Q: Performance 2025, thumbs up. Carrys a generous dividend. lots of momentum. HOWEVER small, with little volume. what is your opinion. thanks
5i Research Answer:
PIC.A is a split share corp that invests in stocks of companies operating in the banking sector, primarily the six Canadian banks. The fund also uses financial derivatives, such as a covered call writing strategy, to enhance income generated by the portfolio and reduce volatility.
PIC.A is essentially a way to provide investors with leveraged exposure to Canadian banks. Of course, leverage works both ways. When it works, the strategy could outperform owning the equities directly. However, it is also much more volatile on the downside. We tend to shy away from these types of structures. They can work for some investors in certain circumstances but generally we would prefer to jut own the underlying stocks/companies.