Item 1. Report to Stockholders.
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Annual
Report
November
30, 2019
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Sprott
Funds Trust
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Sprott
Gold Miners ETF (NYSE Arca: SGDM)
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Sprott
Junior Gold Miners ETF (NYSE Arca: SGDJ)
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Beginning
on January 1, 2021, as permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of the Funds’
annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the
reports from your financial intermediary (such as a broker-dealer or bank). Instead, the reports will be made available on the
Funds’ website (www.sprottetfs.com), and you will be notified by mail each time a report is posted and provided with a website
link to access the report.
If
you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take
any action. You may elect to receive shareholder reports and other communications from the Fund electronically by calling the
Fund at (855)-496-3837, or submit a signed letter of instruction requesting paperless reports to 1290 Broadway, Suite 1000, Denver,
Colorado 80203. If you own these shares through a financial intermediary, you may contact your financial intermediary to request
your shareholder reports electronically.
You
may elect to receive all future reports in paper free of charge. You can inform the Fund that you wish to continue receiving paper
copies of your shareholder reports calling the Fund at (855)-496-3837, or by submitting a signed letter of instruction requesting
paper reports to 1290 Broadway, Suite 1000, Denver, Colorado 80203. If you own these shares through a financial intermediary,
contact the financial intermediary to request paper copies. Your election to receive reports in paper will apply to all funds
held with the fund complex or your financial intermediary.
Table
of Contents
Sprott
Gold Miners ETF
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Performance
Overview
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November
30, 2019 (Unaudited)
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Investment
Objective
The
Sprott Gold Miners ETF (the “Fund”) seeks investment results that correspond (before fees and expenses) to the performance
of its underlying index, the Solactive Gold Miners Custom Factors Index (ticker symbol SOLGMCFT) (the “Underlying Gold Index”).
Performance
Overview
The
Fund for the one-year period ended November 30, 2019 generated a total return of 53.91%. Gold stocks were pushed higher by two
factors. Over the same time period gold rose 19.75%, supported by falling bond yields and lingering concerns about the trade war
and a slowdown in the global economy. Gold closed the period at $1,464 an ounce, convincingly breaking through the technical resistance
level of $1,360 an ounce which it had failed to cross on several occasions. A higher gold price typically translates into higher
earnings for gold miners given their costs are largely fixed in nature.
The
second factor driving gold stocks higher was a wave of high profile mergers in the sector. Barrick Gold Corporation kicked things
off in September 2018 by acquiring Randgold Resources Limited to become the world’s largest gold producer. Not to be left
behind, Newmont Mining Corporation and Goldcorp Inc. announced their merger in January 2019, claiming they would then become the
world’s largest gold mining company.
The
rationale for these mergers are twofold: build scale and reduce operating costs in order to improve profitability. The combination
of these market leaders sent shockwaves throughout the gold mining sector, prompting other companies to review their strategies
and competitive positioning.
A
number of smaller-sized mergers followed including Detour Gold Corporation being acquired by Kirkland Lake Gold Ltd. and Osisko
Gold Royalties Ltd acquiring Barkerville Gold Mines Ltd. We believe this wave of mergers and acquisitions will continue with the
next leg likely involving small- and mid-capitalization companies in the sector.
The
fundamentals for gold also remain attractive with billions of dollars of negative yielding sovereign debt outstanding positioning
gold as an attractive alternative, while ongoing geopolitical and trade tensions raise the appeal for safe haven status assets
like gold.
Performance^
(as of November 30, 2019)
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1
Year
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5
Year
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Since
Inception^^
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Sprott
Gold Miners ETF - NAV
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53.91%
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6.63%
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-0.73%
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Sprott
Gold Miners ETF - Market Price*
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54.25%
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6.56%
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-0.74%
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Solactive
Gold Miners Custom Factors Index**
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N/A
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N/A
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-3.09***
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Sprott
Zacks Gold Miners Total Return Index**
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63.41%
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8.55%
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0.97%
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S&P
500® Total Return Index
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16.11%
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10.98%
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11.25%
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Total
Expense Ratio (per the current prospectus) 0.50%
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 Fund’s recurring expenses. The table
does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of 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.
NAV
is an exchange-traded fund’s per-share value. The per-share dollar amount of the Fund is derived by dividing the total value
of all the securities in its portfolio, less any liabilities, by the number of Fund shares outstanding. Market Price is the price
at which a share can currently be traded in the market. Information detailing the number of days the Market Price of the Fund
was greater than the Fund’s NAV and the number of days it was less than the Fund’s NAV can be obtained at www.sprottetfs.com.
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^
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The
Sprott Gold Miners ETF (“Gold Predecessor Fund”) was reorganized on or about
July 19, 2019 (“Reorganization Date”) from Sprott Gold Miners ETF, then a
series of ALPS ETF Trust, into a series of Sprott Funds Trust. The 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.
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†
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Beta
is defined as a sensitivity measure based on regression against the spot gold price movement
during the trailing 36 months.
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^^
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The
Gold Predecessor Fund’s Commencement date was July 15, 2014.
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*
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Market
Price is based on the midpoint of the bid-ask spread at 4 p.m. ET and does not represent
the returns an investor would receive if shares were traded at other times.
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**
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Effective
July 22, 2019, the Fund discontinued attempting to track Sprott Zacks Gold Miners Total
Return Index and began attempting to track the Solactive Gold Miners Index as its target
index.
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***
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The
return presented is for the period of July 22, 2019 to November 30, 2019, the period
when the Fund began attempting to track the Solactive Gold Miners Index as its target
index through the Fund’s fiscal year end.
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Sprott Gold Miners ETF
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Performance Overview
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November
30, 2019 (Unaudited)
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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 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, 2019, the Gold Underlying Index consisted of 31 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
Fund is concentrated in the gold and silver mining industry. As a result, the 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 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 Fund’s shares are
not individually redeemable. Investors buy and sell shares of the Fund on a secondary market. Only market makers or “authorized
participants” may trade directly with the Fund, typically in blocks of 50,000 shares.
The
Sprott Gold Miners ETF is not suitable for all investors. Investments in the Fund are subject to investment risks, including possible
loss of the principal amount invested.
ALPS
Portfolio Solutions Distributor, Inc., a FINRA member, is the distributor for the Sprott Gold Miners ETF.
ALPS
Portfolio Solutions Distributor, Inc. is not affiliated with Sprott, Solactive AG nor Zacks Index Services, a division of Zacks
Investment Management.
Sprott
Gold Miners ETF
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Performance Overview
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November
30, 2019 (Unaudited)
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Top
10 Holdings^ (as of November
30, 2019)
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Newmont Goldcorp Corp.
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13.96%
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Barrick Gold Corp.
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12.89%
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Franco-Nevada Corp.
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9.23%
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Kirkland Lake Gold, Ltd.
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5.36%
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Royal Gold, Inc.
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4.96%
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Detour Gold Corp.
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4.93%
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B2Gold Corp.
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4.77%
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Agnico Eagle Mines, Ltd.
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4.72%
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Centerra Gold, Inc.
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4.58%
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SSR Mining, Inc.
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4.57%
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Total % of Top 10 Holdings
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69.97%
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Country
Allocation^ (as of November
30, 2019)
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Canada
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72.66%
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United States
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20.18%
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Australia
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3.52%
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South Africa
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3.15%
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Monaco
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0.49%
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Total
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100.00%
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^
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%
of Total Investments (excluding investments purchased with collateral from securities
loaned)
|
Future
holdings are subject to change.
Growth
of $10,000 (as of November 30, 2019)
Comparison
of Change in Value of $10,000 Investment in the Fund and the Underlying Indexes
The
chart above compares historical performance of a hypothetical investment of $10,000 in the Fund since inception with the performance
of the Fund’s benchmark indices. 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 Fund shares.
The
chart above compares historical performance of a hypothetical investment of $10,000 in the Fund since July 21, 2019 (the date
the Fund discontinued attempting to track Sprott Zacks Gold Miners Total Return Index and began attempting to track the Solactive
Gold Miners Index as its target index) with the performance of the Fund’s benchmark indexes. 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 Fund shares.
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*
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Effective
July 22, 2019, the Fund discontinued attempting to track Sprott Zacks Gold Miners Total
Return Index and began attempting to track the Solactive Junior Gold Miners Index as
its target index.
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Sprott Junior Gold Miners ETF
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Performance Overview
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November
30, 2019 (Unaudited)
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Investment Objective
The Sprott Junior Gold Miners ETF (the
“Fund”) seeks investment results that correspond (before fees and expenses) to the performance of its underlying index,
the Solactive Junior Gold Miners Index (ticker symbol SOLJGMFT) (the “Junior underlying index”).
Performance Overview
The Fund for the one-year period ended
November 30, 2019 generated a total return of 39.99%. Junior gold stocks were pushed higher by two factors. Over the same time
period gold rose 19.75%, supported by falling bond yields and lingering concerns about the trade war and a slowdown in the global
economy. Gold closed the period at $1,464 an ounce, convincingly breaking through the technical resistance level of $1,360 an ounce
which it had failed to cross on several occasions. A higher gold price typically translates into higher earnings for gold miners
given their costs are largely fixed in nature and in the case of junior gold stocks raises the value of their unmined deposits.
The second factor driving gold stocks higher
was a wave of high profile mergers in the sector. Barrick Gold Corporation kicked things off in September 2018 by acquiring Randgold
Resources Limited to become the world’s largest gold producer. Not to be left behind, Newmont Mining Corporation and Goldcorp
Inc. announced their merger in January 2019, claiming they would then become the world’s largest gold mining company.
