Q: I'm considering Harvest Premium Yield Treasury ETF (HPYT.CA), US treasury Income, high yield through covered calls; very aggressive Yield of approximately 15% and 0.45 mgmt. fee; new ETF to the market, anything one should be aware of here good or bad? Thank you & keep up the super work!!
5i Research Answer:
HPYT writes covered calls on 100% of its portfolio, which holds long dated US treasury bonds. There have been some new covered call bond funds launched recently. HPYT, at $5M in assets right now, is too small for consideration. It will probably grow, and we would look at it when it has reached $50M. We would not expect the 15% yield to be fully sustainable in all markets, BUT...if interest rates peak the fund's holdings should do well. We do not have anything against its strategy, it is just unproven and too small at this point.