Build an ETF Portfolio for Retirement Income with Covered Calls

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In this video we'll develop a retirement earnings portfolio utilizing 5 ETFs from this video's sponsor, .

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About the Author: Richard Money

44 Comments

  1. Hey there Mark! I have been thinking about you wondering what your next topic will be and where you were. Glad to see you and on a topic of relevance! I am slowly buying ETF’s and split corps now, along with maintaining the individual stocks I have had for decades…with all nice capital gains and good dividend payers…..because I am a long time passive income investor💯
    So nice to have this topic covered and to have you “back on the tube” again. I so enjoy your presentation persona and your choice of topics. You keep things honest and grounded without coming across as if you know everything even though you have decades of experience. There is a saying, the longer I live the less I know. You come across in a humble way. This adds confidence in what you are teaching us or bringing to our attention to give us more food for thought. Cheers from Altantic Canada👍🇨🇦

    1. Thanks so much, and we always appreciate your in-depth comments. I’ve been mostly away from YouTube for the past while for various reasons, but love putting the videos together and look forward to more in the weeks to come. From the Pacific to the Atlantic, have a super day. – Marc

    2. @Brandon Beavis Investing Whenever you are ready, a lot of us are here waiting. You know what they say, “Absence makes the heart grow fonder!”😊👍🇨🇦, from Atlantic to Pacific, great to have you back on the tube.💯

  2. Mark, one thing I find I have to pay attention to with ETF’s as I study them to purchase in my non registered account, is withholding tax issues, because they hold USA and global companies. If you are keen and interested, an overview of any preferential taxation on some or none at all in ETF’s would be a nice topic, if the chat also agrees. I have learned to go to the actual company website, as in this case, Harvest, and click on Tax for each ETF to see where the dividends will be considered come taxation time. Lots to learn on taxation if you are buying in a TFSA AND non registered account. TFSA on some ETF’s could still have the with holding tax, but not the RRSP. I was not aware of this for the TFSA. That is why I sold HHL in my TFSA and bought it in my RRSP instead. HHL has a withholding tax in both non registered and TFSA but not RRSP. Tricky eh!
    Priority for a passive income investor re: taxation in non registered and TFSA is to look at each ETF to see what the distribution will be distributed as. 4 areas are capital gain, the best protected taxation because it is taxed only on 50% of the gains, IF YOU SELL IT. If you keep it, like a passive income investor then capital gain taxation will take place years down the road and in the meantime you collect the dividends, the second tax protection is “good ROC, return of capital. Marc, that topic could be one for you to consider as it has quite a bit of this and that to it!
    Next is eligible dividends because it qualifies for the Canadian dividend tax credit, and the worst is foreign income because it is taxed 100%, no tax breaks.
    Anyway, that is my two cents worth if anyone in the chat is interested. Of course, Marc knows all about what I just mentioned. Marc, maybe a presentation on the above with your amazing visuals could be a possibility??? Thank you so much Marc. We on this household always look forward to your presentations. Cheers from Atlantic Canada, early retired at 45 yrs of age and living the F.I.R.E. life = Financial Independence, Retire Early (FIRE) 😀📈$📉

    1. Again, good, solid, informative comment. On my list of ‘videos to do’ is one on all of the tax implications you’ve noted here. If anyone else is interested, please just like the comment and I’ll see if it moves up the list! 👍- Marc

    2. @Brandon Beavis Investing Another video to consider is a monthly dividend etf that contains predetermined percentages of stocks and bonds. Two that immediately come to mind that are popular with retirees are ZMI & XTR

    1. Hi John. I don’t. For my equity investments I manage my own portfolio of individual securities, and use ETFs for fixed income only. For someone who is looking for a simpler solution, ETFs are appropriate in many cases. Thanks for asking. – Marc

  3. Thanks for the great video Marc. One could also just get HDIF and get them “all in one”. Only disadvantage is you don’t decide the ratios of the ETFs relative to each other.

    1. You pretty much could, yes. As you point out, you don’t control the sector ratios, if that’s something that’s important to you. HDIF also has one extra fund, HUBL. But conceptually, you’d be ok with either the fund of funds, or setting up a mix more specific to your objectives. Thanks for adding to the discussion. – Marc

    2. Another is HDIV, is a gem! I bought some a few months ago when it was below the NAV, but I also use stock chart indicators, about 5 of them, to help decide when the price looks to be in over sold territory. I have a stink bid in for HDIV waiting for more pullback in this “recession” we are in. You know what they say for Passive Income Investors, “Buy low, and buy lower, and lower and lower etc” because we like to hold for years and not sell. HDIV has preferential taxation that I like and have to pay attention to because it is going to be in a non registered account, so need that preferential taxation pocket😊 Nice commment ib516💯

  4. Great content as always Mark! Do they write options on 33% of their holdings per year? And are they at the money or out of the money options?

