Q: This ETF has been trading sideways for the last 3 months. With a 5.5% yield, isn’t this stock supposed to gradually increase? I understand there’s a slight premium associated with this ETF, but it’s not really moving much at all
5i Research Answer:
The premium has declined over the past two months, and with lower rates there is less demand for high interest ETFs. Still, YTD return on the fund is 4.63%, about what one might expect considering the rate curve. We think as the premium shrinks the unit value willl slowly tick up again, as it should. Certainly the past month has seen weakness here. But it has risen in each of the past six trading days, at least.