New Investment Choice in Canada: Covered Calls on NVIDIA, Microsoft, Amazon, Eli Lilly

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In this episode, I sit down with Harvest ETFs' Chief Financial Investment Officer, Paul McDonald, to go over the ingenious Harvest High Income Shares (HHIS). This distinct item uses financiers exposure to top US companies like Amazon, Microsoft, Nvidia, and Eli Lilly, while employing an active covered call strategy to deliver consistent month-to-month income.

In this episode:
Discover how HHIS combines individual stock ownership with a covered call technique.
Discover why liquidity and options markets influenced the stock selection.
Comprehend the advantages of the 33-50% covered call write level technique.
Check out the advantages of the lightly leveraged series within HHIS.
Learn how HHIS is structured as a Canadian trust, offering tax benefits.

Thank you to Harvest ETFs for supporting today's video:
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New Investment Choice in Canada: Covered Calls on NVIDIA, Microsoft, Amazon, Eli Lilly

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About the Author: Richard Money

42 Comments

    1. 🙄 everything is a “crash” these days. OMFG!!! The market dropped 3% …the world is falling apart,the market is crashing….umm yeah ok

    1. This is similar to Yieldmax individual synthetics as opposed to owning the stock. Both cases, the upside is capped.

    2. @@mikep4869 but if they’re good options traders, the yields will bring investors to break-even faster.

  1. Great interview. Funny thing is that I have these new Horizon ETFs planned for next Tuesday’s video. You beat me to the punch lol.

    1. This has only traded for one day! Marc got the scoop, but Adrian will be on this, for sure. The more the better.

  2. Purpose investments are already doing this, how does Harvest different than what Purpose is doing?
    What are the advantages of switching from Purpose?

    1. Seems like harvest is offering better yields, Microsoft for example over at purpose offers 0.10 cents per share per month, while the same 25% leveraged version at harvest offers 60% higher at 0.16 cents per share per
      Month. Harvest also has two versions, a leveraged and un leveraged version while purpose only has leveraged options.

    2. @@BeastBrosNation So have you ask yourself why Harvest is able to offer a much higher yield on blue chip stocks like Microsoft compared to Purpose? I’m sure there is no free lunch. So either the yield is higher because the covered call writing is very close to the money (in which case, the total return will significantly lag compared the stock) or Harvest will be grinding the NAV (which is what I suspect Harvest is doing).

    3. “The first of its kind here in Canada” Quite a stretch given that Purpose has had very similar funds – AMZN, MSFT along with YTSL and others for more than a year now. Write limit at 50% and 25% leverage, the same as what is being discussed here. I am sure there are yield differences but that doesn’t make it a different kind of fund. Disappointing that Marc didn’t discuss the covered call strategy in more detail but in any case the only thing I see as unique is the non-hedged options.

  3. I have the purpose Tesla stock YTSL. Would rather have a basket of these stocks as having only one company still carrying higher risk and the reason I only own the Tesla fund YTSL. Hold it in your TFSA

  4. I prefer SMAX over HHIS because the former doesn’t use leverage so it’s less risky. Also SMAX covers more than just 4 stocks and writes options on 30% so there’s growth potential for the remaining 70%.

    1. @@mark116007 it is actively managed so the higher fee makes sense. I have a DRIP setup for it so I’m just waiting for it to snowball 💦

  5. Not a fan of covered call ETFs. The dividends are tipically high, but the share price usually goes sideways or down over time and they’re often more volatile than the general stock market. Considering your net total return over all, you’d probably be better off investing your money in an S&P ETF, in my experience.

    1. I thought the same thing, check out YGOG from purpose, 2 year return is 61% vs the popular S&P 500 etf VFV which has a return of 42% over the same period. Long term I think low cost index funds still win but this can allow you to generate income sooner and maybe go part time from
      Your job so it’s just about personal goals!

  6. This channel has just become an ad channel for harvest and bmo etf , no original thought , they just want to pivot and run their business of blossom by promoting ETFs and getting commission out of it. Seriously disappointed

    1. The one sponsorship I saw that didn’t align with this channel or investing was the mattress ad read. That was way out of left field.

    2. Do you have a better way to find out about new issues, concepts, investing ideas? Regardless of your vilifying the concept, “advertising” is as good a way as any of spreading the word.

    3. Honestly if it wasn’t for this channel doing things this way I would have never heard of most of the etfs they have talked about on here. Also having the people that are running the funds answer questions is far better than just reading a write-up for some.

      When making money with youtube you have to run it as a company. I would love to see you on just the money made off of ads only. Also most people should never buy single stocks thus why etfs are a far better topic.

  7. What would happen if Harvest, as a company, fails? I understand that changes are minimal, but how would Canadian investors affected? We are entrusting these companies with our hard-earned money.

    1. What Sollie said and it’s work because you need to select the price and time frame for every individual stock. The point of an ETF is to reduce risk and also workload because they’re self cleansing.

    2. Because its not realistic for a lot of people to buy 100 shares of each stock to do covered calls on them
      Nvidia ($128.50 USD) = $12,850
      Microsoft ($424.14 USD) = $42,414
      Amazon ($180.11 USD)= $18,011

      So just 100 shares of each you would need to spend $73,275 just on 3 companies. Its also not very possible to do it inside of a TFSA if a person just turned old enough to open one up.

    3. ​@@XInfinity2024Would CRA consider doing your own covered calls, running a business inside your TFSA?

  8. Thanks very much for this, Marc. Would it be fair to view these funds as sort of the beginning of the YieldMax™concept in Canada? I feel it would be wise to wait as much as a year to see how these progress. I jumped into AMZY a couple of weeks ago.

    1. I my self would say no because of how much more volatile the dividend payout of YieldMax stuff is vs Harvest’s own etfs.

  9. covered call earnings – capital gains – is this something fairly easy to put on taxes … like a T5 issued that includes that on a certain line? …. or ??? dont want too much extra work/complications for a 5-10K investment (via Scotia i-trade)

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