Ninepoint Partners LP NINEPOINT GOLD AND PRECIOUS MINERALS FUND NINEPOINT ENERGY FUND NINEPOINT GOLD BULLION FUND NINEPOINT DIVERSIFIED BOND FUND NINEPOINT SHORT-TERM BOND FUND NINEPOINT SILVER BULLION FUND NINEPOINT ENHANCED BALANCED FUND NINEPOINT GLOBAL INFRASTRUCTURE FUND NINEPOINT GLOBAL REAL ESTATE FUND NINEPOINT ALTERNATIVE HEALTH FUND NINEPOINT INTERNATIONAL SMALL CAP FUND NINEPOINT CONCENTRATED CANADIAN EQUITY FUND NINEPOINT CORE BOND FUND Annual Financial Statements December 31 2018
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Ninepoint Partners LP Partners LP NINEPOINT GOLD AND PRECIOUS MINERALS FUND NINEPOINT ENERGY FUND NINEPOINT GOLD BULLION FUND NINEPOINT DIVERSIFIED BOND FUND NINEPOINT SHORT-TERM BOND
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Ninepoint
Partners LP
NINEPOINT GOLD AND PRECIOUS MINERALS FUND
NINEPOINT ENERGY FUND
NINEPOINT GOLD BULLION FUND
NINEPOINT DIVERSIFIED BOND FUND
NINEPOINT SHORT-TERM BOND FUND
NINEPOINT SILVER BULLION FUND
NINEPOINT ENHANCED BALANCED FUND
NINEPOINT GLOBAL INFRASTRUCTURE FUND
NINEPOINT GLOBAL REAL ESTATE FUND
NINEPOINT ALTERNATIVE HEALTH FUND
NINEPOINT INTERNATIONAL SMALL CAP FUND
NINEPOINT CONCENTRATED CANADIAN EQUITY FUND
NINEPOINT CORE BOND FUND
Annual Financial Statements
December 31
2018
2
Contents
7 Ninepoint Gold and Precious Minerals Fund (formerly, Sprott Gold and Precious Minerals Fund)
18 Ninepoint Energy Fund (formerly, Sprott Energy Fund)
28 Ninepoint Gold Bullion Fund (formerly, Sprott Gold Bullion Fund)
36 Ninepoint Diversified Bond Fund (formerly, Sprott Diversified Bond Fund)
52 Ninepoint Short-Term Bond Fund (formerly, Sprott Short-Term Bond Fund)
60 Ninepoint Silver Bullion Fund (formerly, Sprott Silver Bullion Fund)
68 Ninepoint Enhanced Balanced Fund (formerly, Sprott Enhanced Balanced Fund)
81 Ninepoint Global Infrastructure Fund (formerly, Sprott Global Infrastructure Fund)
91 Ninepoint Global Real Estate Fund (formerly, Sprott Global Real Estate Fund)
102 Ninepoint Alternative Health Fund (formerly, Ninepoint UIT Alternative Health Fund)
113 Ninepoint International Small Cap Fund (formerly, Sprott International Small Cap Fund)
123 Ninepoint Concentrated Canadian Equity Fund (formerly, Sprott Concentrated Canadian Equity Fund)
132 Ninepoint Core Bond Fund
142 Notes to Financial Statements
3
KPMG LLP Bay Adelaide Centre 333 Bay Street, Suite 4600 Toronto ON M5H 2S5 Canada Tel 416-777-8500 Fax 416-777-8818
INDEPENDENT AUDITORS' REPORT
To the Unitholders of:
Ninepoint Gold and Precious Minerals Fund Ninepoint Energy Fund Ninepoint Gold Bullion Fund Ninepoint Diversified Bond Fund Ninepoint Short-Term Bond Fund Ninepoint Silver Bullion Fund Ninepoint Enhanced Balanced Fund Ninepoint Global Infrastructure Fund Ninepoint Global Real Estate Fund Ninepoint Alternative Health Fund Ninepoint International Small Cap Fund Ninepoint Concentrated Canadian Equity Fund Ninepoint Core Bond Fund (Collectively, the "Funds")
Opinion
We have audited the financial statements of the Funds, which comprise:
• the statements of financial position as at December 31, 2018 and December 31, 2017, as applicable
• the statements of comprehensive income (loss) for the applicable periods ended December 31, 2018 and 2017
• the statements of changes in net assets attributable to holders of redeemable units for the applicable periods ended December 31, 2018 and 2017
• the statements of cash flows for the applicable periods ended December 31, 2018 and 2017
• and notes to the financial statements, including a summary of significant accounting policies
(Hereinafter referred to as the "financial statements").
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Funds as at December 31, 2018 and December 31, 2017, as applicable, and their financial performance and their cash flows for the applicable periods ended December 31, 2018 and 2017 in accordance with International Financial Reporting Standards (“IFRS”).
KPMG LLP, is a Canadian limited liability partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.
KPMG Canada provides services to KPMG LLP.
4
Basis for Opinion
We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the "Auditors’ Responsibilities for the Audits of the Financial Statements" section of our auditors’ report.
We are independent of the Funds in accordance with the ethical requirements that are relevant to our audits of the financial statements in Canada and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our opinion.
Other Information
Management is responsible for the other information. Other information comprises:
• the information included in the Management Report of Fund Performance filed with the relevant Canadian Securities Commissions.
Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.
In connection with our audits of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audits and remain alert for indications that the other information or appears to be materially misstated.
We obtained the Management Report of Fund Performance filed with the relevant Canadian Securities Commissions as at the date of this auditors’ report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in the auditors’ report.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
5
In preparing the financial statements, management is responsible for assessing the Funds’ ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Funds or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Funds’ financial reporting process.
Auditors’ Responsibilities for the Audits of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit.
We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinions.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audits in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
6
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Funds’ ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Funds to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits and significant audit findings, including any significant deficiencies in internal control that we identify during our audits.
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Canada
March 26, 2019
7
Ninepoint Gold and Precious Minerals Fund (formerly, Sprott Gold and Precious Minerals Fund)
2,462,280 Chakana Copper Corp. 1,676,817 1,034,158
493,594 Copperbank Resources Corp., Warrants Oct 21, 2019 2,404 4,936
1,810,100 First Mining Gold Corp., Warrants Aug 5, 2019 2,849 -
769,897 Minco Base Metals Corp.** 866,500 - 34 Perseus Mining Ltd., Warrants Mar 9, 2020 - -
1,930,300 Wallbridge Mining Co Ltd. 584,077 308,848
3,132,647 1,347,942
OIL & GAS [0.77%]
600,000 Energold Drilling Corp., Warrants Mar 1, 2019 1,422 -
460,600 Energold Drilling Corp., Warrants Jun 14, 2022 1,034 127
642,060 Gastem Inc.** - -
3,582,000 Oilsands Quest Inc.** - -
512,500 Rodinia Oil Corp.** - -
700,000 White Gold Corp. 976,850 1,120,000
979,306 1,120,127
Total Equities and Warrants 147,804,319 132,279,691
OUNCES BULLION [1.16%]
79,954 Silver Bullion 1,614,100 1,690,967
Total Bullion 1,614,100 1,690,967
Transaction Costs (note 3) (308,156) -
Net Investments [96.64%] 155,636,767 140,862,134
Cash and Other Assets Less Liabilities [3.36%] 4,903,329
Total Net Assets attributable to holders of redeemable units [100.00%] 145,765,463
** Private Company.
See accompanying notes which are an integral part of these financial statements
Ninepoint Gold and Precious Minerals Fund (formerly, Sprott Gold and Precious Minerals Fund)
Notes to financial statements – Fund specific information December 31, 2018
14
Financial Risk Management (note 6)
Investment Objective The primary objective of the Fund is to provide long-term capital growth. In order to achieve its investment objective, the Fund invests
primarily in gold, gold certificates, precious metals and minerals, certificates relating to such metals and minerals and/or in equity securities of
companies that are directly or indirectly involved in the exploration, mining, production or distribution of gold and precious metals and
minerals.
The Schedule of Investment Portfolio presents the securities held by the Fund as at December 31, 2018. Significant risks that are relevant to the
Fund are discussed here. General information on risks and risk management is described in Note 6 of the Generic Notes.
Market Risk a) Other Price Risk
As at December 31, 2018 and 2017, if the S&P/TSX Global Gold Total Return Index were to fluctuate by 10%, with all other variables held
constant, Net Assets attributable to holders of redeemable units would increase or decrease by the amounts shown in the table below. This is a
measure based on the historical relationship of the Fund’s performance against the index noted above. The composition of this calculation
contains several subjective components that, although reasonably estimated, could alter the resulting estimate should these components be
modified based on revised assumptions.
December 31, 2018 December 31, 2017
Impact
As a % of Net Assets
attributable to holders
of redeemable units
Impact
As a % of Net Assets
attributable to holders
of redeemable units $ % $ %
13,410,423 9.20 15,218,935 9.20
b) Currency Risk
The tables below summarize the Fund’s exposure to currency risk as at December 31, 2018 and 2017. The tables also illustrate the potential
impact to the Fund’s Net Assets attributable to holders of redeemable units as a result of 1% changes in these currencies relative to the
Canadian dollar, with all other variables held constant.
December 31, 2018
Currency Fair Value
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units $ % $
Australian Dollar 27,109,913 18.60 271,099
U.S. Dollar 20,111,592 13.80 201,116
Pound Sterling 11,086,763 7.60 110,868
58,308,268 40.00 583,083
December 31, 2017
Currency Fair Value
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units $ % $
Australian Dollar 35,881,470 21.69 358,815
U.S. Dollar 16,721,762 10.11 167,217
Pound Sterling 4,046,897 2.45 40,469
56,650,129 34.25 566,501
Ninepoint Gold and Precious Minerals Fund (formerly, Sprott Gold and Precious Minerals Fund)
Notes to financial statements – Fund specific information December 31, 2018
15
c) Interest Rate Risk
As of December 31, 2018, 4.73% (December 31, 2017 - 5.50%) of the Fund's Net Assets attributable to holders of redeemable units were
invested in fixed income securities, 98.04% of which were private loans (December 31, 2017 - 73.43%). As a result, a 1% change in interest
rates would not have a significant impact on the Fund.
Credit Risk As of December 31, 2018, 4.73% (December 31, 2017 - 5.50%) of the Fund's Net Assets attributable to holders of redeemable units were
invested in fixed income securities, 98.04% of which were private loans (December 31, 2017 - 73.43%). As a result, the credit risk is
considered minimal.
Concentration Risk The table below summarizes the Fund’s concentration risk as a percentage of Net Assets attributable to holders of redeemable units as at
December 31, 2018 and 2017:
December 31, 2018 December 31, 2017 % %
Equities and Warrants:
Precious Metals 89..06 92.04
Base Metals 0.92 0.31
Oil & Gas 0.77 –
Bonds, Convertible Debentures and Loans 4.73 5.50
Silver Bullion 1.16 –
Options purchased – 2.15
Cash and Other Assets Less Liabilities 3.36 –
Total Net Assets attributable to holders of redeemable units 100.00 100.00
Fair Value Measurements (note 5)
The Fund’s assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the tables below as at
December 31, 2018 and 2017:
December 31, 2018
Level 1 Level 2 Level 3 Total
$ $ $ $
Equities 129,678,787 1,135,834 1,386,000 132,200,261 Warrants and Rights 5,170 73,900 – 79,070 Silver Bullion 1,690,967 – – 1,690,967
Bonds, Convertible Debentures and Loans – – 6,891,476 6,891,476
Bonds, Convertible Debentures and Loans – 2,415,895 6,676,337 9,092,232
Options purchased 3,558,779 – – 3,558,779
150,702,388 6,144,155 8,575,087 165,421,630
During the years ended December 31, 2018 and 2017, there were no significant transfers between levels other than the transfers indicated
below, which resulted from the public offering of the security.
Ninepoint Gold and Precious Minerals Fund (formerly, Sprott Gold and Precious Minerals Fund)
Notes to financial statements – Fund specific information December 31, 2018
16
The reconciliation of investments measured at fair value using unobservable inputs (Level 3) for the years ended December 31, 2018 and 2017,
is presented as follows:
December 31, 2018 December 31, 2017
Equities
Bonds and
Convertible
Debentures Equities
Bonds and
Convertible
Debentures $ $ $ $
Balance at beginning of period 1,898,750 6,676,337 1,969,800 –
Net transfers out (1,474,054) – – –
Purchases 961,304 976,866 512,750 6,661,175
Sales – (1,173,410) – –
Realized gains (losses) – 61,872 – –
Change in unrealized appreciation (depreciation) in the value of
investments
– 349,811 (583,800) 15,162
Balance at end of period 1,386,000 6,891,476 1,898,750 6,676,337
Change in unrealized appreciation during the year for investments held at
end of period – 353,051 – 15,162
The Fund’s Level 3 securities consist of private equity and private bond and convertible debenture positions. The Manager determines their fair
value by utilizing a variety of valuation techniques such as the use of comparable recent transactions, discounted cash flows and other
techniques used by market participants. The significant unobservable input used in these valuation techniques can vary considerably over time
depending on company specific factors and economic or market conditions. The potential impact of applying reasonable possible alternative
assumptions for valuing material Level 3 financial assets or liabilities is as follows:
December 31, 2018 Increase Decrease
Impact on Net assets attributable to holders of redeemable units 0.10% (0.12%)
December 31, 2017 Increase Decrease
Impact on Net assets attributable to holders of redeemable units 0.10% (0.08%)
Restricted Cash and Investments (note 10)
As at December 31, 2018 restricted cash and investments held for the Fund totaled $nil (December 31, 2017 - $127).
Management Fees (note 11)
This fee differs among the series of units of the Fund as set out in the chart below:
Series A Series D Series F Series I* Series QF
Up to 2.50% Up to 2.00% Up to 1.50% Negotiated by the
Unitholder
Up to 1.15%
* The management fee for Series I units of the Fund is negotiated by the unitholder and may be paid directly by the Fund or by the unitholder.
Related Party Holdings Ninepoint Financial Group, the parent company of the Fund manager, and its respective subsidiaries, held the following investments in the
Fund as at December 31, 2018 and 2017:
December 31, 2018 December 31, 2017 Units held
Class F 25 25
Value of units held ($) 888 1,005
Tax Loss Carryforwards (note 3)
As of the taxation year ended December 31, 2018, the Fund had capital and non-capital losses available for tax purposes as follows:
Ninepoint Gold and Precious Minerals Fund (formerly, Sprott Gold and Precious Minerals Fund)
Notes to financial statements – Fund specific information December 31, 2018
17
Capital losses Non-capital losses
Non-capital losses
year of expiry $ $
197,861,591 167,088 2034
– 2,887,641 2035
– 2,209,077 2037
– 6,552,733 2038
Sharing Arrangements (note 13)
During the year ended December 31, 2018, the Fund paid $32,985 out of the total transaction costs incurred to certain brokers for research
provided to the portfolio manager (December 31, 2017 — $9,917).
Fund Merger During the year ended December 31, 2018, the Fund acquired all the assets of the funds listed below (the “Acquired Funds”), and in exchange,
it issued shares to the Acquired Funds. In turn, those shares were distributed to the shareholders of the Acquired Funds. The Manager was the
investment advisor to the Acquired Funds.
Transfer Date Acquired Fund
Fair Value of Assets
Acquired by the Fund
Number of shares issued by the
Fund to the Acquired Fund July 31, 2018 Ninepoint Bull/Bear RSP Fund (formerly, Sprott
Bull/Bear RSP Fund)
$3,243,251
98,023
July 31, 2018 Ninepoint Hedge Fund L.P. (formerly, Sprott
Hedge Fund L.P.)
$16,047,520
450,642
July 31, 2018 Ninepoint Hedge Fund L.P. II (formerly, Sprott
Hedge Fund L.P. II)
$6,107,118
183,999
See accompanying generic notes which are an integral part of these financial statements
18
Ninepoint Energy Fund (formerly, Sprott Energy Fund)
90,000 Diamondback Energy Inc. 14,171,330 11,389,864
2,900,000 Kelt Exploration Ltd. 16,752,435 13,456,000
3,200,000 NuVista Energy Ltd. 17,081,412 13,056,000
900,000 Oasis Petroleum Inc. 10,344,951 6,794,600
500,000 Parsley Energy Inc. 17,316,735 10,907,948
675,000 WPX Energy Inc. 13,411,525 10,459,139
132,864,562 96,078,669
OIL AND GAS EQUIPMENT AND SERVICES [9.71%]
700,000 Centennial Resource Development Inc. 14,465,118 10,531,153
14,465,118 10,531,153
Total Equities 147,329,680 106,609,822
Transaction Costs (note 3) (425,617) -
Total Investments [98.30%] 146,904,063 106,609,822
Total unrealized depreciation on forward currency contracts [-0.91%] (Schedule 1) (983,664)
Cash and Other Assets Less Liabilities [2.61%] 2,833,726
Total Net Assets attributable to holders of redeemable units [100.00%] 108,459,884
See accompanying notes which are an integral part of these financial statements
24
Ninepoint Energy Fund (formerly, Sprott Energy Fund)
Forward Currency Contracts (Schedule 1)
As at December 31, 2018
Contract Cost
$(CAD)
Forward
Value
$(CAD)
Unrealized
Depreciation
$(CAD) Bought ($) Sold ($)
Settlement
Date
44,404,096 Canadian Dollar (33,260,000) U.S. Dollar 18-Jan-19 (44,404,096) (45,387,760) (983,664)
(983,664)
Ninepoint Energy Fund (formerly, Sprott Energy Fund)
Notes to financial statements – Fund specific information December 31, 2018
25
Financial Risk Management (note 6)
Investment Objective The Fund seeks to achieve long-term capital growth. The Fund invests primarily in equity and equity-related securities of companies that are
involved directly or indirectly in the exploration, development, production and distribution of oil, gas, coal, or uranium and other related
activities in the energy and resource sector.
The Schedule of Investment Portfolio presents the securities held by the Fund as at December 31, 2018. Significant risks that are relevant to
the Fund are discussed here. General information on risks and risk management is described in Note 6 of the Generic Notes.
Market Risk a) Other Price Risk
As at December 31, 2018 and 2017, if the S&P/TSX Capped Energy Total Return Index were to fluctuate by 10%, with all other variables held
constant, Net Assets attributable to holders of redeemable units would increase or decrease by the amounts shown in the table below. This is a
measure based on the historical relationship of the Fund’s performance against the index noted above. The composition of this calculation
contains several subjective components that, although reasonably estimated, could alter the resulting estimate should these components be
modified based on revised assumptions.
December 31, 2018 December 31, 2017
Impact
As a % of Net Assets
attributable to holders
of redeemable units Impact
As a % of Net Assets
attributable to holders
of redeemable units $ % $ %
13,340,566 12.30 19,361,727 12.20
b) Currency Risk
The tables below summarize the Fund’s exposure to currency risk as at December 31, 2018 and 2017. The tables also illustrate the potential
impact to the Fund’s Net Assets attributable to holders of redeemable units as a result of 1% changes in these currencies relative to the
Canadian dollar, with all other variables held constant.
December 31, 2018
Currency Fair Value
Forward Currency
Contracts Net Exposure
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units
$ $ $ % $
U.S. Dollar 57,168,073 (45,387,760) 11,780,313 10.86 117,803
December 31, 2017
Currency Fair Value
Forward Currency
Contracts Net Exposure
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units
$ $ $ % $
U.S. Dollar 74,681,329 (62,206,647) 12,474,682 7.86 124,747
c) Interest Rate Risk
As at December 31, 2018 and 2017, the Fund did not have a significant exposure to interest rate risk.
Credit Risk As at December 31, 2018 and 2017, the Fund was exposed to credit risk from over-the-counter derivative contracts with counterparties. The
credit risk was considered minimal as these counterparties have a minimal credit rating of AA- by S&P or equivalent.
Ninepoint Energy Fund (formerly, Sprott Energy Fund)
Notes to financial statements – Fund specific information December 31, 2018
26
Concentration Risk The table below summarizes the Fund’s concentration risk as a percentage of Net Assets attributable to holders of redeemable units as at
December 31, 2018 and 2017:
December 31, 2018 December 31, 2017
% %
Equities:
Oil and Gas Exploration and Production 88.59 34.83 Oil and Gas Equipment and Services 9.71 63.26
Unrealized appreciation on forward currency contracts – 0.05
Unrealized depreciation on forward currency contracts (0.91) –
Cash and Other Assets Less Liabilities 2.61 1.86
Total Net Assets attributable to holders of redeemable units 100.00 100.00
Fair Value Measurements (note 5)
The Fund’s assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the tables below as at
During the years ended December 31, 2018 and 2017, there were no significant transfers between levels.
