Q: Peter is HHL etf a good choice for income investors.?? Is div Safe thanks Ken
5i Research Answer:
HHL uses a covered call strategy to attain its high yield, which comes at the tradeoff of a lower potential for capital appreciation. The ETF holds 20 large-cap healthcare companies with an average dividend yield of 1.73%, and the ETF will benefit most if the underlying holdings remain flat or slightly increase. Although, the ETF can underperform if the underlying holdings move sharply higher. We would be comfortable with this name for income, with the understanding that its high yield comes at the cost of price appreciation.