Horizons Enhanced Income Gold ETF (HEP.TO)

Would like a Gold ETF but enjoys getting dividends - Don't think dividend and gold stock. They are two different things. Don't go together. Even if it pays dividend it is going to move a lot. Gold is going into a consolidation. He prefers XGD. The granddaddy in the space. But it is expensive at 65 basis points.

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.

It generates a good dividend by writing Calls against the positions it has in its portfolio. Between the end of July and through to September, gold miners tend to go higher.

Not a good investment. This is large-cap gold companies, so you are going to get the movement of those companies and you are going to get a dividend and a covered call premium attached to that. Right now you are getting a yield of about 13%. In the past 12 months, it was trading at around the $9 mark and is now at around $6. Yielding about 8% a year ago. Has no idea where gold is going to go.

He doesn’t follow it. In general he looks at upper $1400s to lower $1500s for gold prices in the coming year. We are in a trading range. Something needs to come along to change that.

If you are bearish on the sector and you want to generate some income, this is the way to play it. If we see gold above $1800, abandon this.