Q: Peter and staff I am looking at HBIG and or HBIE. Your thoughts please. Are they expensive to own? 76 years retired and looking for stability of income and holding its original value. Thanks Ken
5i Research Answer:
HBIG is Harvest Balanced Income and Growth. HBE is Harvest Balanced Enhanced Income and Growth. HBIG plans a 16c monthly distribution and HBIE plans a 20c monthly distribution, both using call options to boost income. The difference is that HBIE will use leverage as well, and HBIG will not. There are a lot of income products out these days, and covered call options are the flavour-of-the-day. While we do not have anything particularly negative to say about these, we think they may have a hard time attracting assets. With only one day of trading, we need to see how performance goes and also how asset gathering goes. We would not recommend them today.