Q: HMAX ETF pays a dividend of 12%, payout ratio of over 200%, reduces the asset value by the overpayment and unit value is also increased. We would apreciate your comments on the prospects of this ETF and their trading history.
Thanks for your valuable insight.
Thomas
Thanks for your valuable insight.
Thomas
5i Research Answer:
HMAX has only been existence since January 2023. It initially traded at $16.10 and is now $14.91. It has $1.55B in assets and fees are 0.80%. Indicated yield is 13.28%. One year return is 23.87% and YTD 10.98%. It has 70% exposure to the Big Six Canadian banks. Yield is high as it sells 'at the money' call options. This can reduce its gains in a sector rally, but the fund is performing entirely as expected. The ROC component can provide some tax advantages in non-registered accounts. For investors seeking income, we are quite comfortable with it overall.