February 26, 2018 by Hamilton Capital
Hamilton Capital Global Bank ETF (HBG), continues to enjoy material outperformance with comparatively low drawdowns. Since inception, it has reported a 21% annualized return and is 10% ahead of the global banks index (in CAD). HBG also had comparatively low drawdowns during the two large macro corrections and outperformed in 19 of the 20 worst days (see exhibit below).
One of the main contributors to the strong performance of HBG is the earnings growth of the U.S. banks’ portfolio. In Q4, this portfolio reported another very strong quarter, with year-over-year portfolio-weighted EPS growth of ~19% Y/Y, its 7th consecutive quarter of double-digit Y/Y growth (see chart). It is also the 7th consecutive quarter where the U.S. banks in HBG grew materially faster than the sector.
Exhibit I: HBG in 20 Worst Trading Days
Note: Comments, charts and opinions offered in this commentary are produced by Hamilton Capital and are for information purposes only. They should not be considered as advice to purchase or to sell mentioned securities. Any information offered is believed to be accurate, but is not guaranteed.