Dennis Mitchell, who joined Sprott Asset Management as a senior portfolio manager in September after previously serving as chief investment officer of Sentry Investments, is the manager or co-manager of four newly launched Sprott funds.
Announced on Nov. 26, they are: Sprott U.S. Focused Dividend Class, Sprott U.S. Focused Balanced Class, Sprott Global Focused Dividend Class and Sprott Global Focused Balanced Class.
A common theme for the new suite of funds is the building of concentrated portfolios of high-quality companies that generate regular dividend income. Each of the funds will make monthly income distributions. Characteristics that Mitchell will look for in his equity selections include high returns on invested capital, strong recurring free cash flow and low debt-equity ratios.
The strategy calls for each of the funds, including the balanced mandates, to hold 35 to 40 equity positions. The balanced funds will be co-managed by Sprott's co-CIO Scott Colbourne, who specializes in fixed income and currency management. According to the prospectus, the fixed-income portions of the balanced funds will generally range anywhere between 25% and 75% of assets.
The four new funds may also have limited exposure to leveraged exchange-traded funds and engage in limited short-selling, consistent with the funds' objectives and securities regulations.
In the two global mandates, Mitchell and Colbourne have been given a free hand to invest anywhere they see fit. There are no geographic restrictions on what these funds can hold. Nor are there any constraints on the credit quality of the fixed-income holdings in either the global or U.S. balanced funds.
The management fees, not including operating expenses, are 2% for Series A of the equity funds, and 1.85% for the balanced funds. Series A has front-end-load and low-load purchase options. Fee-based and high-net-worth series are also available.