Video summary

Who are the Best Covered Call ETF Providers in Canada? I Asked AI...

Main summary

Key takeaways

Finance

Summary (finance-focused)

Disclosures / Framing

  • Not financial advice: “This video is for educational and entertainment purposes only. It does not constitute financial advice. We are not registered financial advisors.”

Covered Call ETF Providers in Canada (Ranked by “Structural Total Return Performance”)

The video discusses an AI-generated ranking of Canadian covered call ETF providers, emphasizing that:

  • Covered call strategies trade away upside growth in exchange for premium income
  • Total return (capital growth + yield) is the key metric

Top providers mentioned (AI ranking)

  1. Hamilton ETFs (ranked #1)
  2. Harvest (ranked near #2)
  3. BMO (ranked near #2)
  4. Global X Canada

Why Hamilton is Presented as #1 (Total Return via Leverage + Option Writing Structure)

The speaker’s repeated methodology/claims include:

  • “Light leverage” overlay as a major driver of higher total returns
  • Option moneyness/coverage is not the whole story
    • Total outcomes depend on:
      • how much of the portfolio is covered
      • the structure of the leverage
  • Hamilton is said to have pioneered an enhanced “1.25x leverage covered call structure” (speaker’s claim)

Hamilton-specific funds highlighted

  • HYLD and HDIV
    • Framed as “universal all-in-one” Hamilton products and described as the speaker’s top picks
HYLD
  • Mentioned as becoming “HYLD 2.0” in Jan/Feb 2024
  • Speaker claims it has outperformed:
    • the S&P 500
    • VSP (“by long shot”); identity unclear from subtitles, but treated as a benchmark/ETF the speaker tracks
HDIV
  • Speaker highlights strong performance “since inception,” including when it was earlier versioned (“HDIV 1.0”)
  • Sector mix explanation (as described):
    • concentrated in Canadian financials, energy, and gold
    • plus technology exposure via holdings described as QMAX and QDAY
    • CDAY is also mentioned
Other Hamilton fund mentioned
  • Daymax / QDAY / QMAX / CDAY referenced as part of a Hamilton “bundle/franchise”
    • (Exact fund identifiers are partially unclear due to subtitle errors.)

Harvest Presented as Best for Capturing Long-Term Capital Growth (Active Overlays, Partial Coverage)

Harvest strategy claims

  • Typical covered call writing stated as:
    • ~33% coverage for “classic Harvest”
    • sometimes up to ~50%
    • but “typically” 33% to high 30s
  • High income shares favored by the speaker:
    • HHIS described as “all-in-one” and the speaker’s biggest position
  • Speaker claims Harvest uses active covered call overlay management, rather than purely systematic/automatic rules

Harvest funds mentioned

  • HTA: described as a top technology fund within Harvest’s suite
  • HHL / HTA referenced most clearly as the “classic” pair in subtitles
  • ZWT
    • described as Harvest’s top performing technology covered call ETF
    • rationale: it “barely does any covered calls,” so it participates more when tech runs
    • yield mentioned: ~5%

BMO Presented as Best for “Blue Chip Stability”

Claims

  • BMO’s covered call ETFs described as filled with dividend-based blue chips
  • BMO writes out-of-the-money calls on roughly ~50% of holdings
    • speaker cites “roughly 50%” from BMO’s website
  • Performance edge described as focusing on high-quality dividend growth stocks

Funds/tickers mentioned

  • ZWB: called the top covered call fund in Canada by AUM (speaker’s assertion)
  • ZWC: also referenced as another top fund

Global X Canada Presented as Best for High-Volatility Sectors

Claims

  • Global X described as targeting highly volatile sectors to generate large option premium inflows, supporting total return
  • Exposures mentioned:
    • tech
    • Bitcoin
    • gold

Funds/tickers mentioned

  • QQQC: labeled “top fund”
    • speaker notes it may be preferable to reference QCL/QC-type twins, but still cites QQQC as performing well
  • QQCL referenced as a “better total return” comparison
    • subtitle confusion makes unclear which is truly the “top” one per the AI ranking

