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BMO US High Dividend Covered Call ETF (ZWH)
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High Yield ETF (HYLD)
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Hamilton Enhanced U.S. Covered Call ETF (HYLD)
Q: Retiring income investor. Do you have a preference between ZWH and HYLD? HYLD has a significantly higher yield but not sure if I'm missing something as far as risk/stability or fees. Also, would you have a concern holding both VFV for growth as well as HYLD for income?
5i Research Answer:
We are comfortable with both but would side with ZWH here due to the significantly higher asset base $1.05B, almost double that of HYLD. HYLD is a fund of funds and also uses leverage which makes it a bit riskier. HYLD advertises a 0% fee but this is not entirely true as fees still apply to the holdings which are also other Hamilton products, so it is not allowed to charge an additional fee through HYLD.
The only concern we have with holding both VFV and HYLD is the concentration risk on the US market as both ETFs have a focus on the S&P 500. Other than that, we think it is fine to hold both for an income and growth focus.