The Indexpdf document

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The Index

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The Sprott Zacks Gold Miners Index was co-developed by Sprott Asset Management LP and Zacks Index Services. The Index uses a transparent, rules-based methodology that is designed to identify gold stocks with attractive investment merit. The methodology was developed by leveraging Sprott’s experience as a long-time gold sector investor and Zacks research capabilities. The Index is designed to incorporate the factors that have historically been strong predictors of long-term performance of gold stocks. The 4-step process of selecting the stocks, weighting them in the Index and rebalancing quarterly ensures that the Index reflects the most current factor scores.

how-index

25 stocks whose historical stock prices have high beta* to the price of gold are selected from the investible universe of large- to mid-cap gold stocks listed on a U.S. exchange.

Revenue growth has been a strong indicator of production growth and the long-term success of a gold producer.

The revenue growth screen, a major factor that determines a company’s weight in the Index, is based on quarterly revenue growth and measured on a year-over-year basis.

Companies with the highest revenue growth scores are rewarded with higher weighting in the Index, while slower growers are penalized.

Exploring for large deposits and developing mines can often cost billions of dollars and take 10+ years to reach production.

Companies with a lower long-term debt to equity ratio have stronger balance sheets and a greater ability to weather downturns. These companies are rewarded with higher weighting in the Index, while companies with weaker balance sheets are penalized.

The Index rebalances its holdings on a quarterly basis to incorporate the latest results into its screening process, allowing it to adjust its constituents and their weightings based on their latest factor scores.

This ensures that companies with the highest factor scores are represented in the Index on a quarterly basis.

*Beta is defined as a sensitivity measure based on regression against the spot gold price movement during the trailing 36 months.

zack-logo ZAXSGDM Index (inception 5/19/2014) is comprised of approximately 25 stocks selected, based on investment and other criteria, from a universe of gold and silver mining companies whose stock is listed on a major U.S. exchange. The stocks are selected using a proprietary, quantitative rules-based methodology developed by Zacks Index Services. sprott-asset-logo

The Index

The Sprott Zacks Junior Gold Miners Index was co-developed by Sprott Asset Management LP and Zacks Index Services. The Index uses a transparent, rules-based methodology that is designed to identify junior gold stocks with attractive investment merit. The methodology was developed by leveraging Sprott’s experience as a long-time gold sector investor and Zacks research capabilities. The Index is designed to incorporate the factors that have historically been strong predictors of long-term performance of junior gold stocks. The 4-step process of selecting the stocks, weighting them in the Index and rebalancing semi-annually ensures that the Index reflects the most current factor scores.

how-index

The Index selects 30 to 40 companies with market capitalization between approximately $250 million to $2 billion that are listed on a U.S. or Canadian exchange. Excluding companies with market capitalization below $250 million aims to exclude very early stage exploration companies whose historical success rate is low.

Revenue growth has been a strong indicator of how a junior miner is progressing towards becoming an emerging or intermediate producer.

The revenue growth screen is based on quarterly revenue growth and measured on a year-over-year basis.

Companies with the highest revenue growth scores are rewarded with higher weighting in the Index, while slower revenue growers are penalized.

Stock price momentum can identify leadership within the sector and may be an especially meaningful factor when evaluating exploration companies that are not yet generating revenue.

Stronger price momentum of junior gold companies may be driven by a number of potential factors such as a new discovery, mine development or a joint venture.

Companies with the strongest relative stock price momentum scores are rewarded with higher weighting in the Index, while companies with weaker price momentum are penalized.

The Index rebalances its holdings on a semi-annual basis to incorporate the latest results into its screening process, allowing it to adjust its constituents and their weightings based on their latest factor scores.

This ensures that companies with the highest factor scores are represented in the Index on a semi-annual basis.

zack-logo ZAXSGDJ Index (inception 3/2/2015) is comprised of between 30 to 40 stocks selected, based on investment and other criteria, from a universe of gold and silver mining companies whose stock is listed on a major U.S. or Canadian exchange. The stocks are selected using a proprietary, quantitative rules-based methodology developed by Zacks Index Services. sprott-asset-logo