220 | ) | |||
| Sprott Junior Gold Miners ETF | 14,944,042 | (14,944,042 | ) | |||||
The tax character of the distributions paid during the fiscal year ended December 31, 2021, the period ended December 31, 2020 and the year ended November 30, 2020 were as follows:
| Ordinary Income | ||||
| December 31, 2021 | ||||
| Sprott Gold Miners ETF | $ | 3,066,167 | ||
| Sprott Junior Gold Miners ETF | 2,712,420 | |||
| Ordinary Income | ||||
| December 31, 2020 | ||||
| Sprott Gold Miners ETF | $ | 788,715 | ||
| Sprott Junior Gold Miners ETF | 2,324,976 | |||
| Ordinary Income | ||||
| November 30, 2020 | ||||
| Sprott Gold Miners ETF | $ | 485,870 | ||
| Sprott Junior Gold Miners ETF | 395,316 | |||
Under current law, capital losses maintain their character as short-term or long-term and are carried forward to the next tax year without expiration. As of December 31, 2021, the following amounts are available as carry forwards to the next tax year:
| Fund | Short-Term | Long-Term | ||||||
| Sprott Gold Miners ETF | $ | 59,074,631 | $ | 20,313,625 | ||||
| Sprott Junior Gold Miners ETF | 16,990,362 | 8,906,400 | ||||||
19 | December 31, 2021
Sprott ETFs
| Notes to Financial Statements | December 31, 2021 |
As of December 31, 2021, the components of distributable earnings on a tax basis for each Fund were as follows:
| Sprott Gold Miners | Sprott Junior Gold | |||||||
| ETF | Miners ETF | |||||||
| Undistributed net investment income | $ | – | $ | 2,394,788 | ||||
| Accumulated net realized loss on investments | (79,388,256 | ) | (25,896,762 | ) | ||||
| Net unrealized appreciation/(depreciation) on investments | 25,235,858 | (12,597,537 | ) | |||||
| Total | $ | (54,152,398 | ) | $ | (36,099,511 | ) | ||
As of December 31, 2021, the cost of investments for federal income tax purposes and accumulated net unrealized appreciation/(depreciation) on investments were as follows:
| Sprott Gold Miners | Sprott Junior Gold | |||||||
| ETF | Miners ETF | |||||||
| Gross appreciation (excess of value over tax cost) | $ | 33,682,080 | $ | 5,574,591 | ||||
| Gross depreciation (excess of tax cost over value) | (8,448,045 | ) | (18,172,247 | ) | ||||
| Net depreciation of foreign currency | 1,823 | 119 | ||||||
| Net unrealized appreciation (depreciation) | 25,235,858 | (12,597,537 | ) | |||||
| Cost of investments for income tax purposes | $ | 215,536,626 | $ | 148,687,928 | ||||
The differences between book-basis and tax-basis are primarily due to Passive Foreign Investment Company (“PFIC”) adjustments and the deferral of losses from wash sales.
K. Income Taxes
No provision for income taxes is included in the accompanying financial statements, as each Fund intends to distribute to shareholders all taxable investment income and realized gains and otherwise comply with Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. Each Fund evaluates tax positions taken (or expected to be taken) in the course of preparing the Fund’s tax returns to determine whether these positions meet a “more-likely-than-not” standard that, based on the technical merits, have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the “more-likely-than-not” recognition threshold is measured to determine the amount of benefit to recognize in the financial statements.
As of and during the year ended December 31, 2021, the Funds did not have a liability for any unrecognized tax benefits. Each Fund files U.S. federal, state, and local tax returns as required. Each Fund’s tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return, but may extend to four years in certain jurisdictions. Tax returns for open years for the Funds have incorporated no uncertain tax positions that require a provision for income taxes.
