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Hamilton Enhanced Multi-Sector Covered Call ETF (HDIV)
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Hamilton Enhanced U.S. Covered Call ETF (HYLD)
Q: Can you explain, in simple terms, how these 2 ETF’s are soon to have a management fee of 0% .
Is it something unique to these 2 products or could it occur on others having the same properties ? Thanks. Derek.
Is it something unique to these 2 products or could it occur on others having the same properties ? Thanks. Derek.
5i Research Answer:
It is not as good as it sounds, although with the announcement both ETFs also announced divided increases, which is good. But, Hamilton is simply 'internalizing' some of the funds' holdings and they will now own positions in other Hamilton funds. Thus, while there is no direct fee, the company will still make money off the funds' positions in the other funds. Companies are not allowed to charge 'double fees', i.e. charge a fee on a fund that only owns other funds which also have fees. So the 0% fee here is really more of a regulatory requirment than a nice gift from the company.