Investment Q&A

Q: For a RRIF looking forward assuming a slow decline in interest rates, which of these two (HMAX, HDIV) would you select and why please? Do you have any issues with either or both these? Thanks again. Dan

Q: Hi Group i am 74 with a 500k portfolio. I do not need to use this money for another 5 yrs. I would like to slowly convert to dividend / growth / value ETFs. I am looking for yield of 5% or higher along with a 10% growth/value profile. Can yo give me your top 2 picks in the 6 main sectors that fir this criteria along with a few words explaining your selections. Thanks with your help with this

Q: In your answer to me on the BMO and Hamilton covered call ETF's regarding " return of capital " you refer to ZWB having a return of capital of 75% and HMAX as 84% .... Your answer basically addressed taxation which in my case is inside a RRIF account...... And in a follow up question from Bruce you give a brief explanation. I don't think I understand what the term means as to me it sounds like I am getting my own money back which strikes me as a bad thing. Could 5i explain just what exactly the term means ? And whether or not it is a good thing, bad thing , or nothing to be concerned about ..... Thank you as always for your sound advice .....

Q: Regarding both BMO { ZWB, ZWU,ZWT, etc. } and Hamilton { HMAX, UMAX, FMAX, etc. } covered call ETFs, do either use a return "of" capital as part of their distributed yield ? ..... If so how much and would it be a deterrent from buying them ? I have put the word "of" in quotation marks as I think it means I am getting my own money back ? ..... Thanks for your always sound advice .....

Q: On march 28 question ,I was interested by the topics and by your answer,that seems to consider the 3 ETF in the same category :"HMAX would fit in this category as it does employ a covered call strategy targetting Canadian financials and primarily the 'Big 5' banks. Some covered call ETFs we like are QYLD and XYLD. We also think Hamilton ETFs line of covered call ETFs is solid, although some are very new and small which we would watch out for. ". Personnaly I did not choose QYLD and XYLD since I don't consider them in the same category as HMAX and others ETF as BMO ETF etc.. QYLD exerts options on 100% of its portfolio,wich limits upside and could lead to a significant long term downtrend; this is not the case for HMAX whose options are on 50% of its portfolio and consequently it keeps some upside potential.Is my comprehension OK or Do I miss something?

Q: Which covered calls ETFs would you recommend for short/long term. Would the HMAX fir this category?

Thanks for your service!

Q: Hamilton has the tax breakdown of their ETF's for 2023 posted on their website. I see both HMAX and UMAX distributions are 84% Return of Capital. This seems high. Do you think this is an aberration or potentially the norm? If an aberration, could you please quesstimate a percent range that you'd expect Return of Capital to usually be.

Q: Just finished reading the Money Saver's email warning " Avoiding The Yield Trap " on covered call ETF's . Where it mentions ETF's yielding in excess of 10% yet uses a BMO banking covered call as an example . I believe all the Hamilton ETF covered call products yield in that 10% or better area and in the case of the banking ETF ZWB used as an example, HMAX yields 15% which beats ZEB's 10 year return by over 5% . And that doesn't take into account the 50% of the HMAX portfolio that contains the underlying stock which should return 50% of the return on ZEB .....If ZEB over 10 years returns 9.6% then HMAX should return the annual yield of 15% plus 4.8% reflecting the 50% of the portfolio containing the underlying stock .... There will also be a small capital gain/loss reflecting the covered call side of their holdings which I have no idea how to calculate so have ignored .... Please explain how I would be missing out growth in the banking sector using the example the Money Saver used were I to purchase HMAX instead of ZWB ? 15% + 4.8% = 19.8% which doubles ZEB's return ...... Please explain the flaws in my logic. { I suspect they are there I just don't know what they are }

Also could 5i give me a list of all the Hamilton ETF products that operate like HMAX { 50% of the portfolio with the underlying securities } with an explanation of what sector they represent, their current yield in percent , and annual dividend amount { I'd like this number so I can calculate the yield on any given day while I follow them and make my decisions on whether and when to purchase }

Thanks for your great service in helping us DIY investors ......

Q: How would you compare Hmax and BKCL ?

Q: !What can you tell me about these Besides paying a monthly dividend, they seem to be stagnant in appreciation. Is it worth keeping or exchange for something better.

Thank you

Steve

Q: If you had to choose between NWH.UN and HMAX, which would you choose and why?

Thanks for your service!

Q: Good evening,

I have a couple of questions regarding the following 5 ETF's. If it cost more than one credit that is ok. Just curious if you only own those 5 ETF's how diversified would you be? I understand that you be giving up some upside but from a diversification perspective do you have all your sectors covered?

For full disclosure I have 15 percent of my entire portfolio allocated to this 5 ETfs too add a little boost in income.

My last question regarding these 5 ETF's iss they all pay a distribution except SMAX and QMAX. SMAX and QMAX pay dividends according to my platform BMO investorline. Does that mean both these two are eligible for the dividend tax credit?

Thanks and have a great day.
Jimmy

Q: So a lot of people think that interest rates have peaked and are set to go down, thus the market reacts positively. I believe that interest rates have peaked BUT will remain higher for longer. I anticipate that the market will initially react negatively to this but eventually will settle down to the new reality and continue to react to such metrics as earnings growth etc..
Recognizing that no one really knows the future, what would be the likely scenario ( short and long term ) for each of the sector ETF’s I am invested in : Canadian banks , American tech, American healthcare, Canadian large cap industrials/ utilities. Thanks. Derek.

Q: Do these products match the yields they advertise ? What would the expected result to the etf price and yield in the environment of rate cuts in the new year.
Thx

Q: Could you please give me your thoughts on the following etf's for a RIF that is looking at income? HMAX,UMAX,SMAX and QMAX. Thanks Gary

Q: Given the rather negative outlook for Canadian banks,would a position in Hmax for. 1 to 2 year hold for income and preservation of capital be advised? Thank you.

Q: A little while ago I asked 5i what the current yield was for UMAX and HMAX as I wanted to target the yield for an entry point . Could 5i give me the formula to use so I can do this on my own ? Use HMAX as an example to illustrate using the formula ..... Thanks Garth

Q: I have incorporated these ETF’s into my RRIF with the goal of deferring taking capital from my principal ( mandatory and rising % withdrawal requirements ). They now represent 33% of total portfolio. My TFSA and cash accounts equal my
RRIF and are more growth oriented. The ETF’s give me a high yield, diversified portfolio of solid large cap, primarily low growth companies in Canada and the US. So I ask myself “ Why don’t I have my RRIF be 100% of these 5 ETF’s ? What say you ?

Thanks Derek.

Q: I know you don't like comparing ETFs to single stocks...but I'm going to put a question out there anyway. I currently hold TELUS in a non-registered account. As I've held it for a very long time, I'm up 20%, but I feel the stock is stalled for a number of reasons. Given that I bought it for the dividend as well as some growth, I would appreciate your advice on trading it for HMAX. Please compare total estimated growth for both T and HMAX over the next 3-5 years. Additionally, with interest rates expected to begin falling next year, how would that impact the price of HMAX? Thank you.

Q: Are these ETFs worth holding for income in a diversified portfolio? I realize that the covered call strategy limits the upside potential.