L. Lending of Portfolio Securities
The Funds have entered into a securities lending agreement with State Street Bank & Trust Co. (“SSB”), the Funds’ lending agent. The Funds may lend their portfolio securities only to borrowers that are approved by SSB. Each Fund will limit such lending to not more than 33 1/3% of the value of its total assets. Each Fund’s securities held at SSB as custodian shall be available to be lent except those securities the Fund, Sprott Asset Management LP (the "Adviser"), or ALPS Advisors, Inc. (the "Sub-Adviser") specifically identifies in writing as not being available for lending. The borrower pledges and maintains with each Fund collateral consisting of cash (U.S. Dollars only), securities issued or guaranteed by the U.S. government or its agencies or instrumentalities, and by cash equivalents (including irrevocable bank letters of credit issued by a person other than the borrower or an affiliate of the borrower). The initial collateral received by each Fund is required to have a value of no less than 102% of the market value of the loaned securities for U.S. equity securities and a value of no less than 105% of the market value for non-U.S. equity securities. The collateral is maintained thereafter, at a market value equal to not less than 102% of the current value of the U.S. equity securities on loan and not less than 105% of the current value of the non-U.S. equity securities on loan. The market value of the loaned securities is determined at the close of each business day and any additional required collateral is delivered to each Fund on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the customary time period for settlement of securities transactions.
Any cash collateral received is reinvested in a money market fund managed by SSB as disclosed in each Fund’s Schedule of Investments and is reflected in the Statements of Assets and Liabilities as a payable for collateral upon return of securities loaned. Non-cash collateral, in the form of securities issued or guaranteed by the U.S. government or its agencies or instrumentalities, is not disclosed in a Fund’s Statements of Assets and Liabilities as it is held by the lending agent on behalf of each Fund, and each Fund does not have the ability to re-hypothecate these securities. Income earned by each Fund from securities lending activity is disclosed in the Statement of Operations.
20 | December 31, 2021
Sprott ETFs
| Notes to Financial Statements | December 31, 2021 |
The following is a summary of each Fund’s securities lending agreements and related cash and non-cash collateral received as of December 31, 2021:
| Fund | Market Value of | Cash Collateral | Non-Cash Collateral | Total Collateral |
| Securities on Loan | Received | Received | Received | |
| Sprott Gold Miners ETF | $ 10,243,042 | $ 8,878,749 | $ 1,980,235 | $ 10,858,984 |
| Sprott Junior Gold Miners ETF | 17,819,568 | 11,834,253 | 7,036,219 | 18,870,472 |
The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, each Fund benefits from a borrower default indemnity provided by SSB. SSB’s indemnity allows for full replacement of securities lent wherein SSB will purchase the unreturned loaned securities on the open market by applying the proceeds of the collateral, or to the extent such proceeds are insufficient or the collateral is unavailable, SSB will purchase the unreturned loan securities at SSB’s expense. However, the Funds could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.
The following tables reflect a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged or securities loaned, and the remaining contractual maturity of those transactions as of December 31, 2021:
| Sprott Gold Miners ETF | Remaining contractual maturity of the agreements | ||||||||
| Securities Lending Transactions | Overnight & | ||||||||
| Continuous | Up to 30 Days | 30-90 Days | Greater than 90 Days | Total | |||||
| Common Stocks | $8,878,749 | $ | – | $ | – | $ | – | $8,878,749 | |
| Total Borrowings | 8,878,749 | ||||||||
| Gross amount of recognized liabilities for securities lending (collateral received) | 8,878,749 | ||||||||
| Sprott Junior Gold Miners ETF | Remaining contractual maturity of the agreements | ||||||||
| Securities Lending Transactions | Overnight & | ||||||||
| Continuous | Up to 30 Days | 30-90 Days | Greater than 90 Days | Total | |||||
| Common Stocks | $11,843,253 | $ | – | $ | – | $ | – | $11,843,253 | |
| Total Borrowings | 11,843,253 | ||||||||
| Gross amount of recognized liabilities for securities lending (collateral received) | 11,843,253 | ||||||||
3. INVESTMENT ADVISORY FEE AND OTHER AFFILIATED TRANSACTIONS
The Adviser serves as the Funds’ investment adviser pursuant to an Investment Advisory Agreement with the Trust on behalf of each Fund (the “Advisory Agreement”). Pursuant to the Advisory Agreement, each Fund pays the Adviser an annual management fee for the services and facilities it provides, payable on a monthly basis as a percentage of the relevant Fund’s average daily net assets as set out below.
