Product roundup: Hamilton ETFs launches Canada’s first 0DTE options ETFs

Hamilton Capital Partners Inc. (Hamilton ETFs) has launched Canada’s first zero day to expiration (0DTE) options ETFs, testing an investment strategy that’s been making waves in the U.S. due to recent market volatility and short-term trading opportunities.

0DTE options are contracts that expire on the same day they’re traded, offering investors a chance to potentially make quick gains based on intraday market fluctuations. 0DTE options ETFs are funds that use 0DTE options as a core investment strategy.

“We have been looking at the 0DTE space for some time. They are now a very growing part of the options market,” said Nick Piquard, chief options strategist with Hamilton ETFs, who leads the firm’s options team that’s actively managing the funds, in an interview.

“These [ETFs] are a new way of monetizing volatility, and a little bit different from what we’ve done traditionally.”

The new funds, which all have a 0.85% management fee, include:

• Hamilton Enhanced Canadian Equity DayMAX ETF (Cboe: CDAY), which provides investors with exposure primarily to Canadian equities. It holds the Hamilton Champions Canadian Dividend Index ETF (TSX: CMVP) and Vanguard S&P 500 ETF (NYSE: VOO).

• Hamilton Enhanced U.S. Equity DayMAX ETF (Cboe: SDAY), which provides investors with exposure primarily to U.S. equities. It holds the Hamilton Champions U.S. Dividend Index ETFand Vanguard S&P 500 ETF (NYSE: VOO).

• Hamilton Enhanced Technology DayMAX ETF (Cboe: QDAY), which provides investors with exposure primarily to U.S. technology-focused equities. It holds the Technology Select Sector SPDR Fund (NYSE: XLK) and Invesco NASDAQ 100 ETF (Nasdaq: QQQM).

The ETFs employ an actively managed, daily call options strategy, covering generally 25% of their portfolios. They also employ 25% leverage in an effort to boost returns.

The underlying Hamilton Champions ETFs in CDAY and SDAY are uncovered, meaning there are no call options written on them, but there are calls written on the S&P 500 index in both cases. As for QDAY, there are no call options written on the Technology Select Sector SPDR Fund, but there are calls written on the Nasdaq 100 index.

As Piquard explained, there’s a tradeoff with selling calls on a daily basis because “you’re going to get more premium and more yield, but also, you’re going to give up more upside.”

But he said Hamilton ETFs hopes to mitigate this over the long term by “adding a little leverage to the portfolio, so that we have a little bit more upside with the modest leverage of 25%.”

And depending on the markets, the 25% coverage ratio may change, said Pat Sommerville, co-CEO of Hamilton ETFs, in an interview.

“If there’s enough volatility, [we] can actually lower the coverage ratio in those environments where we can achieve the yield while still providing more upside,” he said.

These funds are suitable for investors seeking long-term income generation and will typically offer semi-monthly distributions, Sommerville said. At the same time, they come with higher complexity and risk compared to traditional ETFs.

They are also the first products Hamilton ETFs has listed on Cboe Canada.

Ninepoint announces ETF series for existing funds

Ninepoint Partners LP has announced ETF series for five existing funds.

The following ETF series will trade on the TSX:

• Ninepoint Global Infrastructure Fund (TSX: INFR), which launched on Wednesday. It has a 1% management fee.
• Ninepoint Gold and Precious Minerals Fund (TSX: GLDE), which launched on Wednesday. It has a 1.5% management fee.
• Ninepoint Gold Bullion Fund (TSX: GBUL), which launched on Wednesday. It has a 0.5% management fee.
• Ninepoint Silver Bullion Fund (TSX: SBUL) which launched on Wednesday. It has a 0.85% management fee.
• Ninepoint Capital Appreciation Fund (TSX: NCAP), which is set to launch on July 23, subject to the TSX’s final approval. It will have a 0.95% management fee.

“We’re excited to bring greater flexibility and accessibility to some of our well established strategies through ETF series,” said James Fox, co-CEO and managing partner at Ninepoint Partners, in a release.

“From inflation-sensitive infrastructure and precious metals to long-term capital growth, these ETF series allow investors to efficiently allocate capital based on their portfolio goals and market outlook.”

Desjardins rolls out new mutual funds

Desjardins Investments Inc. has launched three new target-date investment-grade bond mutual funds and new classes for some existing funds.

The new target-date bond funds, available in C, F and D class units, include:

• Desjardins Target 2028 Investment Grade Bond Fund

• Desjardins Target 2029 Investment Grade Bond Fund

• Desjardins Target 2030 Investment Grade Bond Fund

They invest primarily in investment-grade fixed-income securities issued by Canadian corporations that will mature in 2028, 2029 or 2030, respectively. Their management fees vary depending on their class units.

Also, the firm has launched W class units for the Desjardins Global High Yield Fund and the Desjardins Sustainable Global Bond Fund. As of Monday, these funds are now available in A, I, C, F, D and W class units.

TDAM announces mergers, terminations

TD Asset Management Inc. (TDAM) has announced upcoming fund mergers and terminations.

The following funds will be merged on or about Oct. 24:

• TD FundSmart Managed Aggressive Growth Portfolio will be merged into the TD Managed Aggressive Growth Portfolio

• TD FundSmart Managed Balance Growth Portfolio will be merged into the TD Managed Balanced Growth Portfolio

• TD FundSmart Managed Income & Moderate Growth Portfolio will be merged into the TD Managed Income & Moderate Growth Portfolio

“The decision to merge the TD FundSmart Managed Portfolios will further optimize portfolio management efficiency within TDAM’s managed portfolio programs,” a release said.

Unitholders of each discontinuing fund will receive units of the equivalent series of the respective continuing fund unless they choose to redeem or switch their holdings before market close on the effective fund merger date.

TDAM said it will bear the costs or expenses associated with the mergers and that each discontinuing fund would be “wound up as soon as reasonably possible following its merger.”

Also on or about Oct. 24, TDAM will terminate two funds. This includes:

• TD Global Conservative Opportunities Fund

• TD Global Balanced Opportunities Fund

It will liquidate the holdings of the terminating funds “at fair market value, determine distributions and distribute the net assets to securityholders,” the release noted.

But investors can choose to redeem or switch their holdings of the terminating funds prior to market close on Oct. 24 and will not be charged any fees for doing so, the release noted.

TDAM said it will send a notice to investors who hold units of the terminating and discontinuing funds at least 60 days prior to these changes taking effect.

Fiera to terminate two funds

Fiera Capital Corp. has announced the upcoming termination of two funds.

In a release, the firm said it plans to terminate imaxx Canadian Fixed Pay Fund and imaxx Short Term Bond Fund on or about Nov. 28.

Investors can redeem their units of the funds up to the close of business on the termination date, and Fiera Capital said it will waive any short-term trading fees and redemption fees for those that do.

Those who don’t redeem their units by the termination date will instead automatically receive a payout. They’ll be paid the net asset value per unit on the termination date for each unit they hold.

Leading up to their termination, the funds may no longer be fully invested in line with their stated investment objectives outlined in their simplified prospectus, the release noted.

The funds are closed to new purchases.