Q: I read in Q&A today that HBB delivers it's yeald as capital gains. How does it work? I searched everywhere and haven't found the information not even on the Global X website.
Thank you all
Thank you all
5i Research Answer:
Here is the link to Global X's explanation. The ETF enters into swap agreements with a third party (a Canadian bank) which agrees to provide a return based on the market performance of the underlying assets. The bank will typically hedge its risks on this, but earns a fee for arranging the swap. Thus, a total return ETF gets only capital gains from the swap arrangement, and does not receive income (in this case, interest) as a normal ETF would.