| Fund | Advisory Fee |
| Sprott Gold Miners ETF | 0.35% |
| Sprott Junior Gold Miners ETF | 0.35% |
21 | December 31, 2021
Sprott ETFs
| Notes to Financial Statements | December 31, 2021 |
The Sub-Adviser serves as each Fund’s sub-adviser pursuant to a sub-advisory agreement with Adviser and the Trust (the ‘‘Sub-Advisory Agreement’’). Pursuant to the Sub-Advisory Agreement, the Adviser pays the Sub-Adviser a sub-advisory fee out of the Adviser’s advisory fee for the services it provides. The fee is payable on a monthly basis at the annual rate of the relevant Fund’s average daily net assets as set out below:
| Average Assets* | Sub-Advisory Fee** |
| Up to $250 million | 0.04% |
| $250 million-$500 million | 0.03% |
| Above $500 million | 0.02% |
| * | Subject to the following annual minimums per fund sub-advised by the Sub-Adviser for Sprott: (i) first two funds: $40,000 per fund; (ii) additional funds: $30,000 per fund. |
| ** | Annual rate stated as a percentage of the average daily net assets of the Funds |
The Adviser is paid a monthly management fee at an annual rate (stated as a percentage of the average daily net assets of each Fund) of 0.35%. The Adviser is required to pay all fees due to the Sub-Adviser out of the management fee the Adviser receives from the Funds. The Adviser has contractually agreed to waive the management fee, and/or reimburse expenses so that total annual Funds operating expenses after fee waiver/expense reimbursements (not including distribution (12b-1) fees, shareholder service fees, acquired fund fees and expenses, taxes, brokerage commissions and extraordinary expenses) do not exceed a maximum of 0.50% of the shares average daily net assets through April 30, 2022. The Adviser will be permitted to recover expenses it has borne to the extent that the Funds expenses in later periods fall below the annual rates set forth in the expense agreement. The Funds’ fee waiver/expense reimbursement arrangements with the Adviser permit the Adviser to recapture only if any such recapture payments do not cause the Funds’ expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. The Funds will not be obligated to pay any such deferred fees and expenses more than three years after the particular date in which the fees and expenses was deferred. This expense agreement may only be terminated during the period by the Board of Trustees of Sprott Funds Trust.
For the year ended December 31, 2021, the fees waived and recoupment of previously waived fees were as follows:
| Fees waived by Advisor |
Expense Recoupment of Previously Waived Fees |
|||||||
| Sprott Gold Miners ETF | $ | (4,105 | ) | $ | 24,568 | |||
| Sprott Junior Gold Miners ETF | (134,456 | ) | – | |||||
As of December 31, 2021, the balance of recoupable expenses for the Funds were as follows:
| Expires December | Expires December | Expires December | ||||||||||
| 31, 2022 | 31, 2023 | 31, 2024 | ||||||||||
| Sprott Gold Miners ETF | $ | 11,752 | $ | 76,836 | $ | 4,105 | ||||||
| Sprott Junior Gold Miners ETF | 113,864 | 194,571 | 134,456 | |||||||||
The Board consists of four Trustees, three of whom are not “interested persons” (as defined in the 1940 Act), of the Trust (“Independent Trustees”), and one of whom is an interested person. Each current Independent Trustee is paid an annual retainer of $20,000 for his or her services as a Board member to the Trust and another trust in the fund complex, together with out-of-pocket expenses in accordance with the Board’s policy on travel and other business expenses relating to attendance at meetings.
22 | December 31, 2021
Sprott ETFs
| Notes to Financial Statements | December 31, 2021 |
4. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 2021, the cost of purchases and proceeds from sales of investment securities, excluding short-term investments and in-kind transactions, were as follows:
| Fund | Purchases | Sales | ||||||
| Sprott Gold Miners ETF | $ | 156,175,946 | $ | 156,630,501 | ||||
| Sprott Junior Gold Miners ETF | 80,878,824 | 82,647,663 | ||||||
For the period December 31, 2021, the cost of in-kind purchases and proceeds from in-kind sales were as follows:
| Fund | Purchases | Sales | ||||||
| Sprott Gold Miners ETF | $ | 8,447,558 | $ | 8,958,687 | ||||
| Sprott Junior Gold Miners ETF | 80,189,654 | 55,318,586 | ||||||
For the year ended December 31, 2021, the Sprott Gold Miners ETF and the Sprott Junior Gold Miners ETF had in-kind net realized gains/(losses) of $2,889,680 and $17,413,379, respectively.
