Q: This question will likely apply to any of the covered call funds. In your answer to Greg on Oct. 21, you stated that the yield on this fund was 14.02% but the one-year return was only 4.15%. The fund cost approx $13.06 a year ago and now sells for approx $13.70, which means that your capital has grown by 4.15%. But over that year, dividends totalling $1.92 per unit were received (for a yield of 14%). Doesn't that make the total return on this fund closer to 18%? I assumed that if the unit was worth the same or more than I paid for it in a year, the monthly dividend would not result in any decay and that this amount should be added to the increased value of my purchase. If this were a single stock paying 5% and the stock increased 5% isn't my total return 10%? Is a covered call fund calculated differently?

Appreciate your insight.

Paul F..

Q: I have been asked by a 23 year old to provide suggestions for when she initiates her FHSA.

I immediately thought of the banks , which I believe is the premium Canadian sector for long term growth, growing dividends , and safety. I would also recommend a more Canadian diversified security (UMAX ) for her next purchase. Of the above banking securities ( all owned between my cash, tax free, and registered accounts ), which would you start with ? Would you be comfortable with UMAX as second pick ( admittedly hasn’t done much but provides diversification into large cap companies and a good distribution yield). I am only interested in Canadian securities at this point. Should I be comfortable with this approach? Any thoughts would be appreciated.
Thanks. Derek .
Any

Q: What do you think about UMAX in a TFSA to generate monthly tax free income. Are there any issues related to ROC with this ETF in a TFSA.