Hamilton launches multi-sector covered call ETF

Toronto-based Hamilton Capital Partners Inc. has launched a new covered call ETF that aims for a target yield of 8.5% and uses leverage to potentially boost returns.

The Hamilton Enhanced Multi-Sector Covered Call ETF (HDIV) uses 25% leverage to multiply the performance of the Solactive Multi-Sector Covered Call ETFs Index by 1.25. The fund offers equal-weight exposure to seven sector covered call ETFs with a sector mix that broadly aligns with the S&P/TSX 60.

“We believe HDIV can be a core holding for long-term investors, as it offers diversification, attractive monthly distributions, and exposure to the Solactive Multi-Sector Covered Call ETFs Index, which has outperformed the S&P/TSX 60 since its inception in 2015,” Pat Sommerville, partner and head of business development at Hamilton ETFs, said in a statement.

The new fund, which has a management fee of 0.65%, is now trading on the Toronto Stock Exchange.

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