The rationale for these mergers are twofold:
build scale and reduce operating costs in order to improve profitability. The combination of these market leaders sent shockwaves
throughout the gold mining sector, prompting other companies to review their strategies and competitive positioning. It also prompted
the merged companies to sell a number of non-strategic assets which were acquired by smaller-capitalization gold companies. For
example, Evolution Mining Limited acquired Newmont Goldcorp Corporation’s Red Lake gold complex, while Saracen Mineral Holdings
Limited acquired Barrick Gold Corporation’s 50% stake in Kalgoorlie Consolidated Gold Mines. On the merger front, Atlantic
Gold Corporation was acquired by St Barbara Limited and Continental Gold Inc. was acquired by Zijin Mining Group Co., Ltd. These
transactions will allow the acquiring companies to build scale and diversify their asset base. We believe this wave of mergers
and acquisitions will continue amongst small- and mid-capitalization companies in the sector.
The fundamentals for gold also remain attractive
with billions of dollars of negative yielding sovereign debt outstanding positioning gold as an attractive alternative, while ongoing
geopolitical and trade tensions raise the appeal for safe haven status assets like gold.
Performance^
(as of November 30, 2019)
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|
1 Year
|
Since Inception^^
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Sprott Junior Gold Miners ETF - NAV
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39.99%
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5.53%
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|
Sprott Junior Gold Miners ETF - Market Price*
|
40.50%
|
5.56%
|
|
Solactive Junior Gold Miners Custom Factors Index**
|
N/A
|
-13.62%***
|
|
Sprott Zacks Junior Gold Miners Total Return Index**
|
58.15%
|
9.05%
|
|
S&P 500® Total Return Index
|
16.11%
|
11.42%
|
Total
Expense Ratio (per the current prospectus) 0.50%
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 Fund’s recurring expenses. The table
does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of 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.
NAV
is an exchange-traded fund’s per-share value. The per-share dollar amount of the Fund is derived by dividing the total value
of all the securities in its portfolio, less any liabilities, by the number of Fund shares outstanding. Market Price is the price
at which a share can currently be traded in the market. Information detailing the number of days the Market Price of the Fund
was greater than the Fund’s NAV and the number of days it was less than the Fund’s NAV can be obtained at www.sprottetfs.com.
|
^
|
The
Sprott Junior Gold Miners ETF (“Junior Predecessor Fund”) was reorganized
on or about July 19, 2019 (“Reorganization Date”) from Sprott Junior Gold
Miners ETF, then a series of ALPS ETF Trust, into a series of Sprott Funds Trust. The
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.
|
|
^^
|
The
Junior Predecessor Fund’s Commencement date was March 31, 2015.
|
|
*
|
Market
Price is based on the midpoint of the bid-ask spread at 4 p.m. ET and does not represent
the returns an investor would receive if shares were traded at other times.
|
|
**
|
Effective
July 22, 2019, the Fund discontinued attempting to track Sprott Zacks Junior Gold Miners
Total Return Index and began attempting to track the Solactive Junior Gold Miners Index
as its target index.
|
|
***
|
The
return presented is for the period of July 22, 2019 to November 30, 2019, the period
when the Fund began attempting to track the Solactive Junior Gold Miners Index as its
target index through the Fund's fiscal year end.
|
Sprott Junior
Gold Miners ETF
|
Performance Overview
|
November
30, 2019 (Unaudited)
|
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 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, 2019, the Junior Underlying Index consisted of 46 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
Fund is concentrated in the gold and silver mining industry. As a result, the 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 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
Fund’s shares are not individually redeemable. Investors buy and sell shares of the Fund on a secondary market. Only market
makers or “authorized participants” may trade directly with the Fund, typically in blocks of 50,000 shares.
The
Sprott Junior Gold Miners ETF is not suitable for all investors. Investments in the Fund are subject to investment risks, including
possible loss of the principal amount invested.
ALPS
Portfolio Solutions Distributor, Inc., a FINRA member, is the distributor for the Sprott Junior Gold Miners ETF.
ALPS
Portfolio Solutions Distributor, Inc. is not affiliated with Sprott, Solactive AG nor Zacks Index Services, a division of Zacks
Investment Management.
Sprott Junior Gold Miners ETF
|
Performance Overview
|
November
30, 2019 (Unaudited)
|
Top
10 Holdings^ (as of November
30, 2019)
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Koza Altin Isletmeleri AS
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6.46%
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Wesdome Gold Mines, Ltd.
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5.28%
|
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Centamin PLC
|
5.26%
|
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Lundin Gold Inc
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4.71%
|
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Saracen Mineral Holdings, Ltd.
|
4.65%
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Regis Resources, Ltd.
|
4.64%
|
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Perseus Mining, Ltd.
|
4.59%
|
|
Aneka Tambang Tbk
|
4.28%
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K92 Mining, Inc.
|
4.09%
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Hochschild Mining PLC
|
3.69%
|
|
Total % of Top 10 Holdings
|
47.65%
|
Country
Allocation^ (as of November
30, 2019)
|
Canada
|
36.72%
|
|
Australia
|
34.61%
|
|
Russia
|
6.94%
|
|
Turkey
|
6.46%
|
|
Jersey
|
5.26%
|
|
Indonesia
|
4.28%
|
|
Peru
|
3.69%
|
|
United States
|
1.47%
|
|
Monaco
|
0.40%
|
|
China
|
0.17%
|
|
Total
|
100.00%
|
|
^
|
%
of Total Investments (excluding investments purchased with collateral from securities
loaned)
|
Future
holdings are subject to change.
Growth
of $10,000 (as of November 30, 2019)
Comparison
of Change in Value of $10,000 Investment in the Fund and the Underlying Indexes
The
chart above compares historical performance of a hypothetical investment of $10,000 in the Fund since inception with the performance
of the Fund’s benchmark indices. 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 Fund shares.
The
chart above compares historical performance of a hypothetical investment of $10,000 in the Fund since July 21, 2019 (the date
the Fund discontinued tracking Sprott Zacks Junior Gold Miners Total Return Index and began tracking the Solactive Junior Gold
Miners Index as its target index) with the performance of the Fund’s benchmark indexes. 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 Fund shares.
|
*
|
Effective
July 22, 2019, the Fund discontinued tracking Sprott Zacks Junior Gold Miners Total Return
Index and began tracking the Solactive Junior Gold Miners Index as its target index.
Sprott Zacks Junior Gold Miners Total Return Index launched May 26, 2016.
|
Sprott ETFs
|
Disclosure of Fund Expenses
|
November
30, 2019 (Unaudited)
|
Shareholder Expense Example: As
a shareholder of a Fund, you incur two types of costs: (1) transaction costs which may include creation and redemption fees or
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 November
30, 2019.
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 creation and redemption fees or 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 these costs were included, your costs would have been higher.
|
|
Beginning Account
Value
6/1/19
|
Ending Account
Value
11/30/19
|
Expense
Ratio(a)
|
Expenses Paid
During Period
6/1/19 - 11/30/19(b)
|
|
Sprott Gold Miners ETF
|
|
|
|
|
|
Actual
|
$1,000.00
|
$1,270.80
|
0.52%
|
$2.96
|
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,022.46
|
0.52%
|
$2.64
|
|
Sprott Junior Gold Miners ETF
|
|
|
|
|
|
Actual
|
$1,000.00
|
$1,195.00
|
0.52%
|
$2.86
|
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,022.46
|
0.52%
|
$2.64
|
|
|
|
|
|
|
|
(a)
|
Annualized,
based on the Funds' most recent fiscal half year expenses.
|
|
(b)
|
Expenses
are equal to the 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
(183), divided by 365.
|
|
*
|
Each
Fund is a continuation of its respective Predecessor Fund and, therefore, the example
includes expenses of the respective Predecessor Fund that the Fund incurred prior to
Reorganization (see Note 7).
|
Sprott Gold Miners ETF
|
Schedule of Investments
|
November
30, 2019
|
|
Security Description
|
|
Shares
|
|
|
Value
|
|
|
COMMON STOCKS (100.00%)
|
|
|
|
|
|
|
|
|
|
Gold Mining (99.43%)
|
|
|
|
|
|
|
|
|
|
Agnico Eagle Mines, Ltd.
|
|
|
141,013
|
|
|
$
|
8,378,187
|
|
|
Alamos Gold, Inc., Class A
|
|
|
1,184,280
|
|
|
|
6,713,565
|
|
|
AngloGold Ashanti, Ltd., Sponsored ADR
|
|
|
121,187
|
|
|
|
2,307,400
|
|
|
B2Gold Corp.
|
|
|
2,294,592
|
|
|
|
8,481,854
|
|
|
Barrick Gold Corp.
|
|
|
1,371,593
|
|
|
|
22,902,908
|
|
|
Centerra Gold, Inc.(a)
|
|
|
950,638
|
|
|
|
8,130,127
|
|
|
Coeur Mining, Inc.(a)
|
|
|
179,508
|
|
|
|
1,177,573
|
|
|
Detour Gold Corp.(a)
|
|
|
472,881
|
|
|
|
8,757,715
|
|
|
Eldorado Gold Corp.(a)
|
|
|
104,383
|
|
|
|
817,273
|
|
|
Endeavour Mining Corp.(a)
|
|
|
45,306
|
|
|
|
865,326
|
|
|
Franco-Nevada Corp.
|
|
|
166,701
|
|
|
|
16,399,021
|
|
|
Gold Fields, Ltd., Sponsored ADR
|
|
|
168,053
|
|
|
|
899,084
|
|
|
Harmony Gold Mining Co., Ltd., Sponsored ADR(a)
|
|
|
304,964
|
|
|
|
951,488
|
|
|
IAMGOLD Corp.(a)
|
|
|
268,907
|
|
|
|
979,831
|
|
|
Kinross Gold Corp.(a)
|
|
|
186,811
|
|
|
|
807,269
|
|
|
Kirkland Lake Gold, Ltd.
|
|
|
226,672
|
|
|
|
9,520,463
|
|
|
New Gold, Inc.(a)
|
|
|
487,444
|
|
|
|
418,344
|
|
|
Newmont Goldcorp Corp.
|
|
|
645,781
|
|
|
|
24,797,990
|
|
|
Novagold Resources, Inc.(a)
|
|
|
130,018
|
|
|
|
904,439
|
|
|
OceanaGold Corp.
