New ETF offers exposure to portfolio of high-quality, dividend-paying Canadian utility companies
Canadians seeking ways to access dividends now have a new option as class E units of the Hamilton Enhanced Utilities ETF (HUTS) have officially begun trading on the TSX.
“HUTS, the newest addition to our popular enhanced ETF lineup, aims to provide investors with exposure to a portfolio of blue-chip, high dividend paying Canadian utility companies,” said Pat Sommerville, Senior Partner and Head of Business Development at Hamilton ETFs.
“Given the historically defensive nature and strong record of stable dividends of the Canadian utilities sector, we believe it has the right ingredients for a strategy utilizing modest leverage (25%) to provide investors with the potential for enhanced long-term growth and higher monthly income.”
HUTS aims to replicate the rules-based Solactive Canadian Utility Services High Dividend Index, as closely as is reasonable and prior to deducting fees and expenses. The index goes beyond conventional utilities by giving Canadian investors industry sector exposure to utilities, pipelines, and telecommunications.
“We are pleased to have collaborated with Solactive AG and Horizons ETFs, one of Canada’s leading independent ETF providers, on the index for HUTS and Horizons’ recently launched Horizons Canadian Utility Services High Dividend Index ETF (ticker: UTIL on the TSX), in which HUTS will invest,” Sommerville said.
“This partnership between Hamilton ETFs and Horizons ETFs is the first of its kind in the Canadian ETF space and we are excited to provide investors with an enhanced version of the same investment strategy with the launch of HUTS,” he added.
In an interview with Wealth Professional last month, Mark Noble of Horizons ETFs offered some insight into its own newly launched ETF and the collaboration that went behind its development.
“We co-developed this product with Hamilton ETFs, which is a competitor, but an industry partner as well, where they’ll be launching a 1.25% version of the same index,” said Noble, the executive vice president of ETF strategy for Horizons ETFs. “Both of our firms recognize that there’s probably some real value in re-evaluating how you think about utilities.”
“There’s a lot of money with the banks and large bank providers and large ETF providers in Canada,” he added. “[T]here’s lots of space for independent providers to carve out some interesting partnerships. So, maybe it’s the first of many.”
