Q: Dear 5i team.
Can you shed light on why EIT appears to have similar volitility to the general market?
What are the top holdings? Does it use leverage?
Is this something that is just too volitile for a conservative investor? The wild ride with the market last few weeks has got my attention.
Many thanks for your help
Can you shed light on why EIT appears to have similar volitility to the general market?
What are the top holdings? Does it use leverage?
Is this something that is just too volitile for a conservative investor? The wild ride with the market last few weeks has got my attention.
Many thanks for your help
5i Research Answer:
EIT.UN is allowed to use up tp 20% leverage and does at times. Its top five holdings are ARX, TOU, WFC, CNR and PM, representing about 22% of the fund combined. It has in the past tended to make fairly big sector bets. Right now, volatility has likely increased with its 18% oil and gas weighting and is 32% financial weighting. The fund has a very impressive 5-year annualized return of 23.84% and only one down year (2018 at 3.05%) in the past 10. It is up marginally this year but still ahead of US and Canadian markets. We would not consider it 'super conservative' but would not consider it exceptionally high risk, either .