“We’re pretty happy with that,” he said. “That’s pretty good progress for one year.”
HCAL, a portfolio of Canadian banks with a modest leverage of 25% that provides a higher dividend yield without fundamentally altering the product’s risk portfolio, now has almost $240 million. Wessel said its volatility profile is similar to that of individual Canadian banks. When the fund’s first year ended on October 14, it was up 60.4% – 10% ahead of its nearest competitor. It also outperformed covered call strategies by more than 15% during the same period. Wessel said it’s also one of the highest-yielding Canadian bank ETFs, with 4.95% paid monthly.
HCAL is one of three ETFs that Hamilton ETFs is offering with a yield of more than 5%. It also launched the Hamilton Enhanced Multi-Sector Covered Call ETF on July 15. Wessel said it now has $56 million and an 8.5% yield. Hamilton ETFs also has the Hamilton Australian Banks Equal-Weight Index ETF, with a 5.10% yield.
The 12-year-old firm is named after Alexander Hamilton, whom Wessel, a history buff, said is “basically the architect of capitalism” since he created the first central bank. The firm is a financially-focused asset manager. It specializes in the global financial sector and offers seven ETFS, six in the financials.
Wessel said he expected to launch a few more ETFs in the next year, but the next one will have a different structure.