On August 29, 2008, the Sprott Growth Fund posted its 2008 interim management report of fund performance for the period ending June 30, 2008 on SEDAR.com
The following are a few excerpts from the report:
“The Fund experienced some challenges during the first half of 2008. Panic selling induced by the credit crunch and banking crisis negatively affected a number of our positions, as investors sold their winners in a flight to liquidity. A few of the Fund’s holdings were also negatively affected by specific events, such as what we believe to be an unsubstantiated short seller’s attack on the Fund’s largest position and a foreign government’s decision to cancel mining exploration.
Nonetheless, while we traded aggressively around the market turmoil, we chose not to panic and made only selective changes to the overall portfolio. We eliminated several names to reduce risk, such as some Chinese holdings that may be vulnerable to poor investor sentiment and a sharp stock market correction as the Olympics approaches. We also deployed cash into the gold sector, as we don’t believe the US Federal Reserve will raise rates at this point in time. Notable sector shifts include, as a percentage of net assets, an increase in oil and gas from 18.5% at December 31, 2007, to 29.3% at June 30, 2008, and a decrease in industrial products from 24.4% at December 31, 2007, to 16.8% at June 30, 2008 (refer to “Alternative Energy”).
The majority of our portfolio companies continued to execute their business strategies, reported strong and growing earnings, and possessed strong balance sheets and excellent management teams. It is worth noting that investors recognized these attributes at times and many of our positions’ share prices were rewarded during February and May in particular. Furthermore, the S&P 500 Growth Index is now trading at a P/E well below the S&P 500 Value Index, despite being composed of companies with better growth profiles and balance sheets, on average. As a result, we will continue to adhere to the strategy that has proved successful for us in the past, maintaining a high-beta portfolio concentrated in growth equities.”
The Sprott Growth Fund is managed by Peter Hodson. 
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Last update : 29-11-2008 06:16
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