|
|
|
3,138,270
|
|
|
|
6,260,947
|
|
|
Osisko Gold Royalties, Ltd.
|
|
|
672,479
|
|
|
|
5,913,239
|
|
|
Pretium Resources, Inc.(a)
|
|
|
71,452
|
|
|
|
715,972
|
|
|
Royal Gold, Inc.
|
|
|
75,231
|
|
|
|
8,822,339
|
|
|
Sandstorm Gold, Ltd.(a)
|
|
|
1,205,195
|
|
|
|
8,066,087
|
|
|
SEMAFO, Inc.(a)
|
|
|
2,008,878
|
|
|
|
4,219,506
|
|
|
Sibanye Gold, Ltd., Sponsored ADR(a)
|
|
|
180,191
|
|
|
|
1,434,320
|
|
|
SSR Mining, Inc.(a)
|
|
|
522,162
|
|
|
|
8,121,559
|
|
|
Torex Gold Resources, Inc.(a)
|
|
|
525,461
|
|
|
|
7,907,826
|
|
|
Yamana Gold, Inc.
|
|
|
266,412
|
|
|
|
966,729
|
|
|
Total Gold Mining
|
|
|
|
|
|
|
176,638,381
|
|
|
|
|
|
|
|
|
|
|
|
|
Silver Mining (0.57%)
|
|
|
|
|
|
|
|
|
|
Hecla Mining Co.
|
|
|
408,143
|
|
|
|
1,008,113
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL COMMON STOCKS
|
|
|
|
|
|
|
|
|
|
(Cost $172,773,926)
|
|
|
|
|
|
|
177,646,494
|
|
|
|
|
7 Day
Yield
|
|
|
Shares
|
|
|
Value
|
|
|
SHORT TERM INVESTMENTS (0.03%)
|
|
|
|
|
|
|
|
|
|
|
Money Market Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State Street Institutional Treasury Plus Money Market Fund
|
|
|
1.56
|
%
|
|
|
45,517
|
|
|
|
45,517
|
|
|
TOTAL SHORT TERM INVESTMENTS
|
|
|
|
|
|
|
|
(Cost $45,517)
|
|
|
|
|
|
|
|
|
|
|
45,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL INVESTMENTS (100.03%)
|
|
|
|
|
|
|
(Cost $172,819,443)
|
|
|
$
|
177,692,011
|
|
|
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.03%)
|
|
|
|
|
(45,435
|
)
|
|
NET ASSETS - 100.00%
|
|
|
$
|
177,646,576
|
|
|
|
(a)
|
Non-income
producing security.
|
See
Notes to Financial Statements.
Sprott Junior Gold Miners ETF
|
Schedule of Investments
|
November
30, 2019
|
|
Security Description
|
|
Shares
|
|
|
Value
|
|
|
COMMON STOCKS (99.77%)
|
|
|
|
|
|
|
Diversified Metals & Mining (10.16%)
|
|
|
|
|
|
|
Aneka Tambang Tbk
|
|
|
42,579,500
|
|
|
$
|
2,264,064
|
|
|
Aurelia Metals, Ltd.
|
|
|
3,294,033
|
|
|
|
958,073
|
|
|
K92 Mining, Inc.(a)(b)
|
|
|
1,140,726
|
|
|
|
2,164,142
|
|
|
Total Diversified Metals & Mining
|
|
|
|
|
|
|
5,386,279
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold Mining (83.00%)
|
|
|
|
|
|
|
|
|
|
Alacer Gold Corp.(b)
|
|
|
52,337
|
|
|
|
281,327
|
|
|
Alamos Gold, Inc., Class A
|
|
|
97,281
|
|
|
|
551,476
|
|
|
Argonaut Gold, Inc.(b)
|
|
|
124,112
|
|
|
|
172,858
|
|
|
Centamin PLC
|
|
|
1,934,785
|
|
|
|
2,779,993
|
|
|
China Gold International Resources Corp., Ltd.(b)
|
|
|
168,869
|
|
|
|
128,403
|
|
|
Coeur Mining, Inc.(b)
|
|
|
48,808
|
|
|
|
320,180
|
|
|
Continental Gold, Inc.(b)
|
|
|
75,768
|
|
|
|
277,791
|
|
|
Dacian Gold, Ltd.(a)(b)
|
|
|
122,132
|
|
|
|
114,002
|
|
|
Dundee Precious Metals, Inc.(b)
|
|
|
50,704
|
|
|
|
193,533
|
|
|
Eldorado Gold Corp.(b)
|
|
|
41,431
|
|
|
|
324,386
|
|
|
Endeavour Mining Corp.(b)
|
|
|
11,013
|
|
|
|
210,344
|
|
|
Gold Road Resources, Ltd.(b)
|
|
|
2,212,619
|
|
|
|
1,691,170
|
|
|
Golden Star Resources, Ltd.(a)(b)
|
|
|
361,603
|
|
|
|
1,196,906
|
|
|
Guyana Goldfields, Inc.(a)(b)
|
|
|
116,476
|
|
|
|
49,105
|
|
|
Hengxing Gold Holding Co., Ltd.(c)
|
|
|
184,000
|
|
|
|
89,318
|
|
|
Highland Gold Mining, Ltd.
|
|
|
814,535
|
|
|
|
1,923,568
|
|
|
Koza Altin Isletmeleri AS(b)
|
|
|
267,619
|
|
|
|
3,416,066
|
|
|
Lundin Gold Inc(b)
|
|
|
432,993
|
|
|
|
2,490,451
|
|
|
McEwen Mining, Inc.(a)
|
|
|
1,075,388
|
|
|
|
1,215,188
|
|
|
New Gold, Inc.(a)(b)
|
|
|
189,066
|
|
|
|
162,264
|
|
|
Novagold Resources, Inc.(b)
|
|
|
38,884
|
|
|
|
270,633
|
|
|
Novo Resources Corp.(a)(b)
|
|
|
96,288
|
|
|
|
238,491
|
|
|
OceanaGold Corp.
|
|
|
891,561
|
|
|
|
1,778,692
|
|
|
Perseus Mining, Ltd.(b)
|
|
|
4,128,823
|
|
|
|
2,429,672
|
|
|
Petropavlovsk PLC(a)(b)
|
|
|
12,609,411
|
|
|
|
1,744,920
|
|
|
Premier Gold Mines, Ltd.(a)(b)
|
|
|
876,828
|
|
|
|
1,333,428
|
|
|
Pretium Resources, Inc.(b)
|
|
|
21,300
|
|
|
|
213,433
|
|
|
Ramelius Resources, Ltd.
|
|
|
2,365,986
|
|
|
|
1,624,353
|
|
|
Regis Resources, Ltd.
|
|
|
763,725
|
|
|
|
2,453,764
|
|
|
Resolute Mining, Ltd.(b)
|
|
|
1,941,681
|
|
|
|
1,516,918
|
|
|
Roxgold, Inc.(b)
|
|
|
1,850,415
|
|
|
|
1,170,179
|
|
|
Sabina Gold & Silver Corp.(a)(b)
|
|
|
265,582
|
|
|
|
335,901
|
|
|
Saracen Mineral Holdings, Ltd.(b)
|
|
|
1,179,496
|
|
|
|
2,457,250
|
|
|
Seabridge Gold, Inc.(a)(b)
|
|
|
148,858
|
|
|
|
1,932,177
|
|
|
SEMAFO, Inc.(b)
|
|
|
53,456
|
|
|
|
112,280
|
|
|
Silver Lake Resources, Ltd.(b)
|
|
|
2,494,147
|
|
|
|
1,872,609
|
|
|
SolGold PLC(a)(b)
|
|
|
3,693,661
|
|
|
|
1,072,433
|
|
|
SSR Mining, Inc.(b)
|
|
|
13,769
|
|
|
|
214,159
|
|
|
St Barbara, Ltd.
|
|
|
67,647
|
|
|
|
119,882
|
|
|
Teranga Gold Corp.(b)
|
|
|
61,102
|
|
|
|
262,201
|
|
|
Torex Gold Resources, Inc.(b)
|
|
|
16,869
|
|
|
|
253,867
|
|
|
Wesdome Gold Mines, Ltd.(b)
|
|
|
425,071
|
|
|
|
2,793,699
|
|
|
Westgold Resources, Ltd.(b)
|
|
|
145,379
|
|
|
|
196,668
|
|
|
Total Gold Mining
|
|
|
|
|
|
|
43,985,938
|
|
|
Security Description
|
|
Shares
|
|
Value
|
|
Precious Metals & Minerals Mining (2.92%)
|
|
|
|
|
|
Osisko Mining, Inc.(a)(b)
|
|
|
717,675
|
|
|
$
|
1,545,246
|
|
|
|
|
|
|
|
|
|
|
|
|
Silver Mining (3.69%)
|
|
|
|
|
|
|
|
|
|
Hochschild Mining PLC
|
|
|
926,325
|
|
|
|
1,952,756
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL COMMON STOCKS
|
|
|
|
|
|
|
|
|
|
(Cost $59,567,372)
|
|
|
|
|
|
|
52,870,219
|
|
|
|
|
|
|
|
|
|
|
|
|
RIGHTS(0.03%)
|
|
|
|
|
|
|
|
|
|
Gold Mining (0.03%)
|
|
|
|
|
|
|
|
|
|
Saracen Mineral Holdings Ltd.
|
|
|
|
|
|
|
|
|
|
(Expiring 12/16/2019)(b)
|
|
|
206,988
|
|
|
|
18,201
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL RIGHTS
|
|
|
|
|
|
|
|
|
|
(Cost $–)
|
|
|
|
|
|
|
18,201
|
|
|
|
|
7 Day
Yield
|
|
Shares
|
|
Value
|
|
SHORT TERM INVESTMENTS (9.24%)
|
|
|
|
|
|
|
|
|
|
Money Market Fund (0.01%)
|
|
|
|
|
|
|
|
|
|
State Street Institutional Treasury Plus Money Market Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Cost $5,422)
|
|
|
1.56
|
%
|
|
|
5,422
|
|
|
|
5,422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments Purchased with Collateral from Securities Loaned (9.23%)
|
|
|
|
|
|
|
|
|
|
State Street Navigator Securities Lending Government Money Market Portfolio, 1.63%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Cost $4,888,606)
|
|
|
|
|
|
|
4,888,606
|
|
|
|
4,888,606
|
|
|
TOTAL SHORT TERM INVESTMENTS
|
|
|
|
|
|
|
|
(Cost $4,894,028)
|
|
|
|
|
|
|
|
|
|
|
4,894,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL INVESTMENTS (109.04%)
|
|
|
|
|
|
|
|
(Cost $64,461,400)
|
|
|
$
|
57,782,448
|
|
|
LIABILITIES IN EXCESS OF OTHER ASSETS (-9.04%)
|
|
|
|
|
(4,788,453
|
)
|
|
NET ASSETS - 100.00%
|
|
|
$
|
52,993,995
|
|
|
(a)
|
Security,
or a portion of the security position is currently on loan. As of November 30, 2019 the
total market value of securities on loan is $6,732,195. The loaned securities were secured
with cash collateral of $4,888,606 and non-cash collateral with the value of $2,167,577.
