Hamilton Enhanced Multi-Sector Covered Call ETF (HDIV.TO)

Covered call strategy pays about a 10% yield. Has outperformed the TSX 60. Believes there's some leverage involved, and that makes you do really well in an upswinging market.

However, when the market turns down or flat, you have to be careful with these leveraged plays and their at-the-money call options.

A nice, diversified way to get covered call exposure. It's designed for maximum growth and has had a great run. Be cautious chasing it now. When something goes parabolic, he gets nervous. There's more correction risk in the next 12 months vs. more upside.

Multi-fund approach. Quite diversified. Adds about 25% leverage. You pay no MER on the whole, but you do on the underlying ETFs. Nice that you have some upside potential because calls aren't written on the whole portfolio. Good play for income too.

Market didn't sell off on today's Canada GDP news, so outlook is bullish.

Investor is holding HDIV, ZWC, SMAX, and ZEB. By holding all of these, it looks as though you're diversified but you're just duplicating a lot of the strategies.

Likes HDIV a lot for yield-seeking investors. A nice strategy, and you probably don't need a whole lot beyond that. The dividend and covered-call strategies are nice defensive ways to stay invested.

If an investor did want to branch out, they should be looking for growth. But he wouldn't add growth-focused now, because we're at all-time highs and he's not sure the multiple is sustainable.

This would be for a RESP account. He likes a multi-sector ETF. Enhanced means leveraged. It's an OK buy for students and the long term.

You get the dividend from the underlying securities, that's for sure. If underlying companies cut dividends, then the dividend will be down. 

But the enhancement from the options strategy comes from the price of volatility. There's nothing more volatile than the price of volatility. Extra income generated is variable. Right now, it's pretty attractive. But he'd be lying if he said that there's a strategy where you can get 10-11% forever and ever without change.

Right now, probably sustainable. Not a strategy to just buy, without understanding the mechanism of it, and forget about it. Nothing wrong with it, but the income generated is variable, with the biggest swing factor being the price of volatility. If volatility goes down, the fund can't get as much for the call options.

He uses the BMO versions of these because of the funds he runs for BMO.

Covered call option that is food for income oriented investors. MER ratio a little high. Good exposure to Canadian world of index stocks. Leverages product that can present risk. Good on upside, but can be hazardous on downside. Good for small portion of portfolio. 

He avoids anything with leverage for his older clients.