Q: Can you go over your thoughts (other than sector differences) between these 2 types of products. I know they both use covered calls to generate additional income and that one is a split share.
Would a product like umax typically keep its payments at some level more consistently (as there is no preferred share to protect)? Is the upside (downside) potential higher on the split?
That is what I am thinking are the main differences but wondering if there are any other differences in how you see them.
If one was lookig at a swap from FTN to umax to keep a similar yield and lower leverage risk is that a reasonable view?
Would a product like umax typically keep its payments at some level more consistently (as there is no preferred share to protect)? Is the upside (downside) potential higher on the split?
That is what I am thinking are the main differences but wondering if there are any other differences in how you see them.
If one was lookig at a swap from FTN to umax to keep a similar yield and lower leverage risk is that a reasonable view?
5i Research Answer:
FTN uses leverage to generate higher yields for its Class A shareholders, but as mentioned, the...