Expansion of income-oriented products comes as other ETF providers bolster their own shelves
Amid continued investor demand for monthly income opportunities, Purpose Investments has expanded its lineup of yield-focused single-stock ETFs.
The two newest members the Yield Shares by Purpose family of ETFs – launching today on Cboe Canada Inc., formerly known as the NEO Exchange – offer targeted exposure to NVIDIA and Microsoft. They will trade under the ticker symbols MSFY and YNVD, respectively.
“We’re in the midst of the next technological revolution with AI, and NVIDIA and Microsoft are at the forefront of this movement,” Vlad Tasevski, head of Asset Management at Purpose Investments, said in a statement. “With their additions, we’re thrilled to offer Canadian investors an additional way to get complementary exposure to leading technology names while enhancing their monthly distributions.”
Like their older siblings in the Yield Shares suite, these new ETFs address main street investors’ appetite for monthly income and allow investors an opportunity to participate in the long-term growth potential of leading mega-cap companies.
Aside from holding the underlying stock, they use modest leverage – capped at 25% of the net asset value – and employ a covered-call strategy to earn premium income.
Read more: Purpose pushes through with yield-focused single-stock ETFs
Over on the TSX, CI Global Asset Management has launched two US equity ETFs: the CI U.S. Enhanced Momentum Index ETF (CMOM) and CI U.S. Enhanced Value Index ETF (CVLU). Each ETF is trading with hedged common units and unhedged common units.
Compared to other momentum- and value-based methodologies, these new low-cost ETFs – they come with a management fee of 0.30% – are designed to give investors better risk-adjusted returns over the long term.
“These ETFs provide targeted factor-based exposure to U.S. stocks with strong momentum or value characteristics, allowing investors to enhance the style diversification within their portfolios,” said Jennifer Sinopoli, executive vice-president and head of Distribution for CI GAM.
Read more: World's big investors adopt factor-based strategies as inflation hedge
Also on the TSX, Harvest Portfolios Group has launched the Harvest Premium Yield 7-10 Year Treasury ETF – which is trading with class A and class U units (HPYM and HPYM.U, respectively) – and the Harvest Canadian T-Bill ETF, offered in class A units only (TBIL).
Harvest has also completed the initial offering of class U units of the Harvest Premium Yield Treasury ETF (HPYT.U).
HPYM seeks to provide unitholders with high monthly cash distributions by investing, on a non-levered basis, in a portfolio of North American exchange-traded mutual funds that provide exposure to intermediate-term US Treasury bonds, with covered call options generally being written on up to 100% of the portfolio securities.
HPYT follows a similar strategy to HPYM, but instead has exposure to longer-dated US treasury bonds.
Meanwhile, TBIL aims to provide interest income through exposure to Canadian government Treasury Bills with remaining maturities of less than three months.
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