
TSE:HHL
This summary was created by AI, based on 2 opinions in the last 12 months.
The Healthcare Leaders Income ETF (HHL-T) is currently navigating a challenging environment within the US healthcare sector, particularly influenced by negative sentiment towards health insurance companies. Despite this, the ETF has an interesting characteristic; its favorite holding, McKesson Corporation (MCK), is a drug distributor that does not directly manufacture products but plays a crucial role in the healthcare supply chain. The fund maintains an equal weight strategy with a diversified portfolio featuring approximately 20-23 large global healthcare names, including significant allocations to pharmaceuticals, healthcare equipment, and biotechnology. While the management expense ratio (MER) is around 1%, which some may consider on the pricier side, the ETF generates additional income through a covered-writing strategy. This element of diversification offers Canadian investors a strategic way to mitigate sector-specific risks in their portfolios.
It was strictly a yield play when interest rates were so low. He has only a small position. Growth in the ETF can be somewhat restrained by the covered call structure. It's a tradeoff between yield and growth. He's still bullish on the healthcare sector, the demographics are beautiful.
Invests in healthcare issuers, a space he likes. Healthcare offers growth and defence and does well in late cycles and recessions. Pays enhanced dividends, too, with options totalling 8.7% dividends. The MER is around 1%, which is a little high. Covered calls do well in flat or down markets. Covered calls are also very tax efficient.
Healthcare sector lagging in the market, and is due for an increase in value. Very large companies with tailwind in aging population/demand for healthcare. Covered call strategy adds to yield. Good option for investors going forward.