The fund, focused on North American issuers, incorporates a covered-call option strategy
Purpose Investments has launched the Purpose Enhanced Dividend Fund on the TSX. Listed as PDIV, the strategy combines the firm’s North American dividend approach strategy with a covered-call option feature that aims to optimize the trade-off between premium generation and limiting upside appreciation.
“Investors recognize the crucial role dividends can play in their portfolios,” said Som Seif, president and chief executive officer of Purpose Investments. “However, in a world of lofty valuations and flat to rising interest rates, strategies that seek to enhance income and lower volatility can be a meaningful way to help manage risk.”
The fund aims to provide higher dividend equity income with lower risk. It consists of a high-quality equally weighted portfolio of 40 dividend-paying companies in North America, with a fundamental, rules-based selection process used to rebalance the portfolio quarterly. The covered-call option strategy, meanwhile, is applicable to up to 25% of the portfolio for enhanced income generation and lower risk.
With assets under management amounting to $23.7 million, the fund has a management fee of 0.65%.
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“Investors recognize the crucial role dividends can play in their portfolios,” said Som Seif, president and chief executive officer of Purpose Investments. “However, in a world of lofty valuations and flat to rising interest rates, strategies that seek to enhance income and lower volatility can be a meaningful way to help manage risk.”
The fund aims to provide higher dividend equity income with lower risk. It consists of a high-quality equally weighted portfolio of 40 dividend-paying companies in North America, with a fundamental, rules-based selection process used to rebalance the portfolio quarterly. The covered-call option strategy, meanwhile, is applicable to up to 25% of the portfolio for enhanced income generation and lower risk.
With assets under management amounting to $23.7 million, the fund has a management fee of 0.65%.
Related stories:
Desjardins introduces new emerging-market ETF
Capital Group unveils new global fixed-income fund
