Sprott Focus Trust, Inc. (Nasdaq-FUND) Declares Third Quarter Common Stock Distribution of $0.1301 Per Share

Rhea-AI Summary

Sprott Focus Trust, Inc. (Nasdaq-FUND) has announced a quarterly distribution of $0.1301 per share on its Common Stock, payable on September 30, 2024. The distribution can be received in additional shares or cash. The Fund follows a Distribution Policy of paying quarterly distributions at an annual rate of 6% of the rolling average of the prior four quarter-end NAVs. For the current distribution, 44.27% comes from Net Investment Income, 3.23% from Net Realized Long-Term Gains, and 52.50% from Return of Capital. The Fund's 5-year Average Annual Total Return is 11.78%, with a Current Distribution Rate of 1.46%. The Cumulative Total Return for the fiscal year through August 31, 2024, is 3.78%.

Positive

• Quarterly distribution of $0.1301 per share declared
• 5-year Average Annual Total Return of 11.78%
• Cumulative Total Return for the fiscal year of 3.78%

Negative

• 52.50% of the current distribution comes from Return of Capital
• Annualized Current Distribution Rate of 1.46% is relatively low

Insights

Financial Analyst

The $0.1301 per share quarterly distribution by Sprott Focus Trust is in line with its stated policy of 6% annual distribution based on rolling average NAV. This consistency is generally viewed positively by income-seeking investors. However, it's important to note that 52.50% of this distribution is categorized as "Return of Capital", which may indicate the fund is struggling to generate sufficient income from its investments.

The fund's 5-year average annual total return of 11.78% is respectable, but investors should be aware that past performance doesn't guarantee future results. The current annualized distribution rate of 1.46% might seem low compared to some alternatives, potentially affecting the fund's attractiveness to income-focused investors.

Tax Expert

The tax implications of this distribution are significant. With only 44.27% coming from Net Investment Income, investors may face a complex tax situation. The substantial Return of Capital component (52.50%) is not immediately taxable but will lower the cost basis of shares, potentially leading to higher capital gains taxes in the future.

Year-to-date figures show a more balanced allocation, with 29.34% from Net Investment Income and 44.37% from capital gains. This mix could result in a more favorable tax treatment for long-term investors. However, the 26.29% Return of Capital for the year still warrants careful consideration in tax planning.

TORONTO, Sept. 04, 2024 (GLOBE NEWSWIRE) -- Sprott Focus Trust, Inc. (Nasdaq-FUND) (the “Fund” or “FUND”) has declared a quarterly distribution of $0.1301 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 September 30, 2024 to stockholders of record at the close of business on September 16, 2024 (ex-dividend on September 16, 2024). The price of shares issued for reinvestment will be determined on September 23, 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 September 30, 2024 and for 2024 year-to-date are as follows:

Estimated Allocations as of August 31, 2024

	Distribution Per Share		Net Investment Income	Net Realized Short-Term Gains	Net Realized Long-Term Gains	Return of Capital
FUND	$ 0.1301		$ 0.0576 (44.27%)	$ 0.0000 (0.00%)	$ 0.0042 (3.23%)	$ 0.0683 (52.50%)

Estimated Allocations for 2024 through August 31, 2024

	Distribution Per Share		Net Investment Income	Net Realized Short-Term Gains	Net Realized Long-Term Gains	Return of Capital
FUND	$ 0.3886		$ 0.1140 (29.34%)	$ 0.0300 (7.72%)	$ 0.1424 (36.65%)	$ 0.1022 (26.29%)

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 08/31/2024)1	Annualized Current Distribution Rate (expressed as a percentage of NAV as of 08/31/2024)2	Cumulative total return (in relation to NAV for the fiscal year through 08/31/2024)3	Cumulative fiscal year Distribution Rate (as a percentage of NAV as of 08/31/2024)4
FUND	11.78%	1.46%	3.78%	4.35%

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 August 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 August 31, 2024.

³  Cumulative Total Return is the percentage change in the Fund’s NAV from December 31, 2023 to August 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 August 31, 2024), as a percentage of the Fund’s NAV as of August 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 quarterly distribution amount for Sprott Focus Trust (FUND) in Q3 2024?

Sprott Focus Trust (FUND) has declared a quarterly distribution of $0.1301 per share for the third quarter of 2024.

When is the ex-dividend date for Sprott Focus Trust's (FUND) Q3 2024 distribution?

The ex-dividend date for Sprott Focus Trust's (FUND) third quarter 2024 distribution is September 16, 2024.

What is Sprott Focus Trust's (FUND) 5-year Average Annual Total Return as of August 31, 2024?

Sprott Focus Trust's (FUND) 5-year Average Annual Total Return in relation to NAV is 11.78% as of August 31, 2024.

What percentage of Sprott Focus Trust's (FUND) current distribution comes from Return of Capital?

52.50% of Sprott Focus Trust's (FUND) current distribution comes from Return of Capital.