Income-focused investors often face trade-offs, particularly when it comes to owning growth sectors like tech, where companies typically reinvest profits into research and development rather than paying dividends. Additionally, while the tech sector is known for its growth characteristics, it is also one that comes with higher volatility. We launched the Hamilton Technology YIELD MAXIMIZER™ ETF (QMAX) to address these challenges, combining the higher income and tax efficiency of a covered call strategy with the growth and innovation of the technology sector. With this strategy, QMAX provides higher monthly cash flow from exposure to blue-chip technology companies while monetizing the sector’s volatility and maintaining strong growth potential. Specifically, QMAX invests in an equal-weight portfolio of the 15 largest technology-focused companies in the U.S. and writes call options on ~30% of the portfolio, maintaining ~70% upside growth potential.
QMAX – One Year Later:
One year after launching, QMAX has established itself, in our opinion, as a reliable income-generating vehicle for investors and has successfully managed its covered call strategy to deliver attractive monthly distributions while capturing growth from the tech sector.
- Attractive Yield: 12.05%[1] (monthly distributions)
- Annualized Total Return: +41.1%[2] since inception, outperforming Nasdaq-100 by 1.2%[3]
- Distribution Growth: QMAX distribution has grown by 12.5% since inception[4]
- Assets Under Management (AUM) of $4002 million
Outperforming Nasdaq-100 with 10%+ Yield[5]
| TICKER | NAME | 1M | 3M | 6M | YTD | 1 YEAR | SINCE COMMON INCEPTION* | SINCE INCEPTION* |
| QMAX | Hamilton Technology YIELD MAXIMIZER™ ETF | 1.35% | 1.98% | 14.13% | 24.07% | 40.37% | 41.11% | 41.11% |
| XNDX (CAD) | Nasdaq-100 Total Return Index (CAD) | 2.24% | 3.79% | 15.91% | 25.44% | 39.63% | 39.96% | 9.92% |
*Annualized
Key Benefits to Investors
- Higher Income: Significantly higher yield compared to dividends on tech stocks
- Tax Efficiency: Covered call premiums are generally taxed as capital gains
- Dynamic Strategy: Flexible coverage ratio to maximize income and maintain ~70% upside growth potential
- Tech Leaders: Equal-weight exposure to the 15 largest technology focused companies in the U.S.
- Experience: Managed by a team with 40+ years of combined experience
Monetizing Volatility: Why Covered Calls on U.S. Technology Stocks?
The U.S. technology sector, while known for its innovation and market leadership, also comes with a higher level of volatility compared to other sectors. This volatility, however, presents an opportunity for generating income through a covered call strategy. QMAX takes an income-first approach to covered calls and write call options on the underlying stocks to generate premium income. By only writing on ~30% of the portfolio, QMAX locks in premium income while leaving 70% of the portfolio uncovered to capture the upside potential of tech stocks. This strategy allows investors to overcome the typical hurdles of investing in tech stocks, such as limited dividends and high price-tags, while still capturing much of the sector’s growth potential.
We believe the Hamilton Technology YIELD MAXIMIZER™ ETF (QMAX) offers an innovative approach to investing in the U.S. technology sector by solving two key challenges: low dividends and high volatility. Through its income-first covered call strategy, QMAX generates consistent, tax-efficient monthly distributions while maintaining significant exposure to the sector’s growth potential, which we believe, makes QMAX an appealing choice for investors seeking a combination of higher income, reduced volatility, and long-term capital growth.
For additional information on our suite of YIELD MAXIMIZER™ ETFs, please CLICK HERE.
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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.
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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.
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[1] 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, 2024. The yield calculation excludes any additional year end distributions and does not include reinvested distributions.
[2] As at October 31, 2024.
[3] As at October 31, 2024. Nasdaq-100 is the Nasdaq-100 Total Return Index (XNDX) in Canadian dollars.
[4] As at October 31, 2024. Initial distribution of $0.1800 per share. Last distribution of $0.2025 per unit. Distributions are subject to change. For a complete list of historical distributions, please see https://hamiltonetfs.com/etf/qmax/.
[5] Source: Bloomberg, Hamilton ETFs. As of October 31, 2024. The graph illustrates the impact to an initial investment of $100,000. It is not intended to reflect future returns on investments in QMAX. The index performance returns are for illustrative purposes only, and the returns do not reflect any management fees, transaction costs or expenses. Investors cannot invest directly in an index.