Stockchase Opinions

Terry Shaunessy Evolve Global Healthcare Enhanced Yield Fund LIFE-T DON'T BUY Dec 09, 2020

It's a big-yield covered call ETF. Careful chasing high-yield ETFs, because this depends on how the underlying holdings are doing. In this case, it's healthcare, which is doing well during Covid. As a rule, he avoids covered call ETFs; the total return is actually low. In a rising market, you give up a lot of upside in cc-ETFs.
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LIFE vs. HHL In Canada, we have two similar ETFs holding global healthcare, this and HHL-T. Each holds around 20 megacap stocks, equally weighted. He prefers LIFE because the names it holds are more diverse, but owning either or both is fine. Both feature a covered call a third of their portfolios, which is good, because you want two-thirds to really capture the upside potential in this thriving sector. Who knows which set of stocks within these ETFs will hit? You could own both. Plus, you get a little income.

BUY
Hedged versus unhedged version. When deciding, you have to look at where the currency is going. There is a small hedging cost but it is low. He likes the ETFs in general.
BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research.  An equal weight global healthcare ETF. A good choice for an ETF that covers the sector. It offers good yield with high quality companies. Potential investors should keep in mind the US elections in November, as the healthcare sector may see increased volatility in the short term. Unlock Premium - Try 5i Free

COMMENT
These are some of the best ETFs for playing healthcare depending on what strategy you like. These cover global, covered call, yield focused, or actively managed ETFs in the market. The sector is a little overvalued right now so you might want to wait for a pullback. Longterm outlook is favourable.
HOLD

Good exposure to healthcare.
60 basis point management fee.
Enhanced yield fund (~8.7%).
Be careful on management fees when calculating total yield. 

SELL

$200M in assets is very thin, not a ton of money in there. In this case, put limit orders when you buy or sell, or you're at the mercy of what someone is offering. On the chart, old support became new resistance. It's going to struggle there, as it's been a couple of years of resistance.

If it breaks out, that's really good news. The trader in him would be selling right now, but there's always the danger that it keeps going up. You have to decide how much you like the prospects of this sector.

BUY

For extra yield in healthcare, around 9%, because they do some covered writing.

COMMENT

Holds large cap healthcare stocks. Shares have fallen due to Trump's plans. This sector will be challenged given regulatory risk. This offers covered calls (which provides downside protection) in addition to dividends and capital gains. 

COMMENT

The stocks tend to be a bit lower beta and health care has defensive characteristics. There is also a U.S. version.