Hamilton Capital Partners has launched the Hamilton Capital Global Financials Yield ETF (Toronto: HFY), an actively managed ETF targeting exposure to globally-listed financial services companies.
To celebrate the launch of the Hamilton Capital Global Financials Yield ETF, Hamilton Capital Partners were invited to open the Toronto Stock Exchange on 8 February 2017.
Rob Wessel, Managing Partner, Hamilton Capital, commented: “Canadian yield-oriented investors are limited by a comparatively small, concentrated, and highly correlated domestic financial services sector. By investing in the global financial sector, the investment universe expands to include thousands of companies, including over 400 financials with dividend yields above 5%.” (As of 13 February 2016, the underlying yield of the fund is 4.6%).
The ETF may appeal to income-seeking investors who believe an active overlay is the best approach for delivering enhanced yields while maintaining the potential for capital appreciation.
The fund usually holds between 50-80 global dividend-paying stocks from the financial services sector, including commercial and investment banks, insurance companies, brokerages, asset managers, exchanges, real estate investment trusts and other investment companies.
“The Hamilton Capital Global Financials Yield ETF seeks to provide investors with consistent quarterly distributions with positive leverage to rising rates,” said Wessel. “Managed by our large and experienced team of sector specialists, the ETF strives for enhanced diversification by geographic region, while focusing on countries with superior economic performance to reduce risk.”
In order to select financial services companies with good long-term prospects of increasing dividends, the Hamilton Capital’s portfolio management team applies analysis of both a company’s individual attributes (including yield, valuation and growth prospects) as well as it macro environment (including GDP growth, inflation, interest rate trends, fiscal & monetary policies, and regulatory trends).
The fund is currently significantly exposed to the US (41.3%), Australia (16.1%), the UK (9.6%) and Canada (8.0%). The largest sector exposures are to deposit taking/lending (38.3%), investment companies (27.5%), insurance (22.1%) and REITs (12.0%).
The management fee of the ETF is 0.85%.