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Opinions John Hood
Hamilton Canadian Bank 1.25x Leverage ETFHCAL.TOBUYAug 03, 2021
Stock price when the opinion was issued
As of Jun 19, 2026. Market Open.
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Equal exposure to the big 6 banks, with modest leverage. Leverage increases volatility. Drawdown over the last 2 years was 14% on this compared to 7% on the unlevered, unwritten ZEB. As you reach for yield, remember that leverage and covered writing deliver another edge to that sword on the downside.
Lightly levered. 25% of leverage that's balanced periodically, but not daily, so you won't get as much erosion. More like traditional leverage. Promising when rates were low, but no longer. Not a Beta Pro product, which has daily balancing of 100% leverage.
OK if you're very bullish on banks and need juice in your portfolio. For the long term, it's a double-edge sword of a 25% swing whichever way the market goes. Big selloff provides entry point. Extreme caution needed.
Larry Berman CFA, CMT, CTALarry Berman CFA, CMT, CTA
Covers Canadian banks. Pays a 5.16% dividend. It's a leveraged play, investing 12% of cash they're bringing in, which allows them a better return and more income. A consideration: ZWB uses a covered call on the Canadian banks to pay roughly the same dividend. He never does leveraged plays, but HCAL is fine.