Gains on in-kind transactions are not considered taxable for federal income tax purposes and losses on in-kind transactions are also not deductible for tax purposes.
5. CAPITAL SHARE TRANSACTIONS
Shares are created and redeemed by each Fund only in Creation Unit size aggregations of 50,000 Shares. Only broker-dealers or large institutional investors with creation and redemption agreements called Authorized Participants (“AP”) are permitted to purchase or redeem Creation Units from the Funds. Such transactions are generally permitted on an in-kind basis, with a balancing cash component to equate the transaction to the NAV per unit of each Fund on the transaction date. Cash may be substituted equivalent to the value of certain securities generally when they are not available in sufficient quantity for delivery, not eligible for trading by the AP or as a result of other market circumstances.
6. RELATED PARTY TRANSACTIONS
Each Fund may engage in cross trades between other funds in the Trust during the year ended December 31, 2021 pursuant to Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds to which the Adviser serves as the investment adviser. The Board has adopted procedures that apply to transactions between the funds of the Trust pursuant to Rule 17a-7. It has been reported to the Board that these transactions related to cross trades during the period complied with the requirements set forth by Rule 17a-7 and the Trust’s procedures.
Transactions related to cross trades during the year ended December 31, 2021 were as follows:
| Fund | Purchase Cost Paid | Sale Proceeds Received | Realized Loss on Sales | |||||||||
| Sprott Gold Miners ETF | $ | 1,687,688 | $ | 841,850 | $ | (208,317 | ) | |||||
| Sprott Junior Gold Miners ETF | 841,850 | 1,687,688 | (158,388 | ) | ||||||||
7. LIQUIDITY RISK MANAGEMENT PROGRAM
The Board of Trustees (the "Board") of the Trust, on behalf of the Funds, met on September 8, 2021 (the "Meeting") to review the liquidity risk management program (the "Program") established for the Funds. The Funds has adopted and implemented the Program as required by Rule 22e-4 (the "Liquidity Rule") under the 1940 Act. The Board appointed a committee consisting of officers of the Trust ("Sprott Liquidity Committee") as the program administrator for the Funds' Program.
At the Meeting, the Board was provided with the 2021 Liquidity Risk Management Program Annual Report (the "Report"), a report that addressed the operation of the Program and assessed its adequacy and effectiveness of implementation during the period covered by the Report (the "Program Reporting Period"). The Report stated that the Committee concluded that based on how it functions, the Program is operating as intended and is effective in implementing the requirements of the Liquidity Rule. The Report noted, among other items, that the Funds did not hold illiquid securities that, in the aggregated, exceeded 15% of that Fund's assets.
23 | December 31, 2021
Sprott ETFs
| Notes to Financial Statements | December 31, 2021 |
The Report further noted that during the Program Reporting Period, the Committee reviewed historical net redemption activity, and used this information and other factors as a component to establish the Funds' reasonably anticipated trading size. The Report additionally provided that the Program is reasonably designed to assess and manage the Funds' liquidity risk, taking into consideration, among other factors, each Funds' investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources.
The Committee reviewed the Funds' investments and determined that the Funds held adequate levels of cash and highly liquid investments to meet shareholder redemption activities for the Funds in accordance with applicable requirements. Accordingly, the Committee concluded that (i) the Program is reasonably designed to prevent violations of the Liquidity Rule and (ii) the Program has been effectively implemented. There were no material changes to the Program during the Program Reporting Period.
8. SUBSEQUENT EVENTS
The Funds have evaluated the need for disclosures and/or adjustments resulting from subsequent events that occurred between December 31, 2021 and the date the financial statements were issued. Based on this evaluation, no adjustments were required to the financial statements.
