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  5. HDIV: Is there an expectation that the monthly distribution from this etf gets reduced as the interest rate declines? [Hamilton Enhanced Multi-Sector Covered Call ETF]
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Q: Is there an expectation that the monthly distribution from this etf gets reduced as the interest rate declines?
Thank you
Asked by Ahmed on June 07, 2024
5i Research Answer:

Distributions will vary, but the most recent one (payable today), 17.1c vs 16.5c. The ETF does not have fixed income or short term note exposure, so its distribution will still depend on its underlying holdings, which are equity-based. Lower interest rates should continue to support these. Call option premium may be reduced if the market becomes less volatile but we do not think lower rates in specific will be negative for its distribution outlook.