Opinions
Larry Berman CFA, CMT, CTA
Hamilton Enhanced Multi-Sector Covered Call ETF
HDIV-T
BUY
Jun 30, 2025
Stock price when the opinion was issued
You might be interested:
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.
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.