Harvest Premium Yield Treasury ETF (HPYT.TO)

Not a huge fan of covered writing on treasuries. The reason you buy bonds is for some sort of safety in a portfolio, and they also act as a counterweight during growth shocks. With those shocks, stocks tend to go down and bonds tend to go up. The higher a bond is in the capital structure (such as a government bond), the better it does.

But when you're covered-writing bonds, especially government bonds, you lose that upside because you're trying to get some income from them. So covered writing on bonds is a bit antithetical.

He'd suggest having government bonds in your portfolio, don't write calls on them, and take the income. See his Top Picks, but if you want to go shorter try XSB or ZGB.

The investor might be looking for something that doesn't exist. If willing to consider USD exposure, look at RSBA.

This uses long bonds with a covered call strategy. If the market goes up, you get called away and get little gain, though you get the income. The chart is down or sideways this year, -16% in share price, though -6% in total return. You get a huge coupon. It's very tax-efficient exposure to US fixed income, but is not a growth story. NAV will erode over time.

Putting a covered call strategy on long bonds. If markets are very volatile, then the long end of the interest rate curve is also volatile. A lot of the income is generated via the option premium, which is treated as a capital gain. 

Here's a scenario to think about. Market goes up, you get called away, don't get a lot of gain, but you get the income, and then the market goes down. That's been the trend YTD, sideways to down. But you have to look at a total return chart, not just the price chart (as it's misleading on how it distributes).

The price chart shows that this ETF has gone from $11 to $9 this year, that's down 16%. Total return shows it's gone down (because interest rates have gone up), but only by 6%. And you're getting a huge coupon. Very tax-efficient exposure to fixed income. But not a growth story.

If you want growth, buy ZTL or TLT. But these don't have great tax treatment. It depends on what kind of investor you are.

Long-duration bonds in here. If interest rates go up, bonds go down. Attenuates some volatility by writing calls on top for income. If rates go down, you'll get a burst in performance. But you'll get called away, because you sold the calls. Probably OK to stick with it. Makes sense in a sideways or slightly up/down market.

If you think long-term rates are going to decline, then you're giving up a lot of the upside the bonds would give you.

Strategy that gets income off the bond market with an option overlay. When you look at the price relative to TLT, it's been down over the last couple of years but the yield has been higher. Total return vs. just owning TLT (plain long bonds without any enhancement) results in doing better with the covered call strategy. Reason is that yields have generally gone up and prices have gone down.

But if it was the other way around, TLT is going to do better.

In a defensive market for bonds you'll get more income off this one, but don't expect much price appreciation. It's an income play. That income is capital gains, which is very tax efficient. Good way to play the bond market, and better in taxable accounts than in registered accounts -- you're getting income from US bonds via capital gains instead of interest.

Holds longer-term bonds with a covered call. Inflation challenges US bond holders and pressures long bonds. So, this ETF is under high pressure. Dividend is 17%.

Using call options to generate income on equities and fixed income products. We saw worrying signs a couple of weeks ago that the correlation between the fixed income part of your portfolio and US recession risk may be breaking down. 

Ideally, if there were a recession on the horizon, rate cuts would be forecast and bonds would be purchased. The bond market would go up and there would be a flight to treasuries, all while the stock market's going down. A couple of weeks ago, we saw both bonds and equities going down. With the US launching a trade war against the entire world, investors were trying to get out of US dollar positions. US treasuries may not have the type of cushioning effects you want in the tariff trade war. Short-term instruments are probably better.

Wrapper for various covered call ETFs. Gives you more diversification across a number of sectors, while utilizing a covered call strategy for income on 1/3 to 1/2 of the portfolio. He likes that part of the portfolio can breathe to enjoy any upside. Except for tech, most of the other sectors covered are risk-averse.

A covered call on T-bills. This distribution of 17.21% is suspiciously too high. A few things to consider: you cover-write the bonds here, so you won't capture a bounce in bond prices.

Long US treasuries and writes covered calls to generate income. If you look at the chart, while you've been making 17% in yield, you've lost the equivalent in price terms. You must look at total return. Those that focus on the yield and don't understand the return are doomed to risk. Volatile.

Instead, just hold TLT or ZTL -- US bonds at the long end of the treasury curve -- and don't worry about the yield so much.

Long-dated (20-30 years) bond fund, while using leverage and covered call strategies to enhance income. Doesn't perform well when interest rates go up. Must be confident that rate cuts are coming and pretty aggressively to want to own this. That was supposed to be the case, but now it seems that rate cuts will be pushed back a bit.

Won't start to move until yields start to move and rates start to get cut.

Portfolio of US treasury bonds. Selling covered calls provides income, but limits upside. Good for dividend investors. MER is a little higher than would prefer. Available in USD version. 

Covered call bond. Lots of volatility creates excellent yields. Good for income seekers if small portion (diversified). Would recommend for small portion of portfolio. 

Extracting yield from volatility in markets. Difficult to judge outcome of stock for average investor. Would recommend small amount in portfolio for average investor. Not good for retirees. 

Unsure on direction of Bond yields. If comfortable with 5% yields, a good time to buy. Depends on investor requirements. Good for risk adverse investors.