Q: What do you think of this new etf (HHIS) pros and cons. Looking forward to your thoughts
5i Research Answer:
HHIS is quite new, but has garnered $205M in assets. It invests in nine high income single stock ETFs, representing some high growth US companies. These ETFs sell covered calls against their securities. Indicated yield could be as high as 20%. The fund has traded for less than two weeks so we cannot guage performance. We think it is better at least than owning a single stock enhanced ETF, where there is significant single company risk. The diversification of HHIS helps reduce risk somewhat, but certainly not completely. If growth stocks were to weaken or rates rose, this fund could still take a big hit. We would much prefer to see some months at least of performance numbers before recommending this.