Management Fees (note 11)
This fee differs among the series of units of the Fund as set out in the chart below:
Series A Series D Series F Series I* Series PTF
Up to 2.50% Up to 2.00% Up to 1.50% Negotiated by the
Unitholder
Up to 1.50%
* The management fee for Series I units of the Fund is negotiated by the unitholder and may be paid directly by the Fund or by the unitholder.
Related Party Broker Commissions Brokerage commissions paid by the Fund to SP Wealth, a related party of Ninepoint Financial Group Inc., for brokerage services
provided to the Fund for the period ended December 31, 2018 were $185,871. There were no brokerage commissions paid to SP
Wealth for the period ended December 31, 2017.
Ninepoint Energy Fund (formerly, Sprott Energy Fund)
Notes to financial statements – Fund specific information December 31, 2018
27
Tax Loss Carryforwards (note 3)
As of the taxation year ended December 31, 2018, the Fund had capital and non-capital losses available for tax purposes as follows:
Capital losses Non-capital losses
Non-capital losses
year of expiry $ $
114,974,432 3,002,680 2028
– 2,083,078 2029
– 2,820,390 2030
– 1,986,159 2032
– 323,020 2033
– 3,631,410 2037
– 2,441,670 2038
Sharing Arrangements (note 13)
During the year ended December 31, 2018, the Fund paid $50,178 out of the total transaction costs incurred to certain brokers for
research provided to the portfolio manager (December 31, 2017 - $31,876).
Fund Merger During the year ended December 31, 2018, the Fund acquired all the assets of the funds listed below (the “Acquired Fund”), and in exchange,
it issued shares to the Acquired Fund. In turn, those shares were distributed to the shareholders of the Acquired Fund. The Manager was the
investment advisor to the Acquired Fund.
Transfer Date Acquired Fund
Fair Value of Assets
Acquired by the Fund
Number of shares issued by the
Fund to the Acquired Fund November 29, 2018 Ninepoint Energy Opportunities Trust (formerly,
Sprott Energy Opportunities Trust)
$15,542,462
1,581,302
See accompanying generic notes which are an integral part of these financial statements
28
Ninepoint Gold Bullion Fund (formerly, Sprott Gold Bullion Fund)
Statements of Financial Position
(in Canadian Dollars)
As at December 31 2018 2017
$ $
Assets
Current assets
Investments (note 3, 5) 122,007,405 131,191,991
Cash - 279,857
Subscriptions receivable 120,794 63,781
Total assets 122,128,199 131,535,629
Liabilities
Current liabilities
Bank indebtedness 64,518 -
Accrued expenses 60,128 74,558
Redemptions payable 28,877 59,259
Total liabilities 153,523 133,817
Net Assets attributable to holders of redeemable units 121,974,676 131,401,812
Net Assets attributable to holders of redeemable units per series
Series A 64,092,220 70,699,303
Series F 57,882,456 60,702,509
Net Assets attributable to holders of redeemable units per series per unit (note 8)
Series A 13.60 12.90
Series F 14.04 13.27
Series A $US 9.97 10.26
Series F $US 10.29 10.56
See accompanying notes which are an integral part of these financial statements
On behalf of the Manager, Ninepoint Partners LP,
by its General Partner, Ninepoint Partners GP Inc.
John Wilson Kirstin McTaggart
DIRECTOR DIRECTOR
29
Ninepoint Gold Bullion Fund (formerly, Sprott Gold Bullion Fund)
Statements of Comprehensive Income (Loss)
(in Canadian Dollars, except unit amounts)
For the years ended December 31 2018 2017
$ $
Income
Net gain (loss) on investments:
Interest income for distribution purposes (note 3) 84 116
Net realized gains on sales of investments 2,544,533 2,536,239
Change in unrealized appreciation in the value of investments 4,913,263 5,285,559
Net realized losses on foreign exchange (7,578) (32,052)
Units, end of year 4,711,243 4,122,474 - 5,481,741 4,575,841 -
See accompanying notes which are an integral part of these financial statements
32
Ninepoint Gold Bullion Fund (formerly, Sprott Gold Bullion Fund)
Statements of Cash Flows
(in Canadian Dollars)
For the years ended December 31 2018 2017
$ $
Cash flows from operating activities
Increase in Net Assets attributable to holders of redeemable units from operations 6,106,594 6,343,340
Adjustments for:
Foreign exchange gains on cash (1,511) (95)
Net realized gains on sales of investments (2,544,533) (2,536,239)
Change in unrealized appreciation in the value of investments (4,913,263) (5,285,559)
Purchases of investments (2,699,457) (8,385,452)
Proceeds from sales of investments 19,341,839 17,107,784
Net decrease in other assets and liabilities (14,430) (9,380)
Net cash provided by operating activities 15,275,239 7,234,399
Cash flows from financing activities
Proceeds from redeemable units issued 18,055,173 24,491,991
Redemption of redeemable units (33,676,298) (31,885,090)
Net cash used in financing activities (15,621,125) (7,393,099)
Foreign exchange gains on cash 1,511 95
Net decrease in cash (345,886) (158,700)
Cash at beginning of year 279,857 438,462
Cash (Bank indebtedness) at end of year (64,518) 279,857
Supplemental Information
Interest received 84 116
See accompanying notes which are an integral part of these financial statements
33
Ninepoint Gold Bullion Fund (formerly, Sprott Gold Bullion Fund)
Schedule of Investment Portfolio As at December 31, 2018 Average Cost Fair Value
$ $
OUNCES BULLION [100.03%]
69,702 Gold Bullion 97,573,596 122,007,405
Total Investments [100.03%] 97,573,596 122,007,405
Cash and Other Assets Less Liabilities [-0.03%] (32,729)
Total Net Assets attributable to holders of redeemable units [100.00%] 121,974,676
See accompanying notes which are an integral part of these financial statements
Ninepoint Gold Bullion Fund (formerly, Sprott Gold Bullion Fund)
Notes to financial statements – Fund specific information December 31, 2018
34
Financial Risk Management (note 6)
Investment Objective The investment objective of the Fund is to seek to provide a secure, convenient alternative for investors seeking to hold gold. The Fund will
invest primarily in unencumbered, fully allocated gold bullion, permitted gold certificates and/or closed-end funds with the underlying interest
of which is gold. The Fund may also invest a portion of its assets in cash, money market instruments and/or treasury bills. The Fund will only
purchase and expects to only own “Good Delivery Bars” as defined by the London Bullion Market Association (“LBMA”), with each bar
purchased being verified against the LBMA source.
The Schedule of Investment Portfolio presents the investments held by the Fund as at December 31, 2018. Significant risks that are relevant to
the Fund are discussed here. General information on risks and risk management is described in Note 6 of the Generic Notes.
Market Risk a) Other Price Risk
If the price of gold bullion were to fluctuate by 10%, with all other variables held constant, the Fund’s Net Assets attributable to holders of
redeemable units would increase or decrease by the amounts shown in the table below.
December 31, 2018 December 31, 2017
Impact
As a % of Net Assets
attributable to holders
of redeemable units
Impact
As a % of Net Assets
attributable to holders
of redeemable units $ % $ %
12,200,741 10.01 13,119,199 9.98
b) Currency Risk
The tables below summarize the Fund’s exposure to currency risk as at December 31, 2018 and 2017. The tables also illustrate the potential
impact to the Fund’s Net Assets attributable to holders of redeemable units as a result of 1% changes in these currencies relative to the
Canadian dollar, with all other variables held constant.
December 31, 2018
Currency Fair Value
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units $ % $
U.S. Dollar 122,079,097 100.09 1,220,791
December 31, 2017
Currency Fair Value
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units) $ % $
U.S. Dollar 131,184,603 99.83 1,311,846
c) Interest Rate Risk
As at December 31, 2018 and 2017, the Fund did not have a significant exposure to interest rate risk.
Credit Risk As at December 31, 2018 and 2017, the Fund did not have a significant exposure to credit risk.
Ninepoint Gold Bullion Fund (formerly, Sprott Gold Bullion Fund)
Notes to financial statements – Fund specific information December 31, 2018
35
Concentration Risk The table below summarizes the Fund’s concentration risk as a percentage of Net Assets attributable to holders of redeemable units as at
December 31, 2018 and 2017:
December 31, 2018 December 31, 2017 % %
Gold Bullion 100.03 99.84 Cash and Other Assets Less Liabilities (0.03) 0.16 Total Net Assets attributable to holders of redeemable units 100.00 100.00
Fair Value Measurements (note 5)
The Fund’s assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the tables below as at
December 31, 2018 and 2017:
December 31, 2018
Level 1 Level 2 Level 3 Total $ $ $ $
Gold Bullion 122,007,405 – – 122,007,405
December 31, 2017
Level 1 Level 2 Level 3 Total $ $ $ $
Gold Bullion 131,191,991 – – 131,191,991
During the years ended December 31, 2018 and 2017, there were no significant transfers between levels.
Management Fees (note 11)
This fee differs among the series of units of the Fund as set out in the chart below:
Series A Series F Series I*
Up to 0.80% Up to 0.50% Negotiated by the
Unitholder
* The management fee for Series I units of the Fund is negotiated by the unitholder and may be paid directly by the Fund or by the unitholder.
Tax Loss Carryforwards (note 3)
As of the taxation year ended December 31, 2018, the Fund had no capital and non-capital losses available for tax purposes.
See accompanying generic notes which are an integral part of these financial statements
36
Ninepoint Diversified Bond Fund (formerly, Sprott Diversified Bond Fund)
Increase in Net Assets attributable to holders of redeemable units from operations 1,908,342 10,545,371
Increase (decrease) in Net Assets attributable to holders of redeemable units from operations per series
Series A (177,189) 1,209,446
Series F 19,970 1,037,653
Series I 2,063,572 7,751,877
Series P (2,158) -
Series PF 29,480 386,888
Series T (15,135) 123,734
Series FT 40 35,773
Series QF (3,309) -
Series QFT (6,929) -
Weighted average number of redeemable units
Series A 2,363,271 2,623,295
Series F 2,464,882 1,787,840
Series I 20,594,097 11,968,660
Series P 99,709 -
Series PF 707,280 701,653
Series T 278,961 332,088
Series FT 96,494 71,917
Series QF 69,170 -
Series QFT 151,903 -
38
Ninepoint Diversified Bond Fund (formerly, Sprott Diversified Bond Fund)
Statements of Comprehensive Income (Loss) continued
(in Canadian Dollars, except unit amounts)
For the years ended December 31 2018 2017
$ $
Increase (decrease) in Net Assets attributable to holders of redeemable units from operations per series per unit (note 3)
Series A (0.07) 0.46
Series F 0.01 0.58
Series I 0.10 0.65
Series P (0.02) -
Series PF 0.04 0.55
Series T (0.05) 0.37
Series FT 0.00 0.50
Series QF (0.05) -
Series QFT (0.05) -
See accompanying notes which are an integral part of these financial statements
39
Ninepoint Diversified Bond Fund (formerly, Sprott Diversified Bond Fund)
Statements of Changes in Net Assets Attributable to Holders of Redeemable Units
(in Canadian Dollars, except unit amounts)
For the years ended December 31 2018 2017
$ $
Net Assets attributable to holders of redeemable units, beginning of year
Series A 25,087,250 30,342,006
Series F 17,556,971 24,768,631
Series I 134,993,568 114,744,591
Series P - -
Series PF 7,484,553 7,097,665
Series T 2,642,001 3,069,310
Series FT 594,668 697,104
Series QF - -
Series QFT - -
188,359,011 180,719,307
Increase (decrease) in Net Assets attributable to holders of redeemable units from operations
Series A (177,189) 1,209,446
Series F 19,970 1,037,653
Series I 2,063,572 7,751,877
Series P (2,158) -
Series PF 29,480 386,888
Series T (15,135) 123,734
Series FT 40 35,773
Series QF (3,309) -
Series QFT (6,929) -
1,908,342 10,545,371
Distributions to holders of redeemable units continued
From net investment income
Series A (527,549) (603,253)
Series F (819,594) (608,418)
Series I (8,764,122) (5,156,173)
Series P (3,192) -
Series PF (234,257) (236,017)
Series T (113,206) (157,200)
Series FT (41,681) (38,415)
Series QF (6,868) -
Series QFT (20,865) -
From capital gains
Series A - (141,584)
Series F - (99,142)
Series I - (761,402)
Series P - -
Series PF - (42,216)
Series T - (15,073)
Series FT - (3,390)
Series QF - -
Series QFT - -
From return of capital
Series A - -
Series F - -
Series I - -
Series P - -
Series PF - -
Series T - (13,529)
Series FT - (3,013)
Series QF - -
Series QFT - -
(10,531,334) (7,878,825)
40
Ninepoint Diversified Bond Fund (formerly, Sprott Diversified Bond Fund)
Statements of Changes in Net Assets Attributable to Holders of Redeemable Units continued
(in Canadian Dollars, except unit amounts)
For the years ended December 31 2018 2017
$ $
Redeemable unit transactions (note 8)
Proceeds from redeemable units issued
Series A 13,380,579 4,236,514
Series F 25,163,018 3,602,827
Series I 212,911,958 55,040,876
Series P 996,428 -
Series PF 236,063 -
Series T 246,200 320,209
Series FT 831,242 458,204
Series QF 794,998 -
Series QFT 1,664,427 -
Reinvestments of distributions to holders of redeemable units
Series A 456,290 675,549
Series F 668,513 602,695
Series I 8,761,228 5,917,198
Series P 3,192 -
Series PF 234,257 278,233
Series T - -
Series FT - -
Series QF - -
Series QFT - -
Redemption of redeemable units
Series A (13,475,486) (10,631,428)
Series F (6,223,381) (11,747,275)
Series I (31,705,335) (42,543,399)
Series P - -
Series PF (574,805) -
Series T (718,834) (685,450)
Series FT (96,226) (551,595)
Series QF (81,153) -
Series QFT (27,716) -
213,445,457 4,973,158
Net increase (decrease) in Net Assets attributable to holders of redeemable units
Series A (343,355) (5,254,756)
Series F 18,808,526 (7,211,660)
Series I 183,267,301 20,248,977
Series P 994,270 -
Series PF (309,262) 386,888
Series T (600,975) (427,309)
Series FT 693,375 (102,436)
Series QF 703,668 -
Series QFT 1,608,917 -
204,822,465 7,639,704
Net Assets attributable to holders of redeemable units, end of year
Series A 24,743,895 25,087,250
Series F 36,365,497 17,556,971
Series I 318,260,869 134,993,568
Series P 994,270 -
Series PF 7,175,291 7,484,553
Series T 2,041,026 2,642,001
Series FT 1,288,043 594,668
Series QF 703,668 -
Series QFT 1,608,917 -
393,181,476 188,359,011
41
Ninepoint Diversified Bond Fund (formerly, Sprott Diversified Bond Fund)
Statements of Changes in Net Assets Attributable to Holders of Redeemable Units continued
Changes in outstanding redeemable units of the Fund for the years ended December 31,
2018 2017 Series A Series F Series I Series P Series PF Series T Series FT Series QF Series QFT Series A Series F Series I Series PF Series T Series FT
iShares iBoxx $ Investment Grade Corporate Bond ETF Put (350) 17-Jan-20 105.00 USD (58,759) (65,686)
(119,907) (152,869)
Ninepoint Diversified Bond Fund (formerly, Sprott Diversified Bond Fund)
Notes to financial statements – Fund specific information December 31, 2018
47
Financial Risk Management (note 6)
Investment Objective The Fund’s investment objective is to maximize total return and provide income by investing primarily in debt and debt-like securities of
corporate and government issuers from around the world.
The Schedule of Investment Portfolio presents the securities held by the Fund as at December 31, 2018. Significant risks that are relevant to the
Fund are discussed here. General information on risks and risk management is described in Note 6.
Market Risk a) Other Price Risk
As at December 31, 2018 and 2017, the Fund did not have a significant exposure to other price risk.
b) Currency Risk
The tables below summarize the Fund’s exposure to currency risk at December 31, 2018 and 2017. The tables also illustrate the potential
impact to the Fund’s Net Assets attributable to holders of redeemable units as a result of 1% changes in these currencies relative to the
Canadian dollar, with all other variables held constant.
December 31, 2018
Currency Fair Value
Forward Currency
Contracts Net Exposure
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units $ $ $ % $
U.S. Dollar 37,296,892 (38,394,637) (1,097,745) (0.28) (10,977)
Euro 2,474,473 (2,345,444) 129,029 0.03 1,290
39,771,365 (40,740,081) (968,716) (0.25) (9,687)
December 31, 2017
Currency Fair Value
Forward Currency
Contracts Net Exposure
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units $ $ $ % $
U.S. Dollar 46,078,741 (44,675,683) 1,403,058 0.74 14,031
The table below summarizes the Fund’s exposure to interest rate risk, categorized by earlier of contractual re-pricing or maturity dates as at
December 31, 2018 and 2017. The table also illustrates the potential impact to the Fund’s Net Assets attributable to holders of redeemable
units, had interest rates increased or decreased by 1% with all other variables remaining constant. In practice, the actual results may differ from
this sensitivity analysis and the difference could be material. The Fund’s short-term assets and liabilities are not subject to a significant amount
of risk due to fluctuations in the prevailing level of market interest rates.
Total Exposure
Term to Maturity December 31, 2018 December 31, 2017 $ $
Less than 1 year 60,396,672 53,559,315
1-5 years 154,008,413 44,484,933
>5 years 129,359,960 61,901,342
Total 343,765,045 159,945,590
Impact on Net Assets attributable to holders of redeemable units ($) 8,147,232 2,927,004
Impact on Net Assets attributable to holders of redeemable units (%) 2.07 1.55
Ninepoint Diversified Bond Fund (formerly, Sprott Diversified Bond Fund)
Notes to financial statements – Fund specific information December 31, 2018
48
Credit Risk The Fund invests in debt instruments, which have a credit rating as rated primarily by Dominion Bond Rating Services, Standard & Poor’s or
Moody’s. The Fund generally invests in fixed income securities issued or generated by the Canadian government or its agencies, other
Canadian issuers, foreign governments or their agencies, other foreign issuers, and supranational organizations. Ratings for securities that
subject the Fund to credit risk as at December 31, 2018 and 2017, as a percentage of Net Assets attributable to holders of redeemable units, are
summarized as below.
December 31, 2018 December 31, 2017 December 31, 2016
% %
AAA/Aaa 6.42 24.46
AA/Aa 4.98 –
A/A 18.39 2.16 –
BBB/Baa 45.74 27.20 9.20
BB/Ba 7.65 13.76 23.26
B 3.46 16.00 28.97
CCC – 1.32 6.96
Not Rated 0.80 2.40 2.44
Total 87.44 87.30 89.96
As at December 31, 2018 and 2017, the Fund is also exposed to credit risk from over-the-counter derivative contracts with counterparties. The
credit risk is considered minimal as these counterparties have a minimum credit rating of AA- by S&P or equivalent.
Concentration Risk The table below summarizes the Fund’s concentration risk as a percentage of Net Assets attributable to holders of redeemable units as at
Asset-Backed Securities 2.91 1.05 Bonds and Convertible Debentures – Short:
Government Bonds – (2.39) Short-Term Investments 5.36 23.41 Equities and Warrants:
Financials 1.86 5.49 Other 0.75 –
Funds 1.37 –
Unrealized appreciation on forward currency contracts – 0.55 Unrealized depreciation on forward currency contracts (0.26) – Options purchased 0.04 0.57 Options written (0.04) (0.64) Cash and Other Assets Less Liabilities 8.84 9.12 Total Net Assets attributable to holders of redeemable units 100.00 100.00
Ninepoint Diversified Bond Fund (formerly, Sprott Diversified Bond Fund)
Notes to financial statements – Fund specific information December 31, 2018
49
The Fund’s investment portfolio is concentrated in the following geographic segments as at December 31, 2018 and 2017:
December 31, 2018 December 31, 2017 % %
Canada 68.28 69.81
United States 17.03 11.79 United Kingdom 2.45 2.90 Germany 1.65 – Japan 1.27 – Switzerland 0.69 1.47 Other 0.05 3.08 France – 1.35 Unrealized appreciation on forward currency contracts – 0.55 Unrealized depreciation on forward currency contracts (0.26) – Options purchased 0.04 0.57 Options written (0.04) (0.64) Cash and Other Assets Less Liabilities 8.84 9.12 Total Net Assets attributable to holders of redeemable units 100.00 100.00
Fair Value Measurements (note 5)
The Fund’s assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the tables below as at
December 31, 2018 and 2017:
December 31, 2018
Level 1 Level 2 Level 3 Total $ $ $ $
Bonds and Convertible Debentures – Long – 331,067,550 172,940 331,240,490
Collateral as a percentage of securities loaned 102% –%
For the year ended December 31, 2018 and 2017, securities lending income was $nil. For the period ended December 31, 2018 and 2017,
securities lending charges represent nil% of the gross securities lending income.
