Ninepoint Global Infrastructure Fund

Transcription

1 Ninepoint Global Infrastructure Fund INTERIM MANAGEMENT REPORT OF FUND PERFORMANCE JUNE 30 The interim management report of fund performance is an analysis and explanation that is designed to complement and supplement an investment fund s financial statements. This report contains financial highlights but does not contain the complete interim financial statements of the investment fund. You can get a copy of the interim financial statements at your request, and at no cost, by calling , by visiting our website at or SEDAR at or by writing to us at: Ninepoint Partners LP, Royal Bank Plaza, South Tower, 200 Bay Street, Suite 2700, P.O. Box 27, Toronto, Ontario M5J 2J1. Securityholders may also contact us using one of these methods to request a copy of the investment fund s proxy voting policies and procedures, proxy voting disclosure record or quarterly portfolio disclosure.

2 Ninepoint Global Infrastructure Fund June 30, Management Discussion of Fund Performance Investment Objective and Strategies The objective of the Ninepoint Global Infrastructure Fund (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. As part of its investment strategy, the Fund may: invest across all geographical sectors; and engage in short selling consistent with the Fund s investment objective and as permitted by the Canadian securities regulators. On April 1,, Ninepoint Partners LP (the Manager ) acquired the management rights for the Fund from Blumont Capital Corporation. Information prior to the acquisition by the Manager is presented in this report, as required. Risks The risks of investing in the Fund are described in the Fund s simplified prospectus. This Fund is suitable for those investors who are seeking long-term appreciation potential of the global infrastructure and have a medium risk tolerance and a long-term investment horizon. There were no significant changes to the investment objective and strategies that affected the Fund s overall level of risk during the reporting period. Results of Operations and Recent Developments The Fund, Series A, returned 0.8% in the first half of, compared to a 1.3% return of the S&P Global Infrastructure Total Return Index benchmark (in Canadian dollars). Despite a series of interest-rate increases by the U.S. Federal Reserve Board, the U.S. yield curve flattened (a yield curve which reflects little or no difference between short-term and long-term interest rates). Although economic growth remained solid, U.S. 10-year bond yields came under pressure amid fears of a global trade war and generally low interest rates around the world. The U.S. dollar strengthened during the second quarter of as U.S. economic growth outpaced most regions across the rest of the world and fears of a global trade war led investors to seek safety in their investments. At the end of the first half of, the Fund held an overweight exposure to the energy sector and an underweight allocation to the industrials and utilities sectors. The exposures to energy and industrials made a positive contribution to performance, while the utilities exposure detracted from performance. From a geographic perspective, the Fund held overweight positions in the U.S. and Canada and underweight positions in Australia, Italy and Hong Kong. All of these geographic allocations, with the exception of Canada, had a positive impact on the Fund s returns. Top individual contributors to performance included MasterCard Inc., Visa Inc. and CSX Corp., all of which demonstrated consistent revenue, earnings and cash-flow growth. Individual detractors from performance included Brookfield Asset Management Inc., Comcast Corp. and Westshore Terminals Investment Corp. Brookfield Asset Management Inc. was negatively impacted during the first quarter of as a result of changing bond yields. Comcast Corp. bid to acquire Sky PLC causing its stock to trade lower. Westshore Terminals Investment Corp. s stock fell after its largest customer announced an expansion of a potentially competing export terminal. As the yield curve flattened and crude oil prices rose, the Manager increased the Fund s exposure to the energy sector to a slightly overweight allocation. The Fund s underweight positioning in the industrials and utilities sectors allowed exposure to the information technology, real estate and telecommunication services sectors given the Fund s total infrastructure approach. The Manager also reduced the Fund s position in the industrials sector, though it still remains somewhat below market weight. Geographically, with better economic growth in the U.S. relative to most regions of the rest of the world, the Manager maintained the Fund s significantly overweight allocations to U.S. and Canadian securities. NINEPOINT PARTNERS LP INTERIM MANAGEMENT REPORT OF FUND PERFORMANCE

