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Ninepoint Resource Class

March 2018 Commentary

For the month of March, the fund’s underperformance was driven predominantly by the following factors:

  1. A private investment was written off accounting for almost 2%. There is still value here as the company continues as a going concern. However, the fund was unable to sell the position so it was written down to zero

  2. As mentioned previously, this fund is not a basic gold and energy fund, but rather a broad based resource fund. To this point in the year, basically every other space except for gold and energy equities sold off significantly. These include Uranium, Battery Metals (Lithium), Marijuana and base metals.

  3. Within the energy and gold space, the small companies did not participate in the “rally”. In fact, small cap resource names generally suffered which further aggravated point 2 above. Since I took over management of the fund in March 2014, the fund has taken on a small cap bias. Smaller cap names offer greater alpha potential over the long term.

Essentially, YTD what could go wrong has gone wrong. Although the fund has encountered a few company specific issues, the vast majority of underperformance has been driven by poor performing positions that have not encountered any permanent value impairment. These positions have underperformed because of the sentiment toward the specific commodity and/or small cap relative underperformance.

It is also important to note that the fund is not managed with a quarterly or monthly investment horizon. The fund continues to have a very strong record over 3-years and since I began managing it in March 2014.

Jason Mayer

 

COMPOUNDED RETURNS (%) AS AT MARCH 30, 20181

1MTH YTD 3MTH 6MTH 1YR 3YR 5YR ANNUALIZED INCEPTION (10/17/11)
Sprott Resource Class, Series F -9.6 -22.8 -22.8 -3.2 -9.6 15.1 6.1 -1.5
Blended Index2, 2.3 -5.8 -5.8 -2.3 -5.5 0.9 -2.2 -3.3

1 All returns and fund details are a) based on Series F shares; b) net of fees; c) annualized if period is greater than one year; d) as at March 30, 2018; e) 2011 annual returns are from 10/17/11 to 12/31/11. 2 Blended Index (50/50 S&P/TSX Capped Materials Total Return Index and S&P/TSX Capped Energy Total Return Index) and is computed by Ninepoint Partners LP based on available index information.

The Fund is generally exposed to the following risks. See the prospectus of the Fund for a description of these risks: capital gains risk; class risk; commodity risk; concentration risk; currency risk; derivatives risk; exchange traded funds risk; foreign investment risk; inflation risk; liquidity risk; market risk; regulatory risk; securities lending, repurchase and reverse repurchase transactions risk; series risk; short selling risk; small capitalization natural resource company risk; small company risk; tax risk; uninsured losses risk.

Fees, performance fees (if any), other charges and expenses all may be associated with mutual fund investments. Please read the prospectus carefully before investing. The indicated rate of return for series A shares of the Fund for the period ended March 30, 2018 is based on the historical annual compounded total return including changes in unit value and reinvestment of all distributions and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Fund may be lawfully sold in their jurisdiction.

The opinions, estimates and projections (“information”) contained within this report are solely those of Ninepoint Partners LP and are subject to change without notice. Ninepoint Partners LP makes every effort to ensure that the information has been derived from sources believed to be reliable and accurate. However, Ninepoint Partners LP assumes no responsibility for any losses or damages, whether direct or indirect, which arise out of the use of this information. Ninepoint Partners LP is not under any obligation to update or keep current the information contained herein. The information should not be regarded by recipients as a substitute for the exercise of their own judgment. Please contact your own personal advisor on your particular circumstances. Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any investment funds managed by Ninepoint Partners LP. Any reference to a particular company is for illustrative purposes only and should not to be considered as investment advice or a recommendation to buy or sell nor should it be considered as an indication of how the portfolio of any investment fund managed by Ninepoint Partners LP is or will be invested. Ninepoint Partners LP and/or its affiliates may collectively beneficially own/control 1% or more of any class of the equity securities of the issuers mentioned in this report. Ninepoint Partners LP and/or its affiliates may hold short position in any class of the equity securities of the issuers mentioned in this report. During the preceding 12 months, Ninepoint Partners LP and/or its affiliates may have received remuneration other than normal course investment advisory or trade execution services from the issuers mentioned in this report.