We do not see anything 'wrong' with HMAX but investors need to understand what they are buying. It focuses on 10 stocks, so there is concentration. 75% of its portfolio is exposed to Canadian large banks. The banking sector can go down. It sells 'at the money' call options, so in a big market rally its positions will be called away and thus capital gains may be limited (this should not impact yield significantly). But, in a different market environment (less volatility) options premiums can decline, and this could impact yield. The fund does not have a long history. There are fees which will impact long term returns. But...for income focused investors we think it is fine overall.
5i Research Answer: