Insights: Canada

Canadian Banks: Will Q4 be a ‘Clean-up’ Quarter?

Note to Reader: We are pleased to announce the launch of the Hamilton Enhanced Canadian Bank ETF (HCAL), which began trading on the TSX on Thursday, October 15th and has a current yield of ~6.5%. HCAL invests 125% of NAV into the Hamilton Canadian Bank Mean Reversion ETF (HCA) using cash borrowed from a Canadian financial institution. The underlying – and unlevered – HCA seeks to…

Hamilton Enhanced Canadian Bank ETF (HCAL) – Get More from the Canadian Banks

We are excited to announce the launch of the Hamilton Enhanced Canadian Bank ETF, which will begin trading on the TSX under the ticker HCAL on Thursday, October 15th. HCAL will provide exposure to Canada’s ‘big 6’ banks, with enhanced yield and return potential, with distributions paid monthly. HCAL builds on our innovative Canadian Bank mean reversion strategy. Specifically, HCAL’s investment objective is to replicate, before expenses,…

Globe & Mail on HCAL: If the worst is over for Canadian bank stocks, here’s a strategy

The Globe & Mail was quick to cover our latest ETF, the Hamilton Canadian Bank 1.25x Leverage ETF (HCAL), launching on October 15, 2020. The article below explains how a mean-reversion strategy with a modest 25% of leverage can produce bigger gains while boosting the dividend to more than 6%. If the worst is over for Canadian bank stocks, here’s a strategy The Globe and Mail (Ontario Edition)…

Canadian Banks: Outperformance from Mean Reversion (in 7 Charts)

As all Canadian investors know, the stock prices of the Canadian banks are highly correlated, and the individual banks have generated similar returns over long periods of time. Over the past several decades, the Canadian banks that have underperformed tended to catch up to those that outperformed, and vice versa – i.e., their performance was “mean reverting”. In this Insight, we discuss these mean reversion tendencies…

Canadian Banks: Three Vulnerable Loan Exposures (in Charts)

In our Insight, Financials: Does COVID-19 Represent a Growth Scare, Credit Event or Crisis (March 25, 2020), we discussed the implications of the global economy moving swiftly into an undetermined period of negative economic growth. For the banks, we fully expect the result will be a credit cycle. Although the peak of losses and the duration are very much unknown, we believe this credit cycle is likely…

One Chart: Australia Appears to be Flattening the Curve Ahead of Other Countries (including Canada)

In our Insight, “Financials: Does COVID-19 Represent a Growth Scare, Credit Event or Crisis” (March 25, 2020), we discussed the implications of the global economy moving swiftly into an undetermined period of negative economic growth which has caused stocks to fall sharply. One critical variable for every country will be when they can restart their economies, which will be heavily influenced by each country’s ability to…

Financials: Does COVID-19 Represent a Growth Scare, Credit Event or Crisis?

Since we launched our first ETF in January 2016, there have been four significant macro corrections in four years. None of those large and painful corrections represented a crisis, insofar as the declines did not represent a threat to the solvency of the financial sector, either from a lack of liquidity or the destruction of capital. Rather, they were related to the market rapidly (and, in…

Update: HFA Outperforming the Canadian Banks with Lower Volatility (in Charts)

The Hamilton Australian Financials Yield ETF (HFA) invests in one of the world’s best financial sectors, anchored by some of the world’s best capitalized banks. As evidence of the quality of the Australian financial sector, the Australian banks outperformed the Canadian banks during the global financial crisis. This strong historical performance is underpinned by the fact Australia is a higher performing economy, with GDP growth consistently…

One Chart: When/Where the Canadian Banks Spent US$32 bln on U.S. Banks

All Canadian bank investors know that expansion into the U.S. personal and commercial (“P&C”) banking sector remains the focal point of capital deployment for the Canadian banks. In fact, US banking has been – by far – the largest destination of capital deployment since 2004 (when TD Bank acquired a majority stake in Banknorth), with the Canadian banks having spent a huge US$30 bln. The chart…

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