Tax Loss Carryforwards (note 3)
As of the taxation year ended December 31, 2018, the Fund had capital and non-capital losses available for tax purposes as follows:
Capital losses Non-capital losses
Non-capital losses
year of expiry $ $
227,984 – –
Ninepoint Diversified Bond Fund (formerly, Sprott Diversified Bond Fund)
Notes to financial statements – Fund specific information December 31, 2018
51
Sharing Arrangements (note 13) During the year ended December 31, 2018, the Fund paid $nil out of the total transaction costs incurred to certain brokers for research provided
to the portfolio manager (December 31, 2017 - $15,444).
See accompanying generic notes which are an integral part of these financial statements
52
Ninepoint Short-Term Bond Fund (formerly, Sprott Short-Term Bond Fund)
Statements of Financial Position
(in Canadian Dollars)
As at December 31 2018 2017
$ $
Assets
Current assets
Investments (note 3, 5) 9,275,835 14,002,698
Cash 2,822,823 -
Interest receivable 37,564 114,568
Prepaid expenses - 532
Total assets 12,136,222 14,117,798
Liabilities
Current liabilities
Bank indebtedness - 152,356
Redemptions payable - 36,244
Accrued expenses 3,820 -
Total liabilities 3,820 188,600
Net Assets attributable to holders of redeemable units 12,132,402 13,929,198
Net Assets attributable to holders of redeemable units per series
Series A 2,876,468 3,538,898
Series F 3,054,339 3,949,010
Series I 5,983,337 6,340,751
Series I1 218,258 100,539
Net Assets attributable to holders of redeemable units per series per unit (note 8)
Series A 9.72 9.75
Series F 9.71 9.74
Series I 9.79 9.82
Series I1 10.02 10.05
See accompanying notes which are an integral part of these financial statements
On behalf of the Manager, Ninepoint Partners LP,
by its General Partner, Ninepoint Partners GP Inc.
John Wilson Kirstin McTaggart
DIRECTOR DIRECTOR
53
Ninepoint Short-Term Bond Fund (formerly, Sprott Short-Term Bond Fund)
Statements of Comprehensive Income (Loss)
(in Canadian Dollars, except unit amounts)
For the years ended December 31 2018 2017
$ $
Income
Net gain (loss) on investments:
Interest income for distribution purposes (note 3) 359,769 389,019
Dividends (note 3) - 6,964
Net realized losses on sales of investments (42,907) (116,104)
Change in unrealized appreciation (depreciation) in the value of investments 15,460 (32,336)
100,000 Canadian Government Bond, 0.75% May 1, 2019 99,438 99,712
99,438 99,712
Total Bonds and Convertible Debentures 9,304,137 9,275,835
Total Investments [76.46%] 9,304,137 9,275,835
Cash and Other Assets Less Liabilities [23.54%] 2,856,567
Total Net Assets attributable to holders of redeemable units [100.00%] 12,132,402
See accompanying notes which are an integral part of these financial statements
Ninepoint Short-Term Bond Fund (formerly, Sprott Short-Term Bond Fund)
Notes to financial statements – Fund specific information December 31, 2018
58
Financial Risk Management (note 6)
Investment Objective The Fund’s objective is to provide regular income while preserving capital and maintaining liquidity. The Fund invests primarily in short-term
debt securities issued by Canadian federal, provincial and municipal governments as well as corporate issuers.
The Schedule of Investment Portfolio presents the securities held by the Fund as at December 31, 2018. Significant risks that are relevant to the
Fund are discussed here. General information on risks and risk management is described in Note 6.
Market Risk a) Other Price Risk
As at December 31, 2018 and 2017, the Fund did not have a significant exposure to other price risk.
b) Currency Risk
As at December 31, 2018 and 2017 the Fund did not have a significant exposure to currency risk.
c) Interest Rate Risk
The table below summarizes the Fund’s exposure to interest rate risk, categorized by the earlier of contractual re-pricing or maturity dates as at
December 31, 2018 and 2017. The table also illustrates the potential impact to the Fund’s Net Assets attributable to holders of redeemable
units, had interest rates increased or decreased by 1% with all other variables remaining constant. In practice, the actual results may differ from
this sensitivity analysis and the difference could be material. The Fund’s short-term assets and liabilities are not subject to a significant amount
of risk due to fluctuations in the prevailing level of market interest rates.
Total Exposure
Term to Maturity December 31, 2018 December 31, 2017 $ $
Less than 1 year 3,504,095 2,352,554
1-5 years 5,771,740 9,318,359
>5 years – 1,575,785
Total 9,275,835 13,246,698
Impact on Net Assets attributable to holders of redeemable units ($) 50,090 239,765
Impact on Net Assets attributable to holders of redeemable units (%) 0.41 1.72
Credit Risk The Fund invests in debt instruments, which have a credit rating as rated primarily by Dominion Bond Rating Services, Standard & Poor’s or
Moody’s. The Fund will generally invest in high-quality fixed income securities issued or generated by the Canadian government or its
agencies, other Canadian issuers, foreign governments or their agencies, other foreign issuers, and supranational organizations. Ratings for
securities that subject the Fund to credit risk as at December 31, 2018 and 2017, as a percentage of Net Assets attributable to holders of
redeemable units, are summarized in the table below.
Rating December 31, 2018 December 31, 2017 % %
AAA/Aaa 0.82 0.71
AA/Aa 8.25 17.12
A/A 27.99 36.43
BBB/Baa 39.40 46.27
Total 76.46 100.53
Ninepoint Short-Term Bond Fund (formerly, Sprott Short-Term Bond Fund)
Notes to financial statements – Fund specific information December 31, 2018
59
Concentration Risk The table below summarizes the Fund’s concentration risk as a percentage of Net Assets attributable to holders of redeemable units as at
December 31, 2018 and 2017.
December 31, 2018 December 31, 2017 % %
Bonds and Convertible Debentures:
Corporate Bonds 75.64 94.39
Government Bonds 0.82 0.71
Equities
Financials – 5.43
Cash and Other Assets Less Liabilities 23.54 (0.53)
Total Net Assets attributable to holders of redeemable units 100.00 100.00
Fair Value Measurements (note 5)
The Fund’s assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the tables below as at
December 31, 2018 and 2017:
December 31, 2018
Level 1 Level 2 Level 3 Total $ $ $ $
Bonds and Convertible Debentures – 9,275,835 – 9,275,835
– 9,275,835 – 9,275,835
December 31, 2017
Level 1 Level 2 Level 3 Total $ $ $ $
Bonds and Convertible Debentures – 13,246,698 – 13,246,698
Equities 756,000 – – 756,000
756,000 13,246,698 – 14,002,698
During the years ended December 31, 2018 and 2017, there were no significant transfers between levels.
Management Fees (note 11)
This fee differs among the series of units of the Fund as set out in the chart below:
Series A Series F Series I* Series I1*
Up to 0.75% Up to 0.50% Negotiated by the
Unitholder
Negotiated by the
Unitholder
* The management fee for Series I units of the Fund is negotiated by the unitholder and may be paid directly by the Fund or by the unitholder.
Tax Loss Carryforwards (note 3)
As of the taxation year ended December 31, 2018, the Fund had capital and non-capital losses available for tax purposes as follows:
Capital losses Non-capital losses
Non-capital losses
year of expiry $ $
392,822 – –
See accompanying generic notes which are an integral part of these financial statements
60
Ninepoint Silver Bullion Fund (formerly, Sprott Silver Bullion Fund)
Statements of Financial Position
(in Canadian Dollars)
As at December 31 2018 2017
$ $
Assets
Current assets
Investments (note 3, 5) 43,384,379 65,530,882
Cash - 9,498
Due from broker 311,651 -
Subscriptions receivable 2,209 50,428
Total assets 43,698,239 65,590,808
Liabilities
Current liabilities
Bank indebtedness 62,336 -
Accrued expenses 56,037 83,329
Redemptions payable 71,494 110,235
Total liabilities 189,867 193,564
Net Assets attributable to holders of redeemable units 43,508,372 65,397,244
Net Assets attributable to holders of redeemable units per series
Series A 34,821,613 54,536,359
Series F 8,686,759 10,860,885
Net Assets attributable to holders of redeemable units per series per unit (note 8)
Series A 4.73 4.88
Series F 4.91 5.04
Series A $US 3.47 3.88
Series F $US 3.60 4.01
See accompanying notes which are an integral part of these financial statements
On behalf of the Manager, Ninepoint Partners LP,
by its General Partner, Ninepoint Partners GP Inc.
John Wilson Kirstin McTaggart
DIRECTOR DIRECTOR
61
Ninepoint Silver Bullion Fund (formerly, Sprott Silver Bullion Fund)
Statements of Comprehensive Income (Loss)
(in Canadian Dollars, except unit amounts)
For the years ended December 31 2018 2017
$ $
Income
Net gain (loss) on investments:
Interest income for distribution purposes (note 3) - 432
Net realized losses on sales of investments (8,395,987) (4,818,103)
Change in unrealized appreciation in the value of investments 7,671,632 4,189,166
Net realized gains (losses) on foreign exchange 118,867 (57,972)
Units, end of year 7,357,144 1,769,358 11,179,045 2,156,708
See accompanying notes which are an integral part of these financial statements
64
Ninepoint Silver Bullion Fund (formerly, Sprott Silver Bullion Fund)
Statements of Cash Flows
(in Canadian Dollars)
For the years ended December 31 2018 2017
$
Cash flows from operating activities
Decrease in Net Assets attributable to holders of redeemable units from operations (1,672,895) (2,220,743)
Adjustments for:
Foreign exchange (gains) losses on cash 16 (219)
Net realized losses on sales of investments 8,395,987 4,818,103
Change in unrealized appreciation in the value of investments (7,671,632) (4,189,166)
Purchases of investments - (5,323,703)
Proceeds from sales of investments 21,110,497 12,928,545
Net decrease in other assets and liabilities (27,292) (75,686)
Net cash provided by operating activities 20,134,681 5,937,131
Cash flows from financing activities
Proceeds from redeemable units issued 4,785,817 12,656,425
Redemption of redeemable units (24,992,316) (19,887,833)
Net cash used in financing activities (20,206,499) (7,231,408)
Foreign exchange gains (losses) on cash (16) 219
Net decrease in cash (71,818) (1,294,277)
Cash at beginning of year 9,498 1,303,556
Cash (Bank indebtedness) at end of year (62,336) 9,498
Supplemental Information
Interest received - 432
See accompanying notes which are an integral part of these financial statements
65
Ninepoint Silver Bullion Fund (formerly, Sprott Silver Bullion Fund)
Schedule of Investment Portfolio
As at December 31, 2018 Average Cost Fair Value $ $
OUNCES BULLION [99.72%]
2,051,052 Silver Bullion 59,541,448 43,384,379
Total Investments [99.72%] 59,541,448 43,384,379
Cash and Other Assets Less Liabilities [0.28%] 123,993
Total Net Assets attributable to holders of redeemable units [100.00%] 43,508,372
See accompanying notes which are an integral part of these financial statements
Ninepoint Silver Bullion Fund (formerly, Sprott Silver Bullion Fund)
Notes to financial statements – Fund specific information December 31, 2018
66
Financial Risk Management (note 6)
Investment Objective The investment objective of the Fund is to seek to provide a secure, convenient alternative for investors seeking to hold silver. The Fund will
invest primarily in unencumbered, fully allocated silver bullion and silver certificates. The Fund may also invest a portion of its assets in cash,
money market instruments and/or treasury bills. The Fund will only purchase and expects only to own “Good Delivery Bars” as defined by the
London Bullion Market Association (“LBMA”), with each bar purchased being verified against the LBMA source.
The Schedule of Investment Portfolio presents the investments held by the Fund as at December 31, 2018. Significant risks that are relevant to
the Fund are discussed here. General information on risks and risk management is described in Note 6 of the Generic Notes.
Market Risk a) Other Price Risk
If the price of silver bullion were to fluctuate by 10%, with all other variables held constant, the Fund’s Net Assets attributable to holders of
redeemable units would increase or decrease by the amounts shown in the table below.
December 31, 2018 December 31, 2017
Impact
As a % of Net Assets
attributable to holders
of redeemable units
Impact
As a % of Net Assets
attributable to holders
of redeemable units $ % $ %
4,338,438 9.97 6,553,088 10.02
b) Currency Risk
The tables below summarize the Fund’s exposure to currency risk as at December 31, 2018 and 2017. The tables also illustrate the potential
impact to the Fund’s Net Assets attributable to holders of redeemable units as a result of 1% changes in these currencies relative to the
Canadian dollar, with all other variables held constant.
December 31, 2018
Currency Fair Value
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units $ % $
U.S. Dollar 43,379,419 99.70 433,794
December 31, 2017
Currency Fair Value
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units $ % $
U.S. Dollar 65,513,953 100.18 655,140
c) Interest Rate Risk
As at December 31, 2018 and 2017, the Fund did not have a significant exposure to interest rate risk.
Credit Risk As at December 31, 2018 and 2017, the Fund did not have a significant exposure to credit risk.
Ninepoint Silver Bullion Fund (formerly, Sprott Silver Bullion Fund)
Notes to financial statements – Fund specific information December 31, 2018
67
Concentration Risk The table below summarizes the Fund’s concentration risk as a percentage of Net Assets attributable to holders of redeemable units as at
December 31, 2018 and 2017:
December 31, 2018 December 31, 2017 % %
Silver Bullion 99.72 100.20
Cash and Other Assets Less Liabilities 0.28 (0.20)
Total Net Assets attributable to holders of redeemable units 100.00 100.00
Fair Value Measurements (note 5)
The Fund’s assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the tables below as at
December 31, 2018 and 2017:
December 31, 2018
Level 1 Level 2 Level 3 Total $ $ $ $
Silver Bullion 43,384,379 – – 43,696,030
December 31, 2017
Level 1 Level 2 Level 3 Total $ $ $ $
Silver Bullion 65,530,882 – – 65,530,882
During the years ended December 31, 2018 and 2017, there were no significant transfers between levels.
Management Fees (note 11)
This fee differs among the series of units of the Fund as set out in the chart below:
Series A Series F Series I*
Up to 1.30% Up to 0.85% Negotiated by the
Unitholder
* The management fee for Series I units of the Fund is negotiated by the unitholder and may be paid directly by the Fund or by the unitholder.
Tax Loss Carryforwards (note 3)
As of the taxation year ended December 31, 2018, the Fund had capital and non-capital losses available for tax purposes as follows:
Capital losses Non-capital losses
Non-capital losses
year of expiry $ $
47,884,866 – –
See accompanying generic notes which are an integral part of these financial statements
68
Ninepoint Enhanced Balanced Fund (formerly, Sprott Enhanced Balanced Fund)
Ninepoint Enhanced Balanced Fund (formerly, Sprott Enhanced Balanced Fund)
Notes to financial statements – Fund specific information December 31, 2018
77
Financial Risk Management (note 6)
Investment Objective The Fund seeks to achieve long-term capital growth and to generate current income. The Fund invests primarily in Canadian equities and
fixed-income securities of Canadian issuers, and foreign equities and fixed income securities. The Fund provides downside protection through
tactical changes to asset allocation and the use of option strategies.
The Schedule of Investment Portfolio represents the securities held by the Fund as at December 31, 2018. Significant risks that are relevant to
the Fund are discussed here. The Fund invests in redeemable units of an investment fund managed by Ninepoint Partners LP (the “Underlying
Fund”) and third party investment managers to gain exposure to their investment objective and strategies. As a result, the Fund may be
indirectly exposed to other price risk, currency risk, interest rate risk, credit risk and concentration risk from these holdings. As at December 31,
2018, 60.60% (December 31, 2017 – 36.19%) of the Fund’s Net Assets attributable to holders of redeemable shares were invested in units of
the Underlying Fund and third party funds. Only direct exposure to significant risks that are relevant to the Fund are discussed here. For more
information regarding the risks of the Underlying Fund and third party funds, refer to their respective financial statements. General information
on risks and risk management is described in Note 6 of the Generic Notes.
Market Risk a) Other Price Risk
As at December 31, 2018 and 2017, if a blended index of the S&P/TSX Composite Total Return Index, S&P 500 Total Return Index, and
Bloomberg Barclays Canadian Aggregate Bond Index return were to fluctuate by 10%, with all other variables held constant, Net Assets
attributable to holders of redeemable units would increase or decrease by the amounts shown in the table below. This is a measure based on the
historical relationship of the Fund’s performance against the index noted above. The composition of this calculation contains several subjective
components that, although reasonably estimated, could alter the resulting calculation should these components be modified based on revised
assumptions.
December 31, 2018 December 31, 2017
Impact
As a % of Net Assets
attributable to holders
of redeemable units
Impact
As a % of Net Assets
attributable to holders
of redeemable units $ % $ %
2,680,548 6.20 3,855,940 5.60
b) Currency Risk
The tables below summarize the Fund’s exposure to currency risk as at December 31, 2018 and 2017. The tables also illustrate the potential
impact to the Fund’s Net Assets attributable to holders of redeemable units as a result of 1% changes in these currencies relative to the
Canadian dollar, with all other variables held constant.
December 31, 2018
Currency Fair Value
Forward Currency
Contracts Net Exposure
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units $ $ $ % $
U.S. Dollar 9,686,393 (5,637,037) 4,049,356 9.37 40,494
December 31, 2017
Currency Fair Value
Forward Currency
Contracts Net Exposure
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units $ $ $ % $
U.S. Dollar 16,875,407 (13,195,349) 3,680,058 5.34 36,801
Ninepoint Enhanced Balanced Fund (formerly, Sprott Enhanced Balanced Fund)
Notes to financial statements – Fund specific information December 31, 2018
78
Credit Risk As at December 31, 2018 and 2017, the Fund is exposed to credit risk from over-the-counter derivative contracts with counterparties. The credit
risk is considered minimal as these counterparties have a minimum credit rating of AA- by S&P or equivalent.
Concentration Risk The table below summarizes the Fund’s concentration risk as a percentage of Net Assets attributable to holders of redeemable unit as at
December 31, 2018 and 2017:
December 31, 2018 December 31, 2017 % %
Funds 60.60 36.19 Equities and Warrants:
Financials 13.17 15.40 Energy 7.16 12.53 Health Care 3.69 4.25 Information Technology 3.52 7.94 Utilities 3.15 2.87 Real Estate 2.45 2.47
Unrealized appreciation on forward currency contracts – 0.44
Unrealized depreciation on forward currency contracts (0.61) –
Options purchased 0.69 0.15 Options written (0.07) (0.04) Cash and Other Assets Less Liabilities 1.94 5.12 Total Net Assets attributable to holders of redeemable units 100.00 100.00
Fair Value Measurements (note 5) The Fund’s assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the tables below as at
During the years ended December 31, 2018 and 2017, there were no significant transfers between levels.
Ninepoint Enhanced Balanced Fund (formerly, Sprott Enhanced Balanced Fund)
Notes to financial statements – Fund specific information December 31, 2018
79
The reconciliation of investments measured at fair value using unobservable inputs (Level 3) for the years ended December 31, 2018 and 2017,
is presented as follows:
December 31, 2018 December 31, 2017
Equities Equities
$ $
Balance at beginning of year – –
Purchases 348,871 –
Change in unrealized appreciation in the value of investments 14,195 –
Balance at end of year 363,066 –
Change in unrealized appreciation during the year for investments held
at end of year 14,195 –
The Fund’s Level 3 securities consist of a private equity position. The Manager determines the fair value by utilizing a variety of valuation
techniques such as the use of comparable recent transactions, discounted cash flows and other techniques used by market participants. As at
December 31, 2018, the position was not significant to the Fund and any changes in reasonable possible assumptions used in the valuation
would not have a significant impact to the Net Assets attributable to holders of redeemable units of the Fund. As at December 31, 2017, the
Fund did not hold level 3 securities.
Investments in Underlying Funds Each Underlying Fund invests in a portfolio of assets to generate returns in the form of investment income and capital appreciation for its
unitholders. Each Underlying Fund finances its operations primarily through the issuance of redeemable units, which are puttable at the
unitholder’s option and entitle the unitholder to a proportionate share of the Underlying Fund’s net assets. The Fund’s interests in Underlying
Funds, held in the form of redeemable units, are reported in its Schedule of Investments at fair value, which represent the Fund’s maximum
exposure to these investments. Distributions earned from Underlying Funds are included in “Distribution income” in the Statements of
Comprehensive Income. The total realized gains and change in unrealized depreciation arising from Underlying Funds included in the
Statements of Comprehensive Income for the year ended December 31, 2018 were $nil and $658,472, respectively (December 31, 2017 –
realized gains of $406,133 and change in unrealized appreciation of $213,333). The Fund does not provide any additional significant financial
or other support to any Underlying Funds. The tables below set out the interest held by the Fund in Underlying Funds.
