Hamilton Canadian Bank
Mean Reversion Index ETF
Now trading: A smarter way to invest in Canadian banks
Exposure to Canada’s “Big Six” banks using a mean reversion strategy with monthly rebalancing
Potential for higher long-term returns and lower downside volatility
Outperformance of the Solactive Canadian Bank Mean Reversion Index TR vs. equal weight Cdn bank portfolio has been highest during credit downturns
Benefits of mean reversion have been greatest in periods of market turbulence relative to an equal weight portfolio of Canadian banks
What is Mean-Reversion?
Mean reversion is one of the most popular themes in Canadian bank investing, given the individual Canadian banks have tended to perform similarly over time.
HCA attempts to take advantage of these tendencies by rebalancing the portfolio monthly and investing 80% of the portfolio in the 3 banks which have recently underperformed, and 20% in the 3 banks which have outperformed.
The fund is designed to closely track the returns of the Solactive Canadian Bank Mean Reversion Index TR, which applies a variable-weight, mean reversion trading strategy to Canada’s “Big Six” banks, with monthly rebalancing.
- TICKER HCA
- NAV $17.38
- CHANGE -$0.12
- YIELD 5.03%
- ASSETS $18.0M
Solactive Canadian Bank Mean Reversion Index vs Equal Weight Canada’s “Big 5” Banks
Value of $100 invested since inception of Solactive Canadian Bank Mean Reversion Index (SOLCBMRT; Jan 1, 1990) vs equal weight portfolio of Canada’s “Big 5” banks, as at June 29, 2020. Source: Bloomberg, Solactive AG
|BNS||Bank of Nova Scotia||Canada||27%|
|RY||Royal Bank of Canada||Canada||27%|
|BMO||Bank of Montreal||Canada||7%|
|CM||Canadian Imperial Bank of Commerce||Canada||7%|
|NA||National Bank of Canada||Canada||7%|
|Exchange||Toronto Stock Exchange (TSX)|
|Inception Date||June 26, 2020|
|Investment Style||Index-based, mean reversion strategy|
|Benchmark||Solactive Canadian Bank Mean Reversion Index|
|Administrator||Horizons ETFs Management (Canada) Inc.|