Q: In my TFSA I hold full positions in BNS and BCE to primarily generate income Want to boost the yield by adding HHL as a medium risk play. Does this make sense to you? Other suggestions for higher yield and medium risk?
5i Research Answer:
HHL is a healthcare-focused covered call fund. We have no objections to its set up or strategy. It offers an indicated yield of 8.26%, and is up 15.61% YTD. The strategy can lag in a sector rally, and only offers 'some' downside protection in a decline, but the options premiums enhances income, and the sector is less volatile than many others. HDIV is another higher income ETF, as is QMAX. The former is multi sector the latter is focused on tech. Note HDIV uses 25% leverage so may not be as conservative as one desires, as leverage works both ways, of course. ZWC is a high income covered call fund that can also be suggested. Indicated yield 6.63%, YTD 11.75%.