December 31, 2018
Underlying Fund
Country of
establishment
and principal
place of business
Ownership
interest
Total Net Assets
of Underlying
Fund
Carrying amount
included in Statement
of Financial Position % $ $
Ninepoint Diversified Bond Fund Canada 6.41 393,181,476 25,206,205 –
25,206,205
December 31, 2017
Underlying Fund
Country of
establishment and
principal place of
business
Ownership
interest
Total Net Assets of
Underlying Fund
Carrying amount
included in Statement
of Financial Position % $ $
Ninepoint Diversified Bond Fund Canada 13.23 188,359,011 24,915,593
24,915,593
Restricted Cash and Investments (note 10)
As at December 31, 2018 restricted cash and investments held for the Fund totaled $696,207 (December 31, 2017 – $573,933).
Ninepoint Enhanced Balanced Fund (formerly, Sprott Enhanced Balanced Fund)
Notes to financial statements – Fund specific information December 31, 2018
80
Management Fees (note 11)
This fee differs among the series of units of the Fund as set out in the chart below:
Series A Series A1 Series D Series F Series F1 Series I* Series FT Series T
Up to 1.90% Up to 1.80% Up to 1.40% Up to 0.90% Up to 0.80% Negotiated by the
Unitholder
Up to 0.90% Up to 1.90%
* The management fee for Series I units of the Fund is negotiated by the unitholder and may be paid directly by the Fund or by the unitholder.
Tax Loss Carryforwards (note 3) As of the taxation year ended December 31, 2018, the Fund had no capital and non-capital losses available for tax purposes.
Related Party Broker Commissions Brokerage commissions paid by the Fund to SP Wealth, a related party of Ninepoint Financial Group Inc., for brokerage services provided to
the Fund for the year ended December 31, 2018 were $30,201. There were no brokerage commissions paid to SP Wealth for the year ended
December 31, 2017.
Sharing Arrangements (note 13) During year ended December 31, 2018, the Fund paid $8,521 out of the total transaction costs incurred to certain brokers for research provided
to the portfolio manager (December 31, 2017 – $4,771).
See accompanying generic notes which are an integral part of these financial statements
81
Ninepoint Global Infrastructure Fund (formerly, Sprott Global Infrastructure Fund)
Units, end of year 488,436 - 376,515 168,690 611,186 399,472 253,464
See accompanying notes which are an integral part of these financial statements
85
Ninepoint Global Infrastructure Fund (formerly, Sprott Global Infrastructure Fund)
Statements of Cash Flows
(in Canadian Dollars)
For the years ended December 31 2018 2017
$ $
Cash flows from operating activities
Increase (decrease) in Net Assets attributable to holders of redeemable units from operations (892,522) 2,040,112
Adjustments for:
Foreign exchange gains losses on cash 2,602 (1,723)
Net realized gains on sales of investments (387,488) (985,673)
Change in unrealized (appreciation) depreciation in the value of investments 761,091 (999,321)
Change in unrealized (appreciation) depreciation on forward currency contracts 84,883 (7,684)
Purchases of investments (13,696,136) (18,338,097)
Proceeds from sales of investments 17,205,530 18,854,738
Net increase in other assets and liabilities 11,001 23,351
Net cash provided by operating activities 3,088,961 585,703
Cash flows from financing activities
Distributions paid to holders of redeemable units, net of reinvested distributions (219,462) (180,458)
Proceeds from redeemable units issued 2,104,791 9,044,135
Redemption of redeemable units (4,692,575) (10,456,778)
Net cash used in financing activities (2,807,246) (1,593,101)
Foreign exchange gains (losses) on cash (2,602) 1,723
Net increase (decrease) in cash 281,715 (1,007,398)
Cash (Bank indebtedness) at beginning of year (76,939) 928,736
Cash (Bank indebtedness) at end of year 202,174 (76,939)
Supplemental Information
Interest received - 2,466
Dividends received, net of withholding taxes 252,205 418,774
See accompanying notes which are an integral part of these financial statements
86
Ninepoint Global Infrastructure Fund (formerly, Sprott Global Infrastructure Fund)
Schedule of Investment Portfolio As at December 31, 2018 Average Cost Fair Value
$ $
SHARES EQUITIES AND WARRANTS [98.47%]
UTILITIES [32.37%]
2,430 American Water Works Company Inc. 306,848 301,059
41,647 Enel SpA 316,339 328,472
5,057 Exelon Corp. 306,543 311,296
6,044 FirstEnergy Corp. 307,535 309,769
30,342 Iberdrola SA 318,126 332,964
2,075 NextEra Energy Inc. 283,901 492,290
4,987 Public Service Enterprise Group Inc. 367,446 354,294
2,439 Sempra Energy 369,958 360,166
12,626 Veolia Environnement SA 354,525 354,479
2,931,221 3,144,789
INDUSTRIALS [23.79%]
1,662 Canadian Pacific Railway Ltd. 458,577 402,602
4,595 CSX Corp. 323,493 389,664
13,537 Ferrovial, S.A. 345,749 374,552
2,169 Union Pacific Corp. 422,637 409,228
4,150 Waste Connections Inc. 274,318 420,579
2,596 Waste Management Inc. 317,332 315,318
2,142,106 2,311,943
REAL ESTATE [13.58%]
2,576 American Tower Corp. 503,829 556,197
2,601 Crown Castle International Corp. 360,684 385,650
785 Equinix Inc. 453,953 377,751
1,318,466 1,319,598
ENERGY [11.16%]
4,350 ONEOK Inc. 376,430 320,320
10,507 Parkland Fuel Corp. 300,809 371,317
9,700 Pembina Pipeline Corp. 388,248 392,947
1,065,487 1,084,584
INFORMATION TECHNOLOGY [7.34%]
795 Mastercard Inc. 112,427 204,704
2,174 Microsoft Corp. 242,776 301,390
1,150 Visa Inc. 126,138 207,099
481,341 713,193
COMMUNICATION SERVICES [6.66%]
8,572 Cellnex Telecom, S.A. 240,175 300,106
7,471 Comcast Corp. 350,285 347,216
590,460 647,322
FINANCIALS [3.57%]
3,375 Intercontinental Exchange Inc. 255,430 347,013
255,430 347,013
Total Equities and Warrants 8,784,511 9,568,442
Transaction Costs (note 3) (6,835) -
Total Investments [98.47%] 8,777,676 9,568,442
Total unrealized depreciation on forward currency contracts [-0.85%] (Schedule 1) (82,428)
Cash and Other Assets Less Liabilities [2.38%] 231,463
Total Net Assets attributable to holders of redeemable units [100.00%] 9,717,477
See accompanying notes which are an integral part of these financial statements
87
Ninepoint Global Infrastructure Fund (formerly, Sprott Global Infrastructure Fund)
Forward Currency Contracts (Schedule 1)
As at December 31, 2018
Settlement
Contract
Cost
Forward
Value
Unrealized
Depreciation
Bought ($) Sold ($) Date $(CAD) $(CAD) $(CAD)
3,750,886 Canadian Dollar (2,810,000) U.S. Dollar 18-Jan-19 (3,750,886) (3,833,314) (82,428)
Total (82,428)
Ninepoint Global Infrastructure Fund (formerly, Sprott Global Infrastructure Fund)
Notes to financial statements – Fund specific information December 31, 2018
88
Financial Risk Management (note 6)
Investment Objective The investment objective of the Fund is primarily to maximize risk adjusted long-term returns and secondarily to achieve a high level of
income. The Fund focuses on achieving growth of capital through securities selection and pursues a long-term investment program with the aim
of generating capital gains. The Fund seeks to provide a moderate level of volatility and a low degree of correlation to other asset classes
through diversifying across a relatively concentrated group of global infrastructure stocks.
The Schedule of Investment Portfolio presents the securities held by the Fund as at December 31, 2018. Significant risks that are relevant to the
Fund are discussed here. General information on risks and risk management is described in Note 6 of the Generic Notes.
Market Risk a) Other Price Risk
As at December 31, 2018 and 2017, if the MSCI World Core Infrastructure Index (CAD) were to fluctuate by 10%, with all other variables held
constant, Net Assets attributable to holders of redeemable units would increase or decrease by the amounts shown in the table below. This is a
measure based on the historical relationship of the Fund’s performance against the index noted above. The composition of this calculation
contains several subjective components that, although reasonably estimated, could alter the resulting estimate should these components be
modified based on revised assumptions.
December 31, 2018 December 31, 2017
Impact
As a % of Net Assets
attributable to holders
of redeemable units
Impact
As a % of Net Assets
attributable to holders
of redeemable units $ % $ % $
757,963 7.80 1,031,861 7.70
b) Currency Risk
The tables below summarize the Fund’s exposure to currency risk as at December 31, 2018 and 2017. The tables also illustrate the potential
impact to the Fund’s Net Assets attributable to holders of redeemable units as a result of 1% changes in these currencies relative to the
Canadian dollar, with all other variables held constant.
December 31, 2018
Currency Fair Value
Forward Currency
Contracts Net Exposure
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units $ $ $ % $
U.S. Dollar 7,180,601 (3,835,369) 3,345,232 34.43 33,452
Euro 1,519,096 – 1,519,096 15.63 15,191
Pound Sterling 390 – 390 0.00 4
8,700,087 (3,835,369) 4,864,718 50.06 48,647
December 31, 2017
Currency Fair Value
Forward Currency
Contracts Net Exposure
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units $ $ $ % $
U.S. Dollar 5,844,536 - 5,844,536 43.61 58,445
Euro 2,464,195 - 2,464,195 18.39 24,642
Japanese Yen 661,128 - 661,128 4.14 6,611
Australian Dollar 554,858 (622,603) (67,745) 0.29 (677)
9,524,717 (622,603) 8,902,114 66.43 89,021
c) Interest Rate Risk
As at December 31, 2018 and 2017, the Fund did not have a significant exposure to interest rate risk.
Ninepoint Global Infrastructure Fund (formerly, Sprott Global Infrastructure Fund)
Notes to financial statements – Fund specific information December 31, 2018
89
Credit Risk As at December 31, 2018 and 2017, the Fund was exposed to credit risk from over-the-counter derivative contracts with counterparties. The
credit risk was considered minimal as these counterparties have a minimum credit rating of AA- by S&P or equivalent.
Concentration Risk The table below summarizes the Fund’s concentration risk as a percentage of Net Assets attributable to holders of redeemable units as at
December 31, 2018 and 2017:
December 31, 2018 December 31, 2017 % %
Equities:
Utilities 32.37 17.78 Industrials 23.79 34.16 Real Estate 13.58 6.98
Energy 11.16 16.05 Information Technology 7.34 9.85
Communication Services 6.66 9.33
Financials 3.57 6.23
Unrealized appreciation on forward currency contracts – 0.02
Unrealized depreciation on forward currency contracts (0.85) –
Cash and Other Assets Less Liabilities 2.38 (0.40) Total Net Assets attributable to holders of redeemable units 100.00 100.00
The Fund’s investment portfolio is concentrated in the following geographic segments as at December 31, 2018 and 2017:
December 31, 2018 December 31, 2017 % %
United States 69.06 36.14
Canada 12.01 30.14
Spain 10.37 7.67
France 3.65 7.62
Italy 3.38 2.12
Netherlands – 3.65
Bermuda – 4.12
Australia – 4.78
Japan – 4.14
Unrealized appreciation on forward currency contracts – 0.02
Unrealized depreciation on forward currency contracts (0.85) –
Cash and Other Assets Less Liabilities 2.38 (0.40)
Total Net Assets attributable to holders of redeemable units 100.00 100.00
Fair Value Measurements (note 5)
The Fund’s assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the tables below as at
December 31, 2018 and 2017:
December 31, 2018
Level 1 Level 2 Level 3 Total $ $ $ $
Equities 9,568,442 – – 9,568,442
Forward Currency Contracts – (82,428) – (82,428)
9,568,442 (82,428) – 9,650,870
December 31, 2017
Level 1 Level 2 Level 3 Total $ $ $ $
Equities 13,451,439 – – 13,451,439
Forward Currency Contracts – 2,455 – 2,455
13,451,439 2,455 – 13,453,894
Ninepoint Global Infrastructure Fund (formerly, Sprott Global Infrastructure Fund)
Notes to financial statements – Fund specific information December 31, 2018
90
During the years ended December 31, 2018 and 2017, there were no significant transfers between levels.
Management Fees (note 11)
This fee differs among the series of units of the Fund as set out in the chart below:
Series A Series D Series F Series I*
Up to 2.00 Up to 1.50 Up to 1.00 Negotiated by the
Unitholder
* The management fee for Series I units of the Fund is negotiated by the unitholder and may be paid directly by the Fund or by the unitholder.
Tax Loss Carryforwards (note 3)
As of the taxation year ended December 31, 2018, the Fund had capital and non-capital losses available for tax purposes as follows:
Capital losses Non-capital losses
Non-capital losses
year of expiry $ $
131,345 – –
Sharing Arrangements (note 13) During the year ended December 31, 2018, the Fund paid $5,882 out of the total transaction costs incurred to certain brokers for research
provided to the portfolio manager (December 31, 2017 - $3,447).
See accompanying generic notes which are an integral part of these financial statements
91
Ninepoint Global Real Estate Fund (formerly, Sprott Global Real Estate Fund)
Units, end of year 381,764 485,957 136,723 1,778 30,603 449,489 558,801 210,292 1,778 30,603
See accompanying notes which are an integral part of these financial statements
96
Ninepoint Global Real Estate Fund (formerly, Sprott Global Real Estate Fund)
Statements of Cash Flows
(in Canadian Dollars)
For the years ended December 31 2018 2017
$ $
Cash flows from operating activities
Increase (decrease) in Net Assets attributable to holders of redeemable units from operations (394,707) 1,948,935
Adjustments for:
Foreign exchange (gains) losses on cash (4,950) 261
Net realized gains on sales of investments (134,746) (799,815)
Change in unrealized (appreciation) depreciation in the value of investments 476,433 (990,994)
Change in unrealized (appreciation) depreciation on forward currency contracts 81,548 (4,086)
Purchases of investments (15,524,350) (30,915,209)
Proceeds from sales of investments 18,033,165 23,318,237
Net decrease in other assets and liabilities (11,799) (11,473)
Net cash provided by (used in) operating activities 2,520,594 (7,454,144)
Cash flows from financing activities
Distributions paid to holders of redeemable units, net of reinvested distributions (363,514) (247,745)
Proceeds from redeemable units issued 2,472,762 12,022,336
Redemption of redeemable units (5,220,909) (16,492,610)
Net cash used in financing activities (3,111,661) (4,718,019)
Foreign exchange gains (losses) on cash 4,950 (261)
Net decrease in cash (591,067) (12,172,163)
Cash at beginning of year 842,053 13,014,477
Cash at end of year 255,936 842,053
Supplemental Information
Interest received 47,229 59,549
Dividends received, net of withholding taxes 563,446 330,603
See accompanying notes which are an integral part of these financial statements
97
Ninepoint Global Real Estate Fund (formerly, Sprott Global Real Estate Fund)
Schedule of Investment Portfolio As at December 31, 2018 Average Cost Fair Value
$ $
SHARES EQUITIES [97.99%]
RESIDENTIAL REITS [24.51%]
1,673 AvalonBay Communities Inc. 399,373 397,442 1,350 Essex Property Trust Inc. 426,226 451,830
40,027 InterRent Real Estate Investment Trust 432,448 522,352
31,968 Killam Apartment Real Estate Investment Trust 363,480 509,570
25,800 Minto Apartment Real Estate Investment Trust 436,820 477,300
2,959 Sun Communities Inc. 396,200 410,783
2,454,547 2,769,277
RETAIL REITS [19.74%]
5,102 Agree Realty Corp. 405,459 411,698
2,006 Federal Realty Investment Trust 355,632 323,194
4,663 Regency Centers Corp. 386,386 373,473
15,300 RioCan Real Estate Investment Trust 371,184 364,140 1,660 Simon Property Group Inc. 376,723 380,623
12,200 SmartCentres Real Estate Investmet Trust 369,993 376,126
2,265,377 2,229,254
SPECIALIZED REITS [14.96%]
2,270 American Tower Corp. 437,804 490,127
2,877 Crown Castle International Corp. 400,285 426,573
6,000 Cyrusone Inc. 443,442 433,058
706 Equinix Inc. 407,080 339,736
1,688,611 1,689,494
INDUSTRIAL REITS [14.49%]
5,600 Prologis Inc. 400,813 448,824
10,400 STAG Industrial Inc. 375,055 353,173
43,746 Summit Industrial Income REIT 339,860 418,212 23,745 WPT Industrial Real Estate Investment Trust 397,265 416,465
1,512,993 1,636,674
REAL ESTATE OPERATING COMPANIES [7.07%] 36,358 Aroundtown S.A. 220,739 410,465
6,273 Vonovia SE 392,444 388,329
613,183 798,794
HEALTHCARE REITS [3.53%]
10142 Community Healthcare Trust Inc. 416,774 399,091
416,774 399,091
OFFICE REITS [3.53%]
9,000 Allied Properties Real Estate Investment Trust 375,759 398,880
375,759 398,880
DIVERSIFIED REITS [3.48%]
10,169 STORE Capital Corp. 399,043 392,936
399,043 392,936
COMMUNICATION SERVICES [3.44%]
11,094 Cellnex Telecom S.A. 310,896 388,402
310,896 388,402
HOTELS RESTURANTS & LEISURE [3.24%]
1,270 Vail Resorts Inc. 432,335 365,442
432,335 365,442
Total Equities 10,469,518 11,068,244
Transaction Costs (note 3) (12,667) -
Total Investments [97.99%] 10,456,851 11,068,244
Total unrealized depreciation on forward currency contracts [-0.72%] (Schedule 1) (81,548)
Cash and Other Assets Less Liabilities [2.73%] 308,202
Total Net Assets attributable to holders of redeemable units [100.00%] 11,294,898
See accompanying notes which are an integral part of these financial statements
98
Ninepoint Global Real Estate Fund (formerly, Sprott Global Real Estate Fund)
Forward Currency Contracts (Schedule 1)
As at December 31, 2018
Settlement Contract Cost Forward Value
Unrealized
Depreciation
Bought ($) Sold ($) Date $(CAD) $(CAD) $(CAD)
3,710,841 Canadian Dollar (2,780,000) U.S. Dollar 18-Jan-19 (3,710,841) (3,792,389) (81,548)
Total (81,548)
Ninepoint Global Real Estate Fund (formerly, Sprott Global Real Estate Fund)
Notes to financial statements – Fund specific information December 31, 2018
99
Financial Risk Management (note 6)
Investment Objective The objective of the Fund is to provide stable monthly cash distribution and long-term total return through capital appreciation by providing
exposure to the global real estate securities market. The Fund invests primarily in real estate investment trusts (“REITs”), equity-based
securities of companies in the global real estate sectors (residential and commercial) and structured products that hold real estate related
investments.
The Schedule of Investment Portfolio presents the securities held by the Fund as at December 31, 2018. Significant risks that are relevant to the
Fund are discussed here. General information on risks and risk management is described in Note 6 of the Generic Notes.
Market Risk a) Other Price Risk
As at December 31, 2018 and 2017, if the MSCI World IMI Core Real Estate Index (CAD) were to fluctuate by 10%, with all other variables
held constant, Net Assets attributable to holders of redeemable units would increase or decrease by the amounts shown in the table below. This
is a measure based on the historical relationship of the Fund’s performance against the index noted above. The composition of this calculation
contains several subjective components that, although reasonably estimated, could alter the resulting estimate should these components be
modified based on revised assumptions.
December 31, 2018 December 31, 2017
Impact
As a % of Net Assets
attributable to holders
of redeemable units
Impact
As a % of Net Assets
attributable to holders
of redeemable units $ % $ %
1,095,605 9.70 1,363,915 9.20
b) Currency Risk
The tables below summarize the Fund’s exposure to currency risk as at December 31, 2018 and 2017. The tables also illustrate the potential
impact to the Fund’s Net Assets attributable to holders of redeemable units as a result of 1% changes in these currencies relative to the
Canadian dollar, with all other variables held constant.
December 31, 2018
Currency Fair Value
Forward Currency
Contracts Net Exposure
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units $ $ $ % $
U.S. Dollar 7,142,777 (3,794,422) 3,348,355 29.65 33,484
Euro 1,203,126 - 1,203,126 10.65 12,031
8,345,903 (3,794,422) 4,551,481 40.30 45,515
December 31, 2017
Currency Fair Value
Forward Currency
Contracts Net Exposure
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units $ $ $ % $
U.S. Dollar 5,060,082 – 5,060,082 34.13 50,601
Euro 4,484,489 – 4,484,489 30.25 44,845
Israeli Shekel 685,512 – 685,512 4.63 6,855
10,230,083 – 10,230,083 69.01 102,301
Credit Risk As at December 31, 2018, the Fund was exposed to credit risk from over-the-counter derivative contracts with counterparties. The credit risk
was considered minimal as these counterparties have a minimum credit rating of AA- by S&P or equivalent. As at December 31, 2017, the
Fund did not have a significant exposure to credit risk.
