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Hamilton Enhanced Multi-Sector Covered Call ETF (HDIV)
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Harvest Diversified Monthly Income ETF (HDIF)
Q: RE: Asked by Larry on August 16, 2024 -- Follow-up:
Are those not amazingly good 1-year returns for HDIV, HDIF: H DIF: 19.3%, HDIV 23.3%? Is there risk here or some other reason to be cautious? Thx.
Are those not amazingly good 1-year returns for HDIV, HDIF: H DIF: 19.3%, HDIV 23.3%? Is there risk here or some other reason to be cautious? Thx.
5i Research Answer:
Returns are attractive but there is a catch. HDIV is a covered call fund that uses 25% leverage. The leverage enhances returns, but can also amplify declines in a market reversal. Covered call funds enhance income, but can underperform other funds in a market rally (they would still do well, just less well than 'straight' ETFs, but the leverage would help here as well). HDIF is similar and also uses leverage.