Hamilton Canadian Financials YIELD MAXIMIZER ETF T.HMAX

RE:RE:RE:HMAX balance of payouts.

[King-of-Kings]

That's true... although the ACB won't go negative... ZERO is the minimum, and any ROC must be declared as Realized Capital Gain (Only half the gain is taxable as usual). Upon the sale of your units, the entire sale proceeeds will also be treated as Capital Gain as the ACB is ZERO.

Regarding increasing NAV, implies the underlying assets are also increasing in value... Remember: The Distribution comes from Dividends, and Income generated from the sale of Covered Calls. Since they only write covered calls on HALF the assets under management, techincally, we are potentially giving up half the future gain when share prices on half the stocks held by the fund exceed the Strike Price of the options sold. Therefore, we give up part of the upside for immediate income from selling covered calls. the fund also generates some Capital Gains when these stocks are "Called" and the stock is sold.

Aslo the distributions heavily rely on the Premiums generated for selling call options... the more volatile the market for these financial companies, the higher the premium earned... So the distrubutions are hence depend on this volatility.... Lately, the prices have been more stable on these financial stocks and therefore less money is being earened from selling Call Options.... although the overal return is still pretty attractive, and the fund's declared target rate has always been around 13%... So that's not bad at all.

If you don't need to spend your entire monthly distribution, it would make sense to reinvest a portion of these distribution to improve your annual return.