Ninepoint Global Real Estate Fund (formerly, Sprott Global Real Estate Fund)
Notes to financial statements – Fund specific information December 31, 2018
100
Concentration Risk The table below summarizes the Fund’s concentration risk as a percentage of Net Assets attributable to holders of redeemable units as at
Cash and Other Assets Less Liabilities 2.73 6.11 Total Net Assets attributable to holders of redeemable units 100.00 100.00
The Fund’s investment portfolio is concentrated in the following geographic segments as at December 31, 2018 and 2017:
December 31, 2018 December 31, 2017 % %
United States 56.64 29.07 Canada 30.84 23.90 Germany 7.07 – Spain 3.44 7.29 Luxembourg – 4.80 France – 8.45 Netherlands – 4.85 Israel – 4.59 Italy – 3.82 Ireland – 2.91 Finland – 2.80 Other – 1.41 Unrealized depreciation on forward currency contracts (0.72) –
Cash and Other Assets Less Liabilities 2.73 6.11 Total Net Assets attributable to holders of redeemable units 100.00 100.00
Fair Value Measurements (note 5)
The Fund’s assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the tables below as at
December 31, 2018 and 2017:
December 31, 2018
Level 1 Level 2 Level 3 Total $ $ $ $
Equities 11,068,244 – – 11,068,244
Forward Currency Contracts – (81,548) – (81,548)
11,068,244 (81,548) – 10,986,696
Ninepoint Global Real Estate Fund (formerly, Sprott Global Real Estate Fund)
Notes to financial statements – Fund specific information December 31, 2018
101
December 31, 2017
Level 1 Level 2 Level 3 Total $ $ $ $
Equities 13,918,746 – – 13,918,746
13,918,746 – – 13,918,746
During the years ended December 31, 2018 and 2017, there were no significant transfers between levels.
Management Fees (note 11)
This fee differs among the series of units of the Fund as set out in the chart below:
Series A Series D Series F Series I* Series FT Series T
Up to 2.00% Up to 1.50% Up to 1.00% Negotiated by the
Unitholder
Up to 1.00% Up to 2.00%
*The management fee for Series I units of the Fund is negotiated by the unitholder and may be paid directly by the Fund or by the unitholder.
Related Party Holdings Ninepoint Financial Group, the parent company of the Manager and its respective subsidiaries, held the following investments in the Fund as at
December 31, 2018 and 2017:
December 31, 2018 December 31, 2017 Units held
Class A 94 89
Value of units held ($) 1,003 1,048 1,048
Tax Loss Carryforwards (note 3)
As of the taxation year ended December 31, 2018, the Fund had capital and non-capital losses available for tax purposes as follows:
Capital losses Non-capital losses
Non-capital losses
year of expiry $ $
353,746 – –
Sharing Arrangements (note 13) During the year ended December 31, 2018, the Fund paid $10,678 out of the total transaction costs incurred to certain brokers for research
provided to the portfolio manager (December 31, 2017 — $2,948).
See accompanying generic notes which are an integral part of these financial statements
102
Ninepoint Alternative Health Fund (formerly, Ninepoint UIT Alternative Health Fund)
Statements of Financial Position (in Canadian Dollars)
As at December 31 2018 2017
$ $
Assets
Current assets
Investments (note 3, 5, 10) 36,942,434 6,246,163
Cash (note 10) 3,011,387 1,669,310
Due from broker 337,218 -
Subscriptions receivable 338,108 20,892
Dividends receivable 5,808 1,569
Total assets 40,634,955 7,937,934
Liabilities
Current liabilities
Management fees payable (note 11) - 6,242
Options written (note 3, 5) 35,108 -
Due to broker 583,183 197,019
Redemptions payable 227,345 53,443
Accrued expenses 31,485 -
Total liabilities 877,121 256,704
Net Assets attributable to holders of redeemable units 39,757,834 7,681,230
Net Assets attributable to holders of redeemable units per series
Series A 18,781,068 2,642,577
Series D 1,064,724 -
Series F 19,900,103 5,038,653
Series I 11,929 -
Series PTF 10 -
Net Assets attributable to holders of redeemable units per series per unit (note 3)
Series A 15.79 14.08
Series D 10.30 -
Series F 15.80 14.11
Series I 10.70 -
Series PTF 10.00 -
See accompanying notes which are an integral part of these financial statements
On behalf of the Manager, Ninepoint Partners LP,
by its General Partner, Ninepoint Partners GP Inc.
John Wilson Kirstin McTaggart
DIRECTOR DIRECTOR
103
Ninepoint Alternative Health Fund (formerly, Ninepoint UIT Alternative Health Fund)
Statements of Comprehensive Income
(in Canadian Dollars, except unit amounts)
For the year ended December 31, 2018 and for the period from March 30, 2017 to December 31, 2017 2018 2017
$ $
Income
Net gain (losses) on investments:
Interest income for distribution purposes (note 3) 16,160 -
Dividends (note 3) 136,909 4,995
Net realized gains on sales of investments 2,095,678 169,874
Net realized gains on option contracts 571,601 -
Change in unrealized appreciation (depreciation) in value of investments (1,441,461) 1,399,668
Change in unrealized depreciation on option contracts (170) -
161,700 Village Farms International Inc. 1,046,852 714,714 280,000 Westleaf Cannabis Inc.** 238,000 238,000
152,776 Xanthic Biopharma Inc. 293,722 710,409
76,388 Xanthic Biopharma Inc., Warrants Nov 9, 2020 - 217,706
18,334,383 17,515,852
PHARMACEUTICALS & HEALTH TECHNOLOGY [23.89%]
10,400 Abbott Laboratories 872,214 1,026,947
16,000 AstraZeneca PLC, ADR 810,272 829,605
12,000 CVS Health Corp. 1,193,761 1,073,375
8,000 Gilead Sciences Inc. 723,101 683,146
11,100 Merck & Co. Inc. 987,408 1,157,896 19,500 Pfizer Inc. 1,019,763 1,162,024
5,800 Procter & Gamble Co. (The) 634,558 727,837
23,000 Vocera Communications Inc. 899,946 1,235,575
10,000 Walgreens Boots Alliance Inc. 999,735 932,841
18,000 Wright Medical Group NV 639,714 668,893
8,780,472 9,498,139
OTHER WELLNESS [6.77%]
126,100 Akumin Inc. 650,516 585,316
12,500 Planet Fitness Inc. 737,404 915,025
3,500 UnitedHealth Group Inc. 1,146,256 1,190,345
2,534,176 2,690,686
ORGANICS, SUPPLEMENTS & NEUTRACEUTICALS [3.13%]
3,740 ConAgra Brands Inc. 167,748 109,061
53,200 Jamieson Wellness Inc. 1,203,209 1,134,756
1,370,957 1,243,817
Total Equities and Warrants 31,019,988 30,948,494
Transaction Costs (note 3) (29,727) -
Total Investments [92.92%] 36,983,832 36,942,434
Options Written [-0.09%] (Schedule 1) (35,108)
Cash and Other Assets Less Liabilities [7.17%] 2,850,508
Total Net Assets attributable to holders of redeemable units [100.00%] 39,757,834
*Private Company
See accompanying notes which are an integral part of these financial statements
108
Ninepoint Alternative Health Fund (formerly, Ninepoint UIT Alternative Health Fund))
Option Contracts (Schedule 1) As at December 31, 2018
Options Written
Premium Fair
Number of Expiration Strike Received Value
Option Details Option Type Contracts Date Price ($) $(CAD) $(CAD)
Canopy Growth Corp. Put 100 4-Jan-19 25.50 USD (7,375) (4,778)
Cronos Group Inc Put 200 18-Jan-19 14.00 CAD (21,050) (24,500)
Planet Fitness Inc. Call 35 18-Jan-19 55.00 USD (6,119) (5,830)
(34,544) (35,108)
Ninepoint Alternative Health Fund (formerly, Ninepoint UIT Alternative Health Fund)
Notes to financial statements – Fund specific information December 31, 2018
109
Financial Risk Management (note 6)
Investment Objective The investment objective of the Fund is to achieve growth by investing primarily in equity securities of companies engaged in nutrition,
nutraceuticals and new forms of medicines and pharmaceutical solutions.
The Schedule of Investment Portfolio presents the securities held by the Fund as at December 31, 2018. Significant risks that are relevant to
the Fund are discussed here. General information on risks and risk management is described in Note 6 of the Generic Notes.
Market Risk a) Other Price Risk
As at December 31, 2018 and 2017, if a blended index of Thomson Reuters Canada Health Care Total Return Index and Thomson Reuters
United States Healthcare Total Return Index were to fluctuate by 10%, with all other variables held constant, Net Assets attributable to holders
of redeemable units would increase or decrease by amounts shown in the table below.
December 31, 2018 December 31, 2017
Impact
As a % of Net Assets
attributable to holders
of redeemable units Impact
As a % of Net Assets
attributable to holders
of redeemable units $ % $ %
3,260,143 8.20 624,616 8.13
b) Currency Risk
The tables below summarize the Fund’s exposure to currency risk as at December 31, 2018 and 2017. The tables also illustrate the potential
impact to the Fund’s Net Assets attributable to holders of redeemable units as a result of 1% change in these currencies relative to the Canadian
dollar, with all other variables held constant.
December 31, 2018
Currency Fair Value
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units
$ % $
U.S. Dollar 16,145,967 40.61 161,460
December 31, 2017
Currency Fair Value
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units
$ % $
U.S. Dollar 1,701,129 22.15 17,011
Ninepoint Alternative Health Fund (formerly, Ninepoint UIT Alternative Health Fund)
Notes to financial statements – Fund specific information December 31, 2018
110
c) Interest Risk
The table below summarizes the Fund’s exposure to interest rate risk, categorized by earlier of contractual re-pricing or maturity dates as at
December 31, 2018 and 2017. The table also illustrates the potential impact to the Fund’s Net Assets attributable to holders of redeemable
units, had interest rates increased or decreased by 1% with all other variables remaining constant. In practice, the actual results may differ from
this sensitivity analysis and the difference could be material. The Fund’s short-term assets and liabilities are not subject to a significant amount
of risk due to fluctuations in the prevailing level of market interest rates.
Total Exposure
Term to Maturity December 31, 2018 December 31, 2017
$ $
Less than 1 year 5,993,940 –
Total 5,993,940 –
Impact on Net Assets attributable to holders of redeemable units 4,017 –
Impact on Net Assets attributable to holders of redeemable units (%) 0.01 –
Credit Risk The Fund invests in debt instruments, which have a credit rating as rated primarily by Dominion Bond Rating Services, Standard & Poor’s or
Moody’s. The Fund will generally invest in fixed income securities issued or generated by the Canadian government or its agencies, other
Canadian issuers, foreign governments or their agencies, other foreign issuers, and supranational organizations. Ratings for securities that
subject the Fund to credit risk at December 31, 2018 and 2017, as a percentage of Net Assets attributable to holders of redeemable units, are
summarized below.
Ratings December 31, 2018 December 31, 2017 % %
AAA 15.08 –
Total 15.08 –
Concentration Risk The table below summarizes the Fund’s concentration risk as a percentage of Net Assets attributable to holders of redeemable units as at
December 31, 2018 and 2017:
December 31, 2018 December 31, 2017
% %
Short-Term Investments 15.08 –
Equities and Warrants:
Cannabis 44.05 44.26
Pharmaceuticals & Health Technology 23.89 10.79
Other Wellness 6.77 17.43
Organics, Supplements & Nutraceuticals 3.13 8.83
Options Written (0.09) –
Cash and Other Assets Less Liabilities 7.17 18.69
Total Net Assets attributable to holders of redeemable units 100.00 100.00
Ninepoint Alternative Health Fund (formerly, Ninepoint UIT Alternative Health Fund)
Notes to financial statements – Fund specific information December 31, 2018
111
Fair Value Measurement (note 5) The Fund’s assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the tables below as at
During the year ended December 31, 2018, there were no significant transfers between levels other than the transfers indicated below which
resulted from the shares of a security becoming restricted. During the year ended December 31, 2017, there were no significant transfers
between levels.
The reconciliation of investments measured at fair value using unobservable inputs (level 3) for the year ended December 31, 2018 is presented
as follows:
December 31, 2018 December 31, 2017
Equities Warrants Equities Warrants $ $ $ $
Balance at beginning of year – – – –
Transfer in 300,000 – – –
Purchases 1,986,862 – – –
Changed in unrealized appreciation in the value of investments 277,709 – – –
Balance at end of year 2,564,571 – – –
Change in unrealized appreciation during the year for investments held at end
of year 277,709 –
– –
The Fund’s Level 3 securities consist of private equity and private warrant positions. The Manager determines their fair value by utilizing a
variety of valuation techniques such as the use of comparable recent transactions, discounted cash flows and other techniques used by market
participants. The significant unobservable input used in these valuation techniques can vary considerably over time depending on company
specific factors and economic or market conditions. The potential impact of applying reasonable possible alternative assumptions for valuing
material Level 3 financial assets or liabilities is as follows:
December 31, 2018 Increase Decrease
Impact on Net assets attributable to holders of redeemable units 1.33% (0.93%)
Ninepoint Alternative Health Fund (formerly, Ninepoint UIT Alternative Health Fund)
Notes to financial statements – Fund specific information December 31, 2018
112
As at December 31, 2017, the Fund did not hold level 3 securities.
Management fees (note 11)
The fees differ among the series of units of the Fund as set out in the chart below:
Series A Series D Series F Series I* Series PTF
Up to 2.25% Up to 1.75% Up to 1.25% Negotiated by the
unitholder
Up to 1.25%
*The management fee for Series I of the Fund is negotiated by the unitholder and may be paid directly by the Fund or by the unitholder.
Tax Loss Carryforwards (note 3) As of the taxation year ended December 31, 2018, the Fund had no capital and non-capital losses available for tax purposes.
See accompanying generic notes which are an integral part of these financial statements
113
Ninepoint International Small Cap Fund (formerly, Sprott International Small Cap Fund)
Statement of Financial Position
(in Canadian Dollars)
As at December 31 2018
$
Assets
Current assets
Investments (note 3, 5) 44,674,808
Cash 614,888
Subscriptions receivable 30,861
Dividends receivable 78,057
Total assets 45,398,614
Liabilities
Current liabilities
Redemptions payable 580
Accrued expenses 19,603
Total liabilities 20,183
Net Assets attributable to holders of redeemable units 45,378,431
Net Assets attributable to holders of redeemable units per series
Series A 11,624,488
Series D 159,879
Series F 10,683,267
Series PF 22,910,797
Net Assets attributable to holders of redeemable units per series per unit (note 8)
Series A 8.77
Series D 8.90
Series F 8.77
Series PF 8.93
See accompanying notes which are an integral part of these financial statements
On behalf of the Manager, Ninepoint Partners LP,
by its General Partner, Ninepoint Partners GP Inc.
John Wilson Kirstin McTaggart
DIRECTOR DIRECTOR
114
Ninepoint International Small Cap Fund (formerly, Sprott International Small Cap Fund)
Statement of Comprehensive Income (Loss)
(in Canadian Dollars, except unit amounts)
For the period from March 15, 2018 to December 31, 2018 2018
$
Income
Net gain (loss) on investments and derivatives:
Interest income for distribution purposes (note 3) 26,869
Dividends (note 3) 416,268
Net realized gains on sales of investments 508,623
Change in unrealized depreciation in the value of investments (3,158,599)
Securities lending income (note 3) 10,727
Net realized gains on foreign exchange 3,376
Other income 20,407
Total loss (2,172,329)
Expenses (note 11, 12)
Management fees 470,736
Transaction costs (note 3, 13) 131,881
Withholding taxes 47,057
Unitholder reporting costs 44,822
Custodial fees 33,639
Administrative fees 31,314
Audit fees 20,502
Legal fees 2,958
Filing fees 2,928
Independent Review Committee fees (note 14) 2,348
Trustee fees 925
Total expenses 789,110
Decrease in Net Assets attributable to holders of redeemable units from operations (2,961,439)
Decrease in Net Assets attributable to holders of redeemable units from operations per series
Series A (1,370,931)
Series D (17,691)
Series F (693,684)
Series PF (879,133)
Weighted average number of redeemable units
Series A 1,362,214
Series D 12,793
Series F 1,118,370
Series PF 559,720
Decrease in Net Assets attributable to holders of redeemable units from operations per series per unit (note 3)
Series A (1.01)
Series D (1.38)
Series F (0.62)
Series PF (1.57)
See accompanying notes which are an integral part of these financial statements
115
Ninepoint International Small Cap Fund (formerly, Sprott International Small Cap Fund)
Statement of Changes in Net Assets Attributable to Holders of Redeemable Units (in Canadian Dollars, except unit amounts)
For the period from March 15, 2018 to December 31, 2018 2018 $
Net Assets attributable to holders of redeemable units, beginning of period
Series A -
Series D -
Series F -
Series PF -
-
Decrease in Net Assets attributable to holders of redeemable units from operations
Series A (1,370,931)
Series D (17,691)
Series F (693,684)
Series PF (879,133)
(2,961,439)
Distributions to holders of redeemable units
From net investment income
Series A (38,651)
Series D (870)
Series F (128,423)
Series PF (36,308)
From capital gains
Series A (146,714)
Series D (2,017)
Series F (134,697)
Series PF (288,859)
(776,539)
Redeemable unit transactions (note 8)
Proceeds from redeemable units issued
Series A 16,541,669
Series D 187,619
Series F 37,945,671
Series PF 24,096,985
Reinvestments of distributions to holders of redeemable units
Series A 185,365
Series D 2,887
Series F 263,120
Series PF 325,167
Redemption of redeemable units
Series A (3,546,250)
Series D (10,049)
Series F (26,568,720)
Series PF (307,055)
49,116,409
Net Increase in Net Assets attributable to holders of redeemable units
Series A 11,624,488
Series D 159,879
Series F 10,683,267
Series PF 22,910,797
45,378,431
Net Assets attributable to holders of redeemable units, end of period
Series A 11,624,488
Series D 159,879
Series F 10,683,267
Series PF 22,910,797
45,378,431
116
Ninepoint International Small Cap Fund (formerly, Sprott International Small Cap Fund)
Statements of Changes in Net Assets Attributable to Holders of Redeemable Units continued
Changes in outstanding redeemable units of the Fund for the period from March 15, 2018 to December 31, 2018 were as follows:
109,528 Vista Group International Ltd. 369,214 376,281
4,060,471 3,435,742
119
Ninepoint International Small Cap Fund (formerly, Sprott International Small Cap Fund)
Schedule of Investment Portfolio continued As at December 31, 2018 Average Cost Fair Value
$ $
SHARES FINANCIALS [5.20%]
27,150 doBank SpA 403,385 392,478
13,708 FinTech Group AG 502,888 363,529
23,466 Rothschild & Co. SCA 1,146,807 1,131,966
103,045 Urban & Civic PLC 541,463 469,772
2,594,543 2,357,745
SHARES HEALTH CARE [4.45%]
5,688 BioGaia AB 330,137 278,098 32,171 CVS Group PLC 356,905 370,300
31,459 Evotec AG 815,862 854,199
470,900 Raffles Medical Group Ltd. 493,056 518,732
1,995,960 2,021,329
COMMUNICATION SERVICES [4.06%]
55,525 Inmarsat PLC 400,086 366,463
47,700 Internet Initiative Japan Inc. 1,221,059 1,477,565
1,621,145 1,844,028
UTILITIES [2.61%]
16,445 Ormat Technologies Inc. 1,124,843 1,185,598
1,124,843 1,185,598
ENERGY [2.14%]
7,185 Schoeller-Bleckmann Oilfield Equipment AG 900,493 644,317
9,728 Tecnicas Reunidas SA 345,188 324,606
1,245,681 968,923
Total Equities 47,932,268 44,674,808
Transaction Costs (note 3) (98,861) -
Total Investments [98.45%] 47,833,407 44,674,808
Cash and Other Assets Less Liabilities [1.55%] 703,623
Total Net Assets attributable to holders of redeemable units [100.00%] 45,378,431
See accompanying notes which are an integral part of these financial statements
Ninepoint International Small Cap Fund (formerly, Sprott International Small Cap Fund)
Notes to financial statements – Fund specific information December 31, 2018
120
Financial Risk Management (note 6)
Investment Objective The objective of the Fund is to provide unitholders with long term capital appreciation by investing primarily in a portfolio of international
small capitalization equity securities of issuers in countries and industries primarily located in Europe, Japan and Asia-Pacific ex-Japan.
The Schedule of Investment Portfolio presents the securities held by the Fund as at December 31, 2018. Significant risks that are relevant to the
Fund are discussed here. General information on risks and risk management is described in Note 6 of the Generic Notes.
