Q: I am retired and investing for income. I have recently been learning what I can of split corportions. I came across Ninepoint's Large Cap split corp. It is not very old and all I can find so far is flashy sales but not much detail.
Please provide your thoughts on Ninepoint Patners management and comment on NPS specifically.
Thank you.
Please provide your thoughts on Ninepoint Patners management and comment on NPS specifically.
Thank you.
5i Research Answer:
Ninepoint is a spin out of Sprott, and we (Peter) worked with many of the managers for seven years. We like them, but Ninepoint is still a 'sales' shop, creating new products to gain market share. Some of its funds have not been great (private credit in particular) and it had a close association with Bridging Finance, which collapsed. NPS gained 45% last year, but only has $27M in assets. With split-shares, income stops if net asset value is maintained. This makes them far more risky than ETFs or even holding a group of quality stocks. We are not saying this is a bad fund, but it is too new and too small we think for serious consideration. We would like to see how it does in a bad market environment, to get a better feel of its risk.