John Hood Horizons Enhanced Income Energy ETF ENCC-T WATCH Jan 10, 2025

Bullish on energy.
Good long term hold.
High dividend yield that can be risky (13%).

Dividend (~14%) hard to maintain. In short run, energy a good trade. Expecting strength in oil prices (~$70). Would not recommend for the long term, but good short term option. 

An equal-weight index in energy, not market cap. Half of this is a covered call strategy, so you keep half the upside. MER of 0.84%.

Is more diversified that XEG; ENCC spreads the energy bet more. There's talk of Trump wanting to reduce oil prices, but natural gas prices are probably much more bullish. So Canadian energy companies here offer more nat gas than oil exposure vs. the US.

He doesn't use leverage so check for it. It has a covered call approach. Wait for a decision on tariffs.

He likes the idea of adding on weakness, that's what he's been doing. He uses a lot of optionality in his portfolios. So he's writing puts in the energy sector to acquire companies; if they don't go to those prices, he just earns the income. He's perfectly happy with a strategy like that at this point.

If we get a harder economic landing at some point, then oil has some more downside. The US outlook for crude oil demand was just downgraded. We're in a trading range, and he's accumulating into weakness.

Oil has been rangebound from $60-83 in recent years on geopolitical tensions. The volatility plays into the covered call strategy here.

High volatility provides very nice covered call income from the portfolio. And that income insulates somewhat from the volatility.