Insights: Hamilton ETFs

Notes from Dallas: Big Things Happen Here

We recently returned from a visit to Dallas (our third in four years) where we met with eight banks operating in the Lone Star State. Five of the eight have footprints beyond Texas, and hence offered a fuller picture of the attractiveness of the Texas economy and business outlook (hint, there’s a reason they’re in Texas). Of the banks we met, three are holdings in our…

A Day in the Life of the U.S. Financials – Notes from New York

Three days in New York gave us the opportunity to meet with a broad-based group of financial services companies, largely based in the U.S., but several operating globally. Included in the mix were several holdings of the Hamilton Global Financials Yield ETF (ticker: HFY) and the Hamilton U.S. Mid-Cap Financials ETF (USD) (ticker: HFMU.U), both of which invest in the broader financials services sector. The former…

What U.S. Investment Bankers and Banks are Saying about M&A

At Hamilton ETFs, the prospects for M&A is one the supporting factors for our investment thesis for the U.S. mid-cap banks, in which both the Hamilton Global Bank ETF (ticker: HBG) and Hamilton U.S. Mid-Cap Financials ETF (USD) (ticker: HFMU.U) are heavily-weighted[1]. Recent meetings in New York, Dallas and Washington, DC provided us with an opportunity to hear nuanced comments and feedback on the state of…

Notes from Washington, DC – Investigating One of the Wealthiest MSAs in the Country

We recently had the opportunity to meet senior management of over a dozen U.S. mid-cap banks headquartered in the Washington, DC area. Anchored by the capital city, the Washington-Arlington-Alexandria MSA (Washington MSA) is the sixth largest U.S. MSA ([1]) with real GDP of US$507 bln ([2]) and a population of 6.3 mln. Importantly, it is also the second wealthiest MSA ([3]) in the entire country, supported…

HFY: Thriving in a Very Challenging Market (Supported by 4%+ Yield)

The Hamilton Global Financials Yield ETF (HFY) continues to thrive in a very challenging market, generating excellent returns, with much lower volatility. Year-to-date, HFY has risen ~13.0%, over 800 bps ahead of its benchmark of higher yielding financials[1]. It is also outperforming with lower downside volatility than the Canadian banks, global financials, U.S. banks (both large and mid-cap), European financials/banks, and major financials indices in Asia…

Cdn/Aust’n Financials: Fraternal Twins w/ Low Correlations & Near Identical Risk Rewards

The Australian financial sector is among the highest quality and strongest in the world. It is also very similar to the Canadian financial sector. Arguably, there are no two financial sectors globally that more closely resemble each other than Canada and Australia. A desire to provide Canadians with exposure to this great sector is why we launched the Hamilton Australian Financials Yield ETF (HFA), which has…

Scotia’s Pacific Alliance and Five Takeaways on Global Growth

Last week, Bank of Nova Scotia reported its Q3 results and its International Banking division generated solid double-digit earnings growth, supported by a strong economic backdrop and acquisitions. Within this segment is the Bank’s operations in the Pacific Alliance, the Latin American trade bloc that includes Peru, Chile, Columbia, and Mexico. This very large emerging markets platform has over $100 bln in loans, generates earnings of…

European Banks in Charts: Credit Normalization vs. Margins

The European banking sector includes some of the world’s largest banks, making its health and profitability very important to the global markets. Given the sustained weakness in the sector (the STOXX Europe 600 Banks has fallen ~30% since the beginning of 2018), we thought it would be helpful to review key balance sheet and income statement trends – in 14 charts – since the European sovereign…

U.S. Mid-Caps Continue to Generate Outsized EPS Growth; P/Es at ~20% Discount to 5 Year Average

In Q2 2019, portfolio-weighted EPS[1] grew 12% for the holdings in the Hamilton U.S. Mid-Cap Financials ETF (USD) (ticker: HFMU.U). The growth in the quarter was nearly 200 bps ahead of the large cap financials at 10.1%[2] and has outgrown its large cap peers every quarter since HFMU.U was launched eight quarters ago. The strong earnings growth was driven by steady volume growth, a benign credit…

12th Straight Quarter of 10%+ EPS Growth; Valuations at Five-Year Lows

In Q2 2019, the holdings in the Hamilton Global Bank ETF (ticker: HBG) reported portfolio-weighted EPS growth of 14% Y/Y[1], driven by robust U.S. banks fundamentals (~55% weight) and a diversified portfolio of global banks (~45% weight). This is the twelfth consecutive quarter of double-digit portfolio-weighted EPS growth for HBG. The strong growth was led by U.S. banks (especially mid-caps operating in southeast and southwest), India,…

Global Exchanges, E-Brokers and Fin-Tech: Secular and Structural Growth Drivers Abound

We had the opportunity to meet the management of over a dozen global exchanges, e-brokers and fin-tech firms at a recent conference in New York. Global exchanges and e-brokers have benefitted from multiple secular, regulatory and cyclical tailwinds in recent years, which have resulted in strong growth trajectory and robust stock returns. The Hamilton Capital Global Financials Yield ETF (HFY) [1] has ~4% exposure to exchanges and e-brokers,…

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