Sprott Focus Trust, Inc. (Nasdaq-FUND) Declares Second Quarter Common Stock Distribution of $0.1299 Per Share

Rhea-AI Summary

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.

Positive

• Quarterly distribution of $0.1299 per share declared.
• Annual distribution rate set at 6% of the rolling average NAV.
• High percentage of distribution sourced from long-term gains (81.29%).
• Average annual total return of 13.67% over the past five years.

Negative

• Current annualized distribution rate is relatively low at 1.43%.
• Only 14.86% of the distribution comes from net investment income.
• Sizable portion (81.29%) of the distribution relies on realized long-term gains, which may not be sustainable.

Financial Analyst

The announcement of Sprott Focus Trust, Inc.'s quarterly distribution is notable for investors primarily due to its implications for income generation and investment strategy. The declared distribution of $0.1299 per share, which investors can choose to receive in either cash or additional stock, underlines the Fund’s commitment to returning value to shareholders.

From a financial perspective, the distribution breakdown reveals critical insights. With 81.29% attributed to net realized long-term gains, it shows that the Fund has been successful in capitalizing on its investments over a longer horizon. However, only 14.86% of the distribution is sourced from net investment income. This indicates that the Fund’s income-generating investments contribute less to overall returns compared to capital gains.

Additionally, the distribution policy, which aims for an annual rate of 6% of rolling average NAVs, provides a predictable income stream. Yet, investors should be cautious, as the policy is subject to change at the discretion of the Board of Directors. The annualized current distribution rate of 1.43% and the average annual total return of 13.67% over five years suggest that performance has been relatively strong. However, the 3.36% cumulative total return for the fiscal year through May 31, 2024, may reflect recent market volatility.

In summary, while the distribution offers a positive yield, reliance on long-term gains could introduce risk if market conditions change. Investors must consider both the immediate income and long-term sustainability of these distributions.

TORONTO, June 04, 2024 (GLOBE NEWSWIRE) -- Sprott Focus Trust, Inc. (Nasdaq-FUND) (the “Fund” or “FUND”) has declared a quarterly distribution of $0.1299 per share on its Common Stock. The distribution, optionally payable in additional shares of Common Stock or in cash by specific stockholder election, is to be paid on July 1, 2024 to stockholders of record at the close of business on June 14, 2024 (ex-dividend on June 14, 2024). The price of shares issued for reinvestment will be determined on June 24, 2024.

The Fund currently has adopted a Distribution Policy of paying quarterly distributions on its Common Stock. Distributions are being made at the annual rate of 6% of the rolling average of the prior four calendar quarter-end net asset values (“NAVs”), with the fourth quarter distribution being the greater of 1.50% of the rolling average or the minimum distribution required by IRS regulations. The policy, including the annual rate, is subject to change at the discretion of the Fund’s Board of Directors.

The Fund’s estimated sources of the distribution to be paid on July 1, 2024 and for 2024 year-to-date are as follows:

Estimated Allocations as of May 31, 2024

	Distribution Per Share		Net Investment Income	Net Realized Short-Term Gains	Net Realized Long-Term Gains	Return of Capital
FUND	$ 0.1299		$ 0.0193 (14.86%)	$ 0.0050 (3.85%)	$ 0.1056 (81.29%)	$ 0.000 (0.00%)

Estimated Allocations for 2024 through May 31, 2024

	Distribution Per Share		Net Investment Income	Net Realized Short-Term Gains	Net Realized Long-Term Gains	Return of Capital
FUND	$ 0.2585		$ 0.0844 (32.65%)	$ 0.0314 (12.14%)	$ 0.1385 (53.58%)	$ 0.0042 (1.63%)

You should not draw any conclusions about the Fund’s investment performance from the amount of the current distribution or from the terms of the Fund’s Distribution Policy. The amounts and sources of distributions reported herein are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.

Fund Performance and Distribution Rate Information

	Average Annual Total Return (in relation to NAV for the 5-year period ending on 05/31/2024)1		Annualized Current Distribution Rate (expressed as a percentage of NAV as of 05/31/2024)2		Cumulative total return (in relation to NAV for the fiscal year through 05/31/2024)3		Cumulative fiscal year Distribution Rate (as a percentage of NAV as of 05/31/2024)4
FUND	13.67%		1.43%		3.36%		2.85%

¹  Average Annual Total Return in relation to NAV represents the compound average of the Annual NAV Total Returns of the Fund for the five year period ended May 31, 2024. Annual NAV Total Return is the percentage change in the Fund’s NAV over a year, assuming reinvestment of distributions paid.

²  The Annualized Current Distribution Rate is the current fiscal period’s distribution rate annualized as a percentage of the Fund’s NAV as of May 31, 2024.

³  Cumulative Total Return is the percentage change in the Fund’s NAV from December 31, 2023 to May 31, 2024, assuming reinvestment of distributions paid.

⁴  The Cumulative Fiscal Year Distribution Rate is the dollar value of distributions for the fiscal year period (January 1, 2024 to May 31, 2024), as a percentage of the Fund’s NAV as of May 31, 2024.

About Sprott Focus Trust, Inc.

Sprott Focus Trust, Inc. is a closed-end diversified management investment company whose shares of Common Stock are listed and traded on the Nasdaq Global Select Market. The Fund’s investment goal is long-term capital growth, which it seeks by normally investing at least 65% of its assets in equity securities.

For further information on the Fund, please visit our web site at: www.sprottfocustrust.com. An investor should consider investment objectives, risks, charges and expenses carefully before investing. The Fund is a closed-end fund and closed-end funds do not continuously issue shares for sale as open-end mutual funds do. The Fund trades in the secondary market. Investors wishing to buy or sell shares need to place orders through an intermediary or broker.

Suite 230 | 320 Post Road | Darien, Connecticut | USA 06820 | (203) 636-0977 | www.sprott.com

Contact:
Glen Williams
(416) 943-4394

FAQ

What is the amount of the second-quarter distribution for Sprott Focus Trust?

The second-quarter distribution for Sprott Focus Trust is $0.1299 per share.

When will the Sprott Focus Trust's second-quarter distribution be paid?

The second-quarter distribution will be paid on July 1, 2024.

What is the annual distribution rate for Sprott Focus Trust?

The annual distribution rate for Sprott Focus Trust is 6% of the rolling average NAV of the past four quarters.

What are the estimated sources of the Sprott Focus Trust second-quarter distribution?

Estimated sources are 14.86% net investment income, 3.85% short-term gains, and 81.29% long-term gains.

What is the average annual total return for Sprott Focus Trust over the past five years?

The average annual total return over the past five years is 13.67%.

How can stockholders receive the distribution from Sprott Focus Trust?

Stockholders can choose to receive the distribution either in additional shares or cash.

When is the record date for the second-quarter distribution of Sprott Focus Trust?

The record date is June 14, 2024.