Stockchase Opinions

Larry Berman CFA, CMT, CTA Hamilton Enhanced U.S. Covered Call ETF HYLD-T COMMENT Mar 14, 2022

Hamilton does options strategies well. The covered call enhances the yield.
$15.430

Stock price when the opinion was issued

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BUY
Hamilton is a good executor of covered call strategies. Little bit of leverage involved. This means more yield but also more volatility. Important to understand high yields come at the cost of more risk.
DON'T BUY

With covered calls, you have been getting some good premiums, because volatility has been high in recent months. This is a US-based ETF. HYLD's performance YTD has been 0%. You give up upside to participate in US markets. This performance may be down to bad timing and bad luck. Isn't sure why HYLD isn't keeping up with the market indices. A red flag.

DON'T BUY

It's a covered call on banks. There are many of these. The problem they have is they're leveraged by 25% which works well in an upmarket, but down, like when the banks collapsed in March 2023. He avoids anything with leverage.