24 | December 31, 2021
Sprott ETFs
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees
of Sprott Funds Trust
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of Sprott Gold Miners ETF and Sprott Junior Gold Miners ETF (the “Funds”), each a series of Sprott Funds Trust (the “Trust”), including the schedules of investments, as of December 31, 2021, the related statements of operations, the statements of changes in net assets and the financial highlights for each of the periods indicated in the table below, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Funds as of December 31, 2021, the results of their operations, the changes in their net assets and their financial highlights for each of the periods indicated in the table below, in conformity with accounting principles generally accepted in the United States of America.
| Individual Funds | Statement of | ||
| constituting Sprott Funds Trust | operations | Statements of changes in net assets | Financial highlights |
| Sprott Gold Miners ETF | For the year ended December 31, 2021 | For the year ended December 31, 2021, for the Period December 1 through December 31, 2020 and for the year ended November 30, 2020 | For the year ended December 31, 2021, for the Period December 1 through December 31, 2020 and for the two years in the period ended November 30, 2020 |
| Sprott Junior Gold Miners ETF | For the year ended December 31, 2021 | For the year ended December 31, 2021, for the Period December 1 through December 31, 2020 and for the year ended November 30, 2020 | For the year ended December 31, 2021, for the Period December 1 through December 31, 2020 and for the two years in the period ended November 30, 2020 |
The financial highlights for each of the two years in the period ended November 30, 2018 have been audited by other auditors, whose report dated January 24, 2018 expressed unqualified opinions on such statement and financial highlights.
Basis for Opinion
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We have served as the auditor of one or more of the funds in the Trust since 2019.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of the Funds’ internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2021 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
TAIT, WELLER & BAKER LLP
Philadelphia, Pennsylvania
February 25, 2022
25 | December 31, 2021
Sprott ETFs
| Additional Information | December 31, 2021 (Unaudited) |
PROXY VOTING RECORDS, POLICIES AND PROCEDURES
Information regarding how each Fund voted proxies relating to portfolio securities during the most recent 12-month period and a description of the Funds’ proxy voting policies and procedures used in determining how to vote for proxies are available without charge on the SEC’s website at www.sec.gov and upon request, by calling (toll-free) 888.622.1813.
PORTFOLIO HOLDINGS
The Trust is required to disclose, after its first and third fiscal quarters, the complete schedule of each Fund’s portfolio holdings with the SEC as an exhibit to its report on Form N-PORT. Form N-PORT reports for each Fund will be available on the SEC’s website at www.sec.gov. Each Fund’s Form N-PORT reports will be available without charge, upon request, by calling (toll-free) 888.622.1813.
TAX INFORMATION
Pursuant to Section 853(c) of the Internal Revenue Code, the Funds designated the following for the calendar year ended December 31, 2021:
| Foreign Taxes Paid | Foreign Source Income | |||||||
| Sprott Gold Miners ETF | $ | 358,844 | $ | 3,084,876 | ||||
| Sprott Gold Miners Junior ETF | $ | 15,471 | $ | 1,858,961 | ||||
The Funds designate the following for federal income tax purposes for distributions made during the calendar year ended December 31, 2021:
| QDI | DRD | ||
| Sprott Gold Miners ETF | 100.00% | 36.27% | |
| Sprott Gold Miners Junior ETF | 55.43% | 0.00% |
LICENSING AGREEMENTS
Solactive AG (“Solactive”) has entered into a license agreement with the Adviser. Solactive is the Index Provider for Funds. Solactive is not affiliated with the Trust, Sprott, or the Distributor.
The following disclosure relates to Solactive and the Adviser:
The Funds are not sponsored, promoted, sold or supported in any other manner by Solactive nor does Solactive offer any express or Implicit guarantee or assurance either with regard to the results of using the Index and/or index trade mark or the index price at any time or in any other respect. The Index is calculated and published by Solactive. Solactive uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards the Funds, Solactive has no obligation to point out errors in the Index to third parties including but not limited to investors and/or financial intermediaries of the Funds. Neither publication of the Index by Solactive nor the licensing of the Index or Index trade mark for the purpose of use in connection with the Funds constitutes a recommendation by Solactive to invest capital in the Funds nor does it in any way represent an assurance or opinion of Solactive with regard to any investment in these Funds.
