# HEX (Horizons AlphaPro Enhanced Income Equity ETF)



## bmckay (Mar 10, 2011)

What are peoples thoughts on this? It utilizes a covered calls strategy and provides capital gains, dividends, and call income.

Has a nice yield too.


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## gibor365 (Apr 1, 2011)

bmckay said:


> What are peoples thoughts on this? It utilizes a covered calls strategy and provides capital gains, dividends, and call income.
> 
> Has a nice yield too.


I bought it some time ago...we'll see


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## mikeyrofl (Jul 12, 2016)

Any thoughts on buying this today?


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## tygrus (Mar 13, 2012)

Thinly traded.

Better options out there. BMO has a couple covered calls ETF with similar yeilds and better volume.


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## humble_pie (Jun 7, 2009)

the first dynasty of HEX was destroyed by 1) foolish option strategy (they are limited to options on only 30 stocks, whose options they sell too close in time & too close to the money) (in a rising market, this strategy will erode capital); plus 2) the emperors of the first dynasty were foolish enough to hold blackberry, which turned out to be a black swan instead of a tasty berry.

moral of the story: avoid faded royalty who are likely to lose their heads when the people rise up, see french & russian revolutions.

.


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## james4beach (Nov 15, 2012)

bmckay said:


> What are peoples thoughts on this? It utilizes a covered calls strategy and provides capital gains, dividends, and call income.


Those methods might be able to boost the cash distribution, but they do not increase total return or total performance over time. All of the ETFs I've seen that use covered call strategies have underperformed their plain ETF counterparts. It's the same story with the BMO ETFs.

HEX is Canadian equity exposure. So the main question should be, how does its performance compare to a Canadian benchmark: XIU ?

HEX 5 year performance (as of June end) is 5.06% annualized. This is significantly lower performance that XIU which has 9.16% in the same period.

I don't recommend HEX. It performs much worse than the TSX 60, so if you had to choose between the two, I'd choose XIU.

If your goal (the reason you wanted HEX) is to provide larger cash payouts for income to live off, then you could choose CDZ, which does have a higher yield than the TSX but which also has good long term performance on par with TSX.



tygrus said:


> Better options out there. BMO has a couple covered calls ETF with similar yeilds and better volume.


But note, they also underperform their relevant plain index ETFs. The covered call ETFs have not yet been able to demonstrate superior total returns.


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## james4beach (Nov 15, 2012)

HEX is also tiny, with only $54 million in assets. The fees are high at 0.82%, possibly even higher when internal derivatives trading costs are taken into account. I would avoid HEX... performance is just awful vs the TSX index.


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## Bill G (Jan 8, 2017)

I owned HEX (and its sister covered call ETFs HEJ (international) and HEA (US)) for a year or two back in 2013-2014. Ultimately, I went another direction as these holdings couldn't quite answer the "what am I hoping happens?" question. In bull markets they under-perform the base indexes (as shown by james4beach) and in bear markets they get crushed just like equities (the revenue from call option sales provide limited down-side protection).


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