Q: What are your thoughts on HHIC ETF for income and dividend growth.
5i Research Answer:
HHIC assets are $61M currently, fees 0.40% and it is up slightly in its first week of trading. Its aim is to provide high monthly income and growth potential from a portfolio of TSX-listed equities using covered call strategy. It also employs modest leverage to create overall leverage exposure of approximately 25%, and high monthly cash distributions for its unitholders. Initial yield is 17% but we need to see how this develops over time. We have nothing against its strategy nor its securities holdings, which include many of our favourite Canadian large cap stocks. We would consider it OK for those that understand leverage, but we would prefer to see a longer performance history.