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Sprott Focus Trust, Inc. (symbol: FUND) is a diversified closed-end investment company that prioritizes long-term capital growth for its shareholders. Structured as a closed-end fund, Sprott Focus Trust issues a fixed number of shares that are traded on the open market, offering investors an opportunity to gain exposure to a carefully curated portfolio of assets. The fund's investment strategy encompasses a broad range of financial instruments, including equity securities, direct obligations of the U.S. Government or its agencies, and non-convertible preferred stocks and debt securities issued by both domestic and international companies.
Core Investment Strategy and Sector Allocation
Sprott Focus Trust employs an actively managed investment approach designed to identify opportunities for capital appreciation across diverse sectors. The fund's portfolio reflects a strategic emphasis on industries such as Materials, Financials, Energy, and Information Technology, which collectively account for a significant portion of its holdings. This allocation underscores the fund's focus on sectors that are often cyclical yet offer substantial growth potential, particularly in periods of economic expansion or technological advancement. By diversifying across multiple industries, the fund aims to mitigate risk while capitalizing on sector-specific trends and opportunities.
Market Position and Differentiation
A key differentiator for Sprott Focus Trust lies in its affiliation with Sprott Inc., a globally recognized asset manager specializing in precious metals and real assets. This relationship provides the fund with unparalleled access to niche markets and investment opportunities that are often overlooked by generalist funds. Through its parent company, Sprott Focus Trust benefits from deep industry expertise, robust research capabilities, and an extensive network of relationships within the natural resources sector. These advantages enable the fund to uncover unique value propositions and deliver differentiated investment strategies to its shareholders.
Advantages and Challenges of a Closed-End Fund
As a closed-end fund, Sprott Focus Trust offers several potential benefits, including the ability to pursue long-term investment strategies without the pressure of daily redemptions, which can affect open-ended funds. This structure allows the fund's managers to take a disciplined, patient approach to portfolio construction and asset allocation. However, investors should be aware of the potential for shares to trade at a discount or premium to the fund's net asset value (NAV), a common characteristic of closed-end funds that reflects market sentiment and liquidity dynamics.
Investor Profile
Sprott Focus Trust is well-suited for investors seeking a diversified portfolio with exposure to multiple asset classes and sectors, particularly those with a focus on cyclical industries and resource-based investments. The fund's active management approach, combined with its closed-end structure, makes it an attractive option for long-term investors who value strategic allocation and sector-specific expertise.
Sprott Focus Trust (Nasdaq-FUND) has announced a quarterly distribution of $0.2161 per share for Q4 2024, payable on December 30, 2024. Stockholders of record by December 13, 2024, can receive the distribution in cash or additional shares. The Fund maintains a quarterly distribution policy at an annual rate of 6% based on the rolling average of prior four quarter-end NAVs.
The distribution is comprised entirely of net realized long-term gains (100%). For 2024 through November 30, the Fund's distributions included 35.52% from net investment income, 5.18% from short-term gains, and 59.30% from long-term gains. The Fund reported an average annual total return of 11.59% over the past 5 years and a cumulative total return of 10.74% for the fiscal year through November 30, 2024.
Sprott Focus Trust, Inc. (Nasdaq-FUND) has announced a quarterly distribution of $0.1301 per share on its Common Stock, payable on September 30, 2024. The distribution can be received in additional shares or cash. The Fund follows a Distribution Policy of paying quarterly distributions at an annual rate of 6% of the rolling average of the prior four quarter-end NAVs. For the current distribution, 44.27% comes from Net Investment Income, 3.23% from Net Realized Long-Term Gains, and 52.50% from Return of Capital. The Fund's 5-year Average Annual Total Return is 11.78%, with a Current Distribution Rate of 1.46%. The Cumulative Total Return for the fiscal year through August 31, 2024, is 3.78%.
Sprott Focus Trust (Nasdaq: FUND) has announced a quarterly distribution of $0.1299 per share, payable on July 1, 2024. This distribution is part of the Fund's policy of paying quarterly distributions at an annual rate of 6% based on the rolling average NAV of the previous four quarters. For this distribution, stockholders can choose to receive additional shares or cash. The distribution's sources are estimated to be 14.86% from net investment income, 3.85% from short-term gains, and 81.29% from long-term gains. The average annual total return for the Fund over the past five years is 13.67%, with a current annualized distribution rate of 1.43% as of May 31, 2024.
Sprott Focus Trust (Nasdaq-FUND) has announced a quarterly distribution of $0.1254 per share, payable on March 24, 2023 to stockholders on record by March 13, 2023. This distribution can be received in cash or additional shares. The Fund maintains a Distribution Policy of paying quarterly distributions at an annual rate of 6% based on rolling average NAVs. The current distribution breakdown includes net investment income of $0.0265, short-term gains of $0.0292, long-term gains of $0.0347, and return of capital of $0.0350. The estimated annualized distribution rate as of February 28, 2023 is 5.58%.
Sprott Focus Trust (Nasdaq-FUND) announced a quarterly distribution of $0.1276 per share on its Common Stock, payable on December 22, 2022, to stockholders of record by December 12, 2022. The distribution policy entails a quarterly payment at an annual rate of 6% based on a rolling average of the previous four quarters' net asset values (NAVs). The fourth quarter distribution will be the greater of 1.50% or the minimum IRS-required distribution. The Fund’s sources for this distribution include a 100% return of capital for the current distribution.
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