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Opinions Daniel Straus
Horizons Gold Producer Equity Covered Call ETFGLCCTRADEDec 06, 2023
Daniel StrausUnknown
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Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.
MER is 0.81%, assets $255M, indicated yield 10.78%, one year return -12%.
As a covered call gold fund, we have no issues with its set up nor its security positions (typical large cap names). For a gold sector investor wanting enhanced income, w think it is fine.
Our main comment is on the potential for gold. When the gold sector 'runs' it tends to do very well.
We think that a covered call fund is not the best choice for gold investors, as it can limit upside potential during bull markets.
But, for those only interested mainly in income and are willing to give up some potential in exchange for this higher income, we would consider it fine.
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A covered call ETF. Its total distribution yield, which is double digits, is coming from a covered call, option-writing overlay. Important to consider your demand for yield -- do you really need it? Moves in lock-step with XGD but, over time, GLCC will give you less growth. Your capital erodes over the long term.
Perfect short-term play for income needs. For the long term, he'd prefer a non-covered-call strategy like XGD.