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.
|
Sprott Junior Gold Miners ETF
|
Schedule of Investments
|
November
30, 2019
|
|
(c)
|
Securities
were purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of
the United States from registration. Such securities cannot be sold in the United States without either an effective registration
statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of November 30, 2019,
the market value of those securities was $89,318 representing 0.17% of net assets.
|
See
Notes to Financial Statements.
Sprott
ETFs
|
Statements
of Assets and Liabilities
|
November
30, 2019
|
|
|
|
Sprott Gold
Miners ETF
|
|
|
Sprott Junior
Gold Miners ETF
|
|
|
ASSETS:
|
|
|
|
|
|
|
|
|
|
Investments, at value
|
|
$
|
177,692,011
|
|
|
$
|
57,782,448
|
|
|
Receivable for investments sold
|
|
|
2,061
|
|
|
|
276,587
|
|
|
Receivable due from advisor
|
|
|
—
|
|
|
|
24,997
|
|
|
Dividends and reclaim receivable
|
|
|
119,244
|
|
|
|
20,135
|
|
|
Other assets and prepaid expenses
|
|
|
6,372
|
|
|
|
4,877
|
|
|
Total Assets
|
|
|
177,819,688
|
|
|
|
58,109,044
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
|
|
|
|
Payable for investments purchased
|
|
|
12,848
|
|
|
|
143,160
|
|
|
Payable to adviser
|
|
|
55,332
|
|
|
|
—
|
|
|
Payable for collateral upon return of securities loaned
|
|
|
—
|
|
|
|
4,888,606
|
|
|
Administration fees payable
|
|
|
26,154
|
|
|
|
26,081
|
|
|
Professional fees payable
|
|
|
32,693
|
|
|
|
29,759
|
|
|
Transfer agent fees payable
|
|
|
3,750
|
|
|
|
3,750
|
|
|
Trustees' fees and expenses payable
|
|
|
9,053
|
|
|
|
2,947
|
|
|
Accrued expenses and other liabilities
|
|
|
33,282
|
|
|
|
20,746
|
|
|
Total Liabilities
|
|
|
173,112
|
|
|
|
5,115,049
|
|
|
NET ASSETS
|
|
$
|
177,646,576
|
|
|
$
|
52,993,995
|
|
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS CONSIST OF:
|
|
|
|
|
|
|
|
|
|
Paid-in capital
|
|
$
|
243,021,573
|
|
|
$
|
79,575,531
|
|
|
Total distributable earnings
|
|
|
(65,374,997
|
)
|
|
|
(26,581,536
|
)
|
|
NET ASSETS
|
|
$
|
177,646,576
|
|
|
$
|
52,993,995
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTMENTS, AT COST
|
|
$
|
172,819,443
|
|
|
$
|
64,461,400
|
|
|
|
|
|
|
|
|
|
|
|
|
PRICING OF SHARES
|
|
|
|
|
|
|
|
|
|
Net Assets
|
|
$
|
177,646,576
|
|
|
$
|
52,993,995
|
|
|
Shares of beneficial interest outstanding (Unlimited number of shares authorized, par value $0.01 per share)
|
|
|
7,600,000
|
|
|
|
1,750,000
|
|
|
Net Asset Value, offering and redemption price per share
|
|
$
|
23.37
|
|
|
$
|
30.28
|
|
See
Notes to Financial Statements.
Sprott
ETFs
|
Statements
of Operations
|
For
the Year Ended November 30, 2019
|
|
|
|
Sprott Gold
Miners ETF
|
|
|
Sprott Junior
Gold Miners ETF
|
|
|
INVESTMENT INCOME:
|
|
|
|
|
|
|
|
Dividends(a)
|
|
$
|
948,751
|
|
|
$
|
324,997
|
|
|
Securities lending income
|
|
|
59,163
|
|
|
|
82,776
|
|
|
Total Investment Income
|
|
|
1,007,914
|
|
|
|
407,773
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
|
Investment adviser fees (See Note 3)
|
|
|
766,014
|
|
|
|
256,627
|
|
|
Administration fees
|
|
|
51,222
|
|
|
|
51,149
|
|
|
Trustee Fees
|
|
|
9,053
|
|
|
|
2,947
|
|
|
Compliance fees
|
|
|
4,360
|
|
|
|
1,426
|
|
|
Legal fees
|
|
|
22,696
|
|
|
|
22,696
|
|
|
Audit fees
|
|
|
20,000
|
|
|
|
20,000
|
|
|
Transfer agent fees
|
|
|
3,750
|
|
|
|
3,750
|
|
|
Other fees and expenses
|
|
|
35,711
|
|
|
|
22,586
|
|
|
Total Expenses before waiver/reimbursement
|
|
|
912,806
|
|
|
|
381,181
|
|
|
Less fee waiver/reimbursement by investment adviser (See Note 3)
|
|
|
(44,249
|
)
|
|
|
(91,265
|
)
|
|
Net Expense
|
|
|
868,557
|
|
|
|
289,916
|
|
|
NET INVESTMENT INCOME
|
|
|
139,357
|
|
|
|
117,857
|
|
|
|
|
|
|
|
|
|
|
|
|
REALIZED AND UNREALIZED GAIN/(LOSS)
|
|
|
|
|
|
|
|
|
|
Net realized gain on investments
|
|
|
34,726,612
|
|
|
|
8,495,470
|
|
|
Net realized gain/(loss) on foreign currency transactions
|
|
|
12,876
|
|
|
|
(15,590
|
)
|
|
Net realized gain/(loss)
|
|
|
34,739,488
|
|
|
|
8,479,880
|
|
|
Net change in unrealized appreciation on investments
|
|
|
25,267,041
|
|
|
|
6,471,109
|
|
|
Net change in unrealized appreciation/(depreciation) on translation of assets and liabilities denominated in foreign currencies
|
|
|
(62
|
)
|
|
|
4
|
|
|
Net change in unrealized appreciation/(depreciation)
|
|
|
25,266,979
|
|
|
|
6,471,113
|
|
|
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
|
|
|
60,006,467
|
|
|
|
14,950,993
|
|
|
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
|
$
|
60,145,824
|
|
|
$
|
15,068,850
|
|
|
|
(a)
|
Net
of foreign tax withholding in the amounts of $127,835 and $9,324 respectively.
|
See
Notes to Financial Statements.
Sprott
Gold Miners ETF
Statements
of Changes in Net Assets
|
|
|
For the
Year Ended
November 30,
2019
|
|
|
For the
Year Ended
November 30,
2018(a)
|
|
|
OPERATIONS:
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
139,357
|
|
|
$
|
640,844
|
|
|
Net realized gain/(loss)
|
|
|
34,739,488
|
|
|
|
(18,176,992
|
)
|
|
Net change in unrealized appreciation/(depreciation)
|
|
|
25,266,979
|
|
|
|
(21,732,492
|
)
|
|
Net increase/(decrease) in net assets resulting from operations
|
|
|
60,145,824
|
|
|
|
(39,268,640
|
)
|
|
|
|
|
|
|
|
|
|
|
|
DISTRIBUTIONS TO SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
|
From distributable earnings
|
|
|
(644,007
|
)
|
|
|
(1,074,960
|
)
|
|
Total distributions
|
|
|
(644,007
|
)
|
|
|
(1,074,960
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL SHARE TRANSACTIONS:
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares
|
|
|
49,980,129
|
|
|
|
26,707,445
|
|
|
Cost of shares redeemed
|
|
|
(55,410,946
|
)
|
|
|
(27,333,679
|
)
|
|
Net decrease from capital share transactions
|
|
|
(5,430,817
|
)
|
|
|
(626,234
|
)
|
|
Net increase/(decrease) in net assets
|
|
|
54,071,000
|
|
|
|
(40,969,834
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS:
|
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
123,575,576
|
|
|
|
164,545,410
|
|
|
End of year
|
|
$
|
177,646,576
|
|
|
$
|
123,575,576
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INFORMATION:
|
|
|
|
|
|
|
|
|
|
CAPITAL SHARE TRANSACTIONS:
|
|
|
|
|
|
|
|
|
|
Beginning shares
|
|
|
8,100,000
|
|
|
|
8,300,000
|
|
|
Shares sold
|
|
|
2,150,000
|
|
|
|
1,350,000
|
|
|
Shares redeemed
|
|
|
(2,650,000
|
)
|
|
|
(1,550,000
|
)
|
|
Shares outstanding, end of period
|
|
|
7,600,000
|
|
|
|
8,100,000
|
|
|
|
(a)
|
These
financials have been audited by the predecessor independent registered public accounting
firm.
|
See
Notes to Financial Statements.
