Active – Mr. Rule will be utilizing his market experience and personal judgement to make proactive investment decisions for this account.
Tactical – The portfolio will be a dynamic investment strategy that will adjust if market conditions change. Rick will aim to actively adjust the portfolio’s allocation in an attempt to improve the risk-adjusted returns
Strategic – Rick will pick stocks using bottom-up fundamental analysis and deploy capital only when he believes the time appears optimal. The allocation and investment strategy aims to be proactive and fluid. Rick will evaluate current market conditions and patiently deploy capital primarily using good ‘til cancelled (GTC) limit orders.
Merger and Acquisition Targets (Consolidation) – The first theme of Mr. Rule’s portfolio will be establishing positions in companies that Rick believed to be undervalued, which makes them attractive potential targets for acquisition. Rick feels that the next few years will be ripe for mergers and acquisitions (M&A) and Mr. Rule has identified companies that have a high probability of being acquired during this cycle. The mining industry has entered a new phase of the cycle where mineral reserves, having been cannibalized for decades, must now be replenished. The situation simply will not continue.
Acquisitions can occur at 40-60% above the prevailing market price and can provide substantial upside even in a flat or declining gold market. With the acquisitions of Randgold by Barrick and bidding war for Newmont, Mr. Rule feels this will open the flood gates for M&A as large producers push to consolidate in a gold industry faced with dwindling reserves and record-low new discoveries.
Royalty and Streaming Companies (Financing) – The second theme will be positioning for the capital spending cycle in mining in an environment of tightening banking regulation. Mr. Rule believes the best way to capitalize on this trend is by owning royalty and streaming companies—robust businesses with diversified portfolios poised for strong growth with limited downside risk.
Prospect Generators (Exploration) – The third theme will be what Mr. Rule knows and likes best: exploration. It’s no secret that when exploration stocks move, they generally express more upside volatility than almost any other sector in the world. This strategy reduces the risks associated with the exploration business by attracting a third party to finance the rest of the exploration costs. Rick believes that we are coming into a new exploration cycle, which could be beneficial for prospect generators which generate targets to sell to major and junior miners.
This presentation is intended solely for the use of Sprott Asset Management USA Inc. for use with investors and interested parties. Investments, commentary and statements are unique and may not be reflective of investments and commentary in other strategies managed by Sprott Asset Management USA, Inc., Sprott Asset Management LP, Sprott Inc., or any other Sprott entity or affiliate. Opinions expressed in this presentation are those of the presenter and may vary widely from opinions of other Sprott affiliated Portfolio Managers or investment professionals.
The intended use of this material is for information purposes only and is not intended to be an offer or solicitation for the sale of any financial product or service or a recommendation or determination that any investment strategy is suitable for a specific investor. Investors should seek financial advice regarding the suitability of any investment strategy based on the objectives of the investor, financial situation, investment horizon, and their particular needs. This information is not intended to provide financial, tax, legal, accounting or other professional advice since such advice always requires consideration of individual circumstances. The investments discussed herein are not insured by the FDIC or any other governmental agency, are subject to risks, including a possible loss of the principal amount invested.
Generally, natural resources investments are more volatile on a daily basis and have higher headline risk than other sectors as they tend to be more sensitive to economic data, political and regulatory events as well as underlying commodity prices. Natural resource investments are influenced by the price of underlying commodities like oil, gas, metals, coal, etc.; several of which trade on various exchanges and have price fluctuations based on short-term dynamics partly driven by demand/supply and also by investment flows. Natural resource investments tend to react more sensitively to global events and economic data than other sectors, whether it is a natural disaster like an earthquake, political upheaval in the Middle East or release of employment data in the U.S. Past performance is no guarantee of future returns. Sprott Asset Management USA Inc., affiliates, family, friends, employees, associates, and others may hold positions in the securities it recommends to clients, and may sell the same at any time.
President and CEO, Sprott US Holdings Inc.
|Fund Structure||Separately Managed Account (U.S. Domiciled)|
|Subscriptions||Daily; Open Ended Structure|
|Management Fee||2% of Assets Under Management|
|Performance Fee||No Performance Fee or Commission Charges|
|Investor Eligibility||Open to U.S. and Select International Investors|
For more information, please email firstname.lastname@example.org or call 800.477.7853 and reference the “Sprott Rule Managed Account”.
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