3 Ninepoint Global Infrastructure Fund June 30, The Manager employed currency hedges at various times during the first half of, and may look to add U.S. and Canadian dollar hedges over the balance of, if rhetoric surrounding North American Free Trade Agreement negotiations heat up, in order to reduce currencyrelated volatility in the Fund. The Fund s net asset value decreased by 8.0% during the period, from 13.4 million as at December 31, to 12.3 million as at June 30,. This change was predominantly due to net redemptions of 0.9 million, offset by expenses of 0.2 million. The management expense ratio increased compared to the prior period. Ninepoint Partners LP is the manager and portfolio advisor of the Fund. Prior to August 1,, Sprott Asset Management LP was the manager and portfolio advisor of the Fund. Ninepoint Partners LP assumed the portfolio management of the Canadian diversified asset business of Sprott Asset Management LP on August 1,. Related Party Transactions MANAGEMENT FEES The Fund pays a management fee to the Manager an annual rate of 2.00% for Series A units, 1.50% for Series D units, 1.00% for Series F units and as negotiated by the unitholders for Series I. The management fee is calculated and accrued daily and is paid monthly based on the daily net asset value of that series of the Fund. For the six-month period ended June 30,, the Fund incurred management fees of 92,145 (including taxes). The breakdown of the services received in consideration of the management fees, as a percentage of management fees, is as follows: Portfolio Advisory Trailing Commissions Ninepoint Global Infrastructure Fund Series A 54% 46% Ninepoint Global Infrastructure Fund Series D 61% 39% Ninepoint Global Infrastructure Fund Series F 100% Ninepoint Global Infrastructure Fund Series I 100% Out of the management fees that the Manager received from the Fund, the Manager paid trailer commissions of 309 during the six-month period ended June 30, to SP Wealth, an affiliate of the manager. OPERATING EXPENSES The Fund pays its own operating expenses, which include, but are not limited to, audit, legal, custodial, trustee, filing and administrative expenses as well as unitholder reporting costs. The Manager pays certain of these expenses on behalf of the Fund and then is reimbursed by the Fund. 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. For the six-month period ended June 30,, the Manager did not absorb any expenses OTHER RELATED PARTY TRANSACTIONS The Fund relied on the approval, positive recommendation or standing instruction from the Fund s Independent Review Committee with respect to any related party transactions. NINEPOINT PARTNERS LP INTERIM MANAGEMENT REPORT OF FUND PERFORMANCE

4 Ninepoint Global Infrastructure Fund June 30, Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund s financial performance for the six-month period ended June 30, and each of the previous twelve-month periods ended December 31 shown, unless otherwise indicated. The Fund s Net Assets per Unit 1 Series A 2013 Net assets, beginning of period Increase (decrease) from operations: Total revenue Total expenses (0.18) (0.33) (0.35) (0.32) (0.43) (0.45) Realized gains (losses) for the period Unrealized gains (losses) for the period (0.59) (1.24) Total increase (decrease) from operations (0.96) Distributions: From income (excluding dividends) From dividends 0.13 From capital gains 1.41 Return of capital Total annual distributions Net assets, end of period Series D 5 Net assets, beginning of period Increase (decrease) from operations: Total revenue 0.02 Total expenses (0.00) Realized gains (losses) for the period 0.05 Unrealized gains (losses) for the period (0.06) Total increase (decrease) from operations Distributions: From income (excluding dividends) From dividends From capital gains Return of capital Total annual distributions Net assets, end of period NINEPOINT PARTNERS LP INTERIM MANAGEMENT REPORT OF FUND PERFORMANCE

