Q: I purchased this to get exposure to energy, get the high dividend (now approx. 13%), and have an ETF focused more on US energy companies (vs. Canadian). I've held it about 15 months now and I'm down 10%. I expect there is some ROC affecting the share price (are you able to confirm?). In general, what are your thoughts on EMAX for stability and as an income play?
5i Research Answer:
Per its annual report for 2024, it paid $1.84 in distributions in 2024, of which $0.12 was from net investment income, $0.13 from dividends, $0.74 from realized capital gains, and $0.85 from return of capital.
EMAX has a yield of 13%, it does not use leverage, but to attain the high yield it employs a covered call strategy, which naturally limits the upside potential for capital appreciation. It has a somewhat high MER of 0.65%, and for an investor seeking high yields and exposure to energy we think it is OK, but largely we would prefer a non-covered call ETF for the energy sector, such as XEG.