Market Risk a) Other Price Risk
As at December 31, 2018, 98.45% of the Fund’s net assets were invested in equities that were exposed to market price fluctuations. Given the
Fund’s recent inception, there is insufficient data to approximate the Fund’s beta and consequently, it is not possible to reliably determine the
impact of a 10% change in any given index on the Fund’s net asset value. Beta is a measure of a fund’s performance against an index. The
composition of beta contains several subjective components that, although reasonably estimated, could alter the resulting calculation should
these components be modified based on revised assumptions.
b) Currency Risk
The tables below summarize the Fund’s exposure to currency risk as at December 31, 2018. The tables also illustrate the potential impact to the
Fund’s Net Assets attributable to holders of redeemable units as a result of 1% changes in these currencies relative to the Canadian dollar, with
all other variables held constant.
December 31, 2018
Currency Fair Value
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units $ % $
Japanese Yen 13,491,541 29.73 134,915
Euro 11,901,678 26.23 119,017
Pound Sterling 7,379,385 16.26 73,794
Hong Kong Dollar 4,144,442 9.13 41,444
Swedish Krone 2,329,759 5.13 23,298
Australian Dollar 2,138,626 4.71 21,386
Norwegian Krone 1,322,702 2.91 13,227
Israeli Shekel 1,287,125 2.84 12,871
Singapore Dollar 546,513 1.20 5,465
Swiss Franc 517,154 1.14 5,172
New Zealand Dollar 381,322 0.84 3,813
U.S. Dollar 10,500 0.02 105
45,450,747 100.14 454,507
c) Interest Rate Risk
As at December 31, 2018, the Fund did not have a significant exposure to interest rate risk.
Credit Risk As at December 31, 2018, the Fund did not have a significant exposure to credit risk.
Ninepoint International Small Cap Fund (formerly, Sprott International Small Cap Fund)
Notes to financial statements – Fund specific information December 31, 2018
121
Concentration Risk The table below summarizes the Fund’s concentration risk as a percentage of Net Assets attributable to holders of redeemable units as at
December 31, 2018:
December 31, 2018 %
Equities:
Industrials 27.17
Consumer Discretionary 18.27
Consumer Staples 9.23
Real Estate 9.16
Materials 8.59
Information Technology 7.57
Financials 5.20
Health Care 4.45
Communication Services 4.06
Utilities 2.61
Energy 2.14
Cash and Other Assets Less Liabilities 1.55
Total Net Assets attributable to holders of redeemable units 100.00
The Fund’s investment portfolio is concentrated in the following geographic segments as at December 31, 2018:
December 31, 2018 %
Japan 28.98
United Kingdom 16.15
Hong Kong 9.13
France 8.46
Italy 5.90
Germany 5.49
Sweden 4.97
Australia 4.70
Spain 3.20
Austria 2.94
Norway 2.83
Israel 2.61
Singapore 1.14
Switzerland 1.12
New Zealand 0.83
Cash and Other Assets Less Liabilities 1.55
Total Net Assets attributable to holders of redeemable units 100.00
Fair Value Measurements (note 5)
The Fund’s assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the table below as at
December 31, 2018:
December 31, 2018
Level 1 Level 2 Level 3 Total
$ $ $ $
Equities 44,674,808 – – 44,674,808
44,674,808 – – 44,674,808
During the period from March 15, 2018 to December 31, 2018, there were no significant transfers between levels.
Ninepoint International Small Cap Fund (formerly, Sprott International Small Cap Fund)
Notes to financial statements – Fund specific information December 31, 2018
122
Management Fees (note 11)
This fee differs among the series of units of the Fund as set out in the chart below:
Series A Series D Series F Series I* Series PF
Up to 2.50% Up to 2.00% Up to 1.50% Negotiated by the
Unitholder
Up to 1.35%
*The management fee for Series I units of the Fund is negotiated by the unitholder and may be paid directly by the Fund or by the unitholder.
Tax Loss Carryforwards (note 3)
As of the taxation year ended December 31, 2018, the Fund had no capital and non-capital losses available for tax purposes.
Securities Lending (note 3) As at December 31, 2018 the market values of securities loaned and related collateral amounts were as follows:
December 31, 2018
$
Securities loaned 10,497,104
Collateral amounts 10,707,058
Collateral as a percentage of securities loaned 102%
For the period from March 15, 2018 to December 31, 2018, securities lending income was as follows:
December 31, 2018
$
Gross securities lending income 14,302
Securities lending charges (3,575)
Net securities lending income 10,727
Withholding taxes on securities lending income (115) Net securities lending income received by the Fund 10,612
For the period from March 15, 2018 to December 31, 2018, securities lending charges represent 25% of the gross securities lending income.
Fund Merger During the period from March 15, 2018 to December 31, 2018, the Fund acquired all the assets of the below fund (the “Acquired Fund”), and
in exchange, the Fund issued shares to the Acquired Fund. In turn, those shares were distributed to the shareholders of the Acquired fund. The
Manager was the investment advisor to the Acquired Fund. Tax elections were made, which allowed the transfer of assets to occur on a tax-
deferred basis.
Transfer Date Acquired Fund
Fair Value of Assets
Acquired by the Fund
Number of shares issued by the
Fund to the Acquired Fund March 29, 2018 Ninepoint Small Cap Equity Fund (formerly,
Sprott Small Cap Equity Fund)
$16,556,941 1,671,223
See accompanying generic notes which are an integral part of these financial statements
123
Ninepoint Concentrated Canadian Equity Fund (formerly, Sprott Concentrated Canadian Equity Fund)
Statement of Financial Position
(in Canadian Dollars)
As at December 31 2018
$
Assets
Current assets
Investments (note 3, 5) 29,079,027
Cash 168,441
Dividends receivable 108,844
Total assets 29,356,312
Liabilities
Current liabilities
Redemptions payable 75,672
Accrued expenses 39,184
Total liabilities 114,856
Net Assets attributable to holders of redeemable units 29,241,456
Net Assets attributable to holders of redeemable units per series
Series A 28,107,937
Series D 8,139
Series F 1,125,380
Net Assets attributable to holders of redeemable units per series per unit (note 8)
Series A 8.57
Series D 8.48
Series F 8.63
See accompanying notes which are an integral part of these financial statements
On behalf of the Manager, Ninepoint Partners LP,
by its General Partner, Ninepoint Partners GP Inc.
John Wilson Kirstin McTaggart
DIRECTOR DIRECTOR
124
Ninepoint Concentrated Canadian Equity Fund (formerly, Sprott Concentrated Canadian Equity Fund)
Statement of Comprehensive Income (Loss)
(in Canadian Dollars, except unit amounts)
For the period from March 29, 2018 to December 31, 2018 2018
$
Income
Net gain (loss) on investments and derivatives:
Interest income for distribution purposes (note 3) 54,109
Dividends (note 3) 831,315
Net realized losses on sales of investments (1,302)
Change in unrealized depreciation in the value of investments (4,886,481)
Securities lending income (note 3) 3,916
Net realized losses on foreign exchange (24)
Other income 88,488
Total loss (3,909,979)
Expenses (note 11, 12)
Management fees 676,313
Transaction costs (note 3, 13) 197,255
Unitholder reporting costs 128,445
Administrative fees 25,893
Audit fees 20,509
Custodial fees 6,502
Legal fees 2,959
Filing fees 2,928
Independent Review Committee fees (note 14) 2,219
Trustee fees 463
Withholding taxes 27
Total expenses 1,063,513
Decrease in Net Assets attributable to holders of redeemable units from operations (4,973,492)
Decrease in Net Assets attributable to holders of redeemable units from operations per series
Series A (4,803,937)
Series D (604)
Series F (168,951)
Weighted average number of redeemable units
Series A 3,669,200
Series D 408
Series F 145,072
Decrease in Net Assets attributable to holders of redeemable units from operations per series per unit (note 3)
Series A (1.31)
Series D (1.48)
Series F (1.16)
See accompanying notes which are an integral part of these financial statements
125
Ninepoint Concentrated Canadian Equity Fund (formerly, Sprott Concentrated Canadian Equity Fund)
Statement of Changes in Net Assets Attributable to Holders of Redeemable Units
(in Canadian Dollars, except unit amounts)
For the period from March 29, 2018 to December 31, 2018 2018
$
Net Assets attributable to holders of redeemable units, beginning of period
Series A -
Series D -
Series F -
-
Decrease in in Net Assets attributable to holders of redeemable units from operations
Series A (4,803,937)
Series D (604)
Series F (168,951)
(4,973,492)
Redeemable unit transactions (note 8)
Proceeds from redeemable units issued
Series A 41,066,660
Series D 11,262
Series F 1,975,857
Redemption of redeemable units
Series A (8,154,786)
Series D (2,519)
Series F (681,526)
34,214,948
Net Increase in Net Assets attributable to holders of redeemable units
Series A 28,107,937
Series D 8,139
Series F 1,125,380
29,241,456
Net Assets attributable to holders of redeemable units, end of period
Series A 28,107,937
Series D 8,139
Series F 1,125,380
29,241,456
126
Ninepoint Concentrated Canadian Equity Fund (formerly, Sprott Concentrated Canadian Equity Fund)
Statement of Changes in Net Assets Attributable to Holders of Redeemable Units continued
Changes in outstanding redeemable units of the Fund for the period from March 29, 2018 to December 31, 2018 were as follows:
2018 Series A Series D Series F
Units, beginning of period - - -
Subscriptions 4,106,854 1,210 197,553
Redemptions (825,426) (250) (67,223)
Units, end of period 3,281,428 960 130,330
See accompanying notes which are an integral part of these financial statements
127
Ninepoint Concentrated Canadian Equity Fund (formerly, Sprott Concentrated Canadian Equity Fund)
Statement of Cash Flows
(in Canadian Dollars)
For the period from March 29, 2018 to December 31, 2018 2018
$
Cash flows from operating activities
Decrease in Net Assets attributable to holders of redeemable units from operations (4,973,492)
Adjustments for:
Foreign exchange gains on cash (12)
Net realized losses on sales of investments 1,302
Change in unrealized depreciation in the value of investments 4,886,481
Purchases of investments (37,549,595)
Proceeds from sales of investments 46,361,239
Net decrease in other assets and liabilities (69,660)
Net cash provided by operating activities 8,656,263
Cash flows from financing activities
Proceeds from redeemable units issued 204,873
Redemption of redeemable units (8,692,707)
Net cash used in by financing activities (8,487,834)
Foreign exchange gains on cash 12
Net increase in cash 168,429
Cash at beginning of period -
Cash at end of period 168,441
Supplemental Information
Interest received 54,109
Dividends received, net of withholding taxes 722,471
See accompanying notes which are an integral part of these financial statements
128
Ninepoint Concentrated Canadian Equity Fund (formerly, Sprott Concentrated Canadian Equity Fund)
Schedule of Investment Portfolio As at December 31, 2018 Maturity/ Expiry Date Average Cost Fair Value
$ $
PAR VALUE SHORT TERM INVESTMENTS [1.54%]
TREASURY BILLS [1.54%]
150,000 Canadian Treasury Bill, 0.000% Jan 10, 2019 149,692 149,942
300,000 Canadian Treasury Bill, 0.000% Mar 7, 2019 298,923 299,127
Total Short-Term Investments 448,615 449,069
EQUITIES AND WARRANTS [97.90%]
SHARES FINANCIALS [49.07%]
32,970 Bank of Nova Scotia 2,529,805 2,243,609
18,300 Canadian Imperial Bank of Commerce 2,046,253 1,860,744 55,660 CI Financial Corp. 1,433,127 961,805
160,800 Element Fleet Management Corp. 1,144,379 1,111,128
256,060 Major Drilling Group International Inc. 1,550,557 1,177,876
17,300 Methanex Corp. 1,263,996 1,135,918
24,000 Nutrien Ltd. 1,703,774 1,538,880
894,500 Sherritt International Corp. 956,310 402,525
34,200 Teck Resources Ltd. 882,305 1,005,138
8,574,600 7,423,303
ENERGY [16.24%]
48,600 Canadian Natural Resources Ltd. 2,003,837 1,600,883 122,760 Cenovus Energy Inc. 1,429,840 1,178,496
108,030 Crescent Point Energy Corp. 921,705 447,244
28,200 Suncor Energy Inc. 1,078,410 1,075,266
376,150 Trican Well Service Ltd. 1,007,339 447,619
6,441,131 4,749,508
CONSUMER DISCRETIONARY [3.63%]
54,700 Uni-Select Inc. 1,141,908 1,061,727
1,141,908 1,061,727
INDUSTRIALS [3.57%]
58,000 WestJet Airlines Ltd. 1,289,604 1,044,000
1,289,604 1,044,000
INFORMATION TECHNOLOGY [0.00%]
375,000 Spectra7 Microsystems Inc., Warrants Jun 27, 2019 23 -
23 -
Total Equities and Warrants 33,556,365 28,629,958
Transaction Costs (note 3) (39,472) -
Total Investments [99.44%] 33,965,508 29,079,027
Cash and Other Assets Less Liabilities [0.56%] 162,429
Total Net Assets attributable to holders of redeemable units [100.00%] 29,241,456
See accompanying notes which are an integral part of these financial statements
Ninepoint Concentrated Canadian Equity Fund (formerly, Sprott Concentrated Canadian Equity Fund)
Notes to financial statements – Fund specific information December 31, 2018
129
Financial Risk Management (note 6)
Investment Objective The objective of the Fund is to seek to provide unitholders with long term capital appreciation by investing primarily in a concentrated portfolio
of Canadian equity securities.
The Schedule of Investment Portfolio presents the securities held by the Fund as at December 31, 2018. Significant risks that are relevant to the
Fund are discussed here. General information on risks and risk management is described in Note 6 of the Generic Notes.
Market Risk a) Other Price Risk
As at December 31, 2018, 97.90% of the Fund’s net assets were invested in equities that were exposed to market price fluctuations. Given the
Fund’s recent inception, there is insufficient data to approximate the Fund’s beta and consequently, it is not possible to reliably determine the
impact of a 10% change in any given index on the Fund’s net asset value. Beta is a measure of a fund’s performance against an index. The
composition of beta contains several subjective components that, although reasonably estimated, could alter the resulting calculation should
these components be modified based on revised assumptions.
b) Currency Risk
As at December 31, 2018, the Fund did not have a significant exposure to currency risk.
c) Interest Rate Risk
As at December 31, 2018, the Fund did not have a significant exposure to interest rate risk.
Credit Risk As at December 31, 2018, the Fund did not have a significant exposure to credit risk.
Concentration Risk The table below summarizes the Fund’s concentration risk as a percentage of Net Assets attributable to holders of redeemable units as at
December 31, 2018:
December 31, 2018
%
Equities and Warrants: Financials 49.07
Materials 25.39
Energy 16.24
Consumer Discretionary 3.63
Industrials 3.57
Information Technology 0.00
Short-Term Investments 1.54
Cash and Other Assets Less Liabilities 0.56
Total Net Assets attributable to holders of redeemable units 100.00
Ninepoint Concentrated Canadian Equity Fund (formerly, Sprott Concentrated Canadian Equity Fund)
Notes to financial statements – Fund specific information December 31, 2018
130
Fair Value Measurements (note 5)
The Fund’s assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the table below as at
200,000 Toromont Industries Ltd., 3.84% Oct 27, 2027 199,450 201,049
100,000 Toronto-Dominion Bank, 2.98% Sep 30, 2025 99,774 99,996
USD 200,000 TransCanada PipeLines Ltd., 4.83% May 15, 2067 240,724 221,197 139,000 Transcontinental Inc., 3.90% May 13, 2019 139,696 139,523
6,260,614 6,247,418
U.S. GOVERMENT BONDS [6.62%]
USD 150,000 United States Treasury Bond, 3.00% Aug 15, 2048 183,584 203,872
USD 350,000 United States Treasury Bond, 2.88% Aug 15, 2028 440,976 485,305
624,560 689,177
CANADIAN GOVERNMENT BOND [6.26%]
650,000 Canadian Government Bond, 2.00% Jun 1, 2028 623,175 652,041
623,175 652,041
HIGH YIELD BONDS [2.41%]
250,000 Cominar REIT, 4.23% Dec 4, 2019 251,373 251,497
251,373 251,497
Total Investments [75.28%] 7,759,722 7,840,133
Total unrealized depreciation on forward currency contracts [-0.20%] (Schedule 1) (20,860)
Cash and Other Assets Less Liabilities [24.92%] 2,595,611
Total Net Assets attributable to holders of redeemable units [100.00%] 10,414,884
* All par values are in Canadian Dollars unless otherwise noted.
See accompanying notes which are an integral part of these financial statements
138
Ninepoint Core Bond Fund
Forward Currency Contracts (Schedule 1)
As at December 31, 2018
Contract
Cost
$(CAD)
Forward Value
$(CAD)
Unrealized
Depreciation
$(CAD) Bought ($) Sold ($)
Settlement
Date
934,385 Canadian Dollar (700,000) U.S. Dollar 18-Jan-19 (934,385) (955,245) (20,860)
(20,860)
Ninepoint Core Bond Fund
Notes to financial statements – Fund specific information December 31, 2018
139
Financial Risk Management (note 6)
Investment Objective The Fund seeks to provide unitholders with income and long-term capital appreciation through an actively managed portfolio consisting
primarily of corporate investment grade and high yield securities, and government bonds.
The Schedule of Investment Portfolio presents the securities held by the Fund as at December 31, 2018. Significant risks that are relevant to
the Fund are discussed here. General information on risks and risk management is described in Note 6 of the Generic Notes.
Market Risk a) Other Price Risk
As at December 31, 2018, the Fund did not have a significant exposure to other price risk.
b) Currency Risk
The table below summarizes the Fund’s exposure to currency risk as at December 31, 2018. The table also illustrates the potential impact to
the Fund’s Net Assets attributable to holders of redeemable units as a result of 1% changes in these currencies relative to the Canadian dollar,
with all other variables held constant.
December 31, 2018
Currency Fair Value
Forward Currency
Contracts Net Exposure
% of Net Assets
attributable to holders
of redeemable units
Impact on Net Assets
attributable to holders
of redeemable units
$ $ $ % $
U.S. Dollar 952,734 (955,245) (2,511) (0.02) (25)
c) Interest Rate Risk
The table below summarizes the Fund’s exposure to interest rate risk, categorized by earlier of contractual re-pricing or maturity dates as at
December 31, 2018. The table also illustrates the potential impact to the Fund’s Net Assets attributable to holders of redeemable units, had
interest rates increased or decreased by 1% with all other variables remaining constant. In practice, the actual results may differ from this
sensitivity analysis and the difference could be material. The Fund’s short-term assets and liabilities are not subject to a significant amount of
risk due to fluctuations in the prevailing level of market interest rates.
Total Exposure
Term to Maturity December 31, 2018
$
Less than 1 year 1,147,682
1-5 years 2,437,336
>5 years 4,255,115
Total 7,840,113
Impact on Net Assets attributable to holders of redeemable units 449,617
Impact on Net Assets attributable to holders of redeemable units (%) 4.32
Ninepoint Core Bond Fund
Notes to financial statements – Fund specific information December 31, 2018
140
Credit Risk The Fund invests in debt instruments, which have a credit rating as rated primarily by Dominion Bond Rating Services, Standard & Poor’s or
Moody’s. The Fund generally invests in fixed income securities issued or generated by the Canadian government or its agencies, other
Canadian issuers, foreign governments or their agencies, other foreign issuers, and supranational organizations. Ratings for securities that
subject the Fund to credit risk as at December 31, 2018, as a percentage of Net Assets attributable to holders of redeemable units, are
summarized in the table below:
Ratings December 31, 2018 December 31, 2016
%
AAA 6.26
AA 4.66
A 8.33 –
BBB 30.04 9.20
Below BBB 10.28 23.26
Not Rated 15.71 28.97
Total 75.28 89.96
As at December 31, 2018, the Fund was exposed to credit risk from over-the-counter derivative contracts with counterparties. The credit risk
was considered minimal as these counterparties have a minimum credit rating of AA- by S&P or equivalent.
Concentration Risk
The table below summarizes the Fund’s concentration risk as a percentage of Net Assets attributable to holders of redeemable units as at
December 31, 2018:
December 31, 2018
%
Bonds and Convertible Debentures
Corporate Bonds 59.99
U.S. Government Bonds 6.62
Canadian Government Bonds 6.26
High Yield Bonds 2.41
Unrealized depreciation on forward currency contracts (0.20)
Cash and Other Assets Less Liabilities 24.92
Total Net Assets attributable to holders of redeemable units 100.00
Fair Value Measurements (note 5)
The Fund’s assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the tables below as at
December 31, 2018:
December 31, 2018
Level 1 Level 2 Level 3 Total $ $ $ $
Bonds and Convertible Debentures – 7,840,133 – 7,840,133
Forward Currency Contracts – (20,860) – (20,860)
– 7,819,273 – 7,819,273
During the period from October 1, 2018 to December 31, 2018, there were no significant transfers between levels.
