The new fund comes with a covered-call option writing program to minimize volatility of returns
First Asset Investment Management has launched the First Asset Health Care Giants Covered Call ETF on the TSX. Investors can purchase hedged and unhedged units of the fund under the ticker symbols FHI and FHI.B, respectively.
The fund will consist of an actively managed portfolio of securities of the top 20 health care companies on a North American stock exchange by market capitalization; First Asset will determine the companies in its discretion, and the companies will have equal weight within the portfolio.
The ETF aims to provide holders with regular cash distributions as well as the opportunity for capital appreciation. It also seeks to lower overall volatility of returns on the portfolio through a covered-call option writing program. Units of FHI.B will also hedge at least 90% of any foreign currency exposure attributable to the unhedged units.
Both FHI and FHI.B come with a management fee of 0.65%. The funds are eligible for use in RRSPs, RRIFs, RDSPs, and DPSPs, as well as RESPs and TFSAs.