Q: My long term etf, HTA has just announced a distribution increase of approximately 7.7 %. How do they manage this as the underlying stocks have not increased their dividends anywhere near this % ?
HTAE holds HTA and uses leverage for enhanced performance ( up and down .) It borrows 25 % of the portfolio value to do this. What are the typical terms regarding such borrowing ? Is this liability reflected in unit price ? Is a liability of the etf provider or the unit holder ?
Any light you can throw on these questions would be appreciated. Thanks. Derek.
HTAE holds HTA and uses leverage for enhanced performance ( up and down .) It borrows 25 % of the portfolio value to do this. What are the typical terms regarding such borrowing ? Is this liability reflected in unit price ? Is a liability of the etf provider or the unit holder ?
Any light you can throw on these questions would be appreciated. Thanks. Derek.
5i Research Answer:
HTA sells call options on 33% of its holdings, and the call option premium enhances income. Tech...