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…
Insights: Hamilton ETFs
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,…
Insights from Nashville: Titans of Growth
We recently travelled to Nashville to meet with a small group of Tennessee-based banks, all of which operate in the state capital, and half of which are holdings in the Hamilton Capital Global Bank ETF (ticker: HBG) and the Hamilton Capital U.S. Mid-Cap Financials ETF (USD) (ticker: HFMU.U). We also had an opportunity to speak with the Nashville Area Chamber of Commerce. It was a great…
U.S. Banks: The Sun’s still shining on Mid-Caps
New York City in May means a lot of traffic, but also beautiful weather and a chance to catch up with a collection of mid-cap banks from across the U.S. in one trip. In all, we sat down with 8 executive teams, primarily from banks operating in the U.S. Sunbelt (i.e., from California to Florida), including 7 owned by the Hamilton Capital U.S. Mid-Cap Financials ETF…
U.S. Bank M&A: 8 Drivers as Described by Industry Giant, Rodgin Cohen
As financial industry specialists and readers of “Too Big to Fail” will know, Rodgin Cohen, a longtime corporate lawyer with Sullivan & Cromwell, is one of the preeminent authorities on banking and financial services M&A in the United States. So, a chance to hear his thoughts on the state of the current M&A environment, as it relates to U.S. banking, was not to be missed. The…
Election, RBA and Regulators Provide Good News for Australian Financials
The Hamilton Capital Australian Financials Yield ETF (HFA) was launched in December 2018, with a targeted yield of 6.5% or higher, paid monthly (aided by covered calls). The Australian financials have a history of long-term outperformance versus the Canadian financials with lower volatility (including during the global financial crisis). One key reason for Australian financials’ outperformance versus their Canadian counterparts is that Australia typically generates higher GDP growth…
Global Banks Still Thriving; HBG Posts Robust 12% EPS Growth Y/Y
In Q1 2019, the holdings in the Hamilton Capital Global Bank ETF (ticker: HBG) recorded portfolio-weighted EPS growth of a robust 12% Y/Y[1], supported by excellent fundamentals of U.S. banks (~60% weight) and a diversified portfolio of global banks (~40% weight). Encouragingly, the growth was strong and broad-based across nearly all regions, including U.S., India, Singapore, Norway and Austria. With global growth forecast to remain over…
HFMU.U Posts Robust 13% EPS Growth Y/Y; 500 bps Ahead of U.S. Large-Cap Financials
In Q1 2019, the holdings in the Hamilton Capital U.S. Mid-Cap Financials ETF (USD) (ticker: HFMU.U) recorded year-over-year portfolio-weighted EPS growth of a strong 13%[1], or ~500 bps ahead of the large-caps at 8%[2]. This strong performance was supported by excellent fundamentals including stable margins, steady volume growth and a benign credit environment. Within HFMU.U, all three major sub-sectors grew earnings by double-digits, and two outgrew…
Canadian Banks: Why Volatility Will Likely Rise (and a Comment on Mean Reversion)
In October 2018, we launched the Hamilton Capital Canadian Bank Variable-Weight ETF (ticker: HCB), which seeks to benefit from the historical mean reversion tendencies of the Big-6 banks, especially in times of greater market volatility. At the end of each month, the three most oversold banks are rebalanced to represent ~80% of HCB, while the three most overbought banks are rebalanced to 20%. HCB’s objective is…
Cdn/Aust’n Banks: Why the Big Housing Short is So Difficult (and the Risk of a “Direct Hit” Remains Low)
In Q4 2018, we expanded our ETF offering to include two ETFs with monthly distributions and exposure to two world-class – and very similar – financial sectors with excellent performance histories. In October, we launched the Hamilton Capital Canadian Bank Variable-Weight ETF (HCB), a rules-based strategy that seeks to capitalize on the historical mean reversion tendencies of the Canadian banking sector[1]. In December, we launched the…