Since launching in October 2020, the Hamilton Enhanced Canadian Bank ETF (HCAL) has provided investors with a simple way to get more from one of Canada’s most reliable sectors, the Big-6 banks. By adding modest 25% leverage to an equal-weight portfolio of Canadian bank stocks, HCAL has delivered strong results over the past five years, offering investors enhanced income and growth potential from a sector known for its stability and consistent dividends.

Five Years of Enhanced Growth & Income

HCAL’s structure is straightforward: for every $100 invested, HCAL borrows ~$25 at institutional borrowing rates and invests it back into the same six banks, providing roughly 1.25x exposure to the sector. This approach has supported higher monthly income and higher long-term returns since HCAL’s inception when compared to a non-levered Canadian bank portfolio, specifically the Solactive Equal Weight Canada Banks Index (“Canadian Bank Index”).

HCAL vs. Canadian Bank Index — Growth of $100K [1]

 

	Yield[2]	1 Year	3 Year*	5 Year*	Since HCAL Inception*
Hamilton Enhanced Canadian Bank ETF	4.65%	44.8%	23.9%	24.3%	23.4%
Canadian Bank Index	3.57%	37.0%	21.5%	22.0%	21.3%

*Annualized

Long-Term Benefits of Modest Leverage

Over time, the power of compounding is a key driver of returns, and modest leverage can amplify that effect. In HCAL’s case, the 25% leverage applied to Canada’s largest banks has contributed to meaningfully higher long-term returns. The leverage is realized at institutional borrowing rates, typically lower than those available to individual investors, and HCAL can be held in registered accounts, providing access to the benefits of low-cost leverage in accounts where margin isn’t normally available.

Canadian banks have a long history of stability, steady earnings, and consistent dividends[3], qualities that make them well suited to this long-term compounding effect. The chart below illustrates how 1.25x exposure to the Big Six banks has compounded over nearly 20 years (since the Canadian Bank Index’s inception), showing how even modest leverage can have a meaningful impact on long-term performance.

1.25x Canadian Bank Index vs. Canadian Bank Index — Growth of $100K [4]

Similar Volatility to Individual Banks

For investors who typically own one or two Canadian banks, HCAL offers a more comprehensive approach by delivering equal-weight exposure to all six banks. While the use of leverage can increase both gains and losses, diversification across the sector helps mitigate some of that added risk, keeping HCAL’s volatility similar to that of individual Canadian bank stocks[5]. This structure helps investors earn higher monthly income and long-term growth without having to pick a single “winning” bank.

Volatility — HCAL vs. Individual Canadian Banks [5]

Five Years of Strong Results

Five years after launch, HCAL has provided an efficient way to gain enhanced exposure to the Canadian banking sector. By combining equal-weight diversification, steady dividends, and modest 25% leverage, HCAL has delivered higher monthly income and growth, while maintaining similar volatility compared to each of the individual Canadian banks. For investors seeking a convenient way to get more from Canadian banks, HCAL could be an accessible solution.

Investors seeking exposure to Canada’s Big Six banks without leverage may consider the Hamilton Canadian Bank Equal-Weight Index ETF (HEB), a low-cost ETF that provides traditional, unlevered exposure to the same group of banks.

Enhanced Growth ETFs

For investors looking to apply the same enhanced (modest 25% leverage) approach to other stable, dividend-paying sectors, Hamilton ETFs also offers:

• Hamilton Enhanced Canadian Financials ETF (HFIN): Exposure to Canada’s 12 largest financial services companies.
• Hamilton Enhanced Utilities ETF (HUTS): Exposure to utilities, pipelines, and telecoms, three of Canada’s most defensive and income-generating industries.

 

____

A word on trading liquidity for ETFs …

Hamilton ETFs are highly liquid ETFs that can be purchased and sold easily. ETFs are as liquid as their underlying holdings and the underlying holdings trade millions of shares each day.

How does that work? When ETF investors are buying (or selling) in the market, they may transact with another ETF investor or a market maker for the ETF. At all times, even if daily volume appears low, there is a market maker – typically a large bank-owned investment dealer – willing to fill the other side of the ETF order (at net asset value plus a spread). The market maker then subscribes to create or redeem units in the ETF from the ETF manager (e.g., Hamilton ETFs), who purchases or sells the underlying holdings for the ETF.

____

Commissions, management fees and expenses all may be associated with investments in exchange traded funds (ETFs) managed by Hamilton ETFs. Please read the prospectus before investing. Indicated rates of return are the historical annual compounded total returns including changes in per unit value and reinvestment of all dividends or distributions and does not take into account sales, redemptions, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Only the returns for periods of one year or greater are annualized returns. ETFs are not guaranteed, their values change frequently and past performance may not be repeated.

Certain statements contained in this website may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Hamilton ETFs undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Past performance is not indicative of future results. Investors cannot directly invest in the index. All performance data assumes reinvestment of distributions, and excludes management fees, transaction costs, and other expenses which would have impacted an investor’s results. The S&P/TSX 60 Index and the S&P 500 Index (“the indices”) and associated data are a product of S&P Dow Jones Indices LLC, its affiliates and/or their licensors and has been licensed for use by Hamilton ETFs © 2025 S&P Dow Jones Indices LLC, its affiliates and/or their licensors. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC’s indices please visit www.spdji.com. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“SPFS”) and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). Neither S&P Dow Jones Indices LLC, SPFS, Dow Jones, their affiliates nor their licensors (“S&P DJI”) make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and S&P DJI shall have no liability for any errors, omissions, or interruptions of any index or the data included therein.

 

[1] Source: Solactive AG, Bloomberg, Hamilton ETFs. Data from October 14, 2020, to October 31, 2025.
The graph illustrates the growth of an initial investment of $100,000 in HCAL vs. Solactive Equal Weight Canada Banks Index (“Canadian Bank Index”) with annual compounded total returns. The graph is for illustrative purposes only and intended to demonstrate the historical impact of compound growth. It is not a projection of future performance, nor does it reflect potential returns on investments in the ETF. Investors cannot directly invest in the index.
[2] An estimate of the annualized yield an investor would receive if the most recent distribution remained unchanged for the next 12 months, stated as a percentage of the price per unit on October 31, 2025. The yield calculation excludes any additional year end distributions and does not include reinvested distributions.
[3] The last time a Canadian bank cut its dividend was National Bank in 1992.
[4] Source: Solactive AG, Bloomberg, Hamilton ETFs. Data from March 16, 2007, to October 31, 2025.
The graph illustrates the growth of an initial investment of $100,000 in the Solactive Equal Weight Canada Banks Index (“Canadian Bank Index”) vs 1.25x Canadian Bank Index with annual compounded total returns. The graph is for illustrative purposes only and intended to demonstrate the historical impact of the indexes compound growth rate. It is not a projection of future index performance, nor does it reflect potential returns on investments in the ETF. Investors cannot directly invest in the index. All performance data assumes reinvestment of distributions and excludes management fees, transaction costs, and other expenses which would have impacted an investor’s returns.
[5] Volatility is the annualized standard deviation of daily returns. The chart shows the annualized volatility for each stock or ETF since HCAL’s inception on Oct 14, 2020, as at October 31, 2025. Source: Bloomberg, Hamilton ETFs