Important caution about long-history comparisons

  • Speaker argues QQQC’s 10-year total return figures are not a good representation
  • Reason: the ETF was transformed into its current form more recently (suggested swap around 2022–2023)
  • Subtitle implies QQQC may have come from a prior ticker/fund (exact prior identity unclear)

Explicit Performance Metric Guidance / “Blind Spots”

The video frames key evaluation points as:

  • Total return vs “stated yield”
    • speaker emphasizes total return as the “ultimate truth”
  • caution around benchmark comparisons and index drag
    • especially in steady bull markets

Stated blind spot

“Over a multi-year period, all covered call ETFs will underperform their non-covered call index counterparts in a steady bull market.”

  • Example:
    • a Canadian bank ETF is said to beat a covered call bank ETF when banks spike

Leverage counter-argument (example comparison)

  • Speaker argues that leverage can offset underperformance
  • Comparison referenced:
    • ZEB vs ZWB
    • claimed total return gap: 321 vs 208 (units unclear—likely cumulative over a period)
  • Additional claim:
    • CBANK described as the “best covered call strategy right now” by total return
    • speaker claims CBANK “destroying ZWB” and also outperforming ZEB

Recommendations / Positioning (as Stated by the Speaker)

  • Differentiate based on provider/strategy engineering, not just the label “covered call ETF”
  • Prefer newer implementations that are leveraged but “lightly leveraged”
    • speaker belief: they can achieve index-like or superior total returns
  • Examples cited as “lightly leveraged”:
    • HYLD
    • HDIV/HDIV
    • HHIS
    • a ticker that appears as HEDJ (subtitle unclear)
    • other Hamilton franchise tickers

“AI Question” About Creators (Non-core)

  • Mentions creators and philosophies, but no new market strategy is provided in this segment.

Tickers / Instruments Mentioned (from Subtitles)

Covered call / provider ETFs (Canada-focused unless noted)

  • HYLD, HDIV
  • HHIS
  • HTA, HHL
  • ZWT, ZWB, ZWC
  • QQQC, QQCL (and other “QQ…” references)
  • QMAX, QDAY, CDAY, and Daymax (exact set partially unclear)
  • CBANK
  • ZEB

Benchmarks / indices

  • S&P 500

Other / comparisons

  • VSP (benchmark mentioned; exact identity unclear)

Asset class mentioned

  • Bitcoin

Framework / Methodology (Implied)

No formal numbered framework is presented, but the speaker implicitly uses an evaluation approach such as:

  • Rank/compare covered call ETFs by total return, not only distribution yield
  • Evaluate covered call structure, including:
    • leverage overlay (e.g., “light leverage” / 1.25x claim)
    • option moneyness
    • coverage ratio (e.g., ~33% vs ~50% vs more)
  • Consider underlying asset quality:
    • covered calls on US tech may behave differently than covered calls on bonds
  • Watch for data/labeling issues:
    • long-history total return can mislead if an ETF was transformed/rebranded

Key Numbers / Time References Captured

  • Leverage: 1.25x (Hamilton structure claim)
  • Coverage ratio (Harvest classic):
    • ~33% typical
    • up to ~50%
    • “typically” 33% to high 30s
  • ZWT yield: approximately ~5%
  • HYLD 2.0 timing: Jan/Feb 2024
  • Total return example: 321 vs 208 (ZEB vs ZWB; scale/units unclear)
  • CBANK vs ZEB/ZWB: speaker claims CBANK outperforms both
  • QQQC history caution: transformation suggested ~2022–2023; “10 years” total return said to be inaccurate

Presenters / Sources

  • Presenter/Speaker: Adrian (identified as the content creator from Passive Income Investing; also referenced: “I was actually surprised… it was me.”)
  • Other creators referenced as data sources:
    • Jordan (data analyst; channel name unclear from subtitles)
    • Ben Felix (The Rational Reminder)
  • AI source referenced: “the Google AI guys” (no specific product name given)

Original video