I would buy HMAX for 12% of this portfolio, for yield and a little upside.
I would your thoughts on this move. Thanks, James
HMAX has 'at least' 75% of its portfolio in six banks, so from a financial sector weighting standpoint not much changes here. The main shift is moving from enhanced (call options) income and away from 'straight' equity exposure. Upside on HMAX will be less in a sector rally, so it becomes a question of income vs growth. We can't comment on position size, but we would be fine with switching if income is the prime goal. That being said, the financial sector is very cheap right now, and upside could be more owning unencumbered equities in the short term, so such a switch requires a bit of a market timing call as well on the sector. If the sector does not rally, HMAX should provide a bit more of a cushion on a decline because of its option income.