Sprott
Junior Gold Miners ETF
Statements
of Changes in Net Assets
|
|
|
For the
Year Ended
November 30,
2019
|
|
|
For the
Year Ended
November 30,
2018(a)
|
|
|
OPERATIONS:
|
|
|
|
|
|
|
|
Net investment income/(loss)
|
|
$
|
117,857
|
|
|
$
|
(266,197
|
)
|
|
Net realized gain/(loss)
|
|
|
8,479,880
|
|
|
|
(31,413,048
|
)
|
|
Net change in unrealized appreciation/(depreciation)
|
|
|
6,471,113
|
|
|
|
(5,838,502
|
)
|
|
Net increase/(decrease) in net assets resulting from operations
|
|
|
15,068,850
|
|
|
|
(37,517,747
|
)
|
|
|
|
|
|
|
|
|
|
|
|
DISTRIBUTIONS TO SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
|
From distributable earnings
|
|
|
—
|
|
|
|
(223,108
|
)
|
|
Total distributions
|
|
|
—
|
|
|
|
(223,108
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL SHARE TRANSACTIONS:
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares
|
|
|
14,781,738
|
|
|
|
8,988,193
|
|
|
Cost of shares redeemed
|
|
|
(13,632,761
|
)
|
|
|
(84,021,633
|
)
|
|
Net increase/(decrease) from capital share transactions
|
|
|
1,148,977
|
|
|
|
(75,033,440
|
)
|
|
Net increase/(decrease) in net assets
|
|
|
16,217,827
|
|
|
|
(112,774,295
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS:
|
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
36,776,168
|
|
|
|
149,550,463
|
|
|
End of year
|
|
$
|
52,993,995
|
|
|
$
|
36,776,168
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INFORMATION:
|
|
|
|
|
|
|
|
|
|
CAPITAL SHARE TRANSACTIONS:
|
|
|
|
|
|
|
|
|
|
Beginning shares
|
|
|
1,700,000
|
|
|
|
4,750,000
|
|
|
Shares sold
|
|
|
500,000
|
|
|
|
300,000
|
|
|
Shares redeemed
|
|
|
(450,000
|
)
|
|
|
(3,350,000
|
)
|
|
Shares outstanding, end of period
|
|
|
1,750,000
|
|
|
|
1,700,000
|
|
|
|
(a)
|
These
financials have been audited by the predecessor independent registered public accounting
firm.
|
See
Notes to Financial Statements.
Sprott
Gold Miners ETF
|
Financial
Highlights
|
For
a Share Outstanding Throughout the Periods Presented
|
|
|
|
For the Year
Ended
November 30,
2019
|
|
|
For the Year
Ended
November 30,
2018(a)
|
|
|
For the Year
Ended
November 30,
2017(a)
|
|
|
For the Year
Ended
November 30,
2016(a)
|
|
|
For the Year
Ended
November 30,
2015(a)
|
|
|
NET ASSET VALUE, BEGINNING OF PERIOD
|
|
$
|
15.26
|
|
|
$
|
19.82
|
|
|
$
|
19.15
|
|
|
$
|
12.97
|
|
|
$
|
17.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME/(LOSS) FROM INVESTMENT OPERATIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (b)
|
|
|
0.02
|
|
|
|
0.07
|
|
|
|
0.04
|
|
|
|
(0.00
|
)(c)
|
|
|
0.10
|
|
|
Net realized and unrealized gain/(loss)
|
|
|
8.18
|
|
|
|
(4.51
|
)
|
|
|
0.63
|
|
|
|
6.37
|
|
|
|
(4.52
|
)
|
|
Total from investment operations
|
|
|
8.20
|
|
|
|
(4.44
|
)
|
|
|
0.67
|
|
|
|
6.37
|
|
|
|
(4.42
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DISTRIBUTIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(0.09
|
)
|
|
|
(0.12
|
)
|
|
|
(0.00
|
)(c)
|
|
|
(0.19
|
)
|
|
|
(0.05
|
)
|
|
Total distributions
|
|
|
(0.09
|
)
|
|
|
(0.12
|
)
|
|
|
(0.00
|
)(c)
|
|
|
(0.19
|
)
|
|
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in net asset value
|
|
|
8.11
|
|
|
|
(4.56
|
)
|
|
|
0.67
|
|
|
|
6.18
|
|
|
|
(4.47
|
)
|
|
NET ASSET VALUE, END OF PERIOD
|
|
$
|
23.37
|
|
|
$
|
15.26
|
|
|
$
|
19.82
|
|
|
$
|
19.15
|
|
|
$
|
12.97
|
|
|
TOTAL RETURN(d)
|
|
|
53.91
|
%
|
|
|
(22.56
|
)%
|
|
|
3.52
|
%
|
|
|
49.82
|
%
|
|
|
(25.44
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RATIOS/SUPPLEMENTAL DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000s)
|
|
$
|
177,647
|
|
|
$
|
123,576
|
|
|
$
|
164,545
|
|
|
$
|
183,865
|
|
|
$
|
112,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of expenses including reimbursement/waiver to average net assets(e)
|
|
|
0.54
|
%
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
Ratio of expenses excluding reimbursement/waiver to average net assets
|
|
|
0.57
|
%
|
|
|
0.57
|
%
|
|
|
0.57
|
%
|
|
|
0.57
|
%
|
|
|
0.57
|
%
|
|
Ratio of net investment income/(loss) to average net assets
|
|
|
0.09
|
%
|
|
|
0.39
|
%
|
|
|
0.21
|
%
|
|
|
(0.01
|
)%
|
|
|
0.61
|
%
|
|
Portfolio turnover rate(f)
|
|
|
112
|
%
|
|
|
82
|
%
|
|
|
101
|
%
|
|
|
74
|
%
|
|
|
78
|
%
|
|
|
(a)
|
These
financials have been audited by the predecessor independent registered public accounting
firm.
|
|
|
(b)
|
Based
on average shares outstanding during the period.
|
|
|
(c)
|
Less
than $0.005 per share.
|
|
|
(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 Fund paid expenses via a unitary fee to the prior adviser, expenses
were not waived. See Note 3.
|
|
|
(f)
|
Portfolio
does not include securities received or delivered from processing creations or redemptions
in-kind.
|
See
Notes to Financial Statements.
Sprott
Junior Gold Miners ETF
|
Financial
Highlights
|
For
a Share Outstanding Throughout the Periods Presented
|
|
|
|
For the Year
Ended
November 30,
2019
|
|
|
For the Year
Ended
November 30,
2018(a)
|
|
|
For the Year
Ended
November 30,
2017(a)
|
|
|
For the Year
Ended
November 30,
2016(a)
|
|
|
For the Period
March 31, 2015
(Commencement
of Operations) to
November 30,
2015(a)
|
|
|
NET ASSET VALUE, BEGINNING OF PERIOD
|
|
$
|
21.63
|
|
|
$
|
31.48
|
|
|
$
|
33.00
|
|
|
$
|
19.65
|
|
|
$
|
24.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME/(LOSS) FROM INVESTMENT OPERATIONS:
|
|
|
|
|
|
|
|
|
Net investment income/(loss) (b)
|
|
|
0.06
|
|
|
|
(0.06
|
)
|
|
|
(0.09
|
)
|
|
|
(0.05
|
)
|
|
|
0.04
|
|
|
Net realized and unrealized gain/(loss)
|
|
|
8.59
|
|
|
|
(9.74
|
)
|
|
|
(0.87
|
)
|
|
|
13.56
|
|
|
|
(4.57
|
)
|
|
Total from investment operations
|
|
|
8.65
|
|
|
|
(9.80
|
)
|
|
|
(0.96
|
)
|
|
|
13.51
|
|
|
|
(4.53
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DISTRIBUTIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
—
|
|
|
|
(0.05
|
)
|
|
|
(0.56
|
)
|
|
|
(0.16
|
)
|
|
|
—
|
|
|
Total distributions
|
|
|
—
|
|
|
|
(0.05
|
)
|
|
|
(0.56
|
)
|
|
|
(0.16
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in net asset value
|
|
|
8.65
|
|
|
|
(9.85
|
)
|
|
|
(1.52
|
)
|
|
|
13.35
|
|
|
|
(4.53
|
)
|
|
NET ASSET VALUE, END OF PERIOD
|
|
$
|
30.28
|
|
|
$
|
21.63
|
|
|
$
|
31.48
|
|
|
$
|
33.00
|
|
|
$
|
19.65
|
|
|
TOTAL RETURN(c)
|
|
|
39.99
|
%
|
|
|
(31.19
|
)%
|
|
|
(2.99
|
)%
|
|
|
69.35
|
%
|
|
|
(18.73
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RATIOS/SUPPLEMENTAL DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000s)
|
|
$
|
52,994
|
|
|
$
|
36,776
|
|
|
$
|
149,550
|
|
|
$
|
47,857
|
|
|
$
|
23,579
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of expenses including reimbursement/waiver to average net assets(d)
|
|
|
0.54
|
%
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A(e)
|
|
|
Ratio of expenses excluding reimbursement/waiver to average net assets
|
|
|
0.71
|
%
|
|
|
0.57
|
%
|
|
|
0.57
|
%
|
|
|
0.57
|
%
|
|
|
0.57
|
%(e)
|
|
Ratio of net investment income/(loss) to average net assets
|
|
|
0.22
|
%
|
|
|
(0.22
|
)%
|
|
|
(0.26
|
)%
|
|
|
(0.14
|
)%
|
|
|
0.29
|
%(e)
|
|
Portfolio turnover rate(f)
|
|
|
127
|
%
|
|
|
37
|
%
|
|
|
74
|
%
|
|
|
61
|
%
|
|
|
71
|
%
|
|
|
(a)
|
These
financials have been audited by the predecessor independent registered public accounting
firm.
|
|
|
(b)
|
Based
on average shares outstanding during the period.
|
|
|
(c)
|
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.
|
|
|
(d)
|
Prior
to July 19, 2019, the Fund paid expenses via a unitary fee to the prior adviser, expenses
were not waived. See Note 3.
|
|
|
(f)
|
Portfolio
does not include securities received or delivered from processing creations or redemptions
in-kind.
|
See
Notes to Financial Statements.
Sprott
ETFs
|
Notes
to Financial Statements
|
November
30, 2019
|
1. ORGANIZATION
The
Sprott Funds Trust (the “Trust”) was organized as a Delaware statutory trust on January 3, 2018. As of November 30,
2019, the Trust consisted of two 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, previously part of another investment company, ALPS ETF Trust, reorganized effective as of
the close of business on July 19, 2019. See Note 7 for a discussion of the results of the special meeting of shareholders in which
the reorganization was approved.
The
investment objective of the Sprott Gold Miners ETF is to seek investment results that correspond (before fees and expenses) generally
to the performance of its underlying index, the Solactive Gold Miners Custom Factors Index (ticker symbol SOLGMCFT) (the “Underlying
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)
generally to the performance of its underlying index, the Solactive Junior Gold Miners Index (ticker symbol SOLJGMFT)(the “Underlying
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 issues Shares at their net asset value (“NAV”) only in aggregations of a specified number of Shares
(each, a “Creation Unit”). The Funds generally offer and issues 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 or will be 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 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 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.
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 the Fund (including accrued interest
and dividends), less all liabilities (including accrued expenses and dividends declared but unpaid), by the total number of shares
outstanding.
Sprott
ETFs
|
Notes
to Financial Statements
|
November
30, 2019
|
Portfolio
securities listed on any exchange other than the NASDAQ Stock Market LLC (“NASDAQ”) are valued at the last sale price
on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued
at the mean of the most recent bid and ask prices on such day. Securities traded on the NASDAQ are valued at the NASDAQ Official
Closing Price as determined by NASDAQ. 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. Portfolio securities traded in the over-the-counter market, but excluding securities traded on the
NASDAQ, are valued at the last quoted sale price in such market.
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 direction 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.
|
Sprott
ETFs
|
Notes
to Financial Statements
|
November
30, 2019
|
The
following is a summary of the inputs used to value the Funds’ investments at November 30, 2019:
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*
|
|
$
|
177,646,494
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
177,646,494
|
|
|
Short Term Investments
|
|
|
45,517
|
|
|
|
—
|
|
|
|
—
|
|
|
|
45,517
|
|
|
Total
|
|
$
|
177,692,011
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
177,692,011
|
|
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*
|
|
$
|
52,870,219
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
52,870,219
|
|
|
Rights*
|
|
|
18,201
|
|
|
|
—
|
|
|
|
—
|
|
|
|
18,201
|
|
|
Short Term Investments
|
|
|
4,894,028
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,894,028
|
|
|
Total
|
|
$
|
57,782,448
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57,782,448
|
|
|
|
*
|
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 November 30, 2019.
During
the year ended November 30, 2019, the Sprott Junior Gold Miners ETF invested in rights, which are disclosed in the Schedule of
Investments.
The
following provides the effect of derivative instruments on the Statement of Assets and Liabilities for the year ended November
30, 2019.
|
|
|
Asset Derivatives
|
|
|
|
|
Risk Exposure
|
|
Statement of Assets and Liabilities Location
|
|
Fair Value
|
|
|
Sprott Junior Gold Miners ETF
|
|
|
|
|
|
|
|
Equity Contracts (Rights)
|
|
Investments, at value
|
|
$
|
18,201
|
|
|
|
|
|
|
$
|
18,201
|
|
The
following provides the effect of derivative instruments on the Statement of Operations for the year ended November 30, 2019.
|
Risk Exposure
|
|
Statement of Operations Location
|
|
Realized Gain/(Loss)
on Derivatives
|
|
|
Change in
Unrealized
Appreciation/
(Depreciation)
on Derivatives
|
|
|
Sprott Junior Gold Miners ETF
|
|
|
|
|
|
|
|
|
Equity Contracts
(Rights)
|
|
Net realized loss on investments/Net change in unrealized depreciation on investments
|
|
$
|
—
|
|
|
$
|
18,201
|
|
|
Total
|
|
|
|
$
|
—
|
|
|
$
|
18,201
|
|
Sprott
ETFs
|
Notes to Financial
Statements
|
November
30, 2019
|
C.
Gold and Silver Mining Industry Risk
The
Funds are sensitive to changes in, and its 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 its investments. Countries with emerging markets may present heightened risks of nationalization of businesses,
restrictions on foreign ownership and prohibitions on the repatriation of assets. The economies of emerging markets 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, when applicable.
F.
Concentration Risk
Each
Fund seeks to track its respective Underlying Index, which itself is currently 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.
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.
H.
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.
I.
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 November 30, 2019, 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:
|
Fund
|
|
Paid-in Capital
|
|
|
Total Distributable
Earnings
|
|
|
Sprott Gold Miners ETF
|
|
$
|
8,773,522
|
|
|
$
|
(8,773,522
|
)
|
|
Sprott Junior Gold Miners ETF
|
|
|
259,713
|
|
|
|
(259,713
|
)
|
Sprott
ETFs
|
Notes to Financial
Statements
|
November
30, 2019
|
The
tax character of the distributions paid during the fiscal years ended November 30, 2019 and November 30, 2018 were as follows:
|
|
|
Ordinary Income
|
|
|
November 30, 2019
|
|
|
|
|
Sprott Gold Miners ETF
|
|
$
|
644,007
|
|
|
|
|
Ordinary Income
|
|
|
November 30, 2018
|
|
|
|
|
Sprott Gold Miners ETF
|
|
$
|
1,074,960
|
|
|
Sprott Junior Gold Miners ETF
|
|
|
223,108
|
|
Capital
loss carryovers used during the period ended November 30, 2019 were as follows:
|
Fund
|
|
Amount
|
|
|
Sprott Gold Miners ETF
|
|
$
|
25,691,597
|
|
|
Sprott Junior Gold Miners ETF
|
|
|
7,828,710
|
|
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 November 30, 2019, the following amounts are available as carry forwards to the next tax year:
|
Fund
|
|
Short-Term
|
|
|
Long-Term
|
|
|
Sprott Gold Miners ETF
|
|
$
|
42,902,205
|
|
|
$
|
27,655,227
|
|
|
Sprott Junior Gold Miners ETF
|
|
|
11,096,534
|
|
|
|
8,796,310
|
|
As
of November 30, 2019, the components of distributable earnings on a tax basis for each Fund were as follows:
|
|
|
Sprott Gold Miners
ETF
|
|
|
Sprott Junior Gold
Miners ETF
|
|
|
Undistributed net investment income
|
|
$
|
366,798
|
|
|
$
|
200,641
|
|
|
Accumulated net realized loss on investments
|
|
|
(70,557,432
|
)
|
|
|
(19,892,844
|
)
|
|
Net unrealized appreciation/(depreciation) on investments
|
|
|
4,815,637
|
|
|
|
(6,889,333
|
)
|
|
Total
|
|
$
|
(65,374,997
|
)
|
|
$
|
(26,581,536
|
)
|
As
of November 30, 2019, the cost of investments for federal income tax purposes and accumulated net unrealized appreciation/(depreciation)
on investments were as follows:
|
|
|
Sprott Gold Miners
ETF
|
|
|
Sprott Junior Gold
Miners ETF
|
|
|
Gross appreciation (excess of value over tax cost)
|
|
$
|
19,408,898
|
|
|
$
|
3,501,989
|
|
|
Gross depreciation (excess of tax cost over value)
|
|
|
(14,593,199
|
)
|
|
|
(10,391,286
|
)
|
|
Net depreciation of foreign currency
|
|
|
(62
|
)
|
|
|
(36
|
)
|
|
Net unrealized appreciation (depreciation)
|
|
|
4,815,637
|
|
|
|
(6,889,333
|
)
|
|
Cost of investments for income tax purposes
|
|
$
|
172,876,312
|
|
|
$
|
64,671,745
|
|
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.
J.
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
Sprott
ETFs
|
Notes
to Financial Statements
|
November
30, 2019
|
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 November 30, 2019, 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.
K.
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 or Sprott Asset Management LP (the “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 the Fund from securities lending activity
is disclosed in the Statement of Operations.
The
following is a summary of each Fund’s securities lending agreements and related cash and non-cash collateral received as
of November 30, 2019:
|
|
|
|
|
|
|
|
Market
Value of
Securities on Loan
|
Cash
Collateral Received
|
Non-Cash
Collateral Received
|
Total
Collateral Received
|
|
Sprott
Junior Gold Miners ETF
|
6,732,195
|
4,888,606
|
2,167,577
|
7,056,183
|
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 November 30, 2019:
|
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
|
|
$
|
4,888,606
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
4,888,606
|
|
Total Borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,888,606
|
|
Gross amount of recognized liabilities for securities lending (collateral received)
|
|
|
|
4,888,606
|
Sprott
ETFs
|
Notes
to Financial Statements
|
November
30, 2019
|
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. From time to time, the Adviser may waive all or a portion of its fee.
|
Fund
|
Advisory
Fee
|
|
Sprott
Gold Miners ETF
|
0.35%
|
|
Sprott
Junior Gold Miners ETF
|
0.35%
|
ALPS
Advisors, Inc. (the “Sub-Adviser”) serves as each Fund’s sub-adviser pursuant to a sub-advisory agreement with
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 June 30, 2021. 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.
Prior
to July 19, 2019, ALPS Advisors, Inc. served as the Funds’ investment adviser pursuant to an Investment Advisory Agreement
with the Trust on behalf of each Fund (the “ALPS Advisory Agreement”). Pursuant to the ALPS Advisory Agreement, each
Fund paid ALPS Advisors, Inc. an annual management fee for the services and facilities it provided, payable on a monthly basis
0.57% of the each Fund’s average daily net assets. See Note 7 for further details regarding the reorganization. From December
1, 2018 to July 22, 2019 the Sprott Gold Miners ETF and Sprott Junior Gold Miners ETF paid ALPS Advisors, Inc. $528,326 and $179,065,
respectively, for its advisory services prior to the Reorganization.
