Sprott Hopes to Launch Silver Bullion Fund (PHYS, ABX, AUY, EGO, SLW, MVG, SVM, EXK, SLV, GLD)
Earlier this year, commodity hedge fund manager Eric Sprott broke the mold for exchange-traded commodity plays with his Sprott Physical Gold Trust ETV (PHYS), which allows investors to exchange their stake for bullion bars on a monthly basis. MarketWatch notes that investors have paid up to a 10% premium for the option. According to Dow Jones, the Canadian precious metals bull plans to follow up the success of his gold fund with the Sprott Physical Silver Trust, which he hopes to list on the TSX and NYSE.
While Sprott is most often noted for his bullish stance on the yellow metal, a look at Sprott Asset Management’s top-15 U.S.-listed equity holdings from the latest 13F filings shows that amid bets on Barrick Gold (ABX), Yamana Gold (AUY), and Eldorado Gold Corporation (EGO) he had large positions in Silver Wheaton (SLW) and MAG Silver (MVG).
Silvercorp Metals Inc (SVM) and Endeavour Silver (EXK) are both among the top performers in the Gold and Silver Stocks Index over the past week, gaining more than 4%. Meanwhile, the iShares Silver Trust (SLV) has outperformed the massive SPDR Gold Trust (GLD) for the period.
Assuming the Sprott Physical Silver Trust maintains a similar structure to the gold fund, it will be interesting to see what type of premium investors are willing to pay for the option to exchange their stake for bullion instead of cash. Given the pricing disparity between the metals, it will take a much smaller investment in the silver fund to add up to the value of a bullion bar.
If the planned IPO comes to fruition, it will be interesting to see whether the silver trust breaks into Sprott’s largest disclosed equity holdings, and whether it measures up to his stake in the gold trust he launched earlier this year.
Pro portfolio performance is based on institutions’ top-15 holdings as disclosed in quarter-end filings with the SEC. Pro performance does not take into account additional holdings beyond the top 15 nor does it include positions that are not required to be disclosed by the SEC. As such, Pro portfolio performance should be considered an approximation and not a precise record of how an institution has performed over time.
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