HTA.to versus TXF.to

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I see that you guys have selected HTA for the high yield portfolio, just curious why this was selected versus TXF?

Thanks
Randy D.

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Asked on March 14, 2024 12:24 pm
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This one is relatively easy and it simply boils down to performance. I've attached a chart on the recent performance and you'll see Harvest outperforms CI by quite a wide margin. I think some people may see the fees with this one and believe CI could be better because its charging 30 basis points less but the performance has outweighed the fee by quite a wide margin.

Past performance with particular ETFs isn't all that important, and although it is certainly not a guarantee of future returns, in actively managed funds past performance is very important, as it shows a history of the management's ability to drive returns.

Why the outperformance? To me, it seems like HTA has taken a more concentrated approach in its top holdings which has resulted in outperformance. In addition to this, I couldn't find any information about what percentage of the portfolio CI writes covered calls on. It is possible that it is higher than HTA (HTA only writes on about a third of the portfolio), which ultimately leads to lower returns especially when tech is in a bull run. I could be wrong on this as mentioned I couldn't find any data on CI's percentage. However, I'd bet good money they're either worse at writing call options, or they're writing on a larger chunk of the portfolio and thus participating in less upside.

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Posted by Dan Kent
Answered on March 15, 2024 4:32 pm