Ninepoint Core Bond Fund
Notes to financial statements – Fund specific information December 31, 2018
141
Management Fees (note 11) This fee differs among the series of units of the Fund as set out in the chart below:
Series A Series AS Series FS Series I* Series QF
Up to 1.25% Up to 1.15% Up to 0.65% Negotiated by the
Unitholder
Up to 0.65%
* The management fee for Series I units of the Fund is negotiated by the unitholder and may be paid directly by the Fund or by the unitholder.
Related Party Holdings Ninepoint Financial Group, the parent company of the Manager, and its respective subsidiaries, held the following investments in the Fund as
at December 31, 2018:
December 31, 2018
Units held
Series FS 15,095
Value of units held ($) 150,801
Tax Loss Carryforwards (note 3)
As of the taxation period ended December 31, 2018, the Fund had capital and non-capital losses available for tax purposes as follows:
See accompanying generic notes which are an integral part of these financial statements
Capital losses Non-capital losses
Non-capital losses
year of expiry $ $
45,560 – –
Generic Notes to Financial Statements December 31, 2018
142
1. Establishment of the Funds Ninepoint Gold and Precious Minerals Fund, Ninepoint Energy Fund, Ninepoint Gold Bullion Fund, Ninepoint Diversified Bond Fund,
Ninepoint Short-Term Bond Fund, Ninepoint Silver Bullion Fund, Ninepoint Enhanced Balanced Fund, Ninepoint Global Infrastructure Fund,
Ninepoint Global Real Estate Fund, Ninepoint Alternative Health Fund, Ninepoint International Small Cap Fund, Ninepoint Concentrated
Canadian Equity Fund and Ninepoint Core Bond Fund (formerly, Sprott Gold and Precious Minerals Fund, Sprott Energy Fund, Sprott Gold
Bullion Fund, Sprott Diversified Bond Fund, Sprott Short-Term Bond Fund, Sprott Silver Bullion Fund, Sprott Enhanced Balanced Fund,
Sprott Global Infrastructure Fund, Sprott Global Real Estate Fund, Ninepoint UIT Alternative Health Fund, Sprott International Small Cap
Fund and Sprott Concentrated Canadian Equity Fund) are open-ended mutual fund trusts (collectively, the “Funds” and each, a “Fund”). The
Funds, other than Ninepoint Alternative Health Fund, were established under the laws of the Province of Ontario pursuant to a trust agreement
dated September 9, 1997, as amended and restated on October 16, 2001 and February 13, 2004, and as further amended on November 1, 2007,
January 16, 2009, July 16, 2010, August 5, 2010, August 24, 2011, March 27, 2012, January 2, 2013 and April 10, 2014, together with
amended and restated Schedule “A” dated as of January 26, 2018 and July 30, 2018. Ninepoint Alternative Health Fund was established under
the laws of the Province of Ontario pursuant to a trust agreement dated September 16, 2016, as amended and restated on April 16, 2018.
Ninepoint Partners LP (the "Manager") is the manager and portfolio advisor of the Funds. On April 16, 2018, Ninepoint Partners LP acquired
the management rights for Ninepoint Alternative Health Fund from Redwood Asset Management Inc. RBC Investor Services Trust is the
custodian of the Funds, other than Ninepoint Energy Fund, Ninepoint Alternative Health Fund and Ninepoint Core Bond Fund, for which the
custodian is CIBC Mellon Trust Company. The address of the Funds’ registered office is 200 Bay Street, Toronto, Ontario.
The date of inception and series structure of each of the Funds are as follows:
Name of the Fund Date of Inception Series Information
Ninepoint Gold and Precious Minerals Fund October 16, 2001
(publicly launched on November 15, 2001)
Became multi-series in October 2004. The existing
units were designated as Series A and new Series F and I
were introduced. On April 23, 2018, new Series D was
introduced. On November 26, 2018, new Series QF was
introduced.
Ninepoint Energy Fund March 24, 2004
(publicly launched on April 15, 2004)
A multi-series fund since inception, having three series,
Series A, F and I. On April 23, 2018, new Series D was
introduced. On November 30, 2018, new Series PTF
was introduced.
Ninepoint Gold Bullion Fund March 10, 2009
(publicly launched on March 17, 2009)
A multi-series fund since inception, having three series,
Series A, F and I.
Ninepoint Diversified Bond Fund July 16, 2010
(publicly launched on August 5, 2010)
A multi-series fund since inception, having four series,
Series A, F, T and I. On August 24, 2011, new Series
FT were introduced. On May 28, 2015, new Series P,
PT, PF, PFT, Q, QT, QF and QFT were introduced. On
April 23, 2018, new Series D was introduced.
Ninepoint Short-Term Bond Fund July 16, 2010
(publicly launched on August 5, 2010)
A multi-series fund since inception, having three series,
Series A, F and I. On November 16, 2017, new Series
I1 was introduced.
Ninepoint Silver Bullion Fund May 3, 2011
(publicly launched on May 10, 2011)
A multi-series fund since inception, having three series,
Series A, F and I.
Ninepoint Enhanced Balanced Fund March 27, 2012
(publicly launched on April 16, 2012)
A multi-series fund since inception, having seven series,
Series A, A1, F, F1, FT, I and T . On April 23, 2018,
new Series D was introduced.
Ninepoint Global Infrastructure Fund September 1, 2011
(publicly launched on September 1, 2011)
A multi-series fund since inception, having three series,
Series A, F and I. On April 23, 2018, new Series D was
introduced.
Ninepoint Global Real Estate Fund June 29, 2015
(publicly launched on August 5, 2015)
A multi-series fund since inception, having three series,
Series A, F and I. On February 7, 2017, new Series T
and FT were introduced. On April 23, 2018, new Series
D was introduced.
Ninepoint Alternative Health Fund September 16, 2016
(publicly launched on March 30, 2017)
A single series fund since inception; Series A. On June
28, 2017, new Series F was introduced. On April 23,
2018, new Series D and I were introduced. On October
17, 2018, new Series PTF was introduced.
Ninepoint International Small Cap Fund January 26, 2018
(publicly launched on March 15, 2018)
A multi-series fund since inception, having five series,
Series A, D, F, I and PF.
Ninepoint Concentrated Canadian Equity Fund January 26, 2018
(publicly launched on March 29, 2018)
A multi-series fund since inception, having five series,
Series A, D, F, I and PF.
Ninepoint Core Bond Fund July 30, 2018
(publicly launched on October 1, 2018)
A multi-series fund since inception, having six series,
Series A, AS, F, FS, QF and I.
Generic Notes to Financial Statements December 31, 2018
143
The differences among the series of units are the different eligibility criteria, fee structures and administrative expenses associated with each
series.
The Statements of Financial Position of each of the Funds are as at December 31, 2018 and 2017 unless otherwise noted. The Statements of
Comprehensive Income (Loss), Statements of Changes in Net Assets Attributable to Holders of Redeemable Units and Statements of Cash
Flows for each Fund are for the years ended December 31, 2018 and 2017, except for Funds or series of a Fund established during either
period, in which case the information for that Fund or applicable series is provided for the year from the inception of the Fund or start date of
the series of the Fund to December 31 of the applicable year. The Schedule of Investment Portfolio for each Fund is as at December 31, 2018.
These financial statements were approved for issuance by the Manager on March 26, 2019.
2. Basis of Presentation These financial statements have been prepared in compliance with International Financial Reporting Standards (“IFRS”) as published by the
International Accounting Standards Board (“IASB”) and include estimates and assumptions made by the Manager that may affect the reported
amounts of assets, liabilities, income, expenses and the reported amounts of changes in Net Assets during the reporting period. Actual results
could differ from those estimates.
The financial statements have been prepared on a going concern basis using the historical cost convention. However, each Fund is an
investment entity and primarily all financial assets and financial liabilities are measured at fair value in accordance with IFRS.
The financial statements are presented in Canadian dollars, which is each Fund’s functional currency.
3. Summary of Significant Accounting Policies The following is a summary of significant accounting policies followed by the Funds:
NEW STANDARDS AND INTERPRETATIONS
Effective January 1, 2018 the Funds, other than the Funds launched during the year, adopted IFRS 9, Financial Instruments (“IFRS 9”). The
new standard requires financial assets to be classified as amortized cost, fair value through profit or loss (“FVTPL”), or fair value through other
comprehensive income (“FVOCI”) based on the Funds’ business model for managing the financial assets and the contractual cash flow
characteristics of these assets.
Upon transition to IFRS 9, the Funds’ financial assets and financial liabilities previously classified as FVTPL under IAS 39, Financial
Instruments – Recognition and Measurement (“IAS 39”) continue to be classified in the same category and there were no changes in the
measurement attributes. The adoption of IFRS 9 has also been applied retrospectively and the Funds elected not to restate comparative period
results.
CLASSIFICATION AND MEASUREMENT OF INVESTMENTS
The Funds classify and measure financial instruments in accordance with IFRS 9. The Funds’ investments, investments sold short and
derivative assets and liabilities are measured at FVTPL.
The Funds’ accounting policies for measuring the fair value of its investments and derivatives are identical to those used in measuring its Net
Asset Value for transactions with shareholders. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.
Financial assets and liabilities are recorded in the Statements of Financial Position at fair value upon initial recognition. All transaction costs
such as brokerage commissions incurred in the purchase and sale of such securities are recognized directly in the Statements of Comprehensive
Income. Subsequent to initial measurement, financial assets and liabilities at FVTPL are recorded at fair value which, as at the financial
reporting period end is determined as follows:
1. Securities listed upon a recognized public stock exchange are valued at the closing price recorded by the exchange on which the
security is principally traded, where the last traded price falls within that day’s bid-ask spread. In circumstances where the closing
price is not within the bid-ask spread, the Manager determines the point within the bid-ask spread that is most representative of fair
value based on the specific facts and circumstances.
Generic Notes to Financial Statements December 31, 2018
144
2. Common shares of unlisted companies and warrants that are not traded on an exchange are valued using valuation techniques
established by the Manager. Restricted securities are valued in a manner that the Manager determines represents fair value.
3. Short-term notes and treasury bills are valued at their cost. The cost, together with accrued interest, approximates fair value using
closing prices.
4. Bonds, debentures and other debt obligations are valued at the mean of bid/ask prices provided by recognized investment dealers.
Unlisted bonds are valued using valuation techniques established by the Manager.
5. Mutual fund units held as investments are fair valued using their respective NAV per unit on the relevant valuation dates, as these
values are most readily and regularly available.
Physical gold bullion and silver bullion are measured at fair value determined by reference to published price quotations, with unrealized and
realized gains and losses recorded in income based on the IAS 40 – Investment Property (“IAS 40”) fair value model as IAS 40 is the most
relevant standard to apply.
The difference between the fair value of investments and the cost of investments represents the unrealized appreciation or depreciation in the
value of investments. The cost of investments for each security is determined on an average cost basis.
Other assets, such as subscriptions receivable, due to broker, and income receivables, and other liabilities are recognized at fair value upon
initial recognition and subsequently, are measured at amortized cost. IFRS 9 requires that an entity recognize a loss allowance for expected
credit losses on financial assets which are measured at amortized cost or FVOCI. The Funds consider both historical analysis and forward
looking information in determining any expected credit loss. The Funds’ obligation for Net Assets attributable to holders of redeemable shares
is presented at the redemption amount.
TRANSACTION COSTS
Transaction costs are expensed and are included in “Transaction costs” in the Statements of Comprehensive Income. Transaction costs are
incremental costs that are directly attributable to the acquisition, issue or disposal of an investment, which include fees and commissions paid to
agents, advisors, brokers and dealers, levies by regulatory agencies and securities exchanges, and transfer taxes and duties.
INVESTMENT TRANSACTIONS AND INCOME RECOGNITION
Investment transactions are accounted for on the business day following the date the order to buy or sell is executed, with the exception of
short-term investments, which are accounted for on the date the order to buy or sell is executed. Realized gains and losses arising from the sale
of investments and unrealized appreciation and depreciation on investments are calculated with reference to the average cost of the related
investments and are recorded in the Statements of Comprehensive Income.
Interest income for distribution purposes represents the coupon interest recognized on an accrual basis. Dividend income is recognized on the
ex-dividend date, presented gross of any non-recoverable withholding taxes, which are disclosed separately in the Statements of
Comprehensive Income. Distributions from underlying funds are recognized on the distribution date.
FOREIGN CURRENCY TRANSLATION
The fair values of foreign-currency-denominated investments are translated into Canadian dollars using the prevailing rate of exchange on each
valuation date. Income, expenses and investment transactions in foreign currencies are translated into Canadian dollars at the rate of exchange
prevailing on the respective dates of such transactions.
The Funds do not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such
changes are included in “Change in unrealized appreciation (depreciation) in the value of investments” in the Statements of Comprehensive
Income. Realized foreign exchange gains or losses from sales of investments and cash in foreign currencies are included in “Net realized gains
(losses) on foreign exchange” in the Statements of Comprehensive Income. Any difference between the recorded amounts of dividends, interest
and foreign withholding taxes and the Canadian dollar equivalent of the amounts actually received is reported as part of the investment income
in the Statements of Comprehensive Income.
CASH
Cash is comprised of cash on deposit with financial institutions.
Generic Notes to Financial Statements December 31, 2018
145
FORWARD CURRENCY CONTRACTS
The value of a forward currency contract is the gain or loss that would be realized if, on the date that valuation is made, the position were
closed out. It is reflected in the Statements of Financial Position as part of “Unrealized appreciation (depreciation) on forward currency
contracts” and the change in value over the period is reflected in the Statements of Comprehensive Income as part of “Change in unrealized
appreciation (depreciation) on forward currency contracts”. When the forward currency contracts are closed out, gains and losses are realized
and are included in “Net realized gains (losses) on forward currency contracts” in the Statements of Comprehensive Income.
OPTION CONTRACTS
When the Funds purchase options, the premiums paid for purchasing options are included as an asset and are subsequently adjusted each
valuation day to the fair value of the option contract. Premiums received from writing options are included as a liability and are subsequently
adjusted each valuation day to the fair value of the option contract. These amounts are reflected in the Statements of Financial Position as part
of “Options purchased” or “Options written”. Option contracts are valued each valuation day according to the gain or loss that would be
realized if the contracts were closed out on that day. All unrealized gains (losses) arising from option contracts are recorded as “Change in
unrealized appreciation (depreciation) on option contracts” in the Statements of Comprehensive Income, until the contracts are closed out or
expire, at which time the gains (losses) are realized and reflected in the Statements of Comprehensive Income as “Net realized gains (losses) on
option contracts”.
CREDIT DEFAULT SWAPS
The fair value of credit default swaps with exposures to underlying marketable issuers is determined using indicative values obtained by
vendors from third party-broker dealers. Pricing vendors determine the fair value using valuation models that are based on assumptions that are
supported by observable market inputs such as credit spreads. The fair value is independently assessed by valuation specialists to ensure that
they are reasonable. The fair values of credit default swaps are affected by the perceived credit risk of the underlying issuers, movements in
credit spreads and the length of time to maturity. These amounts are reflected in the Statements of Financial Position as part of “Swap
contracts”.
Any interest paid for credit default swaps contracts is recorded as “Interest paid on swap contracts” in the Statements of Comprehensive
Income. The unrealized gain or loss on credit default swaps contracts is reflected in the Statements of Comprehensive Income as part of
“Change in unrealized appreciation (depreciation) on swap contracts”. When the credit default swaps are closed out, any gains (losses) are
recorded as “Net realized gain (loss) on swap contracts” in the Statements of Comprehensive Income.
CALCULATION OF NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS PER SERIES PER UNIT
The Net Assets attributable to holders of redeemable units per unit of a series is based on the fair value of the series’ proportionate share of the
assets and liabilities of the Fund common to all series, less any liabilities of the Fund attributable only to that series, divided by the total
outstanding units of that series. Income, non-series-specific expenses, realized and unrealized gains (losses) on investments and transaction
costs are allocated to each series of a Fund based on the series’ pro-rata share of Net Assets attributable to holders of redeemable units of that
Fund. Expenses directly attributable to a series are charged directly to that series.
INCOME TAXES
The Funds qualify as mutual fund trusts under the Income Tax Act (Canada), and accordingly, are not taxed on that portion of taxable income
that is paid to or allocated to unitholders. The Funds may also retain some net capital gains by utilizing the capital gains refund mechanism
available to mutual fund trusts without incurring any income taxes. No provision for income taxes has been recorded in the Funds as sufficient
income and net realized capital gains have been distributed to unitholders. Non-capital losses may be carried forward for up to 20 years and can
be offset against future taxable income. Capital losses may be carried forward indefinitely to be applied against future capital gains.
For tax purposes, certain Funds generally treat gains from the disposition of gold bullion and silver bullion respectively as capital gains, rather
than income, as they intend to be long-term passive holders of gold and silver bullion, and generally dispose of their holdings in bullion only
for the purposes of meeting redemptions. The Canada Revenue Agency has, however, expressed its opinion that gains or losses of mutual fund
trusts resulting from transactions in commodities should generally be treated for tax purposes as ordinary income rather than as capital gains,
although the treatment in each particular case remains a question of fact to be determined having regard to all the circumstances.
The Funds incur withholding taxes imposed by certain countries on investment income and capital gains. Such income and gains are recorded
on a gross basis and the related withholding taxes are shown separately in the Statements of Comprehensive Income.
Generic Notes to Financial Statements December 31, 2018
146
INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS FROM OPERATIONS PER UNIT
“Increase (decrease) in Net Assets attributable to holders of redeemable units from operations per unit” in the Statements of Comprehensive
Income represents the increase (decrease) in Net Assets attributable to holders of redeemable units from operations per series, divided by the
weighted average number of units of the series outstanding during the period, which is presented in the Statements of Comprehensive Income.
SHORT SELLING
When a Fund engages in a short sale, it borrows that security from a prime broker to complete the sale. The cost of entering into short positions
is recorded in the Statements of Comprehensive Income under “Securities borrowing expense”. Short selling can provide the Fund with
opportunities for gains when markets are volatile or declining. A Fund will engage in short selling only within certain limits and conditions
including: (i) the Fund will short sell only liquid securities that are traded on a stock exchange, (ii) the Fund will limit its short sale exposure to
any single issuer to 5% of the Fund’s total NAV and an aggregate short exposure to 20% of its total NAV, and (iii) the Fund will hold cash
cover in an amount (including the Fund’s assets deposited with lenders and short-term investments) that is at least 150% of the aggregate fair
value of all securities sold short. The Fund can realize a gain on a short sale if the price of the security decreases from the date the security was
sold short until the date at which the Fund closes out its short position, by buying that security at a lower price. A loss will be incurred if the
price of the security increases.
OFFSETTING OF FINANCIAL INSTRUMENTS
Financial assets and liabilities are disclosed net if there is a legally enforceable right to offset the recognized amounts and there is an intention
to settle on a net basis, or to realize the asset and liability simultaneously. Where applicable, additional information is disclosed in the
Offsetting of Financial Instruments section of the Notes to financial statements – Fund specific information.
SECURITIES LENDING
The Funds may enter into securities lending transactions. These transactions involve the temporary exchange of securities as collateral with a
commitment to deliver the same securities on a future date. Income is earned from these transactions in the form of fees paid by the
counterparty and, in certain circumstances, interest paid on securities held as collateral. Income earned from these transactions is recognized on
an accrual basis and included in the Statements of Comprehensive Income.
Certain Funds have entered into a securities lending program with their custodian, RBC Investor Services Trust. The aggregate market value of
all securities loaned by a Fund cannot exceed 50% of the net assets of the Fund. The Fund will receive collateral of at least 102% of the value
of the securities on loan. Collateral will generally be comprised of cash and obligations of, or guaranteed by, the Government of Canada or a
province thereof, or the United States Government or its agencies, or a permitted supranational agency as defined in National Instrument 81-
102. Securities lending income reported in the Statements of Comprehensive Income is net of securities lending charges which the Fund’s
custodian, RBC Investor Services Trust, is entitled to receive.
STANDARDS ISSUED BUT NOT YET EFFECTIVE
The Funds have determined there are no IFRS standards that are issued but not yet effective that could materially impact the Funds’ financial
statements.
