Why award-winner Harvest ETFs is 'punching above its weight'

CEO outlines new Canadian income ETF and reflects on 140% jump in AUM

Why award-winner Harvest ETFs is 'punching above its weight'

Harvest ETFs may have won this year’s WP Award for ETF Provider of the Year, but it’s not resting on its laurels as it prepares to launch its first purely Canadian equity income ETF fund next week.

“We’re just about to launch our first Canadian income ETF, the Harvest Canadian Equity Income Leaders Fund,” Michael Kovacs, president, chief executive officer, and founder of Harvest ETFs told Wealth Professional this week.

“It’s our first purely Canadian fund where all the holdings are Canadian equity income. It’s sort of a who’s who of Canadian business. They will be large-cap companies, and we’re generating pretty good income of 5% to 7% yield. We’ll have some optional writing on that front as well, so it’s going to be getting some interest out of the gate.”

Kovacs expects to launch a few more products later in the year, but, for now, he is pleased that this will fill Harvest’s sleeve since it already has a number of U.S. and globally focused products.

Harvest ETFs, launched in 2016, now has 15 ETFs, most of which are equity income ETFs. It also offers high income funds and equity fund growth strategies focused more on growth than income.

The Harvest Travel & Leisure Index ETF, launched as the first of its kind in Canada during the pandemic last year, includes planes, trains, automobiles, hotels, cruise ships, and booking agencies, and has done well as travel’s opened up again.

“It was one of the most successful launches in Canada last year and raised over $200 million,” said Kovacs, noting that it’s moved with the market.

The Harvest Healthcare Leaders Income Fund is now the largest income generating health care ETF in Canada, with a billion dollars in assets.

“That’s a serious market share in the Canadian market and even our brands fund is now through $400 million,” said Kovacs. “Those stood out as funds that are being well accepted and used in portfolios.”

Harvest was also the first to launch blockchain funding in Canada a few years ago and one of the first to launch a clean energy fund in Canada last year, both of which have ridden the recent markets.

“We’ve stuck to our knitting. We’ve brought up products that we think are unique and can fill a void for people’s portfolios that have growth opportunities or generate income,” he said,

Harvest has also stuck to its original investment philosophy. 

“We focus on growth industries and high-quality companies and then generating high levels of income through our covered call strategy,” said Kovacs, adding it’s also clearly communicated those.

Kovacs is pleased that Harvest received this year’s WP Award for ETF Provider of the Year.

“The award was an honor for all of us, for the whole company, and it means a great deal to be recognized for that work because we’ve been at it for over a decade, and we’ve been building on an investment philosophy that I’ve espoused since I founded the company back tin 2009,” he said.

“It’s great to win. Not only as a firm, but for Canadian investors and advisors. We’re proud of the trust they put in us every time they buy one of our products. It’s also meaningful because it reflects how the industry is thinking of us. The awards remind us that advisors and clients not only share our vision, but they trust our process. And it’s definitely gratifying to be recognized by financial advisors and our colleagues.”

Kovacs also attributes the company’s success in winning the award to its strong growth in the past 18 months, when it’s grown from just under $1 billion to $2.4 billion of assets under management.

“That’s a significant jump,” he said.  “It shows that Harvest is punching above its weight and attracting a lot of attention. I think we’ve played very well, and we’re getting more and more recognition. I think that’s why we won that award.

“We want to be known for our equity income products,” said Kovacs, noting that it’s selective in what it offers. “We’re not trying to be everything to everybody. We’re just trying to be known for doing one or two things really well and build our business that way.”