Q: These appear to both be treasury etfs. One is in CAD the other in USD, but the difference in price is insignificant? I am assuming these are treasury bills. What am I missing here? Are these stable etfs or should I stay away from them?
5i Research Answer:
While the unit prices are different, their performances are very similar. The small price difference is due to currency hedging in HPYT. These are covered call ETFs which invest in high-quality, long-term, US Treasury bonds. The ETF writes call options on 100% of its portfolio, which is how the ETF can distribution a 17% yield. The downside to this is that the upside price potential is capped, and the unit price will likely see stagnation or downside pressure over time. These can be decent instruments for investors looking for high monthly income, but capital appreciation potential is limited.