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  5. HMAX: I know you don't like comparing ETFs to single stocks. [Hamilton Canadian Financials YIELD MAXIMIZER TM ETF]
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Investment Q&A

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Q: I know you don't like comparing ETFs to single stocks...but I'm going to put a question out there anyway. I currently hold TELUS in a non-registered account. As I've held it for a very long time, I'm up 20%, but I feel the stock is stalled for a number of reasons. Given that I bought it for the dividend as well as some growth, I would appreciate your advice on trading it for HMAX. Please compare total estimated growth for both T and HMAX over the next 3-5 years. Additionally, with interest rates expected to begin falling next year, how would that impact the price of HMAX? Thank you.
Asked by Maureen on November 24, 2023
5i Research Answer:

HMAX owns securities entirely in the financial sector, so this becomes a question of diversified financial exposure versus one company in communications. HMAX's call option strategy will ensure a higher yield over Telus, so it becomes a question of upside/downside. In a rising market, HMAX will likely lag the overall market as positions get called away. It can still rise, but may not rise to the same degee as the financial sector. Lower rates 'might' lower call option premium, if volatility decreases as a result. Lower rates should add to the appeal of Telus a bit more, as its upside is not capped by call options. But, T has a growth issue also. 2024 earnings are expected to improve over 2023, but even so are going to be 30% less than they were six years ago. With diversification and higher yield, we would side with HMAX here is a straight-up contest.