Sprott Physical Bullion Trusts Why Consider Sprott Trusts
A Better Way to Own Physical Precious Metals
Fully Allocated Precious Metals
The Trusts' precious metals are fully allocated which provides the Trusts with direct beneficial ownership. Unlike other bullion funds, the Trusts do not have an unallocated account that is used to facilitate transfers of bullion between financial institutions that act as authorized participants. Without exception, all of the bullion owned by the Trusts is held in the Trusts' allocated accounts in physical form.
In contrast, unallocated gold does not correspond to specific bars and does not provide direct beneficial ownership or title. Counter party risk is a key consideration when investing in unallocated gold as there may not be a sufficient amount of gold backing all of the ownership claims and in the event of bankruptcy, you will likely become an unsecured creditor.
Redeemable for Metals
Subject to minimum redemption amounts, unitholders have the ability to redeem their units for physical bullion on a monthly basis. The Royal Canadian Mint can deliver the bars almost anywhere in the world via an Armored Transportation Service Carrier. Physical redemptions will never dilute remaining unitholders. All physical redemptions are equal to 100% of the NAV per Unit of the redeemed units, less redemption and delivery expenses, including the handling of the notice of redemption and the applicable bullion storage in-and-out fees.1
The primary reason to invest in precious metals is to manage a number of potential risks – financial, geopolitical, currency devaluation, inflation, etc. As we witnessed in the 2008 financial crises, even the world’s largest financial institutions are not immune from insolvency and government bail outs. For these reasons, the Trusts store their precious metals in custody with the Royal Canadian Mint, a Federal Crown Corporation of the Government of Canada. There is no levered financial institution between the unitholders and the Trusts' physical bullion and no risk of financial loss in the event of a bankruptcy or nationalization of the financial institution.
Potential Tax Advantage
For U.S. non-corporate investors who hold units for more than one year and make a timely Qualified Election Form (QEF) election, gains realized on the sale of the Trust’s units are currently taxed at the long-term capital gains rate of 15% (20% for higher income taxpayers), versus the maximum of 28% applied against most precious metals ETFs and physical gold coins.2 See our Tax Guide for more information | PDF Version
Easy to Buy, Sell and Own
Just like stocks, you can buy and sell the Trusts throughout the trading day on both the New York Stock Exchange and Toronto Stock Exchange. All of the Trusts are available to trade in U.S. and Canadian dollars.
|Fund||NYSE||TSX US$||TSX C$|
|Sprott Physical Gold and Silver Trust||CEF||CEF.U||CEF|
|Sprott Physical Gold Trust||PHYS||PHYS.U||PHYS|
|Sprott Physical Silver Trust||PSLV||PSLV.U||PSLV|
|Sprott Physical Platinum and Palladium Trust||SPPP||SPPP.U||SPPP|
A Liquid Investment
You can sell your units in the Trusts between 9:30 am and 4:00 pm EST on any open trading day for the New York Stock Exchange or Toronto Stock Exchange. Just like with stocks, proceeds from selling your Trust units are deposited to your brokerage account two business days after the trade date.
Please contact the Sprott Team at 888.622.1813 for more information, or answers to your questions. You can also email us at firstname.lastname@example.org
1. Trust unitholders have the right to redeem for physical metals on a monthly basis, subject to meeting the minimum redemption amount as follows.
- Sprott Physical Gold Trust (PHYS): A unitholder must have enough units to equate to one full-sized London Good Delivery bar (approximately 400 oz). Read more in the prospectus, Redemption of Trust Units for Physical Gold Bullion.
- Sprott Physical Silver Trust (PSLV): A unitholder must have enough units to equate to ten 1000 oz silver bars. Read more in the prospectus, Redemption of Trust Units for Physical Silver Bullion.
- Sprott Physical Gold and Silver Trust (CEF): A unitholder must have at least 100,000 units. Read more in the prospectus, Redemption of Trust Units for Physical Gold Bullion and Silver Bullion.
- Sprott Physical Platinum and Palladium Trust (SPPP): A unitholder must have a minimum of 25,000 trust units. Read more in the prospectus, Redemption of Trust Units for Physical Platinum and Palladium Bullion.
2. For more information, please see ''Tax Considerations-U.S. Federal Income Tax Considerations" in the Prospectus and always consult your tax accountant regarding your particular situation.
Sprott Physical Bullion Trusts
The Sprott Physical Bullion Trusts are generally exposed to multiple risks that have been both identified and described in the Prospectus. Please refer to the Prospectus for a description of these risks. This material must be preceded or accompanied by a prospectus. For an additional copy of the prospectus please visit https://sprott.com/investment-strategies/physical-bullion-trusts/.
Precious metals investments are more volatile on a daily basis and have higher headline risk than other sectors as they tend to be more sensitive to economic data, political and regulatory events as well as underlying commodity prices. Precious metals investments have price fluctuations based on short-term dynamics partly driven by demand/supply and also by investment flows. Precious metals investments tend to react more sensitively to global events and economic data than other sectors.
Sprott Asset Management LP is the investment manager to the Sprott Physical Bullion Trusts (the “Trusts”). Important information about the Trusts, including the investment objectives and strategies, purchase options, applicable management fees, and expenses, is contained in the prospectus. Please read the prospectus carefully before investing. You will usually pay brokerage fees to your dealer if you purchase or sell units of the Trust on the Toronto Stock Exchange (“TSX”) or the New York Stock Exchange (“NYSE”). If the units are purchased or sold on the TSX or the NYSE, investors may pay more than the current net asset value when buying units or shares of the Trust and may receive less than the current net asset value when selling them. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. This communication does not constitute an offer to sell or solicitation to purchase securities of the Trusts.
The risks associated with investing in a Trust depend on the securities and assets in which the Trust invests, based upon the Trust’s particular objectives. There is no assurance that any Trust will achieve its investment objective, and its net asset value, yield and investment return will fluctuate from time to time with market conditions. There is no guarantee that the full amount of your original investment in a Trust will be returned to you. The Trusts are not insured by the Canada Deposit Insurance Corporation or any other government deposit insurer. Please read a Trust’s prospectus before investing. The information contained herein does not constitute an offer or solicitation to 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 or the United States should contact their financial advisor to determine whether securities of the Funds may be lawfully sold in their jurisdiction. The information provided is general in nature and is provided with the understanding that it may not be relied upon as, nor considered to be, the rendering or tax, legal, accounting or professional advice. Readers should consult with their own accountants and/or lawyers for advice on their specific circumstances before taking any action.