Prior
to the Reorganization and under the ALPS Advisory Agreement, ALPS Advisors, Inc. paid substantially all expenses of each Fund
out of its unitary management fee, including licensing fees to the underlying index provider, the cost of transfer agency, custody,
fund administration, legal, audit, independent trustees and other services, except for interest expenses, distribution fees or
expenses, brokerage expenses, taxes and extraordinary expenses not incurred in the ordinary course of each Fund's business. ALPS
Advisors, Inc.’s unitary management fee was designed to pay substantially all of each Fund's expenses and to compensate
the ALPS Advisors, Inc. for providing services for each Fund.
The
Board of the Trust consists of five Trustees, all of whom are not “interested persons” (as defined in the 1940 Act),
of the Trust (“Independent Trustees”). Each current Independent Trustee is paid an annual retainer of $6,000 for his
or her services as a Board member to the Trust, together with out-of-pocket expenses in accordance with the Board’s policy
on travel and other business expenses relating to attendance at meetings.
Sprott
ETFs
|
Notes
to Financial Statements
|
November
30, 2019
|
4. PURCHASES
AND SALES OF SECURITIES
For
the year ended November 30, 2019, 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
|
|
$
|
180,805,433
|
|
|
$
|
181,148,557
|
|
|
Sprott Junior Gold Miners ETF
|
|
|
67,455,072
|
|
|
|
67,445,207
|
|
For
the year November 30, 2019, the cost of in-kind purchases and proceeds from in-kind sales were as follows:
|
Fund
|
|
Purchases
|
|
|
Sales
|
|
|
Sprott Gold Miners ETF
|
|
$
|
49,983,345
|
|
|
$
|
55,409,575
|
|
|
Sprott Junior Gold Miners ETF
|
|
|
14,779,628
|
|
|
|
13,630,258
|
|
For
the year ended November 30, 2019, the Sprott Gold Miners ETF and the Sprott Junior Gold Miners ETF had in-kind net realized gains/(losses)
of $8,827,647 and $334,002 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 engaged in cross trades between other funds in the Trust during the year ended November 30, 2019 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 previously adopted procedures that apply to transactions between the Funds of the Trust pursuant
to Rule 17a-7. 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 November 30, 2019 was as follows:
|
|
|
|
Realized
gain/(loss)
|
|
Fund
|
Purchases
|
Sale
proceeds
|
on
sales
|
|
Sprott
Gold Miners ETF
|
$937,669
|
$1,130,818
|
$(294,554)
|
|
Sprott
Junior Gold Miners ETF
|
1,130,818
|
937,669
|
134,452
|
7. REORGANIZATION
The
Trust acquired all of the assets and liabilities of Sprott Gold Miners ETF (the “Gold Predecessor Fund”), and Sprott
Junior Gold Miners ETF acquired all of the assets and liabilities of Sprott Junior Gold Miners ETF (the “Junior Predecessor
Fund”, together with the Gold Predecessor Fund, the “Predecessor Funds”) each a series of ALPS ETF Trust, in
a tax-free reorganization on July 19, 2019. The Predecessor Funds had the same investment objectives, and substantially the same
strategies and policies as the corresponding Fund at the time of the reorganization.
Sprott
ETFs
|
Notes
to Financial Statements
|
November
30, 2019
|
The
reorganization qualified as a tax-free reorganization for federal income tax purposes. On the July 19, 2019, the assets and liabilities
of each Predecessor Fund was transferred to the corresponding successor Fund in exchange for shares of the Predecessor Fund. Pursuant
to the reorganization, each shareholder of the Predecessor Funds became the owner of the number of corresponding shares of the
Funds, having an equal aggregate net asset value. On the reorganization date, the Funds and the Predecessor Funds reported the
following financial information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Shares
Outstanding
of
Fund
|
|
Net
Assets
of
Fund
|
|
Predecessor
Funds
|
|
Predecessor
Fund
Shares
Exchanged
|
|
Net
Assets of
Predecessor
Fund
Exchanged
|
|
Sprott
Gold Miners ETF
|
|
7,750,000
|
|
|
$
|
187,380,569
|
|
Gold
Predecessor Fund
|
|
7,750,000
|
|
|
$
|
187,380,569
|
|
|
Sprott
Junior Gold Miners ETF
|
|
1,950,000
|
|
|
$
|
68,310,545
|
|
Junior
Predecessor Fund
|
|
1,950,000
|
|
|
$
|
68,310,545
|
|
Immediately
following the reorganization the net assets and shares issued of the combined Funds were:
|
Fund
|
|
Net Assets
|
|
Shares Outstanding
|
|
Sprott
Gold Miners ETF
|
|
$
|
187,380,569
|
|
7,750,000
|
|
|
Sprott
Junior Gold Miners ETF
|
|
$
|
68,310,545
|
|
1,950,000
|
|
Assuming
the reorganization had been completed on December 1, 2018, the beginning of the annual reporting period for the Funds, the pro
forma results of operations for the year ended November 30, 2019 are as follows:
|
|
|
Sprott Gold Miners ETF
|
|
Sprott Junior Gold Miners ETF
|
|
Net Investment Income
|
|
$
|
203,925
|
|
|
$
|
139,535
|
|
|
Net Realized and Unrealized Loss on Investments
|
|
|
60,006,467
|
|
|
|
14,932,792
|
|
|
Net Decrease in Net Assets Resulting from Operations
|
|
$
|
60,210,392
|
|
|
$
|
15,072,327
|
|
Because
the combined investment portfolios have been managed as a single integrated portfolio since the closing of the reorganization,
it is not practicable to separate the amounts of revenue and earnings of the Predecessor Funds that has been included in Fund’s
Statement of Operations since July 19, 2019.
8. SUBSEQUENT
EVENTS
On
September 4, 2019, the Board of Trustees of the Sprott Funds Trust approved an Agreement and Plan of Reorganization (“the
Plan”) for the Tocqueville Gold Fund, a series of Tocqueville Trust, (the “Acquired Fund”) and the Sprott Gold
Equity Fund, a series of Sprott Funds Trust, (the “Acquiring Fund”). The shareholders of the Tocqueville Gold Fund
approved the reorganization at a special meeting of shareholders on December 17, 2019. Pursuant to the Plan, the Acquired Fund
was reorganized into the Acquiring Fund and was effective as of the close of business on January 17, 2020.
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 (formerly the ALPS ETF Trust) (the “Trust”), including
the schedule of investments, as of November 30, 2019, the related statement of operations, the statement of changes in net assets
and the financial highlights for the year then ended, and the related notes (collectively referred to as the “financial
statements”). The statement of changes for the year ended November 30, 2018 and the financial highlights for each of the
four 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. In our opinion, the financial statements present fairly, in all
material respects, the financial position of the Fund as of November 30, 2019, the results of its operations, the changes in its
net assets and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in
the United States of America.
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 November 30, 2019 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
January 28, 2020
Sprott
ETFs
|
Additional
Information
|
November
30, 2019 (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 ended June 30 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 or by writing to.
TAX
INFORMATION
Pursuant
to Section 853(c) of the Internal Revenue Code, the Funds designated the following for the calendar year ended December 31, 2019:
|
|
|
Foreign Taxes Paid
|
|
Foreign Source Income
|
|
Sprott Gold Miners ETF
|
|
$
|
125,871
|
|
|
$
|
877,241
|
|
|
Sprott Gold Miners Junior ETF
|
|
$
|
9,543
|
|
|
$
|
333,131
|
|
The
Funds designate the following for federal income tax purposes for distributions made during the calendar year ended December 31,
2018:
|
|
|
QDI
|
|
|
DRD
|
|
|
Sprott
Gold Miners ETF
|
|
100.00%
|
|
|
|
48.01%
|
|
|
Sprott
Gold Miners Junior ETF
|
|
0.00%
|
|
|
|
0.00%
|
|
In
early 2019, if applicable, shareholders of record received this information for the distribution paid to them by the Funds during
the calendar year 2018 via Form 1099. The Funds will notify shareholders in early 2020 of amounts paid to them by the Funds, if
any, during the calendar year 2019.
LICENSING
AGREEMENTS
Solactive
AG (“Solactive”) has entered into a license agreement with Sprott Asset Management LP (“Sprott”). 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 Sprott:
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.
Sprott
does not guarantee the accuracy and/or the completeness of the Index or any data included therein, and Sprott shall have no liability
for any errors, omissions or interruptions therein. Sprott 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.
Sprott 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
Sprott 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.
Sprott
ETFs
|
Trustees
& Officers
|
November
30, 2019 (Unaudited)
|
INDEPENDENT TRUSTEES
Name, Address1
and Age
|
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,
58
|
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.
|
|
|
|
|
|
|
|
Barbara Connolly Keady,
56
|
Trustee
|
Since
September, 2018
|
Director of New Business Development at Ceres Partners since 2010
|
4
|
Sprott Focus Trust, Inc.
|
|
|
|
|
|
|
|
Peyton T. Muldoon,
49
|
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.,
61
|
Trustee
|
Since
September, 2018
|
Chairman, Global Energy & Power, Marsh JLT Specialty, a global specialty operations focusing on the energy and power business served by Marsh, Inc., since September, 2014. Global Lead in Marine and Energy Operations at Marsh from 2006 to 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.
|
Sprott
ETFs
|
Trustees &
Officers
|
November
30, 2019 (Unaudited)
|
INTERESTED TRUSTEE AND OFFICERS
Name, Address1
and Age
|
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,
49
|
President and Trustee
|
Since
September, 2018
|
Senior Managing Director of Sprott Inc. and Chief Executive Officer of Sprott Asset Management, Inc. (Since 2010)
|
3
|
None
|
|
|
|
|
|
|
|
Thomas W. Ulrich,
56
|
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); Chief Compliance Officer, Altegris Advisors, L.L.C. (from July, 2011 to October, 2012); Principal, General Counsel and Chief Compliance Officer of Geneva Advisors (March, 2005 to July, 2011).
|
N/A
|
N/A
|
|
|
|
|
|
|
|
Varinder Bhathal,
48
|
Treasurer and Chief Financial Officer
|
Since
September, 2018
|
Controller and Director, Finance of Sprott Inc. (June 2007 to Dec 2015); Vice President, Finance of Sprott Inc. (Dec 2015 to Oct 2017); Managing Director, Corporate Finance and Investment Operations of Sprott Inc. (since Oct 2017); Chief Financial Officer of Sprott Capital Partners (since Oct 2016); Chief Financial Officer of Sprott Asset Management LP (since Dec 2018).
