The bank seeks to replicate the performance of the 10 largest financial services companies in Canada by 1.25 times the equal-weighted index, before fees and expenses – currently, its benchmark is the Collective Canadian Core Financial Equal Weight Index – minimizing downside risk. doing .
It primarily invests in equity securities of companies in the index, while writing covered-call options of up to 33% of portfolio holdings, depending on the level of current market volatility and other factors.
Evolve’s new financial ETF comes shortly after the Hamilton ETF launched a similar strategy.
The Hamilton Enhanced Canadian Financial ETF (HFIN), which debuted last week on the TSX under the ticker HFIN, aims to deliver 1.25 times the performance of the equal-weight index of Canada’s largest banks and insurance companies.
In the case of HFIN, the underlying portfolio includes Big Six Bank and six of Canada’s top insurers.