Harvest Enhanced Equity Income ETFs

Harvest enhanced equity income ETFs are built to deliver an enhanced income yield and equity market exposure from an existing Harvest equity income ETF.

They do so by investing directly in an existing equity income ETF and applying a modest amount of leverage to that investment – borrowing money from a lender and investing that money in an ETF. The leverage is maintained at a level around 25% and delivers a higher monthly income distribution as well as greater exposure to market movements than an equity income ETF that uses no leverage.

The leverage applied to these ETFs effectively amplifies an ETFs performance, to both the upside and the downside. This raises their risk rating somewhat, but it also raises their income yield and return potential. These ETFs can serve investors with a higher risk tolerance who want to increase their passive monthly cashflow.

The leverage enhancement is applied to ETFs that already generate their monthly cash distributions with an active covered call strategy. This strategy generates a reasonable and sustainable distribution on these existing ETFs, as well as the ability to offset and monetize market volatility in the short-term. By combining covered call strategies with leverage, Harvest enhanced equity income ETFs can deliver a higher monthly distribution, a higher annualized yield, and more market-like performance.

Harvest enhanced equity income ETFs take established, income-paying, ETFs and enhance their market exposure and income yields.

Harvest has an established reputation for delivering cashflow from our equity income ETFs. We offer a robust suite of products that pay consistent distributions and have become very popular among investors. We see a need in the market for even higher yields and cashflows for investors.

The new enhanced equity income ETFs build on our foundation of equity income success to deliver higher annualized yields from established, income-paying ETFs.

The underlying ETFs held by these enhanced ETFs employ an active and flexible covered call strategy to generate income. This strategy can monetize market volatility and has been shown to generate consistent monthly cash distributions.

Harvest enhanced equity income ETFs add to this yield by including modest leverage at a rate of approximately 25%.

Put simply, this leverage means that for every $1 invested in an enhanced ETF, another 25 cents is borrowed and invested in the same ETF.

So for every $1 invested…. up to a $1.25 is allocated to the underlying ETF and then the income generated on the higher amount will be distributed to the unitholder.

Leverage increases the overall risk-return profile of the ETF, but it also enhances the market growth prospects for an investment.

It’s important to note that the approximate 25% level of leverage is modest and some of its additional risks should be offset by the underlying covered call option strategy which can monetize short-term volatility.

These ETFs offer a higher yield and market growth prospects than our equity income ETFs, but they also come with a higher risk-return profile. Each investor has their own unique goals and needs, as well as their own unique risk tolerance. We think these enhanced ETFs may appeal to investors with a higher risk tolerance and investors who want or need a higher income yield.

Each enhanced ETF focuses on a large-cap portfolio of business leaders from a range of different growth industries. HHLE accesses the stable demand and innovation-driven growth prospects of the healthcare industry. HTAE captures leaders in the tech sector, which has become essential to how we live our lives and conduct business. HBFE brings a portfolio of global brands with long histories of resilience and market growth. HUTE captures global utilities providers and their established reputation for stability. HLFE accesses leading Canadian companies with dominant market shares and strong dividends.

Our enhanced equity income ETFs have unique growth tailwinds but share an investment focus on leading companies and the delivery of monthly cashflow.

Commissions, management fees and expenses all may be associated with investing in HARVEST Exchange Traded Funds (managed by Harvest Portfolios Group Inc.). Please read the relevant prospectus before investing. The funds are not guaranteed, their values change frequently and past performance may not be repeated. Tax, investment and all other decisions should be made with guidance from a qualified professional. Certain statements included in this communication constitute forward-looking statements, including, but not limited to, those identified by the expressions “expect”, “intend”, “will” and similar expressions to the extent they relate to the Investment Fund. The forward-looking statements are not historical facts but reflect the Fund’s, Harvest and the Manager of the Fund’s current expectations regarding future results or events. These forward looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Although the Fund, Harvest and the Manager of the Fund believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. The Fund, Harvest and the Manager of the Fund undertakes no obligation to update publicly or otherwise revise any forward-looking statement or information whether as a result of new information, future events or other such factors which affect this information, except as required by law.