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1.
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The
address for each Trustee and officer is 200 Bay Street, Suite 2600, Toronto, Ontario, Canada M5J2J1.
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2.
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Each
Trustee serves until resignation, death, retirement or removal.
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Sprott
ETFs
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Board Consideration
Regarding Approval of
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November
30, 2019 (Unaudited)
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Investment Advisory Agreements
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APPROVAL OF ADVISORY AGREEMENT
At a meeting of the Board of Trustees (the
“Board) of the Trust held on March 6, 2019, the Board reviewed and discussed the written materials that were provided by
the Adviser in advance of the Meeting and deliberated on the approval of the Advisory Agreement for each Fund. The Board reviewed:
(i) the nature and quality of the advisory services to be provided by the Adviser, including the experience and qualifications
of the personnel providing such services; (ii) the performance history of each Fund, nothing that it had not yet launched; (iii)
the proposed fees and expense of each Fund, including the proposed advisory fee to be paid by each Fund to the Adviser; and (iv)
the anticipated profitability of the Adviser. In considering the approval of the Advisory Agreement, the Board reviewed and analyzed
various factors that they determined were relevant, including the factors enumerated below.
Nature, Extent and Quality of Services
The Board reviewed materials provided by
the Adviser related to the proposed approval of the Advisory Agreement, including a description of its oversight of the Sub-Adviser,
a review of the professional personnel who will be performing services for the Trust, and how it will monitor the Sub-Adviser’s
investment process. The Board also noted the extensive responsibilities that the Adviser will have with respect to each Fund, including:
the oversight of the Sub-Adviser’s adherence to each Fund’s investment strategy and restrictions, monitoring of the
Sub-Adviser’s buying and selling of securities and other transactions, review of Sub-Adviser performance, review of proxies
voted by the Sub-Adviser and oversight of, and the provision of consultation to, the Sub-Adviser with respect to the creation of
custom creation or redemption baskets for authorized participants; oversight of the daily valuation of each Fund’s portfolio
holdings; oversight of general Fund compliance with federal and state laws; and implementation of Board directives as they relate
to the Funds. The Board also considered research support available to, and management capabilities of, the Fund’s management
personnel and that the Adviser will provide oversight of day-to-day Fund operations, including fund accounting, tax matters, administration,
compliance and legal assistance in meeting disclosure and regulatory requirements. The Board discussed the extent of the Adviser’s
research capabilities, the quality of its compliance infrastructure and the experience of its fund management personnel.
Additionally, the Board received satisfactory
responses from the representatives of the Adviser with respect to a series of questions, including: whether the Adviser was involved
in any lawsuits or pending regulatory actions; whether the management of other accounts would conflict with its management of the
Trust; and whether there are procedures in place to adequately allocate trades among its respective clients.
The Board reviewed the description provided
on the practices for monitoring compliance with the Trust’s investment limitations, noting that the Adviser’s CCO would
periodically review the portfolio managers’ performance of their duties to ensure compliance under the Adviser’s compliance
program. The Board concluded that the Adviser had sufficient quality and depth of personnel, resources, investment methods and
compliance policies and procedures essential to performing its duties under the Advisory Agreement and that the nature, overall
quality and extent of the management services to be provided by the Adviser to the Trust would be satisfactory.
Performance
Because the Trust and each Fund had not
yet commenced operations, the Trustees could not consider the Fund’s past performance. However, the Trustees considered the
performance of the corresponding series of ALPS ETF Trust managed by the Sub-Adviser as investment adviser. The Trustees also considered
the Sub-Adviser’s responses to the Board’s requests for information related to the Board’s consideration of the
sub-advisory agreement.
Fees and Expenses
The Board noted that the Adviser proposed
a 0.35% advisory fee for each Fund with a net expense ratio of 0.15%. The Board reviewed the peer group data for advisory fees
and operating expenses, noting that for Sprott Gold Miners ETF, the advisory fee fell below the peer group average and matched
the lowest advisory fee within the peer group. The expense ratio for Sprott Gold Miners ETF was higher than the peer group average,
but was still within the peer group range. For Sprott Junior Gold Miners ETF, the Board also noted that the Fund had the lowest
advisory fee in the peer group, and had an expense ratio that was higher than the peer group average. In considering whether to
approve the Agreements, the Trustees also considered and discussed information and analysis provided by the Adviser regarding its
fees. The Board concluded that based on the Adviser’s services to be provided to the Trust and comparative fee and expense
data, the advisory fee charged by the Adviser and the estimated expenses for the Trust were reasonable.
Profitability
The Board considered the level of profits
that could be expected to accrue to the Adviser with respect to the Trust based on profitability projections and analyses discussed
with the Board and the selected financial information of the Adviser provided by the Adviser to the Board. After review and discussion,
the Board concluded the investment advisory relationship would initially be unprofitable to the Adviser and, once the Trust had
sufficient assets, the anticipated profit from the Adviser’s relationship with the Trust would not be excessive.
Economies of Scale
The Board determined that because each Fund
had not yet commenced operations, economies of scale were not a determinative factor. The Board further determined, however, that
to the extent that material economies of scale were to be achieved in the future, and such economies of scale
Sprott
ETFs
|
Board Consideration
Regarding Approval of
|
November
30, 2019 (Unaudited)
|
|
Investment Advisory Agreements
|
|
had not been shared with each Fund, the
Board would seek to have those economies of scale shared with each Fund in connection with future renewals of the Advisory Agreement.
Fall-Out Benefits
The Board considered potential benefits
to the Adviser from acting as investment adviser to each Fund.
APPROVAL OF SUB-ADVISORY AGREEMENT
At a meeting of the Board of Trustees (the
“Board) of the Trust held on September 5, 2018 (the “September Meeting”), the Board reviewed and discussed the
written materials that were provided by the Sub-Adviser in advance of the September Meeting and deliberated on the approval of
the Sub-Advisory Agreement. The Board reviewed: (i) the nature and quality of the advisory services to be provided by the Sub-Adviser,
including the experience and qualifications of the personnel providing such services; (ii) the performance history of the Fund,
noting that it had not yet launched; (iii) the proposed fees and expense of the Fund, including the proposed sub-advisory fee to
be paid by the Adviser to the Sub-Adviser; and (iv) the anticipated profitability of each Fund to the Sub-Adviser. In considering
the approval of the Sub-Advisory Agreement, the Board reviewed and analyzed various factors that they determined were relevant,
including the factors enumerated below.
Nature, Extent and Quality of Services
As to the nature, quality and extent of
the services to be provided by the Sub-Adviser, the Board noted the experience of the portfolio management and research personnel
of the Sub-Adviser, including their experience in the investment field, education and industry credentials and the Sub-Adviser’s
experience managing the Predecessor Funds as investment adviser. The Board reviewed the presentation materials prepared by the
Sub-Adviser describing its investment process. The Board received satisfactory responses from the Sub-Adviser with respect to a
series of questions, including: whether the Sub-Adviser is involved in any lawsuits or pending regulatory actions. The Board discussed
the Sub-Adviser’s compliance structure and broker-dealer selection process. In consideration of the compliance policies and
procedures for the Sub-Adviser included in the Meeting Materials, the Board concluded that the Sub-Adviser had sufficient quality
and depth of personnel, resources, investment methods and compliance policies and procedures essential to performing their duties
under the Sub-Advisory Agreement and that the nature, overall quality and extent of investment management services to be provided
to the Trust would be satisfactory.
Performance
Each Fund had not yet commenced operations,
the Board was not able to review the Fund’s performance. However, the Trustees considered the performance of each Predecessor
Fund. The Board reviewed materials provided by the Sub-Adviser regarding the portfolio management team and the investment strategies
to be employed in the management of each Fund’s assets. The Board noted the reputation and experience of the Sub-Adviser.
The Board recognized the skill and successful management of each Predecessor Fund.
Fees and Expenses
As to the costs of the services to be provided
by the Sub-Adviser, the Board discussed the sub-advisory fee payable by the Adviser to Sub-Adviser, pursuant to the Sub-Advisory
Agreement. The Board considered that Sub-Adviser is to be paid by the Adviser and not by the Trust, and considered fees charged
by the Sub-Adviser for providing investment advice to other funds. The Adviser confirmed to the Board that the Adviser was of the
opinion that the sub-advisory fees to be paid to the Sub-Adviser were reasonable in light of the anticipated quality of the services
to be performed by the Sub-Adviser and the proposed division of services between the Adviser and Sub-Adviser. Based on the representations
of the Adviser and Sub-Adviser and the materials provided, the Board concluded that the sub-advisory fee to be paid to the Sub-Adviser
was reasonable.
Profitability
As to profits to be realized by the Sub-Adviser,
the Trustees noted that all sub-advisory fees will be paid by the Adviser, and not directly paid by the Trust. Consequently, the
Board did not consider the costs of services provided by the Sub-Adviser or its profitability to be significant factors. However,
the Board considered the profitability information provided by the Sub-Adviser and determined that its expected profitability with
respect to each Fund was not unreasonable.
Economies of Scale.
The Board determined that because each Fund
had not yet commenced operations, economies of scale were not a factor. The Board further determined, however, that to the extent
that material economies of scale were to be achieved in the future, and such economies of scale had not been shared with the Fund,
the Board would seek to have those economies of scale shared with each Fund in connection with future renewals of the Sub-Advisor
Agreement.
Fall-Out Benefits.
The Board considered potential benefits
to the Sub-Adviser from acting as sub-adviser to each Fund.
This material must be preceded or accompanied
by the Prospectus.
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