By Ambrose O’Callaghan
Harvest has announced the launch of the Harvest Balanced Income & Growth ETF (HBIG:TSX), the Harvest Balanced Income & Growth Enhanced ETF (HBIE:TSX), and the Harvest Industrial Leaders Income ETF (HIND:TSX) on Monday, April 15, 2024. Michael Kovacs, Harvest ETFs President and CEO of Harvest ETFs, recently sat down to discuss the launch of these three new ETFs:
Q: Why did you choose to launch a balanced ETF?
A: Most current balanced funds in the Canadian market provide income at levels below inflation rates and have distribution frequencies that are mostly quarterly and annually. The Harvest Balanced Income & Growth ETF aims to produce and deliver high monthly income while providing access to a 60/40 balanced portfolio for steady growth.
Q: How will HBIG deliver value to its Unitholders?
A: HBIG will provide unitholders with monthly cash distributions and the opportunity for capital appreciation by investing, on a non-levered basis, in a portfolio of exchange traded funds that are listed on a recognized North American stock exchange.
This ETF provides exposure towards large capitalization equity securities, investment grade bonds or money market instruments issued by corporations or governments and will include ETFs that engage in covered call strategies. HBIG will invest up to 75% of its net assets ETFs that make use covered calls.
Q: What is the Harvest Balanced Income & Growth Enhanced ETF? How does it differ from HBIG?
A: Some investors are seeking more income and potentially higher returns. For these investors, we launched the Harvest Balanced Income & Growth Enhanced ETF ( HBIE). This ETF aims to provide higher levels of income and returns using a 25% leverage on a portfolio that replicates HBIG.
These ETFs trade on the TSX with ticker symbols HBIG for Harvest Balanced Income & Growth ETF and HBIE for Harvest Balanced Income & Growth Enhanced ETF
Q: How do you define industrials as an asset class?
A: For the most part, Industrials are companies that manufacture machinery, handheld tools, and industrial products. This sector also includes aerospace and defence firms as well as companies engaged in transportation and logistic services.
Q: Why did you decide to launch the Harvest Industrial Leaders Income ETF?
A: The Harvest Industrial Leaders Income ETF (HIND:TSX) was created to tap into the manufacturing industry as it is poised to benefit from the passing of three key pieces of legislation: The CHIPs and Science Act of 2022, the Inflation Reduction Act, and the Infrastructure Investment and Jobs Act.
This legislation has already spurred record private sector investment in the manufacturing space.
Q: What are some of the key growth drivers in the industrials space right now?
A: In 2023, the United States manufacturing industry was able to capitalize on the momentum generated by the three significant pieces of legislation that were signed into law in 2021 and 2022.
These laws have sought to prioritize rebuilding US infrastructure, advancing clean energy initiatives, and building out the domestic semiconductor industry. This new legislation has also aimed to foster job growth, as well as workforce development and workplace equity.
The infusion of funds and tax incentives into US manufacturing has had impact across various sectors. These include semiconductors, clean energy components, electric vehicles, batteries, and the constituent parts and raw materials of these products.
Q: How will HIND provide value to its unitholders?
A: HIND seeks to provide investors with exposure to industrial leaders that drive innovation and deliver steady monthly income.
It aims to provide unitholders with the opportunity for capital appreciation and monthly cash distributions. To achieve the distributions and help lower volatility, a covered call writing strategy targeting to 33% of the portfolio securities will be used.
The Harvest Industrial Leaders Income ETF trades on the TSX with ticker symbol HIND.
