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Hamilton Canadian Financials YIELD MAXIMIZER TM ETF (HMAX)
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Hamilton Utilities YIELD MAXIMIZER TM ETF (UMAX)
Q: Hamilton has the tax breakdown of their ETF's for 2023 posted on their website. I see both HMAX and UMAX distributions are 84% Return of Capital. This seems high. Do you think this is an aberration or potentially the norm? If an aberration, could you please quesstimate a percent range that you'd expect Return of Capital to usually be.
5i Research Answer:
These funds do not have a long tenure, so we would expect things to level out a bit more over time. Call option premium is considered capital gain income. We would guestimate ROC to be in the 30% to 40% range over time.