Q: A guest mentioned this ETF on Market Call yesterday. It has a big dividend. Can you give me your opinion on this ETF? Is there a downside?
5i Research Answer:
Assets are $292M, yield 7.56%, 5-year return 7.13%, fees 0.33%. The fund uses call options to enhance income and buys put options to protect against some downside risks. But note that return of capital is a big component of return. So while yield is high, the unit value has declined from $19.55 in 2016 to $17.45 today. Unit value has declined in all but two of its years since inception. But, for a relatively lower risk 7% return, it has done what it has intended. We would not consider it that great, however.