5 Ninepoint Global Infrastructure Fund June 30, 2013 Series F Net assets, beginning of period Increase (decrease) from operations: Total revenue Total expenses (0.12) (0.21) (0.23) (0.19) (0.29) (0.40) Realized gains (losses) for the period Unrealized gains (losses) for the period (0.41) (1.01) Total increase (decrease) from operations (0.57) Distributions: From income (excluding dividends) From dividends 0.13 From capital gains 1.67 Return of capital Total annual distributions Net assets, end of period Series I 4 Net assets, beginning of period Increase (decrease) from operations: Total revenue Total expenses (0.04) (0.07) (0.08) (0.04) (0.03) Realized gains (losses) for the period (0.03) Unrealized gains (losses) for the period (0.29) (1.53) (0.34) Total increase (decrease) from operations (1.05) (0.21) Distributions: From income (excluding dividends) From dividends 0.10 From capital gains 0.96 Return of capital Total annual distributions Net assets, end of period This information is derived from the Fund s interim and audited annual financial statements. 2 The increase/decrease from operations is based on the weighted average number of units outstanding over the financial period. Net assets and distributions are based on the actual number of units outstanding at the relevant time. This table is not intended to be a reconciliation of beginning to ending net assets per unit. 3 Distributions were reinvested in additional units of the Fund. 4 Information provided is for the period from July 17, (first issuance) to December 31, for Series I. 5 Information provided is for the period from June 13, (first issuance) to June 30, for Series D. 6 The final allocation of distributions for the period ended June 30, between income, dividends, capital gains and return of capital will be determined at December 31,. NINEPOINT PARTNERS LP INTERIM MANAGEMENT REPORT OF FUND PERFORMANCE

6 Ninepoint Global Infrastructure Fund June 30, Ratios and Supplemental Data Series A 2013 Total net asset value (000s) 1 5,338 6,553 7,121 10,451 15,991 14,631 Number of units outstanding 1 505, , ,068 1,004,877 1,328,833 1,254,819 Management expense ratio % 2.83% 3.02% 2.62% 2.70% 4.09% Management expense ratio before waivers or absorptions % 2.83% 3.02% 2.72% 2.78% 4.62% Trading expense ratio % 0.26% 0.19% 0.03% 0.03% 0.03% Portfolio turnover rate % % 99.36% 30.66% 37.67% 38.52% Net asset value per unit Series D Total net asset value (000s) 1 3 Number of units outstanding Management expense ratio % Management expense ratio before waivers or absorptions % Trading expense ratio % Portfolio turnover rate % Net asset value per unit Series F 2013 Total net asset value (000s) 1 5,101 4,426 2,583 2,527 5,903 6,930 Number of units outstanding 1 464, , , , , ,197 Management expense ratio % 1.73% 1.97% 1.51% 1.60% 3.66% Management expense ratio before waivers or absorptions % 1.73% 1.97% 1.62% 1.68% 4.19% Trading expense ratio % 0.26% 0.19% 0.03% 0.03% 0.03% Portfolio turnover rate % % 99.36% 30.66% 37.67% 38.52% Net asset value per unit Series I Total net asset value (000s) 1 1,889 2,422 3,275 8,130 6,288 Number of units outstanding 1 198, , , , ,392 Management expense ratio % 0.68% 0.83% 0.44% 0.00% Management expense ratio before waivers or absorptions % 0.68% 0.83% 0.54% 0.00% Trading expense ratio % 0.26% 0.19% 0.03% 0.03% Portfolio turnover rate % % 99.36% 30.66% 37.67% Net asset value per unit The information is provided as at June 30, and December 31 of the years shown prior to. 2 Management expense ratio ( MER ) is based on total expenses (including incentive fees, if any; excluding commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of the daily average net asset value during the period. 3 The Manager may waive or absorb a portion of the operating expenses of the Fund. Waivers and absorption can be terminated at any time. 4 The trading expense ratio ( TER ) represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period. The TER includes dividend expense and securities borrowing expense paid by the Fund in connection with securities sold short. 5 The Fund s portfolio turnover rate indicates how actively the Fund s portfolio adviser trades its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Fund. The portfolio turnover is expressed as a non-annualized percentage. NINEPOINT PARTNERS LP INTERIM MANAGEMENT REPORT OF FUND PERFORMANCE