The Adviser does not guarantee the accuracy and/or the completeness of the Index or any data included therein, and the Adviser shall have no liability for any errors, omissions or interruptions therein. The Adviser makes no warranty, express or implied, as to results to be obtained by the Funds, owners of the Shares of the Funds or any other person or entity from the use of the Index or any data included therein. The Adviser makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the Index or any data included therein. Without limiting any of the foregoing, in no event shall the Adviser have any liability for any special, punitive, direct, indirect or consequential damages (including lost profits) arising out of matters relating to the use of the Index even if notified of the possibility of such damages.
26 | December 31, 2021
Sprott ETFs
| Trustees & Officers | December 31, 2021 (Unaudited) |
INDEPENDENT TRUSTEES
| Name,
Address1 and Birth Year |
Position(s) Held with the Trust |
Term
of Office2 and Length of Time Served |
Principal
Occupation(s) During Past Five Years |
Number
of Portfolios in the Fund Complex Overseen |
Other
Directorships Held By Trustee |
| Michael
W. Clark, 1959 |
Trustee | Since September, 2018 | President, Chief Operating Officer, Chief Risk Officer, Head of Executive Committee, and member of Board of Directors of Chilton Investment Company since 2005. | 4 | Sprott Focus Trust, Inc. |
| Peyton
T. Muldoon, 1969 |
Trustee | Since September, 2018 | Licensed salesperson, Sotheby’s International Realty, a global real estate brokerage firm (since 2011). | 4 | Sprott Focus Trust, Inc. |
| James
R. Pierce, Jr., 1956 |
Trustee | Since September, 2018 | Chairman, Global Energy & Power, Marsh Specialty, a global specialty operations focusing on the energy and power business served by Marsh, Inc., since September, 2014. | 4 | Sprott Focus Trust, Inc. |
| 1. | The address for each Trustee is 200 Bay Street, Suite 2600, Toronto, Ontario, Canada M5J2J1. |
| 2. | Each Trustee serves until resignation, death, retirement or removal. |
27 | December 31, 2021
Sprott ETFs
| Trustees & Officers | December 31, 2021 (Unaudited) |
INTERESTED TRUSTEE AND OFFICERS
| Name,
Address1 and Birth Year |
Position(s) Held with the Trust |
Term
of Office2 and Length of Time Served |
Principal
Occupation(s) During Past Five Years |
Number
of Portfolios in the Fund Complex Overseen |
Other
Directorships Held By Trustee |
| John
Ciampaglia, 1970 |
President and Trustee |
Since September, 2018 |
Senior Managing Director of Sprott Inc. and Chief Executive Officer of Sprott Asset Management, LP. (Since 2010) | 3 | N/A |
| Thomas
W. Ulrich, 1963 |
Secretary, Chief Compliance Officer |
Since September, 2018 |
Managing Director, Sprott Inc. group of companies (since January 2018); General Counsel and Chief Compliance Officer of Sprott Asset Management USA Inc. (since October, 2012); In]House Counsel and Chief Compliance Officer of Sprott Global Resource Investments Ltd. (since October, 2012). | N/A | N/A |
| Varinder
Bhathal, 1971 |
Treasurer and Chief Financial Officer |
Since September, 2018 |
Chief Financial Officer of Sprott Asset Management LP (since Dec 2018); Chief Financial Officer of Sprott Capital Partners (since Oct 2016); Managing Director, Corporate Finance and Investment Operations of Sprott Inc. (since Oct 2017); Vice President, Finance of Sprott Inc. (Dec 2015 to Oct 2017). | N/A | N/A |
| 1. | The address for each Trustee and officer is 200 Bay Street, Suite 2600, Toronto, Ontario, Canada M5J2J1. |
| 2. | Each Trustee serves until resignation, death, retirement or removal. |
The Statement of Additional Information includes additional information about the Funds’ Trustees and is available free of charge at www.sprottetfs.com, or upon request by calling the Fund toll free at 1-855-496-3837.
28 | December 31, 2021
This material must be preceded or accompanied by the Prospectus.
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