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Harvest Healthcare Leaders Income ETF (HHL $7.02)
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Evolve Global Healthcare Enhanced Yield Fund (LIFE $17.64)
Q: I am thinking of adding one of these 2 beaten down health related ETF's to my holdings. I wonder if you can tell me if you feel either or both are at risk of further decline due to Trumps RX plan, and/or their exposure to the US healthcare system which seems to be under attack by this administration?
Do you have a preference for one over the other, or do you have another name in this space that you like, and how safe do you feel the dividend is for each of them?
I am looking for a steady reliable yield and prefer ones that trade in Canada. Thank you.
Do you have a preference for one over the other, or do you have another name in this space that you like, and how safe do you feel the dividend is for each of them?
I am looking for a steady reliable yield and prefer ones that trade in Canada. Thank you.
5i Research Answer:
HHL has a bit better longer term performance record. Both have similar strategies, selling options on about one-third of their holdings. But the performance record is fairly similar and we would be largely indifferent here. For enhanced sector income, traded in Canada, we would see these as the best choices. Political risk is likely to continue. LIFE has 65% US exposure and HHL has 82%, so if this is a concern we would lean to LIFE. We would not have big concerns on the dividends: they could decline a bit in a sector correction, but the options premiums helps offset this. Dividends are essentially passed-through to investors but the diversification of the portfolios helps offset dividend risk somewhat.