Sprott Focused US Balanced Class
WHY INVEST IN SPROTT FOCUSED U.S. BALANCED CLASS?
- Experienced portfolio managers.
Equity portfolio: high-quality companies, concentrated, not limited by market cap or sector.
- Actively managed, repeatable and disciplined investment process.
- An ideal balanced holding for investors seeking growth and current income.
Tax-efficient monthly distribution, targeted at 3.5% per annum.
A FOCUSED APPROACH TO EQUITY INVESTING
Sprott Focused Business Investing means investing in a focused manner, in high quality businesses.
The focus is on businesses with a franchise value advantage as shown by their pricing power, differentiated service or product and superior long-term returns on capital. The result is a focused portfolio of 35-40 high-quality companies that have been well-researched and thoroughly understood.
High-quality business is at the core of the strategy. It is defined as a business that generates strong returns on invested capital, strong recurring free cash flow from a collection of irreplaceable assets capitalized with low amounts of debt.
Returns on invested capital (ROIC) – is considered the best long-term measure of the quality of a business and the skill of the management team operating the business.
Free cash flow – it is what gives business life. The strategy only invests in businesses with strong, recurring positive free cash flow.
Irreplaceable assets can be tangible or intangible and are easily spotted in many franchise businesses.
Debt and its servicing cost can leave the shareholders more vulnerable to cyclical downturns, when revenues and cash flow decline. Generally, the less debt the company has, the better.
The strategy only invests in a company once the margin of safety is large enough to compensate for the risk. Companies that make up the portfolio are continuously monitored to make sure they continue to offer the required return potential.
Sprott Focused Business Investing is designed to build a concentrated portfolio of high-quality businesses that will generate superior risk-adjusted returns over the long term. The portfolio consists of companies with high returns on invested capital, run by management teams that behave like true stewards of investor capital, added to the portfolio only when they are priced to deliver sufficient return for the risk incurred.