Product roundup: Mackenzie unveils new ETFs, including two tilted to different economic conditions

• Mackenzie Defensive Tilt ETF (TSX: MDEF)
• Mackenzie Cyclical Tilt ETF (TSX: MCYC)
• Mackenzie Canadian High Dividend Yield ETF (TSX: MHDC)
• Mackenzie US High Dividend Yield ETF (TSX: MHDU)

They all have a 0.55% management fee.

MDEF and MCYC “give investors a new tool to tilt their portfolio depending on what’s going on in the economy” without having to manually sift through hundreds of stocks to “disentangle what’s cyclical and what’s defensive,” said Nelson Arruda, senior vice-president, portfolio manager and head of Mackenzie’s multi-asset strategies team in Toronto, in an interview.

Both funds will have diversified portfolios of approximately 80–120 companies, which Mackenzie selects using a rules-based and factor-based approach.

MDEF will hold companies that tend to perform well during economic slowdowns, including insurance companies, “which have strong balance sheets; their earnings are not necessarily tied to economic growth,” Arruda explained.

Meanwhile, MCYC will focus on investing in companies that “tend to be very cyclical in nature,” in that their performance is tied to the economic cycle and they tend to be dependent on demand for goods and services, he said. This includes microchip companies, retailers and construction companies.

“These ETFs [offer] … a more direct way to express growth or defensive views without having to use sectors, which are a little bulkier or can have more noise in them,” Arruda said.

“So, if you want to adjust your portfolio, you’ll want to move into cyclical as the economy is growing and move into defensive as the economy is weakening.”

Arruda advised against investing in both MDEF and MCYC simultaneously if one already has a core equity portfolio, as the two funds may offset each other.

MHDC and MHDU, on the other hand, will generally invest in 40–60 companies in Canada and the U.S., respectively.

Those funds have three layers to their source of returns, Arruda said.

The first layer is providing investors with exposure to dividend-producing companies, such as the big banks in Canada or Home Depot, Inc. in the U.S., he noted.

The second layer involves writing options on as much as 30% of the portfolio in an aim to generate income.

The third and final layer involves cash leverage, which Mackenzie will use to “help solve that total return reduction that some options strategies can use,” Arruda said.

He suggested MDEF and MCYC would be most suitable for investors who want to tilt their portfolios based on economic conditions or looking to stay invested despite market highs and lows, while MHDC and MHDU would be most suitable for those seeking yield, whether it be retirees or people with cash flow requirements in the short term.

Evolve looks to launch equity ETFs

Evolve Funds Group Inc. says it has filed prospectuses to list two new equity ETFs on the TSX.

If approved, the Evolve Canadian Equity UltraYield ETF and Evolve US Equity UltraYield ETF would be listed on the exchange with the ticker symbols MAPL and BIGY, respectively.

MAPL would aim to provide investors with modestly leveraged exposure to a portfolio of leading Canadian companies with a covered call strategy, while BIGY would have the same strategy but invest in a portfolio of leading U.S. companies and be hedged to the Canadian dollar.

For both funds, the level of covered call option writing may vary, while the maximum aggregate leverage of the funds will not exceed approximately 33%, or 1.33 times, of their net asset values, Evolve said in a release.

Cash distributions, if any, would be paid at least semi-monthly.

Hamilton ETFs expands purchase option for ETFs

Hamilton Capital Partners Inc. (Hamilton ETFs) has expanded purchase options for two of its funds to provide investors with greater choice and flexibility.

On Wednesday, it rolled out the U.S.-dollar-unhedged unit classes for Hamilton U.S. Equity Yield Maximizer ETF (SMAX) and Hamilton Technology Yield Maximizer ETF (QMAX).

The new unit classes were listed on the TSX under the tickers SMAX.U and QMAX.U.

The Hamilton U.S. Equity Yield Maximizer ETF aims to deliver attractive monthly income by providing exposure to a portfolio of primarily large-cap U.S. equity securities, whereas the Hamilton Technology Yield Maximizer ETF has the same investment objective but invests in a portfolio of primarily large-cap U.S.-exchange-traded technology equity securities.

Global X selects ICE indices for new ETFs

Global X Investments Canada Inc. has selected indices from Intercontinental Exchange, Inc. (ICE) for the benchmarks underlying its new inverse and leveraged ETFs.

In a release, Global X announced that it’s licensed the following ICE indices for four of its BetaPro ETFs:

• The BetaPro 3X US Treasury 20+ Year Daily Leveraged Bull Alternative ETF (TSX: TTLT) and the BetaPro -3X US Treasury 20+ Year Daily Leveraged Bear Alternative ETF (TSX: STLT) are designed to provide 300% and -300% of the daily performance, respectively, of the ICE U.S. Treasury 20+ Year Bond Index. The index measures U.S. dollar-denominated sovereign debt issued by the U.S. government.
• The BetaPro 3X Semiconductor Daily Leveraged Bull Alternative ETF (TSX: SOXL) and the BetaPro -3X Semiconductor Daily Leveraged Bear Alternative ETF (TSX: SOXS) aim to deliver 300% and -300% of the daily performance of the NYSE Semiconductor Index. That’s a market capitalization-weighted ICE index of the 30 largest U.S.-listed semiconductor companies.

“We are excited to work with ICE indices for the benchmarks underlying Canada’s latest 3X leveraged and inverse ETFs,” said Chris McHaney, executive vice-president, investment management and strategy with Global X, in the release. “With a built-in currency hedge to help neutralize U.S. dollar movements, our BetaPro 3X and -3X ETFs can offer Canadian investors a more refined tool for dynamic trading and portfolio diversification.”

Bloomberg launches new indices

Bloomberg announced on Wednesday the launch of a set of stock market indices.

The new Bloomberg Screened Choice Indices are a suite of market cap-weighted equity benchmarks. People can either choose to use the new benchmarks or customize them to align with their values, screening out companies involved in things like fossil fuels and weapons, or with poor ESG track records.

“Whether clients have explicit exclusion policies requiring custom solutions or are seeking a foundational benchmark off-the-shelf, this index family offers a flexible framework to meet their needs,” said Zarina Nasib, global head of sustainable indices index product at Bloomberg Index Services Ltd., in a release.

Users can either adopt one of the new pre‑configured benchmarks or build their own by selecting any combination of six modular exclusion themes, which cover areas such as coal, tobacco, fossil fuels, controversial weapons, vice products (like alcohol or gambling), and companies with serious ESG controversies or UN Global Compact violations.

In total, there are 66 new indices, available in both U.S. dollars and Euros.

Like other Bloomberg Indices, the Bloomberg Screened Choice Indices are available for benchmarking, asset allocation and product creation purposes.

More information is available here.

Foresters rolls out new life insurance product

Foresters Financial has rolled out a new participating whole life insurance product that aims to provide Canadians with long-term financial protection.

In a release, the firm said Advantage Max “combines permanent life insurance with tax-deferred cash value accumulation accessible through flexible certificate loans.” It has a 6.25% dividend scale interest rate.

The policy offers up to $20 million in coverage, requires no medical exam for coverage up to $1 million (for applicants up to age 50) or $500,000 (for people aged 51–55), and includes optional riders and member benefits like a quit smoking plan and children’s insurance.