4. Critical Accounting Estimates and Judgments The preparation of financial statements requires management to use judgment in applying its accounting policies and to make estimates and
assumptions about the future. The following discusses the most significant accounting judgments and estimates that the Funds have made in
preparing the financial statements:
Generic Notes to Financial Statements December 31, 2018
147
FAIR VALUE MEASUREMENT OF DERIVATIVES AND SECURITIES NOT QUOTED IN AN ACTIVE MARKET
The Funds hold financial instruments that are not quoted in active markets, including derivatives. Fair values of such instruments are
determined using valuation techniques and may be determined using reputable pricing sources (such as pricing agencies) or indicative prices
from market makers. Where no market data is available, the Funds may value investments using valuation models, which are usually based on
methods and techniques generally recognized as standard within the industry. The models used to determine fair values are validated and
periodically reviewed by experienced personnel of the Manager, independent of the party that created them. Models use observable data, to the
extent practicable. However, areas such as credit risk (both own and counterparty), volatilities and correlations require the Manager to make
estimates. Changes in assumptions about these factors could affect the reported fair values of financial instruments. The Funds consider
observable data to be market data that is readily available, regularly distributed and updated, reliable and verifiable, not proprietary, and
provided by independent sources that are actively involved in the relevant market. Common shares of unlisted companies may be valued at cost
and adjusted based on the last known transaction. Refer to Note 5 for further information about the fair value measurement of the Funds’
financial instruments.
CLASSIFICATION AND MEASUREMENT OF INVESTMENTS AND APPLICATION OF THE FAIR VALUE OPTION
In classifying and measuring financial instruments held by the Funds, the Manager is required to make significant judgments in determining the
most appropriate classification in accordance with IFRS 9. The Manager has assessed the Funds’ business models and concluded that FVTPL,
in accordance with IFRS 9, provides the most appropriate classification of the Funds’ financial instruments.
ASSESSMENT AS AN INVESTMENT ENTITY
Entities that meet the definition of an investment entity within IFRS 10, Consolidated Financial Statements are required to measure their
subsidiaries at FVTPL rather than consolidate them. The criteria which define an investment entity are as follows:
• an entity that obtains funds from one or more investors for the purpose of providing those investors with investment services;
• an entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation,
investment income or both; and
• an entity that measures and evaluates the performance of substantially all of its investments on a fair value basis.
The Manager has assessed the characteristics of an investment entity as they apply to the Funds, and such assessment requires significant
judgments. Based on the assessment, the Manager concluded that each Fund meets the definition of an investment entity.
5. Fair Value Measurements The Funds use a three-tier hierarchy as a framework for disclosing fair value based on inputs used to value the Funds’ investments. The fair
value hierarchy has the following levels:
Level 1 Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that the Funds have the ability to access at the
measurement date;
Level 2 Quoted prices which are not active, or inputs that are observable (either directly or indirectly) for substantially the full term of the
asset or liability; and
Level 3 Prices, inputs or complex modeling techniques that are both significant to the fair value measurement and unobservable (supported by
little or no market activity).
The hierarchy of investments and derivatives for each Fund is included in the Notes to financial statements – Fund specific information of each
Fund.
All fair value measurements are recurring. The carrying values of cash, subscriptions receivable, interest receivable, payable for investments
purchased, redemptions payable, distributions payable, accrued expenses and each Fund’s obligations for Net Assets attributable to holders of
redeemable units approximate their fair values due to their short-term nature. Fair values are classified as Level 1 when the related security or
derivative is actively traded and a quoted price is available. If an instrument classified as Level 1 subsequently ceases to be actively traded, it is
transferred out of Level 1. In such cases, instruments are reclassified into Level 2, unless the measurement of its fair value requires the use of
significant unobservable inputs, in which case it is classified as Level 3.
The following provides details of the categorization in the fair value hierarchy by asset classes:
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148
Level 1 securities include:
• Equity securities and options using quoted market prices (unadjusted).
• Investments in other mutual funds valued at their respective NAV per unit on relevant valuation dates.
Level 2 securities include:
• Equity securities that are not frequently traded in active markets. In such cases, fair value is determined based on observable market
data (e.g., transactions for similar securities of the same issuer).
• Fixed-income securities valued at evaluated bid prices provided by recognized investment dealers (i.e. third-party pricing vendor
based on a variety of factors including broker input, financial information on the issuer and other observable market inputs).
• Derivative assets and liabilities such as forward currency contracts and swaps, which are valued based on observable inputs such as
the notional amount, forward market rate, contract rates, interest and credit spreads. To the extent that the inputs used are observable
and reliable, these derivatives are included in Level 2.
Level 3 securities include:
• Investments valued using valuation techniques that are based on unobservable market data. These techniques are determined pursuant
to procedures established by the Manager. Quantitative information about unobservable inputs and related sensitivity of the fair value
measurement are disclosed in the Notes to financial statements – Fund specific information.
Additional disclosures relating to transfers between levels and a reconciliation of the beginning and ending balances in Level 3 are also
disclosed in the Notes to financial statements – Fund specific information.
For the periods ended December 31, 2018 and 2017, the majority of Level 2 securities consisted of private placement common shares subject to
a hold period following the closing date of the purchase, and warrants received in consideration of the private placement purchase. Upon the
passing of the hold period on the private placement common shares during the period, the shares would be moved from Level 2 to Level 1. The
warrants would be Level 2 until either the warrant expired, at which time the security would be removed from the Level 2 balance, or the
warrant was exercised, at which time the warrant would be converted into a Level 1 security to the extent that the security is traded in an active
market. There were no other material transfers between Level 1 and Level 2 during the periods.
6. Financial Risk Management Each Fund is exposed to risks that are associated with its investment strategies, financial instruments and markets in which it invests. The
extent of risk within a Fund is largely contingent upon the Fund’s investment policy and guidelines as stated in its prospectus, and the
management of such risks is contingent upon the qualification and diligence of the portfolio manager designated to manage the Fund.
The Schedule of Investment Portfolio groups securities by asset type, sector or geographic region. Significant risks that are relevant to the
Funds are discussed below. Refer to the Notes to financial statements – Fund specific information of each Fund for specific risk disclosures.
MARKET RISK
The Funds’ investments are subject to market risk, which is the risk that the fair value of future cash flows of a financial instrument will
fluctuate because of changes in market variables such as equity prices, currency rates and interest rates.
a) Other Price Risk
Other price risk is the risk that the fair value of a financial instrument will fluctuate due to a change in market prices (other than those arising
from interest rate risk or currency risk). The sensitivity analysis disclosed is estimated based on the historical correlation between the return of a
Fund as compared to the return of a Fund’s benchmark. The analysis assumes that all other variables remain unchanged. The historical
correlation may not be representative of future correlation and accordingly, the impact on net assets could be materially different. The
investments of a Fund are subject to normal market fluctuations and the risks inherent in the financial markets. The maximum risk resulting
from purchased securities held by the Funds is limited to the fair value of these investments. The Manager moderates this risk through a careful
selection of securities within specified limits, as well as through the diversification of the investment portfolio.
b) Currency Risk
Currency risk is the risk that arises from the change in the price of one currency against another. The Funds hold securities that are denominated
in currencies other than the Canadian dollar. These securities are converted to the Funds’ functional currency (Canadian dollar) in determining
fair value, and fair values are subject to fluctuations relative to the strengthening or weakening of the functional currency.
Generic Notes to Financial Statements December 31, 2018
149
c) Interest Rate Risk
Interest rate risk is the risk borne by an interest-bearing financial instrument that is attributed to interest rate fluctuations. Cash does not expose
the Funds to significant amounts of interest rate risk. Excess cash amounts and amounts held as collateral for securities sold short may be
invested in Government of Canada treasury bills with maturities of less than three months.
CREDIT RISK
Credit risk is the risk of loss due to the failure of a counterparty to satisfy its obligations. The credit risk relating to issuers of debt securities is
reviewed periodically and adjustments may be made, as appropriate, to reflect an allowance for possible default. The credit risk relating to
issuers of the secured debt is managed by the terms of agreements; in particular, the notes are secured and the issuers are subject to a number of
financial covenants, which are monitored on a regular basis.
The Funds may also be exposed to credit risk from the counterparties to the derivative instruments they hold. Credit risk associated with these
transactions is considered minimal as all counterparties have an approved credit rating equivalent to a Standard & Poor’s credit rating of AA –
or higher on their long-term debt.
All transactions executed by a Fund in listed securities are settled upon delivery using approved brokers. The risk of default is considered
minimal, as the delivery of those securities sold is made only when the broker has received payment. Payment is made on purchases only when
the security is received by the broker. The trade will fail to consummate if either party fails to meet its obligations.
LIQUIDITY RISK
Liquidity risk is the risk that a Fund will not be able to generate sufficient cash resources to fulfill its payment obligations. The Funds
predominantly invest in liquid securities that are readily tradable in an active market. Consequently, the Funds are able to readily dispose of
securities if necessary to fund redemptions in the course of operations. The Funds traditionally maintain a cash reserve in anticipation of normal
redemption activity. Although each Fund may, from time to time, invest in illiquid or restricted securities such as private placements, private
companies and warrants which are identified in the applicable Fund’s Schedule of Investment Portfolio, such investments do not comprise a
significant portion of a Fund’s investment portfolio.
With the exception of derivative contracts and investments sold short, where applicable, all of the Funds’ financial liabilities are short-term
liabilities maturing within 90 days after the period end. For Funds that hold investments sold short, these investments have no specific maturity
date. For Funds that hold derivative contracts with a term to maturity that exceeds 90 days from the period end, further information related to
those contracts can be found in the derivatives schedules included in the Schedule of Investment Portfolio of those Funds.
CONCENTRATION RISK
Concentration risk arises as a result of the concentration of financial instrument exposures within the same category, whether it is geographic
region, asset type or industry sector.
7. Capital Management The capital of a Fund is represented by the issued and outstanding units and the NAV attributable to participating unitholders. The Manager
utilizes the capital of the Funds in accordance with each Fund’s investment objectives, strategies and restrictions, as outlined in the Fund’s
prospectus, while maintaining sufficient liquidity to meet normal redemptions. The Funds do not have any externally imposed
capital requirements.
8. Redeemable Units Each Fund is permitted to issue an unlimited number of series of redeemable units and an unlimited number of redeemable units in each series.
Each Fund offers at least three series, unless otherwise indicated; Series A, Series F and Series I. Series A units are available to all investors.
Series F units are available to investors who participate in fee-based programs through their dealers and whose dealer has signed a Series F
agreement with the Manager, or individual investors approved by the Manager. Series I units are available to institutional investors at the
discretion of the Manager.
For the Funds, other than Ninepoint Gold Bullion Fund, Ninepoint Short-Term Bond Fund, Ninepoint Silver Bullion Fund and Ninepoint Core
Bond Fund, Series D units are available to investors who acquire units through a discount brokerage account or other account approved by the
manager and whose dealer has signed a Series D agreement with the manager relating to the distribution of these units.
Generic Notes to Financial Statements December 31, 2018
150
For Ninepoint Core Bond Fund, Series AS are available to all investors until the earlier of March 31, 2019 and the date the Fund has assets
under management equal to or greater than $100 million, at which time Series AS will be closed to new purchases. Series FS units are available
to investors who participate in fee-based programs through their dealer and whose dealer has signed a Series F Agreement with the Manager,
investors for whom the Manager does not incur distribution costs, or individual investors approved by the Manager. Series FS units are
available to investors until the earlier of March 31, 2019 and the date the Fund has assets under management equal to or greater than $100
million, at which time this series will be closed to new purchases.
For Ninepoint Diversified Bond Fund, Ninepoint Enhanced Balanced Fund and Ninepoint Global Real Estate Fund, Series T and Series FT
units are available. Series T units are intended for investors who seek monthly distributions at a target annual distribution rate consisting of net
income, capital gains and/or returns of capital. Series FT units are designed for investors who participate in fee-based programs and who seek
monthly distributions at a target annual distribution rate consisting of net income, capital gains and/or returns of capital.
For Ninepoint Diversified Bond Fund, Series P, Series PT, Series PF and Series PFT units are available to an investor, discretionary accounts of
an advisor or a “household group”, holding in aggregate at least a $1 million investment in the Fund, and, for Series PF and PFT, also
participates in fee-based programs. Series Q, Series QT, Series QF and Series QFT units are available to an investor, discretionary accounts of
an advisor or a “household group”, holding in aggregate at least a $5 million investment in the Fund, and, for Series PF and PFT, also
participates in fee-based programs. A “household group” consists of members of the same family residing at the same residence plus corporate,
partnership or trust entities over which those family members have voting control (over 50%). Series PF units are also available to investors in
Ninepoint International Small Cap Fund and Ninepoint Concentrated Canadian Equity Fund. Series QF are also available to investors in
Ninepoint Gold and Precious Minerals Fund and Ninepoint Core Bond Fund.
For Ninepoint Energy Fund and Ninepoint Alternative Health Fund, Series PTF units are available to investors who participate in fee-based
programs through their dealer and whose dealer has signed a Series PTF Agreement with the Manager and have met certain infrastructure
requirements.
For Ninepoint Enhanced Balanced Fund, Series A1 and F1 units are available to all investors who purchased these series on or before April 16,
2013.
There were no Series A, Series F and Series QF units issued or outstanding during the period for Ninepoint Core Bond Fund. There were no
Series D units issued or outstanding during the period for Ninepoint Diversified Bond Fund, Ninepoint Enhanced Balanced Fund and Ninepoint
Global Real Estate Fund. There were no Series I units issued or outstanding during the period for Ninepoint Gold Bullion Fund, Ninepoint
Silver Bullion Fund, Ninepoint International Small Cap Fund and Ninepoint Concentrated Canadian Equity Fund. There were no Series PF
units issued or outstanding during the period for Ninepoint Concentrated Canadian Equity Fund. There were no Series PT, Series PFT, Series Q
and Series QT units issued or outstanding during the period for Ninepoint Diversified Bond Fund.
Redeemable units of the Funds are redeemable at the option of the unitholders, in accordance with the provisions of each Fund’s trust
agreement, at their NAV per unit.
The Funds have multiple classes of redeemable units that do not have identical features and therefore, the units do not qualify as equity under
IAS 32, Financial Instruments: Presentation.
9. Distribution of Income and Capital Gains Net investment income and net realized capital gains are distributed to unitholders annually at the end of the calendar year, with the exception
of Ninepoint Diversified Bond Fund, Ninepoint Enhanced Balanced Fund and Ninepoint Global Real Estate Fund which also makes monthly
distributions on Series T and Series FT units as applicable. Ninepoint Diversified Bond Fund, Ninepoint Short-Term Bond Fund, Ninepoint
Global Infrastructure Fund and Ninepoint Global Real Estate Fund also make monthly distributions on Series A, Series F and Series I units.
Ninepoint Diversified Bond Fund also makes monthly distributions on Series P, Series PF, Series QF and Series QFT units. Ninepoint Short-
Term Bond Fund also makes monthly distributions on Series I1 units. Ninepoint Global Infrstructure Fund also made monthly distributions on
Series D units. Ninepoint Core Bond Fund makes monthly distributions on Series FS and Series I units. All distributions allocated to
unitholders are either paid in cash or reinvested automatically in additional units of the Funds. These amounts are reflected on the Statements of
Changes in Net Assets Attributable to Holders of Redeemable Units as part of “Distributions to unitholders” and/or “Units issued from
reinvested distributions”.
Generic Notes to Financial Statements December 31, 2018
151
10. Restricted Cash and Investments Cash, investments and broker margin include balances with prime brokers held as collateral for securities sold short and other derivatives. This
collateral is not available for general use by the Funds. The value of any restricted cash and investments held for each of the Funds is disclosed
in the Notes to financial statements – Fund specific information, if applicable.
11. Related-Party Transactions
MANAGEMENT FEES
Each Fund pays the Manager an annual management fee to cover management expenses. Management fees are unique to each Fund and each
series and are subject to applicable taxes. The management fee is calculated and accrued daily and is paid on the last business day of each
month based on the daily NAV of each Fund.
INCENTIVE FEES
The Funds listed below pay the Manager an incentive annually fee that is equal to 10% of the difference by which the percentage return in the
unit value of the applicable series of the Fund from January 1 to December 31 exceeds the percentage return of the benchmark index. The
benchmark indices are as follows:
Name of the Fund Benchmark
Ninepoint Gold and Precious Minerals Fund S&P TSX Global Gold Total Return Index
Ninepoint Energy Fund S&P TSX Capped Energy Total Return Index
If the performance of a series of a Fund in any year is less than the performance of the applicable index described above (the “Deficiency”),
then no incentive fee will be payable in any subsequent year until the performance of the applicable series of the applicable Fund, on a
cumulative basis calculated from the first of such subsequent years, has exceeded the amount of the Deficiency. The Manager may reduce the
incentive fee payable by a Fund with respect to a particular investor.
12. Operating Expenses and Sales Charges Each Fund pays its own operating expenses, other than marketing costs and costs of dealer compensation programs, which are paid by the
Manager. Operating expenses include, but are not limited to, audit, legal, safekeeping, trustee, custodial, fund administration expenses,
preparation costs of financial statements and other reports to investors and Independent Review Committee (“IRC”) member fees and expenses.
Operating expenses are charged to all Funds pro-rata, on the basis of Net Assets or another measure that provides a fair and reasonable
allocation.
At its sole discretion, the Manager may waive or absorb a portion of the operating expenses of certain Funds. Amounts waived or absorbed by
the Manager are reported in the Statements of Comprehensive Income. Waivers or absorptions can be terminated at any time without notice.
13. Sharing Arrangements In addition to paying for the cost of brokerage services in respect of securities transactions, commissions paid to certain brokers may also cover
research services provided to the portfolio manager. Sharing arrangements for each Fund are disclosed in the Notes to financial statements –
Fund specific information, if applicable.
14. Independent Review Committee In accordance with National Instrument 81-107, Independent Review Committee for Investment Funds, the Manager has established an IRC for
all of the Funds. The mandate of the IRC is to consider and provide recommendations to the Manager on conflicts of interest to which the
Manager is subject when managing the Funds. The IRC reports annually to unitholders of the Funds on its activities, and the annual report is
available on or after March 31 in each year. The Manager charges compensation paid to the IRC members and the costs of the ongoing
administration of the IRC to the Funds. These amounts are recorded in the Statements of Comprehensive Income.
Generic Notes to Financial Statements December 31, 2018
152
15. Subsequent Events Management has evaluated subsequent events for the Funds through to March 26, 2019, the date the financial statements were available to be
issued, and has concluded that there were no subsequent events relevant for financial statement disclosure, except as discussed below.
CHANGE INVESTMENT OBJECTIVE & INVESTMENT STRATEGIES, NAME AND MANAGEMENT FEES
By way of unitholder voting, effective March 4, 2019, for Short-Term Bond Fund, the following changes were approved:
• The investment objective and investment strategies changed to invest primarily in high interest savings accounts offered at Schedule 1
Canadian Banks;
• The name of Ninepoint Short-Term Bond Fund changed to Ninepoint High Interest Savings Fund; and
• The management fee reduced from 0.75% to 0.39% for Series A units, 0.50% to 0.14% for Series F units and from a maximum of
0.75% to a maximum of 0.39%, for Series I units, which is negotiated between Ninepoint Partners and each unitholder.
FUND MERGERS
On March 4, 2019, Ninepoint Global Infrastructure Fund acquired all the assets of Ninepoint Real Asset Class (formerly, Sprott Real Asset
Class) and in exchange, it issued shares to Ninepoint Real Asset Class. In turn, those shares were distributed to the unitholders of Ninepoint
Real Asset Class. The Manager was the investment advisor to Ninepoint Real Asset Class.
Transfer Date Acquired Fund
Fair Value of Assets
Acquired by the Fund
Number of shares issued by the
Fund to the Acquired Fund March 4, 2019 Ninepoint Real Asset Class $4,982,282 485,751
On March 4, 2019, Ninepoint Short-Term Bond Fund acquired all the assets of Ninepoint Short-Term Bond Class (formerly Sprott Short-Term
Bond Class) and in exchange, it issued shares to Ninepoint Short-Term Bond Class. In turn, those shares were distributed to the unitholders of
Ninepoint Short-Term Bond Class. The Manager was the investment advisor to Ninepoint Short-Term Bond Class.
Transfer Date Acquired Fund
Fair Value of Assets Acquired
by the Fund
Number of shares issued by the
Fund to the Acquired Fund March 4, 2019 Ninepoint Short-Term Bond Class $4,773,253 491,290
PROPOSED FUND MERGERS
On March 22, 2019, the Manager gave notice of its intention to merge the Funds listed below pending approval at separate special meetings of
securityholders to be held consecutively on or about May 23, 2019. The fund acquiring the net assets is known as the “Continuing Fund”, and
the fund delivering the net assets is known as the “Terminating Fund”.
Terminating Fund Continuing Fund
Ninepoint Enhanced Balanced Class Ninepoint Enhanced Balanced Fund
Ninepoint Focused U.S. Dividend Class Ninepoint Global Infrastructure Fund
FUND TERMINATION
On March 22, 2019, the Manager gave notice of its intention to terminate Ninepoint Core Bond Fund effective on or about May 31, 2019.