Opinions
John Hood
Horizons Enhanced Income Gold ETF
HEP-T
DON'T BUY
Oct 21, 2015
$4.150
Stock price when the opinion was issued
E.T.F.'s
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BUY
HEP-T vs. XGD-T. HEP-T has a covered call overly to the gold stocks and generates extra yield. If you are bullish then you don’t want that covered call. If you are a yield seeker then it is a fine way to get exposure to gold.
E.T.F.'s
WEAK BUY
Nice thing is they take a portion of the portfolio and write covered calls on it, so you get some income as you go along and it takes out some of the volatility. You underperform a bit, but you get the income. Not the best way if you're bullish on gold. With this ETF, you get the best of both worlds.
E.T.F.'s
HOLD
A way to extract extra yield from gold miners. With volatility, the enhanced yield is interesting. If you think the price will go sideways, it would be preferable to hold something that generates yield like HEP. However, if you think it will go up, you don't want to give away the upside. Right now, gold probably has some upside in the next 6 - 12 months.
E.T.F.'s
Really doesn’t like this. If he is going to be writing a covered call position on gold, which he doesn’t like to begin with, he doesn’t want to be messing around with a yield component. He wants to get the full benefit of the rise in the price of the commodity, rather than hedging it off.