7 Return (%) Ninepoint Global Infrastructure Fund June 30, Past Performance The indicated rates of return are the historical total returns including changes in unit values and assume reinvestment of all distributions in additional units of the relevant Series of the Fund. These returns do not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that may reduce returns. Please note that past performance is not indicative of future performance. All rates of return are calculated based on the Net Asset Value of the particular Series of the Fund. Year-by-Year Returns The following chart indicates the performance of each Series of the Fund the six-month period ended June 30, and each of the previous twelve-month periods ended December 31 shown, unless otherwise noted. The chart shows, in percentage terms, how much an investment made on the first day of each period would have grown or decreased by the last day of each period * ** *** Series A Series D Series F Series I * Return from September 20, 2011 (launch date) for Series A and September 1, 2011 for Series F, to December 31, 2011 (not annualized). ** Return from July 17, to December 31, for Series I (not annualized). *** Return from June 13, to June 30, for Series D (not annualized). NINEPOINT PARTNERS LP INTERIM MANAGEMENT REPORT OF FUND PERFORMANCE

8 Ninepoint Global Infrastructure Fund June 30, Summary of Investment Portfolio As at June 30, Portfolio Allocation Top 25 Long Positions % of Net Asset Value Issuer % of Net Asset Value Long Positions Cash 4.7 Industrials 30.4 Mastercard Inc. 4.6 Energy 23.8 Visa Inc. 4.1 Information Technology 15.6 Parkland Fuel Corp. 3.9 Specialized REITs 8.9 CSX Corp. 3.8 Utilities 8.6 Ferrovial S.A. 3.8 Telecommunication Services 3.3 Suncor Energy Inc. 3.7 Financials 2.7 NextEra Energy Inc. 3.7 Health Care 2.3 Microsoft Corp. 3.7 Total Long Positions 95.6 Equinix Inc. 3.6 Cash 4.7 Pembina Pipeline Corp. 3.6 Other Net Liabilities (0.3) TransCanada Corp. 3.3 Total Net Asset Value Cellnex Telecom, S.A. 3.3 Waste Connections Inc. 3.3 Atlantia S.p.A. 3.3 The Williams Companies, Inc. 3.3 Portfolio Allocation by Geographic Region BBA Aviation PLC 3.3 % of InterXion Holding N.V. 3.2 Net Asset Value Vinci S.A. 3.2 Long Positions American Tower Corp. 3.2 United States 50.4 Kinder Morgan Inc. 3.1 Canada 20.1 Raytheon Co. 3.1 Spain 7.2 Brookfield Infrastructure Partners L.P. 2.9 Italy 3.3 Marathon Petroleum Corp. 2.9 United Kingdom 3.3 Intercontinental Exchange Inc. 2.6 France 3.2 Top 25 long positions as a percentage of net asset value 87.2 Netherlands 3.2 Bermuda 2.9 Germany 2.0 Total Long Positions 95.6 Cash 4.7 The Fund held no short positions as at June 30,. Other Net Liabilities (0.3) Total Net Asset Value This summary of investment portfolio may change due to the ongoing portfolio transactions of the Fund. Quarterly updates of the Fund s investment portfolio are available on the Internet at NINEPOINT PARTNERS LP INTERIM MANAGEMENT REPORT OF FUND PERFORMANCE

9 Corporate Information Corporate Address Ninepoint Partners LP Royal Bank Plaza, South Tower 200 Bay Street, Suite 2700, P.O. Box 27 Toronto, Ontario M5J 2J1 T TOLL-FREE F E invest@ninepoint.com For additional information visit our website: Call our mutual fund information line for daily closing prices: or Auditors KPMG LLP Bay Adelaide Centre 333 Bay Street Suite 4600 Toronto, Ontario M5H 2S5 Legal Counsel Borden Ladner Gervais LLP Bay Adelaide Centre, East Tower 22 Adelaide Street West Suite 3400 Toronto, Ontario M5H 4E3 M 11 E