As at 2023/02/03
President & CEO
Q1: Why did you launch the Harvest Diversified Monthly Income ETF?
At Harvest we have consistently delivered growth opportunities and income for investors through our ETFs. We use a simple, powerful investment philosophy: owning high-quality companies in sectors with long-term growth tailwinds using a covered call strategy to maximize income on top of existing dividend yields.
We launched HDIF to capture the success of some of our equity income ETFs, proven income-generators for Canadian investors. This ETF will give investors access to the growth potential and income we are known for at Harvest through a single investment product.
Q2: What tools and strategies are in the fund to deliver its target 8.5% yield?
HDIF’s income mechanics begin with the ETFs it holds. Each ETF holds of between 15 and 30 equally weighted high-quality companies that already generate strong dividend yield. We can then exceed the income of a typical Canadian dividend ETF by using a covered call strategy to generate premiums on up to 33% of the ETF’s holdings while offsetting volatility.
In HDIF, we have applied leverage at a rate of 1.25. This leverage increases both the return and yield on the ETF, creating a product with a product with an initial monthly yield of around 8.5%.
Q3: Who is this ETF for?
HDIF was built with income-seekers in mind. Investors of all stripes and tax brackets need passive income generation, but pre-retirees and retirees need income acutely now. With interest rates as low as they have been for the past several years, many traditional income-generating products are paying less than the rate of inflation. That means that many of the products people relied on to supplement their CPP benefits aren’t providing enough to live on.
Since traditional fixed income often can’t offset government-mandated drawdowns on RRIF accounts, many retirees are watching their savings dwindle. Thousands of Canadians are worried that they might outlive their savings. A high yield income product like HDIF can go a long way in making this complex situation simpler.
Q4: What are some long-term performance tailwinds behind each of the ETFs in this fund?
What’s great about HDIF is that it captures the unique performance drivers behind each of its 5 component ETFs. HHL provides access to the healthcare sector’s huge and unchanging demand, as well as the innovation large-cap companies drive and capture in this space. HTA pulls from the tech giants that continue to be the biggest and best sustainable growth drivers. HUTL maximizes the yield with the defensive characteristics of utilities by focusing on companies with scale, diversified across the globe. HUBL puts investors at the beating heart of the world’s largest economy: the US banking sector. Finally, HBF gives diversified access to the world’s biggest, best, and most recognizable brands, companies with an unprecedented key role in the functioning of our global economy.
Put all that together and you get unique performance drivers with long-term prospects.
Q5: How is the Harvest Diversified Monthly Income ETF different?
HDIF stands out in the market because it pulls from our existing expertise. Where many other ‘funds of funds’ need to pull from a range of ETF providers and charge an additional fee on top of underlying management costs, HDIF is comprised of only Harvest ETFs and charges no extra fee. That’s because we already have a track record of providing growth and income through our ETFs, we can combine them at no extra cost, limiting any performance-inhibiting fees.
HDIF is different because Harvest is different. We already do what we say we’re going to do in each of these ETFs, now we’re putting them all in one package.
Harvest Healthcare Leaders Income ETF
Growing demand from an aging developed world and richer developing world plus regular innovation from large-cap companies like Johnson & Johnson.
Harvest Tech Achievers Growth & Income ETF
Huge scale, growth drivers for a decade, companies like Microsoft that are essential to our current world and will be crucial to new wave tech like the cloud, 5G, Blockchain and the Metaverse.
Harvest Brand Leaders Plus Income ETF
Leaders with large market share, diversified and meeting strict financial criteria. The resilience and global recognition of McDonalds, Nike, and Apple.
Harvest US Bank Leaders Income ETF
Financial titans at the heart of the US economy. Companies like Bank of America or JPMorgan that power growth in the world’s richest country.
Harvest Equal Weight Global Utilities Income ETF
Diversified globally across developed European and North American markets in dominant companies that have scale in a sector where scale is everything.
Harvest Canadian Equity Income Leaders ETF
Core portfolio of Canadian market leaders, companies with dominant market shares that meet strict dividend payment criteria.
We own quality businesses. We select leading companies with histories of success. They dominate their industries, they innovate, they lead, and their brand equity is measured by a long record of strong financial performance.
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Harvest Diversified Monthly Income ETF
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.