Full review of UMAX: Hamilton Utilities Yield Maximizer ETF (13% Target yield) - Monthly income

Link to full post:
https://wyzeinvestors.com/umax/

Similar posts

HDIV ETF review: Hamilton Enhanced Multi-Sector Covered Call https://wyzeinvestors.com/hdiv-etf-re...
High Dividend Yield ETF Showdown: HMAX vs ZWB https://wyzeinvestors.com/zwb-vs-hmax/
JEPI ETF REVIEW: JPMorgan Equity Premium Income - https://wyzeinvestors.com/jepi-etf/

Investment Objective

Hamilton introduced a new ETF called UMAX, which focuses on the utilities sector (UMAX was launched June 14th 2023). This ETF is designed to provide investors with attractive monthly income while offering exposure to a diversified portfolio of utility services equity securities primarily listed in Canada and the U.S. UMAX aims to reduce volatility and enhance dividend income by employing an active covered call strategy.

Unlike some other income ETFs, UMAX does not utilize leverage. However, it still aims to generate higher monthly income for investors. It offers exposure to blue-chip Canadian utilities, including pipelines, telecoms, and railways. By implementing the covered call strategy, UMAX seeks to enhance monthly income and reduce volatility. Currently, the coverage through covered calls is approximately 50%.

UMAX targets a yield of 13% or more, with monthly distributions to provide consistent income.

Investors can access UMAX, along with other Hamilton ETFs, on the Toronto Stock Exchange (TSX). These ETFs can be included in various portfolios, such as RRSP, RRIF, DPSP, RDSP, FHSA, RESP, and TFSA. Additionally, for investors interested in a Dividend Reinvestment Plan (DRIP), they can contact their individual brokerage for setup details.

Similar funds from Hamilton ETFs

In addition to UMAX, Hamilton offers other notable ETFs in their lineup, including HMAX Hamilton Canadian Financials Yield Maximizer and HYLD Hamilton Enhanced U.S. Covered Call ETF.

HMAX is designed to maximize yield within the Canadian financials sector. It aims to provide investors with attractive monthly income by investing in a diversified portfolio of Canadian financial companies. On the other hand, HYLD focuses on the U.S. market and utilizes a similar covered call strategy to generate income and reduce volatility. It seeks to provide enhanced yield potential by investing in a diversified portfolio of U.S. securities, primarily in the large-cap segment.

How UMAX is able to set such high dividend yield target?

According to the issuers’ website, UMAX is able to provide higher monthly income for two reasons:

UMAX writes covered call options on approximately 50% of the portfolio
The fund is currently writing option At The Money (ATM) wheras similar funds are writing options OTM (Out of The Money).