Q: What are your thoughts on HMAX (Hamilton Etf) and Petroleo Brasileiro NYSE: PBR
Thanks,
Carlos
Thanks,
Carlos
5i Research Answer:
HMAX focuses on Canadian financials and writes at-the-money call options on 50% of its portfolio. With call premium and dividends, it offers a 14% yield, much of which will be capital gains and return of capital. It does not use leverage. For an investor seeking enhanced income and who understands covered call funds, we would be quite comfortable recommending it. It is down 3.22% YTD but yields 14.66% currently. We do not follow Brazil companies, but PBR is a very large, very cheap oil and gas producer, with a high and growing dividend. The balance sheet is OK and good growth is expected this year. It is of course highly cyclical but we would consider it fine.