    1. Thanks, Jay. The 33% max is at any given time, but subject to the fund managers’ discretion. They can actually have a 0% position if they choose. Not sure what price points they buy at… I’d imagine it changes depending upon market conditions, but can’t say 100%. – Marc

    2. I communicated with Harvest recently. They had written covered calls on only 22% of HTA at the time. Just an example.

  5. This is really useful, to see what’s behind the curtains and what makes the various funds unique or different in their approach. Nice to find a good Canadian youtube channel explaining investing.

  6. Hey Brandon! Thanks for another great video. Are you able to shed some clarity as to whether or not Harvest pays or provides any incentive to you recommend or hype their products. I just think it would be beneficial to be transparent and honest regarding this, as I know many followers trust in your opinions and advice . Much appreciated

    1. UMM not sure if you missed it but at the end of the presentation Marc mentioned that this video was sponsored by Harvest? I would think that is being as transparent as you can expect anyone to be. It’s like when Hockey night in Canada(I assume you are Canadian) has a sponsor for one of their segments. The said sponsor is paying for that “advertising space”. I would expect that Harvest funds have paid some sort of compensation to have this type of video made featuring their product. However I also feel that Marc and Brandon are not going to “plug” a product that they don’t have at least a measure of confidence in- of being beneficial for at least some of their viewers. Maybe I’m not understanding your question properly, sorry? It sounds like you are asking them to tell you how much they got paid for this advertisement, and that’s not really any of our business(it’s theirs, and revenue Canada’s I suppose.). I’m just glad they do announce their sponsorships, it makes their incentive clear to the viewer and we can decide at what the level of trust we should apply to this “not financial advice” haha. Maybe I misunderstood what you are asking for? If I didn’t misunderstand, then that question, I find a bit rude-just sayin’.

    2. Hi Bishop. Appreciate you following our channel and asking this question. Without getting into specifics, companies from time to time do provide compensation to YouTube channels to highlight their service or products. In this case, Harvest has sponsored this video series, and in fact when you start the video, it shows “Includes paid promotion” on the screen, I did mention that Harvest has sponsored the video twice during the video, and also in the written disclosure. We would hope this provides sufficient disclosure and transparency. All that said, we regularly turn down sponsorship opportunities for companies we don’t fully believe in, and so if we do post videos that are sponsored, we will disclose that and also you can be assured we’re comfortable with their product or service. Sponsored or not, our goal is to educate our audience. Hope that helps! – Marc

  7. A very solid bunch of ETFs. I have always liked the Harvest ETFs for reliability and variety of exposure. Great job too on explaining covered calls.

  8. Marc, just shared your presentation with a more senior investor but quite smart and retired living the F.I.R.E. life. It was your explanation of options using the vehicle that pulled the trigger for excellent presentation. My senior friend reached out asking about options and cover calls. Your visual and helpful presentation will help him a lot as it did with me. Nice job there Marc💯🇨🇦

    1. Subjective, I suppose. Compared to a pure index fund, they are higher. When you factor in the cost of the covered call strategy, you might argue otherwise. But ya…. it’s always important to make that judgement and weigh the benefits.. Thanks. – Marc

  9. I own HDIF, which is made up of six of harvest’s ETFs, including the five you reviewed. It’s new though; inception date of Feb 2022…it is on my list of ‘things to consider buying more of”.

  10. Although the video is interesting , I think that promoting your sponsor isn’t a good idea when the channel suppose to serve the community with unbiased recommendations. This may put you in a conflict of interest, and may harm your reputation.

    1. Thanks for taking the time to share your views. Our goal is always to provide good, solid information that will help our viewers learn more about this complicated field of investing. In some cases, our videos are sponsored and in others they aren’t, but in all cases, we’re not going to say anything we don’t believe in. I hope that if you view the complete video it does provide valid information on what goes into building a portfolio of ETFs, whether they are Harvest’s fund, or another fund company. That was the goal at least. Again.. appreciate you watching, and thanks for your comment. – Marc

  11. I typically like your videos and I already see the value in covered call strategies. Unfortunately the fact they’re sponsoring the video gives me a slimy feeling that this is an ad and I can’t take it seriously.
    Thumbs down on this one for me.

    1. Sorry to hear that, Christian. I hope the content of the video, whether sponsored or not, is valid and provides education to those who are learning about this type of investment. Hope to see you again on another video, though. Cheers. – Marc

  12. Hamilton ETFs do an interesting thing with Covered calls. They take some of these etfs, bundle them, then add a 25%margin to them, boosting income

    1. Thanks, Richard. I ‘m not as up to speed on the Hamilton funds, but that strategy sounds reasonable. Harvest does something similar with HDIF, which is their fund of funds. Thanks for watching the video – Marc

  13. Hello Marc, thanks for a great video as always. What are the costs of these ETFs ? Also, would it be a good idea to use asset allocation ETF (example : XGRO or XBAL) for fixed income in retirement?

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